|  |
|--|
|  |
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     **FORM 10-K**

**(Mark One)**

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

**For the fiscal year ended December 31, 2005**

**OR**

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

**Commission file number 33-20083**

     **THE PRUDENTIAL INSURANCE COMPANY OF AMERICA**

     **in respect of**

| **THE PRUDENTIAL VARIABLE CONTRACT REAL    PROPERTY ACCOUNT** |
|---------------------------------------------------------------|
|                                                               |
| **(Exact name of Registrant as specified    in its charter)** |

| ****New    Jersey****                                                                    |   | **22-1211670**                        |
|------------------------------------------------------------------------------------------|--------|---------------------------------------|
|                                                                                          |   |                                       |
| **(State or other jurisdiction            of            incorporation or organization)** |   | **(IRS Employer Identification No.)** |

| ****751 Broad Street,                Newark, New Jersey 07102-2992**** |
|------------------------------------------------------------------------|
|                                                                        |
| **(Address of principal            executive offices) (Zip Code)**     |

| ****(800)                778-2255****                               |
|---------------------------------------------------------------------|
|                                                                     |
| **(Registrant's Telephone            Number, including area code)** |

     **Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securites Act.       YES     NO**

     **Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.      YES     NO**

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

     **Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 75 days.       YES       NO**

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

**Large accelerated filer               Accelerated filer               Non-accelerated filer**

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

**DOCUMENTS INCORPORATED BY REFERENCE**

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

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

 

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     **THE PRUDENTIAL 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**           |            |
|         |       |                                                                                      |       |            |       |
| **1A.**      | ** ** | **Risk Factors**                                                                          | ** ** | ** **8**** | ** ** |
|         |       |                                                                                      |       |            |       |
| **1B.**      |       | **Unresolved    Staff Comments**                                                          |       |  **8**     |       |
|         |       |                                                                                      |       |            |       |
| **2.**       |            | **Properties**                                                                            |            | **8**           |            |
|         |       |                                                                                      |       |            |       |
| **3.**       |            | **Legal Proceedings**                                                                     |            | **8**           |            |
|         |       |                                                                                      |       |            |       |
| **4.**       |            | **Submission of Matters to a Vote of Security Holders**                                   |            | **8**           |            |
|         |       |                                                                                      |       |            |       |
| **PART II**  |       |                                                                                      |       |            |       |
|         |       |                                                                                      |       |            |       |
| **5.**       |            | **Market for the Registrant's Interests, Related Security Holder Matters and Issuer**     |            | **9**           |            |
| ** **   |            | **Purchases of Equity Securities**                                                        |            | ** **      |            |
|         |       |                                                                                      |       |            |       |
| **6.**       |            | **Selected Financial Data**                                                               |            | **10**          |            |
|         |       |                                                                                      |       |            |       |
| **7.**       |            | **Management's Discussion and Analysis of Financial Condition and Results of Operations** |            |  **11**    |            |
|         |       |                                                                                      |       |            |       |
| **7A.**      |            | **Quantitative and Qualitative Disclosures About Market Risk**                            |            | **19**          |            |
|         |       |                                                                                      |       |            |       |
| **8.**       |            | **Financial Statements and Supplementary Data**                                           |            | **21**          |            |
|         |       |                                                                                      |       |            |       |
| **9.**       |            | **Changes in and Disagreements with Accountants on Accounting  and Financial Disclosure** |            | **21**          |            |
|         |       |                                                                                      |       |            |       |
|         |       |                                                                                      |       |            |       |
| **9A.**      |            | **Controls and Procedures**                                                               |            | **21**          |            |
|         |       |                                                                                      |       |            |       |
| **9B.**      |            | **Other Information**                                                                     |            | **21**          |            |
|         |       |                                                                                      |       |            |       |
| **PART III** |       |                                                                                      |       |            |       |
|         |       |                                                                                      |       |            |       |
| **10.**      |            | **Directors and Executive Officers of the Registrant**                                    |            | **22**          |            |
|         |       |                                                                                      |       |            |       |
| **11.**      |            | **Executive Compensation**                                                                |            | **24**          |            |
|         |       |                                                                                      |       |            |       |
| **12.**      |            | **Security Ownership of Certain Beneficial Owners and Management**                        |            | **24**          |            |
|         |       |                                                                                      |       |            |       |
| **13.**      |            | **Certain Relationships and Related Transactions**                                        |            | **24**          |            |
|         |       |                                                                                      |       |            |       |
| **14.**      |            | **Principal Accounting Fees and Services**                                                |            |  **24**    |            |
|         |       |                                                                                      |       |            |       |
| **PART IV**  |       |                                                                                      |       |            |       |
|         |       |                                                                                      |       |            |       |
| **15.**      |            | **Exhibits, Financial Statement Schedules.**                                              |            | **25**          |            |
|         |       |                                                                                      |       |            |       |
|         |            | **Exhibit    Index**                                                                      |            | **25**          |            |
|         |       |                                                                                      |       |            |       |
|         |            | **Signatures**                                                                            |            | **27**          |            |

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**Forward-Looking Statement Disclosure**

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

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**PART I**

**Item 1. Business**

The Prudential Variable Contract    Real Property Account (the “Real Property Account”), the Registrant,    was established on November 20, 1986. Pursuant to New Jersey law, the Real    Property Account was established as a separate investment account of The    Prudential Insurance Company of America (“Prudential”).  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 The    Prudential Insurance Company of America.

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

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

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

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

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

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

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

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

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

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

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

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**Real Estate Market Overview**

Space market fundamentals continued    their gradual recovery in 2005 as vacancy rates fell across all property    types and in most major markets. The gradual recovery and continued strong    demand for property investments drove transaction volumes to record levels    last year. All major property types saw increases in transaction volumes    and pricing, and further declines in capitalization rates last year. According to the    National Council of Real Estate Investment Fiduciaries (“NCREIF”),    the NCREIF Property Index, which is the benchmark for unleveraged private institutional    real estate investments    in the U.S.,gained 5.43% in the fourth quarter pushing the index’s one-year totalreturn to 20.06%.

**Office Market**

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

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

**Apartment Market**

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

**Retail Market**

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

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

**Industrial Market**

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

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

**Hotel Market**

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

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

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**Item 1A. Risk          Factors**

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

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

**Item 1B.  Unresolved Staff Comments**

None

**Item 2.  Properties**

Not Applicable.

**Item 3.  Legal Proceedings**

None.

**Item 4.  Submission of Matters to a Vote of Securities Holders**

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

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**PART II**

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

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

As of December 31, 2005, approximately32,809 contract owners of record held investments in the Real Property Account.

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| **Item 6. Selected Financial            Data**  |   |   |                                      |   |   |                 |   |   |                 |   |   |                 |   |   |                 |   |   |                 |   |   |                 |
|-------------------------------------------------|--------|--------|--------------------------------------|--------|--------|-----------------|--------|--------|-----------------|--------|--------|-----------------|--------|--------|-----------------|--------|--------|-----------------|--------|--------|-----------------|
|                                                 |        |   | **Year Ended          December 31,** |
|                                                 |        |        |                                      |
|                                                 |        |   | **2005**                             |   |   | **2004**        |   |   | **2003**        |   |   | **2002**        |   |   | **2001**        |   |   | **2000**        |   |   | **1999**        |
|                                                 |        |        |                                      |        |        |                 |        |        |                 |        |        |                 |        |        |                 |        |        |                 |        |        |                 |
| **RESULTS OF OPERATIONS:**                      |   |   |                                      |   |   |                 |   |   |                 |   |   |                 |   |   |                 |   |   |                 |   |   |                 |
|                                                 |        |   |                                      |   |   |                 |   |   |                 |   |   |                 |   |   |                 |   |   |                 |   |   |                 |
| **Total Investment Income**                     |   | **$**  | **28,644,271**                       |   | **$**  | **29,076,163**  |   | **$**  | **27,060,494**  |   | **$**  | **27,077,048**  |   | **$**  | **27,480,593**  |   | **$**  | **26,387,938**  |   | **$**  | **24,835,049**  |
|                                                 |        |        |                                      |        |        |                 |        |        |                 |        |        |                 |        |        |                 |        |        |                 |        |        |                 |
|                                                 |        |   |                                      |   |   |                 |   |   |                 |   |   |                 |   |   |                 |   |   |                 |   |   |                 |
| **Net Investment Income**                       |   | **$**  | **9,219,171**                        |   | **$**  | **7,799,606**   |   | **$**  | **10,613,409**  |   | **$**  | **10,864,043**  |   | **$**  | **12,350,306**  |   | **$**  | **13,638,117**  |   | **$**  | **13,279,589**  |
|                                                 |        |   |                                      |   |   |                 |   |   |                 |   |   |                 |   |   |                 |   |   |                 |   |   |                 |
| **Net Realized and Unrealized          (Loss)** |   |   |                                      |   |   |                 |   |   |                 |   |   |                 |   |   |                 |   |   |                 |   |   |                 |
| **Gain on Investment in Partnership**           |   |   | **15,460,619**                       |   |   | **3,280,394**   |   |   | **(6,467,364**  | **)**  |   | **(8,517,663**  | **)**  |   | **(2,547,749**  | **)**  |   | **4,487,022**   |   |   | **(7,217,046)** |
|                                                 |        |        |                                      |        |        |                 |        |        |                 |        |        |                 |        |        |                 |        |        |                 |        |        |                 |
|                                                 |        |   |                                      |   |   |                 |   |   |                 |   |   |                 |   |   |                 |   |   |                 |   |   |                 |
| **Net Increase in Net Assets**                  |   |   |                                      |   |   |                 |   |   |                 |   |   |                 |   |   |                 |   |   |                 |   |   |                 |
| **Resulting From Operations**                   |   | **$**  | **24,679,790**                       |   | **$**  | **11,080,000**  |   | **$**  | **4,146,045**   |   | **$**  | **2,346,380**   |   | **$**  | **9,802,557**   |   | **$**  | **18,125,139**  |   | **$**  | **6,062,543**   |
|                                                 |        |        |                                      |        |        |                 |        |        |                 |        |        |                 |        |        |                 |        |        |                 |        |        |                 |
|                                                 |        |   |                                      |   |   |                 |   |   |                 |   |   |                 |   |   |                 |   |   |                 |   |   |                 |
|                                                 |        |   |                                      |   |   |                 |   |   |                 |   |   |                 |   |   |                 |   |   |                 |   |   |                 |
| **FINANCIAL POSITION:**                         |   |   |                                      |   |   |                 |   |   |                 |   |   |                 |   |   |                 |   |   |                 |   |   |                 |
|                                                 |        |   |                                      |   |   |                 |   |   |                 |   |   |                 |   |   |                 |   |   |                 |   |   |                 |
|                                                 |        |   | **Year Ended          December 31,** |
|                                                 |        |        |                                      |
|                                                 |        |   | **2005**                             |   |   | **2004**        |   |   | **2003**        |   |   | **2002**        |   |   | **2001**        |   |   | **2000**        |   |   | **1999**        |
|                                                 |        |        |                                      |        |        |                 |        |        |                 |        |        |                 |        |        |                 |        |        |                 |        |        |                 |
|                                                 |        |   |                                      |   |   |                 |   |   |                 |   |   |                 |   |   |                 |   |   |                 |   |   |                 |
| **Total Assets**                                |        | **$**  | **246,015,115**                      |   | **$**  | **240,575,611** |   | **$**  | **235,627,852** |   | **$**  | **229,720,113** |   | **$**  | **234,594,652** |   | **$**  | **221,512,296** |   | **$**  | **225,142,653** |
|                                                 |        |        |                                      |        |        |                 |        |        |                 |        |        |                 |        |        |                 |        |        |                 |        |        |                 |
|                                                 |        |   |                                      |   |   |                 |   |   |                 |   |   |                 |   |   |                 |   |   |                 |   |   |                 |
| **Long Term Lease Obligation**                  |   | **$**  | **0**                                |   | **$**  | **0**           |   | **$**  | **0**           |   | **$**  | **0**           |   | **$**  | **0**           |   | **$**  | **0**           |   | **$**  | **0**           |
|                                                 |        |        |                                      |        |        |                 |        |        |                 |        |        |                 |        |        |                 |        |        |                 |        |        |                 |
|                                                 |        |   |                                      |   |   |                 |   |   |                 |   |   |                 |   |   |                 |   |   |                 |   |   |                 |
| **Mortgage Loans Payable**                      |   | **$**  | **33,195,607**                       |   | **$**  | **43,773,767**  |   | **$**  | **43,934,494**  |   | **$**  | **35,699,108**  |   | **$**  | **28,994,521**  |   | **$**  | **10,092,355**  |   | **$**  | **10,184,662**  |
|                                                 |        |        |                                      |        |        |                 |        |        |                 |        |        |                 |        |        |                 |        |        |                 |        |        |                 |
|                                                 |        |   |                                      |   |   |                 |   |   |                 |   |   |                 |   |   |                 |   |   |                 |   |   |                 |

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

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

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

**(a) Liquidity and Capital Resources**

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

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

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

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

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

**(b) Results of Operations**

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

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**Net Investment Income Overview**

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

**Valuation Overview**

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

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

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

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

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

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

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

|                                                                            |  **Twelve Months    Ended December 31,** |       |
|---------------------------------------------------------------------------------|-----------------------------------------------|------------|
|                                                                            |                                               |            |   |
|                                                                            |                                          | **2005**   |   |   | **2004** |   |
|                                                                            |                                               |            |   |  |  |   |
| ***Net            Investment Income:***                                         |                                          |       |   |   |   |   |
|                                                                            |                                          |       |   |   |   |   |
| Office properties                                                               | $                                             | 3,100,955  |   | $ | 2,102,465 |   |
| Apartment        complexes                                                      |                                          | 1,952,155  |   |   | 2,191,107 |   |
| Retail properties                                                               |                                          | 4,402,792  |   |   | 4,728,171 |   |
| Industrial        properties                                                    |                                          | 574,977    |   |   | 933,253 |   |
| Hotel property                                                                  |                                          | 1,086,783  |   |   | 640,660 |   |
| Other (including        interest income,                                        |                                          |       |   |   |   |   |
|    investment        mgt fee, etc.)                              |                                          | (1,898,491 | ) |   | (2,796,050 | ) |
|                                                                            |                                               |            |   |  |  |   |
| **Total Net          Investment Income**                                        | $                                             | 9,219,171  |   | $ | 7,799,606 |   |
|                                                                            |                                               |            |   |  |  |   |
|                                                                            |                                          |       |   |   |   |   |
| ***Net            Realized Gain (Loss) on Real Estate Investments:***           |                                          |       |   |   |   |   |
|                                                                            |                                          |       |   |   |   |   |
| Apartment        complexes                                                      |                                          | 4,446,010  |   |   | 1,730,000 |   |
| Office properties                                                               |                                          | 1,174,380  |   |   | — |   |
| Land                                                                            |                                          | 598,432    |   |   | — |   |
|                                                                            |                                               |            |   |  |  |   |
| **Total Net          Realized Gain (Loss) on Real Estate Investments**          |                                          | 6,218,822  |   |   | 1,730,000 |   |
|                                                                            |                                               |            |   |  |  |   |
|                                                                            |                                          |       |   |   |   |   |
| ***Net            Unrealized Gain (Loss) on Real Estate Investments:***         |                                          |       |   |   |   |   |
|                                                                            |                                          |       |   |   |   |   |
| Office properties                                                               |                                          | 3,298,783  |   |   | 222,384 |   |
| Apartment        complexes                                                      |                                          | 516,658    |   |   | (653,214 | ) |
| Retail properties                                                               |                                          | 3,011,793  |   |   | 2,072,496 |   |
| Industrial        properties                                                    |                                          | 1,369,434  |   |   | (190,659 | ) |
| Hotel property                                                                  |                                          | 1,045,129  |   |   | 99,387 |   |
|                                                                            |                                               |            |   |  |  |   |
| **Total Net          Unrealized Gain (Loss) on Real Estate Investments**        |                                          | 9,241,797  |   |   | 1,550,394 |   |
|                                                                            |                                               |            |   |  |  |   |
| **Net Realized          and Unrealized Gain (Loss) on Real Estate Investments** | $                                             | 15,460,619 |   | $ | 3,280,394 |   |
|                                                                            |                                               |            |   |  |  |   |

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**OFFICE PORTFOLIO**

| **Year Ended December 31,**                                                                                                                                                |   |   | **Net Investment          Income/Loss 2005** |   |   | **Net Investment          Income/Loss 2004** |   |   | **Realized / Unrealized          Gain/(Loss) 2005** |   |   | **Unrealized Gain/(Loss)          2004** |   |   | **Occupancy 2005** |   |   | **Occupancy 2004** |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|----------------------------------------------|--------|--------|----------------------------------------------|--------|--------|-----------------------------------------------------|--------|--------|------------------------------------------|--------|--------|--------------------|--------|--------|--------------------|--------|
|                                                                                                                                                                            |   |        |                                              |   |        |                                              |   |        |                                                     |   |        |                                          |   |        |                    |   |        |                    |   |
| **Property**                                                                                                                                                               |   |   |                                              |   |   |                                              |   |   |                                                     |   |   |                                          |   |   |                    |   |   |                    |   |
| Lisle, IL                                                                                                                                                                  |   | $      | 313,356                                      |   | $      | 498,150                                      |   | $      | (98,837                                             | )      | $      | (2,161,087                               | )      |   | 38%                |   |   | 43                 | %      |
| Brentwood, TN                                                                                                                                                              |   |   | 984,017                                      |   |   | 806,096                                      |   |   | 1,254,008                                           |   |   | 1,626,824                                |   |   | 93%                |   |   | 91                 | %      |
| Oakbrook Terrace, IL (1)                                                                                                                                                   |   |   | 203,313                                      |   |   | 404,805                                      |   |   | 1,174,380                                           |   |   | (613,875                                 | )      |   | N/A                |   |   | 41                 | %      |
| Beaverton, OR                                                                                                                                                              |   |   | 851,182                                      |   |   | 904,462                                      |   |   | 809,842                                             |   |   | (400,000                                 | )      |   | 78%                |   |   | 72                 | %      |
| Brentwood, TN                                                                                                                                                              |   |   | 749,087                                      |   |   | (511,048                                     | )      |   | 1,333,767                                           |   |   | 1,770,522                                |   |   | 100%               |   |   | 100                | %      |
|                                                                                                                                                                       |   |        |                                              |   |        |                                              |   |        |                                                     |   |        |                                          |   |   |               |   |   |               |   |
|                                                                                                                                                                            |   | $      | 3,100,955                                    |   | $      | 2,102,465                                    |   | $      | 4,473,160                                           |   | $      | 222,384                                  |   |   |                    |   |   |                    |   |
|                                                                                                                                                                       |   |        |                                              |   |        |                                              |   |        |                                                     |   |        |                                          |   |   |               |   |   |               |   |
|                                                                                                                                                                       |   |   |                                         |   |   |                                         |   |   |                                                |   |   |                                     |   |   |               |   |   |               |   |
| (1)    Net        investment income for the year ended December 31, 2005 reflects partial        period results for the       |
|       office property located in        Oakbrook Terrace, Illinois that was sold on June 8, 2005.              |

**Net Investment Income**

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

**Total Net Realized and Unrealized      Gain/(Loss)**

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

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**APARTMENT COMPLEXES**

| **Year Ended December 31,** |   |   | **Net Investment          Income/Loss 2005** |   |   | **Net Investment          Income/Loss 2004** |   |   | **Realized /          Unrealized Gain/(Loss) 2005** |   |   | **Realized /          Unrealized Gain/(Loss) 2004** |   |   | **Occupancy 2005** |   |   | **Occupancy 2004** |
|-----------------------------|--------|--------|----------------------------------------------|--------|--------|----------------------------------------------|--------|--------|-----------------------------------------------------|--------|--------|-----------------------------------------------------|--------|--------|--------------------|--------|--------|--------------------|
|                             |   |        |                                              |   |        |                                              |   |        |                                                     |   |        |                                                     |   |        |                    |   |        |                    |
| **Property**                |   |   |                                              |   |   |                                              |   |   |                                                     |   |   |                                                     |   |   |                    |   |   |                    |
| Atlanta, GA                 |   | $      | 123,570                                      |   | $      | 814,285                                      |   | $      | (597,672                                            | )      | $      | (1,946,818                                          | )      |   | 91%                |   |   | 88%                |
| Raleigh, NC                 |   |   | 678,498                                      |   |   | 559,605                                      |   |   | 1,114,329                                           |   |   | 262,271                                             |   |   | 93%                |   |   | 95%                |
| Jacksonville, FL (1)        |   |   | 902,707                                      |   |   | 972,604                                      |   |   | 4,283,549                                           |   |   | 69,368                                              |   |   | N/A                |   |   | 89%                |
| Gresham/Salem, OR (1)       |   |   | 247,380                                      |   |   | (155,387                                     | )      |   | 162,462                                             |   |   | 2,691,965                                           |   |   | N/A                |   |   | 91%                |
|                        |   |        |                                              |   |        |                                              |   |        |                                                     |   |        |                                                     |   |   |               |   |   |               |
|                             |   | $      | 1,952,155                                    |   | $      | 2,191,107                                    |   | $      | 4,962,668                                           |   | $      | 1,076,786                                           |   |   |                    |   |   |                    |
|                        |   |        |                                              |   |        |                                              |   |        |                                                     |   |        |                                                     |   |   |               |   |   |               |
|                        |   |   |                                         |   |   |                                         |   |   |                                                |   |   |                                                |   |   |               |   |   |               |

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

**Net Investment Income**

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

**Total Realized and Unrealized      Gain/(Loss)**

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

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**RETAIL PROPERTIES**

| **Year Ended December 31,**                                                                                                                                                                                                                                                                                             |   |   | **Net Investment          Income/Loss 2005** |   |   | **Net Investment          Income/Loss 2004** |   |   | **Unrealized          Gain/(Loss) 2005** |   |   | **Unrealized          Gain/(Loss) 2004** |   |   | **Occupancy 2005** |   |   | **Occupancy 2004** |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|----------------------------------------------|--------|--------|----------------------------------------------|--------|--------|------------------------------------------|--------|--------|------------------------------------------|--------|--------|--------------------|--------|--------|--------------------|--------|
|                                                                                                                                                                                                                                                                                                                         |   |        |                                              |   |        |                                              |   |        |                                          |   |        |                                          |   |        |                    |   |        |                    |   |
| **Property**                                                                                                                                                                                                                                                                                                            |   |   |                                              |   |   |                                              |   |   |                                          |   |   |                                          |   |   |                    |   |   |                    |   |
| Roswell, GA                                                                                                                                                                                                                                                                                                             |   | $      | 1,767,394                                    |   | $      | 1,576,783                                    |   | $      | 1,652,340                                |   | $      | (2,536,369                               | )      |   | 94%                |   |   | 74%                |   |
| Kansas City, KS; Kansas City,        MO                                                                                                                                                                                                                                                                                 |   |   | 195,927                                      |   |   | 623,917                                      |   |   | (5,069,318                               | )      |   | 2,727,694                                |   |   | 81%                |   |   | 81%                |   |
| Hampton, VA                                                                                                                                                                                                                                                                                                             |   |   | 1,272,509                                    |   |   | 1,220,607                                    |   |   | 5,096,161                                |   |   | 981,574                                  |   |   | 100%               |   |   | 100%               |   |
| Ocean City, MD                                                                                                                                                                                                                                                                                                          |   |   | 871,644                                      |   |   | 921,803                                      |   |   | 1,332,610                                |   |   | 899,597                                  |   |   | 85%                |   |   | 93%                |   |
| Westminster, MD (1)                                                                                                                                                                                                                                                                                                     |   |   | (5,704                                       | )      |   | 138,296                                      |   |   | —                                   |   |   | —                                   |   |   | N/A                |   |   | N/A                |   |
| Westminster, MD (2)                                                                                                                                                                                                                                                                                                     |   |   | 278,799                                      |   |   | 246,765                                      |   |   | —                                   |   |   | —                                   |   |   | N/A                |   |   | N/A                |   |
| CARS Preferred Equity (3)                                                                                                                                                                                                                                                                                               |   |   | 22,223                                       |   |   | —                                       |   |   | —                                   |   |   | —                                   |   |   | N/A                |   |   | N/A                |   |
|                                                                                                                                                                                                                                                                                                                    |   |        |                                              |   |        |                                              |   |        |                                          |   |        |                                          |   |   |               |   |   |               |   |
|                                                                                                                                                                                                                                                                                                                         |   | $      | 4,402,792                                    |   | $      | 4,728,171                                    |   | $      | 3,011,793                                |   | $      | 2,072,496                                |   |   |                    |   |   |                    |   |
|                                                                                                                                                                                                                                                                                                                    |   |        |                                              |   |        |                                              |   |        |                                          |   |        |                                          |   |   |               |   |   |               |   |
|                                                                                                                                                                                                                                                                                                                         |   |   |                                              |   |   |                                              |   |   |                                          |   |   |                                          |   |   |                    |   |   |                    |   |
| (1)   Classified        as Other Real Estate Investment (mortgage paid in full September 13,        2004).(2)   Mortgage    Loan Receivable (Originated January 2004).(3)   Net investment    income for the year ended December 31, 2005 reflects partial period results. |

**Net Investment Income**

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

**Unrealized Gain/(Loss)**

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

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**INDUSTRIAL PROPERTIES**

| **Year Ended December 31,**                                                                                                                               |   |   | **Net Investment          Income/Loss 2005** |   |   | **Net Investment          Income/Loss 2004** |   |   | **Unrealized          Gain/(Loss) 2005** |   |   | **Unrealized          Gain/(Loss) 2004** |   |   | **Occupancy 2005** |   |   | **Occupancy 2004** |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|----------------------------------------------|--------|--------|----------------------------------------------|--------|--------|------------------------------------------|--------|--------|------------------------------------------|--------|--------|--------------------|--------|--------|--------------------|--------|
|                                                                                                                                                           |   |        |                                              |   |        |                                              |   |        |                                          |   |        |                                          |   |        |                    |   |        |                    |   |
| **Property**                                                                                                                                              |   |   |                                              |   |   |                                              |   |   |                                          |   |   |                                          |   |   |                    |   |   |                    |   |
| Aurora, CO                                                                                                                                                |   | $      | 574,977                                      |   | $      | 936,264                                      |   | $      | 1,369,434                                |   | $      | (190,659                                 | )      |   | 78%                |   |   | 66%                |   |
| Bolingbrook, IL (1)                                                                                                                                       |   |   | —                                       |   |   | 2,603                                        |   |   | —                                   |   |   | —                                   |   |   | N/A                |   |   | N/A                |   |
| Salt Lake City, UT (1)                                                                                                                                    |   |   | —                                       |   |   | (5,614                                       | )      |   | —                                   |   |   | —                                   |   |   | N/A                |   |   | N/A                |   |
|                                                                                                                                                      |   |        |                                              |   |        |                                              |   |        |                                          |   |        |                                          |   |   |               |   |   |               |   |
|                                                                                                                                                           |   | $      | 574,977                                      |   | $      | 933,253                                      |   | $      | 1,369,434                                |   | $      | (190,659                                 | )      |   |                    |   |   |                    |   |
|                                                                                                                                                      |   |        |                                              |   |        |                                              |   |        |                                          |   |        |                                          |   |   |               |   |   |               |   |
| (1)   The        Bolingbrook, Illinois and Salt Lake City, Utah industrial properties        were sold in September 2002 and January 2003, |   |
|      respectively,        but certain post-closing adjustments were incurred in 2004.                                            |

**Net Investment Income**

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

**Unrealized Gain/(Loss)**

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

**HOTEL PROPERTY**

| **Year Ended December 31,** |   |   | **Net Investment          Income/Loss 2005** |   |   | **Net Investment          Income/Loss 2004** |   |   | **Unrealized          Gain/(Loss) 2005** |   |   | **Unrealized          Gain/(Loss) 2004** |   |   | **Occupancy 2005** |   |   | **Occupancy 2004** |   |
|-----------------------------|--------|--------|----------------------------------------------|--------|--------|----------------------------------------------|--------|--------|------------------------------------------|--------|--------|------------------------------------------|--------|--------|--------------------|--------|--------|--------------------|--------|
|                             |   |        |                                              |   |        |                                              |   |        |                                          |   |        |                                          |   |        |                    |   |        |                    |   |
| **Property**                |   |   |                                              |   |   |                                              |   |   |                                          |   |   |                                          |   |   |                    |   |   |                    |   |
| Lake Oswego, OR             |   | $      | 1,086,783                                    |   | $      | 640,660                                      |   | $      | 1,045,129                                |   | $      | 99,387                                   |   |   | 80                 | %      |   | 66                 | %      |

**Net Investment Income**

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

**Unrealized Gain/(Loss)**

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

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**Other**

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

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

**(c) Inflation**

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

**Critical Accounting Policies**

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

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

**Valuation of Investments**

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

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

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

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

**Other Estimates**

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

**Item 7A. Quantitative and Qualitative      Disclosures About Market Risk**

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

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

|                           |   |   | **Maturity** |   |   | **Estimated Market        Value(in $ millions)**            |   |   | **AverageInterest Rate**                  |   |
|---------------------------|--------|--------|--------------|--------|--------|-------------------------------------------------------------|--------|--------|-------------------------------------------|--------|
|                      |   |   |              |   |   |                                                             |   |   |                                           |   |
| Cash and Cash equivalents |   |   | 0-3 months   |   |   |       $   45.5 |   |   |       3.83% |   |
|                      |   |   |         |   |   |                                                        |   |   |                                      |   |

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

| **Debt (in $ thousands),including current    portion** |   |   | ** ****2006** |   |   | ** ****2007** |   |   | ** ****2008** |   |   | ** ****2009** |   |   | ** ****2010** |   |   | ** ****Thereafter** |   |   | ** ****Total** |   |   | **EstimatedFairValue** |   |
|--------------------------------------------------------|--------|--------|--------------------|--------|--------|--------------------|--------|--------|--------------------|--------|--------|--------------------|--------|--------|--------------------|--------|--------|--------------------------|--------|--------|---------------------|--------|--------|------------------------|--------|
|                                                        |        |        |                    |        |        |                    |        |        |                    |        |        |                    |        |        |                    |        |        |                          |        |        |                     |        |        |                        |        |
| Average Fixed Interest        Rate                     |   |   | 5.38               | %      |   | 5.35               | %      |   | 5.74               | %      |   | 6.75               | %      |   | 6.75               | %      |   | 6.75                     | %      |   | 6.50                | %      |   |                   |   |
| Fixed Rate                                             |   |   |               |   | $      | 549                |   | $      | 588                |   | $      | 16,026             |   | $      | 9,277              |   | $      | 565                      |   | $      | 6,191               |   | $      | 33,196                 |   | $ | 33,764 |   |
| Variable Rate                                          |   |   |               |   |   | —             |   |   | —             |   |   | —             |   |   | —             |   |   | —                   |   |   | —              |   |   | —                 |   |   | — |   |
|                                                   |        |        |                    |        |        |                    |        |        |                    |        |        |                    |        |        |                    |        |        |                          |        |        |                     |        |        |                        |        |
| Total Mortgage Loans        Payable                    |   | $      | 549                |   | $      | 588                |   | $      | 16,026             |   | $      | 9,277              |   | $      | 565                |   | $      | 6,191                    |   | $      | 33,196              |   | $      | 33,764                 |   |
|                                                   |        |        |                    |        |        |                    |        |        |                    |        |        |                    |        |        |                    |        |        |                          |        |        |                     |        |        |                        |        |

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

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**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, 2005.  Based on such evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of December 31, 2005, our disclosure controls and procedures were effective in timely alerting them to material information relating to us required to be included in our periodic SEC filings.There has been no change in our internal control over financial reporting during the year ended December 31, 2005, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

**Item 9B.  Other Information**

None.

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**PART III**

**Item 10.  Directors and Executive Officers of the Registrant**

**THE PRUDENTIAL INSURANCE COMPANY OF AMERICA**

**DIRECTORS**

**FREDERIC K. BECKER**–Director since 1994 (current term expires June, 2006).  Chairman, Audit Committee; Member, Executive Committee.  President, Wilentz Goldman & Spitzer, P.A. (law firm) since 1989, with firm since 1960.

**GORDON M. BETHUNE –**Director since 2005 (current term expires June 2006).  Member, Compensation Committee.  Member, Corporate Governance and Business Ethics Committee.  Retired since 2004.  Mr. Bethune is also a director of Honeywell International, Inc., Sprint Corporation, and Willis Group Holdings Limited.

**W. GASTON CAPERTON, III –**Director since 2004 (current term expires June, 2006).****Member, Finance and Dividends Committee.  Member, Investment Committee.  President, The College Board since 1999.  Governor Caperton is also a director of Energy Corporation of America, Owens Corning, United Bankshares, Inc., and West Virginia Media.  Trustee Emeritus, Benedum Foundation. 

**GILBERT F. CASELLAS**–Director since 2001 (current term expires June, 2006).  Member, Audit Committee.  Counsel for Mintz Levin Cohn Ferris Glovsky, and Popeo, P.C. (law firm) since 2005.  Mr. Casellas is also a director of The Swarthmore Group, Inc.

**JAMES G. CULLEN**–Director since 1994 (current term expires June, 2006).  Chairman, Compensation Committee; Member, Audit Committee; Member, Executive Committee.  Retired since 2000.  Mr. Cullen is also a director of Agilient Technologies, Inc., Johnson & Johnson, and NeuStar, Inc.

**WILLIAM H. GRAY, III**–Director since 1991 (current term expires June, 2006).  Chairman, Corporate Governance and Business Ethics Committee; Member, Executive Committee.  Retired since 2004.  Mr. Gray is a Senior Director of Public Policy and Business Diversity, Buchanan Ingersoll, PC, since 2005.  Mr. Gray is also a director of Dell Computer Corporation, JP Morgan Chase & Co., Pfizer, Inc., and Visteon Corporation.

**JON F. HANSON**–Director since 1991 (current term expires June, 2006).  Chairman, Executive Committee; Chairman, Committee on Finance and Dividends; Chairman, Investment Committee.  Chairman of The Hampshire Companies since 1976.  Mr. Hanson is also a director of CD&L, Inc., HealthSouth Corp., James E. Hanson Management Company, Pascack Community Bank, and Yankee Global Enterprises.

**CONSTANCE J. HORNER**–Director since 1994 (current term expires June, 2006).  Member, Compensation Committee; Member, Corporate Governance and Business Ethics Committee.  Ms. Horner is also a director of Ingersoll-Rand Company, Ltd., and Pfizer, Inc.

**KARL J. KRAPEK**–Director since 2003 (current term expires June, 2006).  Member, Finance and Dividends Committee.  Member, Investment Committee.  Retired since 2002.  Mr. Krapek is also a director of Connecticut Bank and Trust Company, Delta Airlines, Inc., Lucent Technologies, Inc., and Visteon Corporation.

**JAMES A. UNRUH**–Director since 1996 (current term expires June, 2006). Member, Audit Committee.  Founding Principal, Alerion Capital Group, LLC since 1998.  Mr. Unruh is also a director of Tenet Healthcare Corporation, CSG Systems International, Inc., and Qwest Communications, Inc.  

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**THE PRUDENTIAL INSURANCE COMPANY OF AMERICA**

**PRINCIPAL OFFICERS ****

**VIVIAN L. BANTA**–Chief Executive Officer, Insurance Division, Prudential since 2002.  Prior to 2002: Executive Vice President. 

**SUSAN L. BLOUNT**–Senior    Vice President and General Counsel, Prudential since 2005. Prior to 2005Vice President, Chief Investment Counsel and Secretary.

**RICHARD J. CARBONE**–Senior Vice President and Chief Financial Officer, Prudential since 1997.

**C. EDWARD CHAPLIN**–Senior Vice President and Treasurer, Prudential since 2000.  Mr. Chaplin is also a director of MBIA, Inc.

**KATHLEEN M. GIBSON**–Vice President, Secretary and Corporate Governance Officer, Prudential, since 2004.  Prior to 2004: Vice President and Secretary, Prudential.  

**ROBERT C. GOLDEN**–Executive Vice President, Prudential since 1997.

**MARK B. GRIER**–Vice Chairman, Financial Management, Prudential since 2002.  Prior to 2002 Executive Vice President, Financial Management.  

**ARTHUR F. RYAN**–Chairman of the Board, Chief Executive Officer and President, Prudential since 1994 (current term expires June, 2006).  Member, Executive Committee.  Mr. Ryan is also a director of Regeneron Pharmaceuticals, Inc.

**PETER B. SAYRE–**Senior Vice President and Corporate Controller, Prudential since 2004.  Prior to 2004: Vice President, Chief Tax Officer.

**SHARON C. TAYLOR**–Senior Vice President, Prudential since 2002.  Prior to 2002: Vice President, Human Resources Communities of Practice.

******Principal officers of The Prudential Insurance Company of America hold comparable positions with Prudential Financial, Inc.

**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 and our Principal Accounting 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 Audit Committee of the Company consists of four members of its Board of Directors, who, in the business judgment of the Board of Directors, are independent within the meaning SEC rules.  In addition, the Board of Directors has determined that at least one member of the Audit Committee, Mr. Unruh, has the requisite experience to be designated an audit committee financial expert as that term is defined by rules of the SEC.  Specifically, Mr. Unruh has accounting and financial management expertise, which he gained through his experience as Senior Vice President, Finance, of a New York Stock Exchange listed company, as well as experience in financial management positions in other organizations and other similar positions.

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**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 9 of Notes to Financial Statements of the Partnership on page F-22.

**Item 14.  Principal Accounting Fees and Services.**

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

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     **PART IV**

**Item 15.  Exhibits, Financial Statement Schedules.**

| (a)                               |   | The following documents are    filed as part of this report:                                                                                                                                                                                                                                                                                                                                                                                                        |
|-----------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   |
|                              |   |  1.                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | Financial Statements |
|                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   |
|                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | See the Index to Financial Statements and    Supplementary Data on page F-1. |
|                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   |
|                              |   | 2.                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | Financial Statement Schedules |
|                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   |
|                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | The following financial statement schedules        of The Prudential Variable Contract Real Property Partnership should        be read in conjunction with the financial statements in Item 8 of this    Annual Report on Form 10-K: |
|                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   |
|                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | Schedule III. Real Estate Owned: Properties |
|                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | Schedule III. Real Estate Owned: Interest    in Properties |
|                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   |
|                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | See the Index to Financial Statements and    Supplementary Data on page F-1. |
|                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   |
|                              |   |  3.                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | Documents Incorporated by Reference |
|                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   |
|                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | See the following list of exhibits. |
|                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   |
|                              |   |  4.                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | Exhibits |
|                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   |
|                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | See the following list of exhibits. |
|                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   |
| (b)      |   | None.                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   |
| (c)                     |   | The following is a list of Exhibits to the        Registrant's Annual Report on Form 10-K for the fiscal year ended December        31, 2005. The Registrant will furnish a copy of any Exhibit listed below        to any security holder of the Registrant who requests it upon payment        of a fee of 15 cents per page. All Exhibits are either contained in this        Annual Report on Form 10-K or are incorporated by reference as indicated    below. |
|                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   |
|                              |   |  3.1                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | Amended Charter of The Prudential Insurance        Company of America, filed as Exhibit 3.1 to form 10-K, Registration Statement    No. 33-20083-01, filed March 31, 2003, and incorporated herein by reference. |
|                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   |
|                              |   |  3.2                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | Amended By-Laws of The Prudential Insurance        Company of America, filed as Exhibit 3.2 to form 10-K, Registration Statement    No. 33-20083-01, filed March 31, 2003, and incorporated herein by reference. |
|                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   |
|                              |   |  3.3                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | Resolution of the Board of Directors establishing        The Prudential Variable Contract Real Property Account, filed as Exhibit        (3C) to Form S-1, Registration Statement No. 33-20083, filed February        10, 1988, andincorporated herein by reference. |
|                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   |
|                              |   |  4.1                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | Revised Individual Variable Annuity Contract        filed as Exhibit A(4)(w) to Post-Effective Amendment No. 8 to Form N-4,        Registration Statement No. 2-80897, filed October 23, 1986, and incorporated    herein by reference. |
|                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   |
|                              |   |  4.2                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | Discovery Plus Contract, filed as Exhibit        (4)(a) to Form N-4, Registration Statement No. 33-25434, filed November    8, 1988, and incorporated herein by reference. |
|                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   |
|                              |   |  4.3                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | Custom VAL (previously named Adjustable Premium        VAL) Life Insurance Contracts with fixed death benefit, filed as Exhibit        1.A.(5) to Form S-6, Registration Statement No. 33-25372, filed November    4, 1988, and incorporated herein by reference. |
|                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   |
|                              |   |  4.4                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | Custom VAL (previously named Adjustable Premium        VAL) Life Insurance Contracts with variable death benefit, filed as Exhibit        1.A.(5) to Form S-6, Registration Statement No. 33-25372, filed November    4, 1988, and incorporated herein by reference. |
|                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   |
|                              |   |  4.5                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | Variable Appreciable Life Insurance Contracts        with fixed death benefit, filed as Exhibit 1.A.(5) to Pre-Effective Amendment        No. 1 to Form S-6, Registration Statement No. 33-20000, filed June 15,    1988, and incorporated herein by reference. |
|                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   |

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|   |   | 4.6    |   | Variable Appreciable Life Insurance Contracts        with variable death benefit, filed as Exhibit 1.A.(5) to Pre-Effective        Amendment No. 1 to Form S-6, Registration Statement No. 33-20000, filed    June 15, 1988, and incorporated herein by reference.                                                               |
|--------|--------|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |   |   |                                                                                                                                                                                                                                                                                                                             |
|   |   | 9.     |   | None.                                                                                                                                                                                                                                                                                                                            |
|   |   |   |   |                                                                                                                                                                                                                                                                                                                             |
|   |   | 10.1   |   | 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   |   | Partnership Agreement of The Prudential Variable Contract Real Property Partnership filed as Exhibit	(10C) to Pre-Effective Amendment No. 1 to Form S-1, Registration Statement No. 33-20083, filed    May 2, 1988, and incorporated herein by reference.                                                                        |
|   |   |   |   |                                                                                                                                                                                                                                                                                                                             |
|   |   | 11.    |   | Not applicable.                                                                                                                                                                                                                                                                                                                  |
|   |   |   |   |                                                                                                                                                                                                                                                                                                                             |
|   |   | 12.    |   | Not applicable.                                                                                                                                                                                                                                                                                                                  |
|   |   |   |   |                                                                                                                                                                                                                                                                                                                             |
|   |   | 16.    |   | None.                                                                                                                                                                                                                                                                                                                            |
|   |   |   |   |                                                                                                                                                                                                                                                                                                                             |
|   |   | 18.    |   | None.                                                                                                                                                                                                                                                                                                                            |
|   |   |   |   |                                                                                                                                                                                                                                                                                                                             |
|   |   | 22.    |   | Not applicable.                                                                                                                                                                                                                                                                                                                  |
|   |   |   |   |                                                                                                                                                                                                                                                                                                                             |
|   |   | 23.    |   | None.                                                                                                                                                                                                                                                                                                                            |
|   |   |   |   |                                                                                                                                                                                                                                                                                                                             |
|   |   | 24.    |   | Filed herewith as Exhibit 24.                                                                                                                                                                                                                                                                                                    |
|   |   |   |   |                                                                                                                                                                                                                                                                                                                             |
|   |   | 31.1   |   | Section 302 Certification of the Chief Executive    Officer.                                                                                                                                                                                                                                                                     |
|   |   |   |   |                                                                                                                                                                                                                                                                                                                             |
|   |   | 31.2   |   | Section 302 Certification of the Chief Financial    Officer.                                                                                                                                                                                                                                                                     |
|   |   |   |   |                                                                                                                                                                                                                                                                                                                             |
|   |   | 32.1   |   | Section 906 Certification of the Chief Executive    Officer.                                                                                                                                                                                                                                                                     |
|   |   |   |   |                                                                                                                                                                                                                                                                                                                             |
|   |   | 32.2   |   | Section 906 Certification of the Chief Financial    Officer.                                                                                                                                                                                                                                                                     |

26

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**SIGNATURES**

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

**THE PRUDENTIAL INSURANCE COMPANY OF AMERICA****in respect of****The Prudential Variable Contract Real Property Account****(Registrant)**

| Date: March 30, 2006 | By:    |   |                  |
|----------------------|--------|--------|-----------------------|
|                      |   |   |                       |
|                 |   |   | Richard J. Carbone    |
|                 |   |   | Senior Vice President |

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**             |
|--------------------|--------|----------------------------------------------|--------|----------------------------|
|                    |   |                                              |        |                            |
|               |   |                                         |   |                       |
|                    |   | Chairman of the Board, Chief                 |   |  March 30, 2006       |
| Arthur F. Ryan     |   | Executive Officer, President    and Director |   |                       |
|               |   |                                         |   |                       |
|                    |   |  Chief Financial Officer                |   |  March 30, 2006       |
| Richard J. Carbone |   |                                         |   |                       |
|               |   |                                         |   |                       |
|                    |        | Vice President                               |        |                            |
| Dennis G. Sullivan |   | (Principal Accounting Officer)               |   |   March 30, 2006 |

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|                    | **Title** | **Date**       |
|-------------------------|-----------|----------------|
|                    |      |           |
|                    |      |           |
| *****                   | Director  | March 30, 2006 |
|                         |      |           |
| Frederic K. Becker      |      |           |
|                    |      |           |
| *****                   | Director  | March 30, 2006 |
|                         |      |           |
| Gordon M. Bethune       |      |           |
|                    |      |           |
| *****                   | Director  | March 30, 2006 |
|                         |      |           |
| W. Gaston Caperton, III |      |           |
|                    |      |           |
| *****                   | Director  | March 30, 2006 |
|                         |      |           |
| Gilbert F. Casellas     |      |           |
|                    |      |           |
| *****                   | Director  | March 30, 2006 |
|                         |      |           |
| James G. Cullen         |      |           |
|                    |      |           |
| *****                   | Director  | March 30, 2006 |
|                         |      |           |
| William H. Gray, III    |      |           |
|                    |      |           |
| *****                   | Director  | March 30, 2006 |
|                         |      |           |
| Jon F. Hanson           |      |           |
|                    |      |           |
| *****                   | Director  | March 30, 2006 |
|                         |      |           |
| Constance J. Horner     |      |           |
|                    |      |           |
| *****                   | Director  | March 30, 2006 |
|                         |      |           |
| Karl J. Krapek          |      |           |
|                    |      |           |
| *****                   | Director  | March 30, 2006 |
|                         |      |           |
| James A. Unruh          |      |           |

|   |  **By: *** |   |                         |
|--------|-----------------|--------|------------------------------|
|   |            |   |                              |
|   |            |   | **Clifford E. Kirsch**       |
|   |            |   |  **(Attorney-in-Fact)** |

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**THE PRUDENTIAL VARIABLE CONTRACT      REAL PROPERTY ACCOUNT**

**(Registrant)**

**INDEX**

|   |   |                                                                    |                                                                                            |   |   | **Page** |
|--------|--------|-------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------|--------|--------|----------|
|   |   |                                                                    |                                                                                            |   |   |     |
| **A.** |   | **THE PRUDENTIAL VARIABLE CONTRACT          REAL PROPERTY ACCOUNT**     |                                                                                            |
|   |   |                                                                    |                                                                                            |   |   |     |
|   |   | Financial Statements:                                                   |                                                                                            |   |
|   |   |                                                                    |                                                                                            |   |   |     |
|   |   |                                                                    | Report of Independent Registered        Public Accounting Firm                                  | F-2    |
|   |   |                                                                    |                                                                                            |   |   |     |
|   |   |                                                                    | Statements of Net Assets – December        31, 2005 and 2004                               | F-3    |
|   |   |                                                                    |                                                                                            |   |   |     |
|   |   |                                                                    | Statements of Operations – Years        Ended December 31, 2005, 2004, 2003                | F-3    |
|   |   |                                                                    |                                                                                            |   |   |     |
|   |   |                                                                    | Statements of Changes in Net        Assets – Years Ended December 31, 2005, 2004, 2003     | F-3    |
|   |   |                                                                    |                                                                                            |   |   |     |
|   |   |                                                                    | Notes to Financial Statements                                                                   | F-4    |
|   |   |                                                                    |                                                                                            |   |   |     |
| **B.** |   | **THE PRUDENTIAL VARIABLE CONTRACT          REAL PROPERTY PARTNERSHIP** |                                                                                            |
|   |   |                                                                    |                                                                                            |   |   |     |
|   |   | Financial Statements:                                                   |                                                                                            |
|   |   |                                                                    |                                                                                            |   |   |     |
|   |   |                                                                    | Report of Independent Registered        Public Accounting Firm                                  | F-8    |
|   |   |                                                                    |                                                                                            |   |   |     |
|   |   |                                                                    | Report of Independent Registered        Public Accounting Firm on Financial Statement Schedules | F-9    |
|   |   |                                                                    |                                                                                            |   |   |     |
|   |   |                                                                    | Statements of Assets and Liabilities – December        31, 2005 and 2004                   | F-10   |
|   |   |                                                                    |                                                                                            |   |   |     |
|   |   |                                                                    | Statements of Operations – Years        Ended December 31, 2005, 2004 and 2003             | F-11   |
|   |   |                                                                    |                                                                                            |   |   |     |
|   |   |                                                                    | Statements of Changes in Net        Assets – Years Ended December 31, 2005, 2004 and 2003  | F-12   |
|   |   |                                                                    |                                                                                            |   |   |     |
|   |   |                                                                    | Statements of Cash Flows – Years        Ended December 31, 2005, 2004 and 2003             | F-13   |
|   |   |                                                                    |                                                                                            |   |   |     |
|   |   |                                                                    | Schedule of Investments – December        31, 2005 and 2004                                | F-14   |
|   |   |                                                                    |                                                                                            |   |   |     |
|   |   |                                                                    | Notes to Financial Statements                                                                   | F-16   |
|   |   |                                                                    |                                                                                            |   |   |     |
|   |   | Financial Statement Schedules:                                          |                                                                                            |
|   |   |                                                                    |                                                                                            |   |   |     |
|   |   |                                                                    | For the period ended December        31, 2005                                                   |   |
|   |   |                                                                    |                                                                                            |   |   |     |
|   |   |                                                                    | Schedule III – Real Estate        Owned: Properties                                        | F-26   |
|   |   |                                                                    |                                                                                            |   |   |     |
|   |   |                                                                    | Schedule IV– Mortgage Loans        on Real Estate                                          | F-27   |

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

F-1

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**Report of Independent Registered      Public Accounting Firm**

|  To        the Contract Owners of |
|----------------------------------------|

|  The        Prudential Variable Contract Real Property Account |
|---------------------------------------------------------------------|

|  and        the Board of Directors of |
|--------------------------------------------|

|  The        Prudential Insurance Company of America |
|----------------------------------------------------------|

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

|                                    |   |
|-----------------------------------------|--------|
|  PricewaterhouseCoopers        LLP |

|  New        York, New York |
|---------------------------------|

|  March        30, 2006 |
|-----------------------------|

F-2

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| **FINANCIAL          STATEMENTS OF**                                                         |   |
|----------------------------------------------------------------------------------------------|--------|
| **PRUDENTIAL          VARIABLE CONTRACT REAL PROPERTY ACCOUNT**                              |   |
|                                                                                         |   |   |   |   |   |   |   |   |   |   |   |
| **STATEMENT OF NET ASSETS**                                                                  |   |   |   |   |   |   |   |   |   |   |   |
| December 31, 2005 and 2004                                                                   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                         |        | **2005** |   |  | **2004** |   |   |   |   |   |   |
|                                                                                         |        |  |   |  |  |   |   |   |   |   |   |
| **ASSETS**                                                                                   |   |   |   |   |   |   |   |   |   |   |   |
|      Investment        in The Prudential Variable Contract          |   |   |   |   |   |   |   |   |   |   |   |
|           Real        Property Partnership | $      | 83,277,385 |   | $ | 75,689,330 |   |   |   |   |   |   |
|                                                                                         |        |  |   |  |  |   |   |   |   |   |   |
| Net Assets                                                                                   | $      | 83,277,385 |   | $ | 75,689,330 |   |   |   |   |   |   |
|                                                                                         |        |  |   |  |  |   |   |   |   |   |   |
|                                                                                         |   |   |   |   |   |   |   |   |   |   |   |
| **NET ASSETS,**representing:                                                                 |   |   |   |   |   |   |   |   |   |   |   |
|      Equity        of contract owners                               | $      | 60,796,985 |   | $ | 54,956,278 |   |   |   |   |   |   |
|      Equity        of The Prudential Insurance Company of America   |        | 22,480,400 |   |  | 20,733,052 |   |   |   |   |   |   |
|                                                                                         |        |  |   |  |  |   |   |   |   |   |   |
|                                                                                         | $      | 83,277,385 |   | $ | 75,689,330 |   |   |   |   |   |   |
|                                                                                         |        |  |   |  |  |   |   |   |   |   |   |
|                                                                                         |   |   |   |   |   |   |   |   |   |   |   |
| Units outstanding                                                                            |        | 36,749,552 |   |  | 37,494,920 |   |   |   |   |   |   |
|                                                                                         |        |  |   |  |  |   |   |   |   |   |   |
|                                                                                         |   |   |   |   |   |   |   |   |   |   |   |
| Portfolio shares held                                                                        |   | 2,814,362 |   |   | 2,894,367 |   |   |   |   |   |   |
| Portfolio net asset value per        share                                                   | $      | 29.59 |   | $ | 26.15 |   |   |   |   |   |   |
|                                                                                         |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                         |   |   |   |   |   |   |   |   |   |   |   |
| **STATEMENT OF OPERATIONS**                                                                  |   |   |   |   |   |   |   |   |   |   |   |
| For the periods ended December        31, 2005, 2004 and 2003                                |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                         |        | **2005** |   |  | **2004** |   |  | **2003** |   |   |   |
|                                                                                         |        |  |   |  |  |   |  |  |   |   |   |
| **INVESTMENT INCOME**                                                                        |   |   |   |   |   |   |   |   |   |   |   |
| Net investment income from Partnership        operations                                     | $      | 3,737,105 |   | $ | 3,162,352 |   | $ | 4,287,463 |   |   |   |
|                                                                                         |        |  |   |  |  |   |  |  |   |   |   |
| **EXPENSES**                                                                                 |   |   |   |   |   |   |   |   |   |   |   |
| Charges to contract owners for        assuming mortality risk and                            |   |   |   |   |   |   |   |   |   |   |   |
|      expense        risk and for administration                     |        | 460,468 |   |  | 435,006 |   |  | 425,598 |   |   |   |
|                                                                                         |        |  |   |  |  |   |  |  |   |   |   |
| **NET INVESTMENT INCOME**                                                                    |        | 3,276,637 |   |  | 2,727,346 |   |  | 3,861,865 |   |   |   |
|                                                                                         |        |  |   |  |  |   |  |  |   |   |   |
|                                                                                         |   |   |   |   |   |   |   |   |   |   |   |
| **NET REALIZED AND UNREALIZED          GAIN**                                                |   |   |   |   |   |   |   |   |   |   |   |
|      **LOSS)          ON INVESTMENTS**                              |   |   |   |   |   |   |   |   |   |   |   |
| Net change in unrealized gain        (loss) on investments from Partnership                  |   | 3,745,793 |   |   | 628,942 |   |   | (2,801,446 | ) |   |   |
| Realized gain (loss) on sale        of investments from Partnership                          |        | 2,520,876 |   |  | 701,429 |   |  | 188,273 |   |   |   |
|                                                                                         |        |  |   |  |  |   |  |  |   |   |   |
| **NET GAIN (LOSS) ON INVESTMENTS**                                                           |        | 6,266,669 |   |  | 1,330,371 |   |  | (2,613,173 | ) |   |   |
|                                                                                         |        |  |   |  |  |   |  |  |   |   |   |
|                                                                                         |   |   |   |   |   |   |   |   |   |   |   |
| **NET INCREASE IN NET ASSETS**                                                               |   |   |   |   |   |   |   |   |   |   |   |
|      **RESULTING          FROM OPERATIONS**                         | $      | 9,543,306 |   | $ | 4,057,717 |   | $ | 1,248,692 |   |   |   |
|                                                                                         |        |  |   |  |  |   |  |  |   |   |   |
|                                                                                         |   |   |   |   |   |   |   |   |   |   |   |
| **STATEMENT OF CHANGES IN NET          ASSETS**                                              |   |   |   |   |   |   |   |   |   |   |   |
| For the periods ended December        31, 2005, 2004 and 2003                                |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                         |        | **2005** |   |  | **2004** |   |  | **2003** |   |   |   |
|                                                                                         |        |  |   |  |  |   |  |  |   |   |   |
| **OPERATIONS**                                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Net investment income                                                                        | $      | 3,276,637 |   | $ | 2,727,346 |   | $ | 3,861,865 |   |   |   |
| Net change in unrealized gain        (loss) on investments in Partnership                    |   | 3,745,793 |   |   | 628,942 |   |   | (2,801,446 | ) |   |   |
| Net realized gain (loss) on        sale of investments in Partnership                        |        | 2,520,876 |   |  | 701,429 |   |  | 188,273 |   |   |   |
|                                                                                         |        |  |   |  |  |   |  |  |   |   |   |
|                                                                                         |   |   |   |   |   |   |   |   |   |   |   |
| **NET INCREASE IN NET ASSETS**                                                               |   |   |   |   |   |   |   |   |   |   |   |
|      **RESULTING          FROM OPERATIONS**                         |        | 9,543,306 |   |  | 4,057,717 |   |  | 1,248,692 |   |   |   |
|                                                                                         |        |  |   |  |  |   |  |  |   |   |   |
|                                                                                         |   |   |   |   |   |   |   |   |   |   |   |
| **CAPITAL TRANSACTIONS**                                                                     |   |   |   |   |   |   |   |   |   |   |   |
| Net withdrawals by contract        owners                                                    |   | (841,882 | ) |   | (1,350,431 | ) |   | (670,727 | ) |   |   |
| Net withdrawals by The Prudential        Insurance Company of America                        |        | (1,113,369 | ) |  | (666,590 | ) |  | (1,379,401 | ) |   |   |
|                                                                                         |        |  |   |  |  |   |  |  |   |   |   |
|                                                                                         |   |   |   |   |   |   |   |   |   |   |   |
| **NET DECREASE IN NET ASSETS**                                                               |   |   |   |   |   |   |   |   |   |   |   |
|      **RESULTING          FROM CAPITAL TRANSACTIONS**               |        | (1,955,251 | ) |  | (2,017,021 | ) |  | (2,050,128 | ) |   |   |
|                                                                                         |        |  |   |  |  |   |  |  |   |   |   |
|                                                                                         |   |   |   |   |   |   |   |   |   |   |   |
| **TOTAL INCREASE (DECREASE)          IN NET ASSETS**                                         |   | 7,588,055 |   |   | 2,040,696 |   |   | (801,436 | ) |   |   |
|                                                                                         |   |   |   |   |   |   |   |   |   |   |   |
| **NET ASSETS**                                                                               |   |   |   |   |   |   |   |   |   |   |   |
|      Beginning        of period                                     |        | 75,689,330 |   |  | 73,648,634 |   |  | 74,450,070 |   |   |   |
|                                                                                         |        |  |   |  |  |   |  |  |   |   |   |
|      End        of period                                           | $      | 83,277,385 |   | $ | 75,689,330 |   | $ | 73,648,634 |   |   |   |
|                                                                                         |        |  |   |  |  |   |  |  |   |   |   |
|                                                                                         |   |   |   |   |   |   |   |   |   |   |   |

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

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**NOTES TO THE FINANCIAL STATEMENTS      OF  PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY ACCOUNT**December 31, 2005

**Note 1: General**

The Prudential Variable Contract    Real Property Account (“Account”) was established on November    20, 1986 by resolution of the Board of Directors of The Prudential Insurance    Company of America (“Prudential”), which is 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 Prudential’s    other assets. The Account is used to fund benefits under certain variable    life insurance and variable annuity contracts issued by Prudential. These    products are Variable Appreciable Life (“PVAL and PVAL $100,000+ Face    Value”), Discovery Plus (“PDISCO+”), and Variable Investment    Plan (“VIP”).

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 variable    annuity contracts. The Account, along with the Pruco Life Variable Contract    Real Property Account and the Pruco Life of New Jersey Variable Contract    Real Property Account, are the sole investors in the Partnership. These financial    statements should be read in conjunction with the financial statements of    the Partnership. 

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

**Note 2: Summary of Significant      Accounting Policies**

**A.   Basis of Accounting**

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

**B.   Investment      in Partnership Interest**

The investment in the Partnership    is based on the Account’s proportionate interest of the Partnership’s    market value. At December 31, 2005 and 2004 the Account’s interest    in the Partnership was 40.6% or 2,814,362 shares and 40.6% or 2,894,367 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      The Prudential Insurance Company of America**

Prudential 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.

F-4

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**Note 3: Taxes**

Prudential 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.

**Note 4: Net Withdrawals by Contract      Owners**

Net contract owner withdrawals for    the real estate investment option in The Prudential Insurance Company of    America's variable insurance and variable annuity products for the years    ended December 31, 2005, 2004 and 2003 were as follows:

| **2005:**                                                  |   |          |   |   |                     |   |   |       |   |
|------------------------------------------------------------|--------|---------------|--------|--------|--------------------------|--------|--------|------------|--------|
|                                                       |   | **VIP &** |   |   | **PVAL & PVAL**      |   |   |       |   |
|                                                       |   | **PDISCO+**   |   |   | **$100,000+ face value** |   |   | **TOTAL**  |   |
|                                                            |        |               |        |        |                          |        |        |            |        |
| Contract Owner Net Payments:                               | $      | 12,796        |   | $      | 3,991,805                |   | $      | 4,004,601  |   |
| Policy Loans:                                              |   | 0             |   |   | (1,160,988               | )      |   | (1,160,988 | )      |
| Policy Loan Repayments and Interest:                       |   | 0             |   |   | 1,194,065                |   |   | 1,194,065  |   |
| Surrenders, Withdrawals, and        Death Benefits:        |   | (554,301      | )      |   | (2,603,294               | )      |   | (3,157,595 | )      |
| Net Transfers To Other Subaccounts                         |   |          |   |   |                     |   |   |       |   |
|      or        Fixed Rate Option: |   | 22,921        |   |   | 1,033,843                |   |   | 1,056,764  |   |
| Administrative and Other Charges:                          |   | (1,695        | )      |   | (2,777,034               | )      |   | (2,778,729 | )      |
|                                                            |        |               |        |        |                          |        |        |            |        |
| **Net Withdrawals by Contract          Owners**            | $      | (520,279      | )      | $      | (321,603                 | )      | $      | (841,882   | )      |
|                                                            |        |               |        |        |                          |        |        |            |        |
|                                                       |   |          |   |   |                     |   |   |       |   |
| **2004:**                                                  |   |          |   |   |                     |   |   |       |   |
|                                                       |   | **VIP &** |   |   | **PVAL & PVAL**      |   |   |       |   |
|                                                       |   | **PDISCO+**   |   |   | **$100,000+ face value** |   |   | **TOTAL**  |   |
|                                                            |        |               |        |        |                          |        |        |            |        |
| Contract Owner Net Payments:                               | $      | 33,557        |   | $      | 4,168,816                |   | $      | 4,202,373  |   |
| Policy Loans:                                              |   | 0             |   |   | (1,144,139               | )      |   | (1,144,139 | )      |
| Policy Loan Repayments and Interest:                       |   | 0             |   |   | 1,219,695                |   |   | 1,219,695  |   |
| Surrenders, Withdrawals, and        Death Benefits:        |   | (476,794      | )      |   | (2,385,471               | )      |   | (2,862,265 | )      |
| Net Transfers To Other Subaccounts                         |   |          |   |   |                     |   |   |       |   |
|      or        Fixed Rate Option: |   | 263,856       |   |   | (166,388                 | )      |   | 97,468     |   |
| Administrative and Other Charges:                          |   | (1,927        | )      |   | (2,861,636               | )      |   | (2,863,563 | )      |
|                                                            |        |               |        |        |                          |        |        |            |        |
| **Net Withdrawals by Contract          Owners**            | $      | (181,308      | )      | $      | (1,169,123               | )      | $      | (1,350,431 | )      |
|                                                            |        |               |        |        |                          |        |        |            |        |
|                                                       |   |          |   |   |                     |   |   |       |   |
| **2003:**                                                  |   |          |   |   |                     |   |   |       |   |
|                                                       |   | **VIP &** |   |   | **PVAL & PVAL**      |   |   |       |   |
|                                                       |   | **PDISCO+**   |   |   | **$100,000+ face value** |   |   | **TOTAL**  |   |
|                                                            |        |               |        |        |                          |        |        |            |        |
| Contract Owner Net Payments:                               | $      | 11,672        |   | $      | 4,472,957                |   | $      | 4,484,629  |   |
| Policy Loans:                                              |   | 0             |   |   | (1,195,131               | )      |   | (1,195,131 | )      |
| Policy Loan Repayments and Interest:                       |   | 0             |   |   | 1,316,067                |   |   | 1,316,067  |   |
| Surrenders, Withdrawals, and        Death Benefits:        |   | (765,214      | )      |   | (2,989,212               | )      |   | (3,754,426 | )      |
| Net Transfers To Other Subaccounts                         |   |          |   |   |                     |   |   |       |   |
|      or        Fixed Rate Option: |   | 247,041       |   |   | 1,371,135                |   |   | 1,618,176  |   |
| Administrative and Other Charges:                          |   | (2,370        | )      |   | (3,137,672               | )      |   | (3,140,042 | )      |
|                                                            |        |               |        |        |                          |        |        |            |        |
| **Net Withdrawals by Contract          Owners**            | $      | (508,871      | )      | $      | (161,856                 | )      | $      | (670,727   | )      |
|                                                            |        |               |        |        |                          |        |        |            |        |

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| **Note 5: Unit Activity**                                                                                                                                                            |   |       |   |   |                              |                                 |   |                                 |   |                                 |       |   |   |       |   |   |                               |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------|--------|--------|-----------------------------------|--------------------------------------|--------|--------------------------------------|--------|--------------------------------------|------------|--------|--------|------------|--------|--------|------------------------------------|--------|
|                                                                                                                                                                                 |   |       |   |   |                              |                                 |   |                                 |   |                                 |       |   |   |       |   |   |                               |   |
| Transactions in        units for the years ended December 31, 2005, 2004 and 2003 were as follows:                                                          |
|                                                                                                                                                                                 |   |       |   |   |                              |                                 |   |                                 |   |                                 |       |   |   |       |   |   |                               |   |
| **2005:**                                                                                                                                                                            |   |       |   |   |                              |                                 |   |                                 |   |                                 |       |   |   |       |   |   |                               |   |
|                                                                                                                                                                                 |   |       |   |   |                              |                                 |   | **PDISCO+**                          |   |                                 | **VIP**    |   |   | **PVAL**   |   |   | **PVAL $100,000+      face value** |   |
|                                                                                                                                                                                      |        |            |        |        |                                   |                                      |        |                                      |        |                                      |            |        |        |            |        |        |                                    |        |
| **Company Contributions:**                                                                                                                                                           |   | 1,373,623  |   |   | **Contract Owner Contributions:** |                                 |   | 51,235                               |   |                                 | 66,652     |   |   | 1,592,159  |   |   | 1,430,019                          |   |
| **Company Redemptions:**                                                                                                                                                             |   | (1,709,303 | )      |   | **Contract Owner Redemptions:**   |                                 |   | (224,793                             | )      |                                 | (145,446   | )      |   | (1,756,695 | )      |   | (1,422,819                         | )      |
|                                                                                                                                                                                 |   |       |   |   |                              |                                 |   |                                 |   |                                 |       |   |   |       |   |   |                               |   |
| **2004:**                                                                                                                                                                            |   |       |   |   |                              |                                 |   |                                 |   |                                 |       |   |   |       |   |   |                               |   |
|                                                                                                                                                                                 |   |       |   |   |                              |                                 |   | **PDISCO+**                          |   |                                 | **VIP**    |   |   | **PVAL**   |   |   | **PVAL $100,000+      face value** |   |
|                                                                                                                                                                                      |        |            |        |        |                                   |                                      |        |                                      |        |                                      |            |        |        |            |        |        |                                    |        |
| **Company Contributions:**                                                                                                                                                           |   | 1,721,406  |   |   | **Contract Owner Contributions:** |                                 |   | 251,872                              |   |                                 | 74,919     |   |   | 1,684,883  |   |   | 1,762,982                          |   |
| **Company Redemptions:**                                                                                                                                                             |   | (1,918,713 | )      |   | **Contract Owner Redemptions:**   |                                 |   | (256,989                             | )      |                                 | (169,082   | )      |   | (1,934,487 | )      |   | (2,106,617                         | )      |
|                                                                                                                                                                                 |   |       |   |   |                              |                                 |   |                                 |   |                                 |       |   |   |       |   |   |                               |   |
| **2003:**                                                                                                                                                                            |   |       |   |   |                              |                                 |   |                                 |   |                                 |       |   |   |       |   |   |                               |   |
|                                                                                                                                                                                 |   |       |   |   |                              |                                 |   | **PDISCO+**                          |   |                                 | **VIP**    |   |   | **PVAL**   |   |   | **PVAL $100,000+      face value** |   |
|                                                                                                                                                                                      |        |            |        |        |                                   |                                      |        |                                      |        |                                      |            |        |        |            |        |        |                                    |        |
| **Company Contributions:**                                                                                                                                                           |   | 1,930,945  |   |   | **Contract Owner Contributions:** |                                 |   | 176,756                              |   |                                 | 70,296     |   |   | 1,897,546  |   |   | 1,976,682                          |   |
| **Company Redemptions:**                                                                                                                                                             |   | (2,529,430 | )      |   | **Contract Owner Redemptions:**   |                                 |   | (278,131                             | )      |                                 | (249,884   | )      |   | (2,175,255 | )      |   | (1,791,690                         | )      |
|                                                                                                                                                                                 |   |       |   |   |                              |                                 |   |                                 |   |                                 |       |   |   |       |   |   |                               |   |
| **Note 6: Purchases          and Sales of Investments**                                                                                           |
|                                                                                                                                                                                 |   |       |   |   |                              |                                 |   |                                 |   |                                 |       |   |   |       |   |   |                               |   |
| The aggregate costs        of purchases and proceeds from sales of investments in the Partnership        for the years ended December 31, 2005, 2004 and 2003 were as follows:  |   |
|                                                                                                                                                                                 |   |       |   |   |                              |                                 |   |                                 |   |                                 |       |   |   |       |   |   |                               |   |
|                                                                                                                                                                                 |   |       |   |   |                              |  **December          31, 2005** |   |  **December          31, 2004** |   |  **December          31, 2003** |       |   |   |       |
|                                                                                                                                                                                 |   |       |   |   |                              |                                      |   |                                      |   |                                      |       |   |   |       |
| **Purchases:**                                                                                                                                                                       |   |       |   |   |                              | $                                    |   | 0                                    |   | $                                    | 0          |   | $      | 0          |   |   |                               |   |
| **Sales:**                                                                                                                                                                           |   |       |   |   |                              | $                                    |   | (2,415,719                           | )      | $                                    | (2,452,028 | )      | $      | (2,475,726 | )      |   |                               |   |

F-6

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**Note 7: Financial Highlights**

Prudential Insurance Company of America    (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 Prudential Insurance Company of    America have the lowest and highest total expense ratio. The summary may    not reflect the minimum and maximum contract charges offered by the Company    as contract owners may not have selected all available and applicable contract    options as discussed in Note 1. The table reflects contract owner units only.

| ** **               |   | **At year ended** |   | **For year ended** |
|--------------------------|--------|-------------------|--------|--------------------|
|                     |   |                   |   |                    |
| ** **               |   | **Units**         |   |               | **Unit Value** |   |   | **Net Assets** |   | **Investment** |   |   | **Expense Ratio **** |   | **Total Return ***** |
| ** **               |   | **(000’s)** |   |               | **Lowest- Highest** |   |   | **(000’s)** |   | **Income Ratio *** |   |   | **Lowest-Highest** |   | **Lowest-Highest** |
|                     |   |                   |   |               |  |   |  |  |   |  |   |   |  |   |  |
| December 31,        2005 |   | 26,664            |   |               | $2.154332        to $2.356938 |   |   | $     60,797 |   | 4.64 | % |   | 0.60% to        1.20% |   | 11.82% to        12.48% |
| December 31,        2004 |   | 27,073            |   |               | $1.92668        to $2.09540 |   |   | $     54,956 |   | 4.15 | % |   | 0.60% to        1.20% |   | 4.81% to        5.43% |
| December 31,        2003 |   | 27,766            |   |               | $1.83832        to $1.98753 |   |   | $     53,574 |   | 5.77 | % |   | 0.60% to        1.20% |   | 1.03% to        1.63% |
| December 31,        2002 |   | 28,139            |   |               | $1.81952        to $1.95560 |   |   | $     53,487 |   | 5.59 | % |   | 0.60% to        1.20% |   | 0.02% to        0.62% |
| December 31,        2001 |   | 29,263            |   |               | $1.81915        to $1.94357 |   |   | $     55,383 |   | 5.91 | % |   | 0.60% to        1.20% |   | 3.55% to 4.17% |

The table above reflects information    for units held by contract owners. Prudential also maintains a position in    the Real Property Account, to provide for property acquisitions and capital    expenditure funding needs. Prudential held 10,086,116, 10,421,720, 10,619,027,    11,217,512 and 13,675,143 units representing $22,480,400, $20,733,052, $20,075,011,    $20,962,590 and $25,462,204 of net assets as of December 31, 2005, 2004,    2003, 2002 and 2001, respectively. Charges for mortality risk, expense risk    and administrative expenses are used by Prudential to purchase additional    units in its account resulting in no impact to 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 inthe unit values.

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

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

**Charges and Expenses**

**A. Mortality Risk and Expense      Risk Charges**

Mortality risk and expense risk charges    are determined daily using an effective annual rate of 1.2%, 0.9%, 0.6% and    1.2% for PDISCO+, PVAL, PVAL $100,000 + face value, and VIP, 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 Prudential. The mortality risk and expense risk charges are assessed    through reduction in unit values.

**B. 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 PVAL and PVAL $100,000 + face value are (1) state    premium taxes; (2) sales charges, up to 0.50%, which are deducted in order    to compensate Prudential for the cost of selling the contract and (3) transaction    costs which 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 Prudential for the guaranteed    minimum death benefit risk. These charges are assessed through the redemption    of units.

**C. Deferred Sales Charge**

A deferred sales charge, applicable    to PVAL and PVAL $100,000 + face value and not to exceed 50% of the first    year's primary annual premium for PVAL cotracts, is imposed upon surrenders    of certain variable life insurance contracts to compensate Prudential 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. No    sales charge will be imposed after the tenth year of the contract. No sales    charge will be imposed on death benefits. 

Also a deferred sales charge is imposed    upon the withdrawals of certain purchase payments to compensate Prudential    for sales and other marketing expenses for PDISCO+ and VIP. The amount of    any sales charge will depend on the amount withdrawn and the number of contract    years that have elapsed since the contract owner or annuitant made the purchase    payments deemed to be withdrawn. No sales charge is made against the withdrawal    of investment income. A reduced sales charge is imposed in connection with    the withdrawal of a purchase payment to effect an annuity if three or more    contract years have elapsed since the contract date, unless the annuity effected    is an annuity certain. No sales charge is imposed upon death benefit payments    or upon transfers made between subaccounts. A deferred sales charge is assesed    through the redemption of units.

**D. Partial Withdrawal Charge**

A charge is imposed by Prudential    on partial withdrawals of the cash surrender value for PVAL and PVAL $100,000    + face value. 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.

**E. Annual Maintenance Charge**

An annual maintenance charge, applicable    to PDISCO+ and VIP, of $30 will be deducted if and only if the contract fund    is less than $10,000 on a contract anniversary or at the time a full withdrawal    is effected, including a withdrawal to effect an annuity. The charge is made    by reducing accumulation units credited to a contract owner’s account.

**Note 8: Related Party**

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

 

F-7

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**Report of Independent Accountants**

To the Partners of The PrudentialVariable Contract Real Property Partnership:

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

PricewaterhouseCoopers LLP  New York, New YorkFebruary 28, 2006

F-8

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**Report of Independent Accountants      on**

**Financial Statement Schedules**

To the Partners of The PrudentialVariable Contract Real Property Partnership:

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

PricewaterhouseCoopers LLP  New York, New YorkFebruary 28, 2006

F-9

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**THE          PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP**CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES****

|                                                                                                                                        |   | **December 31, 2005** |   |   | **December 31, 2004** |   |
|---------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------|--------|--------|-----------------------|--------|
|                                                                                                                                        |        |                       |   |        |                       |   |
| **ASSETS**                                                                                                                                  |   |                  |   |   |                  |   |
|                                                                                                                                        |   |                  |   |   |                  |   |
| REAL ESTATE INVESTMENTS – At          estimated market value:                                                                          |   |                  |   |   |                  |   |
|      Real          estate and improvements                                                                         |   |                  |   |   |                  |   |
|           (cost:          12/31/2005 – $183,767,148; 12/31/2004 – $224,584,885) | $      | 178,628,645           |   | $      | 203,246,069           |   |
|      Real          estate partnerships (cost: 12/31/2005 – $18,578,394;                                       |   |                  |   |   |                  |   |
|           12/31/2004 – $11,286,826)                                                  |   | 14,348,816            |   |   | 12,126,566            |   |
|      Mortgage          and other loans receivable (cost: 12/31/2005 – $4,277,769                              |   |                  |   |   |                  |   |
|           12/31/2004 – $1,332,060)                                                   |   | 4,277,769             |   |   | 1,332,060             |   |
|                                                                                                                                        |        |                       |   |        |                       |   |
|                                                                                                                                        |   |                  |   |   |                  |   |
|           Total          real estate investments                                          |   | 197,255,230           |   |   | 216,704,695           |   |
|                                                                                                                                        |   |                  |   |   |                  |   |
| CASH AND CASH EQUIVALENTS                                                                                                                   |   | 45,467,485            |   |   | 17,557,182            |   |
|                                                                                                                                        |   |                  |   |   |                  |   |
| OTHER ASSETS, NET                                                                                                                           |   | 3,292,400             |   |   | 6,313,734             |   |
|                                                                                                                                        |        |                       |   |        |                       |   |
|           Total          assets                                                           | $      | 246,015,115           |   | $      | 240,575,611           |   |
|                                                                                                                                        |        |                       |   |        |                       |   |
|                                                                                                                                        |   |                  |   |   |                  |   |
| **LIABILITIES & PARTNERS'            EQUITY**                                                                                           |   |                  |   |   |                  |   |
|                                                                                                                                        |   |                  |   |   |                  |   |
| INVESTMENT LEVEL DEBT                                                                                                                       | $      | 33,195,607            |   | $      | 43,773,767            |   |
|                                                                                                                                        |   |                  |   |   |                  |   |
| ACCOUNTS PAYABLE AND ACCRUED          EXPENSES                                                                                              |   | 2,545,052             |   |   | 3,096,006             |   |
|                                                                                                                                        |   |                  |   |   |                  |   |
| DUE TO AFFILIATES                                                                                                                           |   | 760,926               |   |   | 721,419               |   |
|                                                                                                                                        |   |                  |   |   |                  |   |
| OTHER LIABILITIES                                                                                                                           |   | 472,336               |   |   | 622,900               |   |
|                                                                                                                                        |   |                  |   |   |                  |   |
| MINORITY INTEREST                                                                                                                           |   | 3,638,343             |   |   | 5,638,458             |   |
|                                                                                                                                        |        |                       |   |        |                       |   |
|                                                                                                                                        |   |                  |   |   |                  |   |
|           Total          liabilities                                                      |   | 40,612,264            |   |   | 53,852,550            |   |
|                                                                                                                                        |        |                       |   |        |                       |   |
|                                                                                                                                        |   |                  |   |   |                  |   |
| COMMITMENTS AND CONTINGENCIES                                                                                                               |   |                  |   |   |                  |   |
|                                                                                                                                        |   |                  |   |   |                  |   |
| PARTNERS' EQUITY                                                                                                                            |   | 205,402,851           |   |   | 186,723,061           |   |
|                                                                                                                                        |        |                       |   |        |                       |   |
|                                                                                                                                        |   |                  |   |   |                  |   |
|           Total          liabilities and partners' equity                                 | $      | 246,015,115           |   | $      | 240,575,611           |   |
|                                                                                                                                        |        |                       |   |        |                       |   |
|                                                                                                                                        |   |                  |   |   |                  |   |
| NUMBER OF SHARES OUTSTANDING          AT END OF PERIOD                                                                                      |   | 6,941,631             |   |   | 7,140,308             |   |
|                                                                                                                                        |        |                       |   |        |                       |   |
|                                                                                                                                        |   |                  |   |   |                  |   |
| SHARE VALUE AT END OF PERIOD                                                                                                                | $      | 29.59                 |   | $      | 26.15                 |   |
|                                                                                                                                        |        |                       |   |        |                       |   |
|                                                                                                                                        |   |                  |   |   |                  |   |
|                                                                                                                                        |   |                  |   |   |                  |   |
| **The accompanying            notes are an integral part of these consolidated financial statements.**                            |
|                                                                                                                                        |   |                  |   |   |                  |   |

F-10

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**THE          PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP  CONSOLIDATED STATEMENTS OF OPERATIONS**

|                                                                                                                                                 |   | **Year Ended            December 31,** |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------|--------|
|                                                                                                                                                 |        |                                   |
|                                                                                                                                                 |   | **2005**                               |   |   | **2004** |   |   | **2003** |   |
|                                                                                                                                                 |        |                                        |   |  |  |   |  |  |   |
| INVESTMENT INCOME:                                                                                                                                   |   |                                   |   |   |   |   |   |   |   |
| Revenue from real estate          and improvements                                                                                                   | $      | 27,087,813                             |   | $ | 27,810,539 |   | $ | 26,217,891 |   |
| Equity in income of real          estate partnership                                                                                                 |   | 252,618                                |   |   | 629,190 |   |   | 560,660 |   |
| Interest and equity income          on mortgage                                                                                                      |   |                                   |   |   |   |   |   |   |   |
|      and          other loans receivable                                                                                    |   | 281,134                                |   |   | 138,296 |   |   | — |   |
| Income from other real estate          investments                                                                                                   |   | —                                 |   |   | 246,764 |   |   | — |   |
| Interest on short-term investments                                                                                                                   |   | 1,022,706                              |   |   | 251,374 |   |   | 281,943 |   |
|                                                                                                                                                 |        |                                        |   |  |  |   |  |  |   |
|                                                                                                                                                 |   |                                   |   |   |   |   |   |   |   |
|      Total          investment income                                                                                       |   | 28,644,271                             |   |   | 29,076,163 |   |   | 27,060,494 |   |
|                                                                                                                                                 |        |                                        |   |  |  |   |  |  |   |
|                                                                                                                                                 |   |                                   |   |   |   |   |   |   |   |
| INVESTMENT EXPENSES:                                                                                                                                 |   |                                   |   |   |   |   |   |   |   |
| Operating                                                                                                                                            |   | 7,420,509                              |   |   | 7,545,335 |   |   | 5,116,001 |   |
| Investment management fee                                                                                                                            |   | 2,845,519                              |   |   | 2,666,103 |   |   | 2,493,957 |   |
| Real estate taxes                                                                                                                                    |   | 2,382,626                              |   |   | 2,687,018 |   |   | 2,590,600 |   |
| Administrative                                                                                                                                       |   | 4,438,482                              |   |   | 5,243,944 |   |   | 3,496,973 |   |
| Interest expense                                                                                                                                     |   | 2,173,789                              |   |   | 2,910,841 |   |   | 2,557,294 |   |
| Minority interest                                                                                                                                    |   | 164,175                                |   |   | 223,316 |   |   | 192,260 |   |
|                                                                                                                                                 |        |                                        |   |  |  |   |  |  |   |
|                                                                                                                                                 |   |                                   |   |   |   |   |   |   |   |
|       Total          investment expenses                                                                                    |   | 19,425,100                             |   |   | 21,276,557 |   |   | 16,447,085 |   |
|                                                                                                                                                 |        |                                        |   |  |  |   |  |  |   |
|                                                                                                                                                 |   |                                   |   |   |   |   |   |   |   |
| NET INVESTMENT INCOME                                                                                                                                |   | 9,219,171                              |   |   | 7,799,606 |   |   | 10,613,409 |   |
|                                                                                                                                                 |        |                                        |   |  |  |   |  |  |   |
|                                                                                                                                                 |   |                                   |   |   |   |   |   |   |   |
| REALIZED AND UNREALIZED GAIN          (LOSS) ON REAL ESTATE                                                                                          |   |                                   |   |   |   |   |   |   |   |
|      INVESTMENTS:                                                                                                           |   |                                   |   |   |   |   |   |   |   |
| Net proceeds from real estate          investments sold                                                                                              |   | 55,054,217                             |   |   | 7,105,000 |   |   | 5,689,488 |   |
| Less:  Cost of          real estate investments sold                                                                                       |   | 47,015,948                             |   |   | 7,307,410 |   |   | 6,620,263 |   |
|            Realization          of prior years' unrealized                                    |   |                                   |   |   |   |   |   |   |   |
|                 gain          (loss) on real estate investments sold |   | (655,341                               | )      |   | (1,932,410 | ) |   | (1,396,836 | ) |
|            Minority          interest in realized gain (loss) on real estate                  |   |                                   |   |   |   |   |   |   |   |
|                 investments          sold                            |   | 2,474,788                              |   |   | — |   |   | — |   |
|                                                                                                                                                 |        |                                        |   |  |  |   |  |  |   |
|                                                                                                                                                      |   |                                   |   |   |   |   |   |   |   |
|                                                                                                                                                      |   |                                   |   |   |   |   |   |   |   |
| NET GAIN (LOSS) REALIZED ON          REAL ESTATE INVESTMENTS SOLD                                                                                    |   | 6,218,822                              |   |   | 1,730,000 |   |   | 466,061 |   |
|                                                                                                                                                 |        |                                        |   |  |  |   |  |  |   |
|                                                                                                                                                 |   |                                   |   |   |   |   |   |   |   |
|                                                                                                                                                 |   |                                   |   |   |   |   |   |   |   |
| Change in unrealized gain          (loss) on real estate investments                                                                                 |   | 10,475,654                             |   |   | 2,457,887 |   |   | (6,169,630 | ) |
| Less: Minority interest in          unrealized gain (loss) on real estate investments                                                                |   | 1,233,857                              |   |   | 907,493 |   |   | 763,795 |   |
|                                                                                                                                                 |        |                                        |   |  |  |   |  |  |   |
|                                                                                                                                                 |   |                                   |   |   |   |   |   |   |   |
| Net unrealized gain (loss)          on real estate investments                                                                                       |   | 9,241,797                              |   |   | 1,550,394 |   |   | (6,933,425 | ) |
|                                                                                                                                                 |        |                                        |   |  |  |   |  |  |   |
|                                                                                                                                                 |   |                                   |   |   |   |   |   |   |   |
| NET REALIZED AND UNREALIZED          GAIN (LOSS)                                                                                                     |   |                                   |   |   |   |   |   |   |   |
|      ON          REAL ESTATE INVESTMENTS                                                                                    |   | 15,460,619                             |   |   | 3,280,394 |   |   | (6,467,364 | ) |
|                                                                                                                                                 |        |                                        |   |  |  |   |  |  |   |
|                                                                                                                                                 |   |                                   |   |   |   |   |   |   |   |
| INCREASE (DECREASE) IN NET          ASSETS RESULTING                                                                                                 |   |                                   |   |   |   |   |   |   |   |
|      FROM          OPERATIONS                                                                                               | $      | 24,679,790                             |   | $ | 11,080,000 |   | $ | 4,146,045 |   |
|                                                                                                                                                 |        |                                        |   |  |  |   |  |  |   |
|                                                                                                                                                 |   |                                   |   |   |   |   |   |   |   |
|                                                                                                                                                 |   |                                   |   |   |   |   |   |   |   |
| **The accompanying            notes are an integral part of these consolidated financial statements.**                                |

F-11

----

Back to Index

**THE          PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP  CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS**

|                                                                                                                                                                 |   | **Year Ended            December 31,** |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------|--------|
|                                                                                                                                                                 |        |                                   |
|                                                                                                                                                                 |   | **2005**                               |   |   | **2004** |   |   | **2003** |   |
|                                                                                                                                                                 |        |                                        |   |  |  |   |  |  |   |
| INCREASE          (DECREASE) IN NET ASSETS                                                                                                                           |   |                                   |   |   |   |   |   |   |   |
| RESULTING FROM OPERATIONS:                                                                                                                                           |   |                                   |   |   |   |   |   |   |   |
| Net investment income                                                                                                                                                | $      | 9,219,171                              |   | $ | 7,799,606 |   | $ | 10,613,409 |   |
| Net gain (loss) realized          on real estate                                                                                                                     |   |                                   |   |   |   |   |   |   |   |
|      investments          sold                                                                                                              |   | 6,218,822                              |   |   | 1,730,000 |   |   | 466,061 |   |
| Net unrealized gain (loss)          from real estate                                                                                                                 |   |                                   |   |   |   |   |   |   |   |
|      investments                                                                                                                            |   | 9,241,797                              |   |   | 1,550,394 |   |   | (6,933,425 | ) |
|                                                                                                                                                                 |        |                                        |   |  |  |   |  |  |   |
|                                                                                                                                                                 |   |                                   |   |   |   |   |   |   |   |
| Increase (decrease) in net          assets                                                                                                                           |   |                                   |   |   |   |   |   |   |   |
|      resulting          from operations                                                                                                     |   | 24,679,790                             |   |   | 11,080,000 |   |   | 4,146,045 |   |
|                                                                                                                                                                 |        |                                        |   |  |  |   |  |  |   |
|                                                                                                                                                                 |   |                                   |   |   |   |   |   |   |   |
| INCREASE (DECREASE) IN NET          ASSETS RESULTING                                                                                                                 |   |                                   |   |   |   |   |   |   |   |
|      FROM          CAPITAL TRANSACTIONS:                                                                                                    |   |                                   |   |   |   |   |   |   |   |
| Withdrawals                                                                                                                                                          |   |                                   |   |   |   |   |   |   |   |
|      (2005          -198,677; 2004 -226,527; and                                                                                            |   |                                   |   |   |   |   |   |   |   |
|           2003 – 278,014          shares, respectively)                                                       |   | (6,000,000                             | )      |   | (6,000,000 | ) |   | (6,856,490 | ) |
|                                                                                                                                                                 |        |                                        |   |  |  |   |  |  |   |
|                                                                                                                                                                 |   |                                   |   |   |   |   |   |   |   |
|                Increase          (decrease) in net assets                                 |   |                                   |   |   |   |   |   |   |   |
|                     resulting          from capital transactions |   | (6,000,000                             | )      |   | (6,000,000 | ) |   | (6,856,490 | ) |
|                                                                                                                                                                 |        |                                        |   |  |  |   |  |  |   |
|                                                                                                                                                                 |   |                                   |   |   |   |   |   |   |   |
| INCREASE (DECREASE) IN NET          ASSETS                                                                                                                           |   | 18,679,790                             |   |   | 5,080,000 |   |   | (2,710,445 | ) |
|                                                                                                                                                                 |   |                                   |   |   |   |   |   |   |   |
| NET ASSETS – Beginning          of period                                                                                                                       |   | 186,723,061                            |   |   | 181,643,061 |   |   | 184,353,506 |   |
|                                                                                                                                                                 |        |                                        |   |  |  |   |  |  |   |
|                                                                                                                                                                 |   |                                   |   |   |   |   |   |   |   |
| NET ASSETS – End of period                                                                                                                                      | $      | 205,402,851                            |   | $ | 186,723,061 |   | $ | 181,643,061 |   |
|                                                                                                                                                                 |        |                                        |   |  |  |   |  |  |   |
|                                                                                                                                                                 |   |                                   |   |   |   |   |   |   |   |
|                                                                                                                                                                 |   |                                   |   |   |   |   |   |   |   |
| **The accompanying            notes are an integral part of these consolidated financial statements.**                                                |
|                                                                                                                                                                 |   |                                   |   |   |   |   |   |   |   |

F-12

----

Back to Index

**THE          PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP  CONSOLIDATED STATEMENTS OF CASH FLOWS**

|                                                                                                       |   | **Year Ended            December 31,** |   |
|------------------------------------------------------------------------------------------------------------|--------|----------------------------------------|--------|
|                                                                                                       |        |                                   |
|                                                                                                       |   | **2005**                               |   |   | **2004** |   |   | **2003** |   |
|                                                                                                       |        |                                        |   |  |  |   |  |  |   |
|                                                                                                       |   |                                   |   |   |   |   |   |   |   |
| CASH FLOWS FROM OPERATING          ACTIVITIES:                                                             |   |                                   |   |   |   |   |   |   |   |
| Net increase in net assets          from operations                                                        | $      | 24,679,790                             |   | $ | 11,080,000 |   | $ | 4,146,045 |   |
| Adjustments to reconcile net          increase in net assets                                               |   |                                   |   |   |   |   |   |   |   |
|      to          net cash from operating activities                               |   |                                   |   |   |   |   |   |   |   |
|      Net          realized and unrealized loss (gain)                             |   | (15,460,619                            | )      |   | (3,280,394 | ) |   | 6,467,364 |   |
|      Amortization          of deferred financing costs                            |   | (34,620                                | )      |   | (108,232 | ) |   | (523,586 | ) |
|      Distributions          in excess of (less than) equity in income             |   |                                   |   |   |   |   |   |   |   |
|           of          real estate partnership operations |   | (148,668                               | )      |   | (209,678 | ) |   | 648,193 |   |
|      Minority          interest in consolidated partnerships                      |   | 164,175                                |   |   | 223,316 |   |   | 192,260 |   |
|      Bad          debt expense                                                    |   | 240,176                                |   |   | 459,103 |   |   | 185,844 |   |
|      (Increase)          decrease in:                                             |   |                                   |   |   |   |   |   |   |   |
|           Other          assets                          |   | 2,815,778                              |   |   | (304,747 | ) |   | (502,655 | ) |
|      Increase          (decrease) in:                                             |   |                                   |   |   |   |   |   |   |   |
|           Accounts          payable and accrued expenses |   | (550,954                               | )      |   | 97,254 |   |   | (93,346 | ) |
|           Due          to affiliates                     |   | 39,507                                 |   |   | (296,513 | ) |   | 110,429 |   |
|           Other          liabilities                     |   | (150,564                               | )      |   | (324,210 | ) |   | 35,865 |   |
|                                                                                                       |        |                                        |   |  |  |   |  |  |   |
|                                                                                                       |   |                                   |   |   |   |   |   |   |   |
| Net cash flows from (used          in) operating activities                                                |   | 11,594,001                             |   |   | 7,335,899 |   |   | 10,666,413 |   |
|                                                                                                       |        |                                        |   |  |  |   |  |  |   |
|                                                                                                       |   |                                   |   |   |   |   |   |   |   |
| CASH FLOWS FROM INVESTING          ACTIVITIES:                                                             |   |                                   |   |   |   |   |   |   |   |
|      Net          proceeds from real estate investments sold                      |   | 41,676,816                             |   |   | 7,105,000 |   |   | 5,689,488 |   |
|      Acquisition          of real estate and improvements                         |   | —                                 |   |   | — |   |   | (8,008,729 | ) |
|      Additions          to real estate and improvements                           |   | (6,198,211                             | )      |   | (7,746,015 | ) |   | (6,963,127 | ) |
|      Contributions          to real estate partnerships                           |   | (7,142,900                             | )      |   | (467,875 | ) |   | (1,326,071 | ) |
|      Origination          of mortgage loan receivable                             |   | (2,945,709                             | )      |   | (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                  |   | 25,389,996                             |   |   | (1,940,950 | ) |   | (11,108,439 | ) |
|                                                                                                       |        |                                        |   |  |  |   |  |  |   |
|                                                                                                       |   |                                   |   |   |   |   |   |   |   |
| CASH FLOWS FROM FINANCING          ACTIVITIES:                                                             |   |                                   |   |   |   |   |   |   |   |
|      Withdrawals                                                                  |   | (6,000,000                             | )      |   | (6,000,000 | ) |   | (6,856,490 | ) |
|      Proceeds          from investment level debt                                 |   | —                                 |   |   | 8,750,000 |   |   | 8,750,000 |   |
|      Principal          payments on investment level debt                         |   | (853,525                               | )      |   | (8,910,727 | ) |   | (514,614 | ) |
|      Contributions          from minority interest partners                       |   | —                                 |   |   | — |   |   | 242,354 |   |
|      Distributions          to minority interest partners                         |   | (2,220,169                             | )      |   | (578,854 | ) |   | (868,559 | ) |
|                                                                                                       |        |                                        |   |  |  |   |  |  |   |
|                                                                                                       |   |                                   |   |   |   |   |   |   |   |
|      Net          cash flows from (used in) financing activities                  |   | (9,073,694                             | )      |   | (6,739,581 | ) |   | 752,691 |   |
|                                                                                                       |        |                                        |   |  |  |   |  |  |   |
|                                                                                                       |   |                                   |   |   |   |   |   |   |   |
| NET CHANGE IN CASH AND CASH                                                                                |   |                                   |   |   |   |   |   |   |   |
|      EQUIVALENTS                                                                  |   | 27,910,303                             |   |   | (1,344,632 | ) |   | 310,665 |   |
|                                                                                                       |   |                                   |   |   |   |   |   |   |   |
| CASH AND CASH EQUIVALENTS – Beginning          of period                                              |   | 17,557,182                             |   |   | 18,901,814 |   |   | 18,591,149 |   |
|                                                                                                       |        |                                        |   |  |  |   |  |  |   |
|                                                                                                       |   |                                   |   |   |   |   |   |   |   |
| CASH AND CASH EQUIVALENTS – End          of period                                                    | $      | 45,467,485                             |   | $ | 17,557,182 |   | $ | 18,901,814 |   |
|                                                                                                       |        |                                        |   |  |  |   |  |  |   |
|                                                                                                       |   |                                   |   |   |   |   |   |   |   |
|                                                                                                       |   |                                   |   |   |   |   |   |   |   |
| **The accompanying            notes are an integral part of these consolidated financial statements.**     |
|                                                                                                       |   |                                   |   |   |   |   |   |   |   |

F-13

----

Back to Index

|                                                                                                                                                                                                               |   |               |   |                                                         |            |                                                                                           |   |            | **December            31,** |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|--------|--------------------------------------------------------------|-----------------|------------------------------------------------------------------------------------------------|--------|-----------------|-----------------------------|--------|
|                                                                                                                                                                                                               |   |               |   |                                                         |            | **2005 Total            Rentable****Square Feet****Unless Otherwise****Indicated (Unaudited)** |   |            | ****                        |   |
|                                                                                                                                                                                                               |   |               |   |                                                         |            |                                                                                           |   | **2005**        |                        |   | **2004** |   |
|                                                                                                                                                                                                               |   |               |   |                                                         |            |                                                                                           |        |                 |                        |        |  |   |
| **Property Name**                                                                                                                                                                                                  |   | **2005 Ownership** |   | **City, State**                                              |            |                                                                                           |   | **Cost**        |                        |   | **Estimated            Market Value** |   |   | **Cost** |   |   | **Estimated            Market Value** |   |
|                                                                                                                                                                                                                    |   |                    |   |                                                              |            |                                                                                                |   |                 |                             |   |  |  |   |  |  |   |  |  |   |
| **REAL ESTATE INVESTMENTS**                                                                                                                                                                                        |   |               |   |                                                         |            |                                                                                           |   |            |                        |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                               |   |               |   |                                                         |            |                                                                                           |   |            |                        |   |   |   |   |   |   |   |   |   |   |
| **OFFICES**                                                                                                                                                                                                        |   |               |   |                                                         |            |                                                                                           |   |            |                        |   |   |   |   |   |   |   |   |   |   |
| 750 Warrenville                                                                                                                                                                                                    |   | WO                 |   | Lisle, IL                                                    |            | 103,193                                                                                        |   | $               | 23,173,035                  |   | $ | 10,000,000 |   | $ | 23,173,036 |   | $ | 10,098,838 |   |
| Oakbrook Terrace                                                                                                                                                                                                   |   | WO                 |   | Oakbrook, IL                                                 |            | 123,734                                                                                        |   |            | —                      |   |   | — |   |   | 14,833,796 |   |   | 9,698,734 |   |
| Summit @ Cornell Oaks                                                                                                                                                                                              |   | WO                 |   | Beaverton , OR                                               |            | 72,109                                                                                         |   |            | 12,046,574                  |   |   | 10,566,213 |   |   | 11,934,209 |   |   | 9,644,005 |   |
| Westpark                                                                                                                                                                                                           |   | WO                 |   | Nashville, TN                                                |            | 97,199                                                                                         |   |            | 10,903,925                  |   |   | 12,600,290 |   |   | 10,708,970 |   |   | 11,151,327 |   |
| Financial Plaza                                                                                                                                                                                                    |   | WO                 |   | Brentwood, TN                                                |            | 98,049                                                                                         |   |            | 12,333,151                  |   |   | 12,300,000 |   |   | 12,333,151 |   |   | 10,966,233 |   |
|                                                                                                                                                                                                                    |   |                    |   |                                                              |            |                                                                                                |   |                 |                             |   |  |  |   |  |  |   |  |  |   |
|                                                                                                                                                                                                               |   |               |   | Offices % as of 12/31/05                                     |            | 22%                                                                                            |   |            | 58,456,685                  |   |   | 45,466,503 |   |   | 72,983,162 |   |   | 51,559,137 |   |
|                                                                                                                                                                                                               |   |               |   |                                                         |            |                                                                                           |   |            |                        |   |   |   |   |   |   |   |   |   |   |
| **APARTMENTS**                                                                                                                                                                                                     |   |               |   |                                                         |            |                                                                                           |   |            |                        |   |   |   |   |   |   |   |   |   |   |
| Brookwood Apartments                                                                                                                                                                                               |   | WO                 |   | Atlanta, GA                                                  |            | 240 Units                                                                                      |   |            | 18,481,376                  |   |   | 17,155,625 |   |   | 17,344,994 |   |   | 16,616,914 |   |
| Dunhill Trace Apartments                                                                                                                                                                                           |   | WO                 |   | Raleigh, NC                                                  |            | 250 Units                                                                                      |   |            | 16,170,782                  |   |   | 19,202,057 |   |   | 16,083,715 |   |   | 18,000,660 |   |
| Riverbend Apartments                                                                                                                                                                                               |   | CJV                |   | Jacksonville, FL                                             |            | 458 Units                                                                                      |   |            | —                      |   |   | — |   |   | 20,015,959 |   |   | 22,600,000 |   |
| SIMA Apartments                                                                                                                                                                                                    |   | CJV                |   | Gresham/Salem, OR                                            |            | 493 Units                                                                                      |   |            | —                      |   |   | — |   |   | 12,004,323 |   |   | 13,900,000 |   |
|                                                                                                                                                                                                                    |   |                    |   |                                                              |            |                                                                                                |   |                 |                             |   |  |  |   |  |  |   |  |  |   |
|                                                                                                                                                                                                               |   |               |   | Apartments % as of 12/31/05                                  |            | 18%                                                                                            |   |            | 34,652,158                  |   |   | 36,357,682 |   |   | 65,448,991 |   |   | 71,117,574 |   |
|                                                                                                                                                                                                               |   |               |   |                                                         |            |                                                                                           |   |            |                        |   |   |   |   |   |   |   |   |   |   |
| **RETAIL**                                                                                                                                                                                                         |   |               |   |                                                         |            |                                                                                           |   |            |                        |   |   |   |   |   |   |   |   |   |   |
| King's Market                                                                                                                                                                                                      |   | WO                 |   | Rosewell, GA                                                 |            | 314,358                                                                                        |   |            | 37,646,731                  |   |   | 27,199,960 |   |   | 33,864,392 |   |   | 21,765,286 |   |
| Hampton Towne Center                                                                                                                                                                                               |   | WO                 |   | Hampton, VA                                                  |            | 174,540                                                                                        |   |            | 18,035,334                  |   |   | 26,100,000 |   |   | 18,031,495 |   |   | 21,000,000 |   |
| White Marlin Mall                                                                                                                                                                                                  |   | CJV                |   | Ocean City, MD                                               |            | 186,016                                                                                        |   |            | 15,328,836                  |   |   | 21,500,000 |   |   | 15,229,878 |   |   | 19,300,000 |   |
| Kansas City Portfolio                                                                                                                                                                                              |   | EJV                |   | Kansas City, KS;MO                                           |            | 487,660                                                                                        |   |            | 11,413,171                  |   |   | 7,183,593 |   |   | 11,286,726 |   |   | 12,126,466 |   |
| CARS Preferred Equity                                                                                                                                                                                              |   | EJV                |   | Various                                                      |            | N/A                                                                                            |   |            | 7,165,223                   |   |   | 7,165,223 |   |   | — |   |   | — |   |
|                                                                                                                                                                                                                    |   |                    |   |                                                              |            |                                                                                                |   |                 |                             |   |  |  |   |  |  |   |  |  |   |
|                                                                                                                                                                                                               |   |               |   | Retail % as of 12/31/05                                      |            | 43%                                                                                            |   |            | 89,589,295                  |   |   | 89,148,776 |   |   | 78,412,491 |   |   | 74,191,752 |   |
|                                                                                                                                                                                                               |   |               |   |                                                         |            |                                                                                           |   |            |                        |   |   |   |   |   |   |   |   |   |   |
| **INDUSTRIAL**                                                                                                                                                                                                     |   |               |   |                                                         |            |                                                                                           |   |            |                        |   |   |   |   |   |   |   |   |   |   |
| Smith Road                                                                                                                                                                                                         |   | WO                 |   | Aurora, CO                                                   |            | 277,930                                                                                        |   |            | 10,823,619                  |   |   | 11,704,500 |   |   | 10,692,625 |   |   | 10,204,072 |   |
|                                                                                                                                                                                                                    |   |                    |   |                                                              |            |                                                                                                |   |                 |                             |   |  |  |   |  |  |   |  |  |   |
|                                                                                                                                                                                                               |   |               |   | Industrial % as of 12/31/05                                  |            | 6%                                                                                             |   |            | 10,823,619                  |   |   | 11,704,500 |   |   | 10,692,625 |   |   | 10,204,072 |   |
|                                                                                                                                                                                                               |   |               |   |                                                         |            |                                                                                           |   |            |                        |   |   |   |   |   |   |   |   |   |   |
| **HOTEL**                                                                                                                                                                                                          |   |               |   |                                                         |            |                                                                                           |   |            |                        |   |   |   |   |   |   |   |   |   |   |
| Portland Crown Plaza                                                                                                                                                                                               |   | CJV                |   | Portland, OR                                                 |            | 161 Rooms                                                                                      |   |            | 8,823,785                   |   |   | 10,300,000 |   |   | 8,334,342 |   |   | 8,300,000 |   |
|                                                                                                                                                                                                                    |   |                    |   |                                                              |            |                                                                                                |   |                 |                             |   |  |  |   |  |  |   |  |  |   |
|                                                                                                                                                                                                               |   |               |   | Hotel % as of 12/31/05                                       |            | 5%                                                                                             |   |            | 8,823,785                   |   |   | 10,300,000 |   |   | 8,334,342 |   |   | 8,300,000 |   |
|                                                                                                                                                                                                               |   |               |   |                                                         |            |                                                                                           |   |            |                        |   |   |   |   |   |   |   |   |   |   |
| **LAND**                                                                                                                                                                                                           |   |               |   |                                                         |            |                                                                                           |   |            |                        |   |   |   |   |   |   |   |   |   |   |
| Gateway Village                                                                                                                                                                                                    |   | EJV                |   | Blue Springs, MO                                             |            |                                                                                           |   |            | —                      |   |   | — |   |   | 100 |   |   | 100 |   |
|                                                                                                                                                                                                                    |   |                    |   |                                                              |            |                                                                                                |   |                 |                             |   |  |  |   |  |  |   |  |  |   |
|                                                                                                                                                                                                               |   |               |   | Land % as of 12/31/05                                        |            | 0%                                                                                             |   |            | —                      |   |   | — |   |   | 100 |   |   | 100 |   |
|                                                                                                                                                                                                               |   |               |   |                                                         |            |                                                                                           |   |            |                        |   |   |   |   |   |   |   |   |   |   |
| **MORTGAGE AND            OTHER LOANS RECEIVABLE**                                                                                                                                                  |   |               |   |                                                         |            |                                                                                           |   |            |                        |   |   |   |   |   |   |
| Westminster West                                                                                                                                                                                                   |   | Eloan              |   | Westminster, MD                                              |            |                                                                                           |   |            | 4,277,769                   |   |   | 4,277,769 |   |   | 1,332,060 |   |   | 1,332,060 |   |
|                                                                                                                                                                                                                    |   |                    |   |                                                              |            |                                                                                                |   |                 |                             |   |  |  |   |  |  |   |  |  |   |
|                                                                                                                                                                                                               |   |               |   | Mortgage and Other Loans          Receivable% as of 12/31/05 |            | 2%                                                                                             |   |            | 4,277,769                   |   |   | 4,277,769 |   |   | 1,332,060 |   |   | 1,332,060 |   |
|                                                                                                                                                                                                               |   |               |   |                                                         |            |                                                                                           |   |            |                        |   |   |   |   |   |   |   |   |   |   |
| **Total Real            Estate Investments as a Percentage of Net Assets as of 12/31/05**                                                                                                           |   | **96**%            |   |                                                         | **206,623,311** |                                                                                           |   | **197,255,230** |                        |   | **237,203,771** |   |   | **216,704,695** |   |
|                                                                                                                                                                                                               |   |               |   |                                                         |            |                                                                                                |   |                 |                             |   |  |  |   |  |  |   |  |  |   |
|                                                                                                                                                                                                               |   |               |   |                                                         |            |                                                                                           |   |            |                        |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                               |   |               |   |                                                         |            |                                                                                           |   |            |                        |   |   |   |   |   |   |   |   |   |   |
| WO – Wholly          Owned Investment                                                                                                                                                |   |               |   |                                                         |            |                                                                                           |   |            |                        |   |   |   |   |
| CJV – Consolidated          Joint Venture                                                                                                                                            |   |               |   |                                                         |            |                                                                                           |   |            |                        |   |   |   |   |
| EJV – Joint          Venture Investment accounted for under the equity method                                                                                                        |   |               |   |                                                         |            |                                                                                           |   |            |                        |   |   |   |   |
| Eloan – Mezzanine          loan accounted for under the equity method                                                                                                                |   |               |   |                                                         |            |                                                                                           |   |            |                        |   |   |   |   |
|                                                                                                                                                                                                               |   |               |   |                                                         |            |                                                                                           |   |            |                        |   |   |   |   |   |   |   |   |   |   |
| **The accompanying            notes are an integral part of these consolidated financial statements.**                   |
|                                                                                                                                                                                                               |   |               |   |                                                         |            |                                                                                           |   |            |                        |   |   |   |   |   |   |   |   |   |   |

F-14

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|                                                                                                   |   |   |                 |   | **December            31, 2005** |       | **December            31, 2004** |   |
|--------------------------------------------------------------------------------------------------------|--------|--------|-----------------|--------|----------------------------------|------------|----------------------------------|--------|
|                                                                                                        |   |   |                 |   |                                  |       |                                  |   |
|                                                                                                        |   |   | **Face Amount** |   |                             | **Cost**   |                             |   | **Estimated      Market Value** |   |   | **Cost** |   |   | **Estimated      Market Value** |   |
|                                                                                                        |   |        |                 |   |                                  |            |                             |        |  |   |  |  |   |  |  |   |
| **CASH AND CASH EQUIVALENTS – Percentage            of Net Assets**                               |   |   |            |   |                             |            |                             |   | 22.1% |   |   |  |   |   | 9.4% |   |
|                                                                                                        |   |   |                 |   |                             |            |                             |   |   |   |   |  |   |   |   |   |
| Federal Home Loan Bank, 1.75%,          January 3, 2006                                                |   | $      | 488,000         |   | $                                | 487,908    |                             | $      | 487,908 |   | $ | — |   | $ | — |   |
| Federal Home Loan Bank, 0          coupon bond, January 30, 2006                                       |   |   | 44,184,000      |   |                             | 44,033,621 |                             |   | 44,033,621 |   |   | — |   |   | — |   |
| Federal Home Loan Bank, 6.450%,          January 3, 2005                                               |   |   | 19,457,000      |   |                             | —     |                             |   | — |   |   | 19,455,135 |   |   | 19,455,135 |   |
|                                                                                                        |   |   |            |   |                                  |            |                             |        |  |   |  |  |   |  |  |   |
|                                                                                                        |   |   |                 |   |                             |            |                             |   |  |   |   |  |   |   |  |   |
|                                                                                                        |   |   |                 |   |                             |            |                             |   |  |   |   |  |   |   |  |   |
| **Total Cash Equivalents**                                                                             |   |   |                 |   |                             | 44,521,529 |                             |   | 44,521,529 |   |   | 19,455,135 |   |   | 19,455,135 |   |
|                                                                                                        |   |   |                 |   |                             |            |                             |   |  |   |   |  |   |   |  |   |
| **Cash**                                                                                               |   |   |                 |   |                             | 945,956    |                             |   | 945,956 |   |   | (1,897,953 | ) |   | (1,897,953 | ) |
|                                                                                                        |   |   |            |   |                                  |            |                             |        |  |   |  |  |   |  |  |   |
|                                                                                                        |   |   |                 |   |                             |            |                             |   |  |   |   |  |   |   |  |   |
| **Total Cash and Cash Equivalents**                                                                    |   |   |                 |   | $                                | 45,467,485 |                             | $      | 45,467,485 |   | $ | 17,557,182 |   | $ | 17,557,182 |   |
|                                                                                                        |   |   |            |   |                                  |            |                             |        |  |   |  |  |   |  |  |   |
|                                                                                                        |   |   |                 |   |                             |            |                             |   |  |   |   |  |   |   |  |   |
|                                                                                                        |   |   |                 |   |                             |            |                             |   |  |   |   |  |   |   |  |   |
|                                                                                                        |   |   |                 |   |                             |            |                             |   |  |   |   |  |   |   |  |   |
| **The accompanying notes            are an integral part of these consolidated financial statements.** |
|                                                                                                   |   |   |                 |   |                             |            |                             |   |  |   |   |  |   |   |  |   |

F-15

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**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS      OF****THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP****For Years Ended December 31, 2005, 2004, and 2003**

**Note 1: Organization**

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

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

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

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

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

**Note 2: Summary of Significant Accounting Policies**
 A:*Basis of Presentation* – The        accompanying consolidated financial statements of the Partnership have        been presented on the market value basis of accounting in conformity        with accounting principles generally accepted in the United States of        America. The consolidated financial statements of Partnership include        wholly owned entities, and those real estate partnerships in which the        Partnership has a controlling interest. All significant inter-company        balances and transactions have been eliminated in consolidation.    B:*Management’s Use of Estimates          in the Financial Statements –*  The          preparation of financial statements in conformity with accounting principles          generally accepted in the United States of America requires management          to make estimates and assumptions that affect the amounts reported          in the consolidated financial statements and accompanying notes. Actual          results could differ from those estimates.
****

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**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS      OF****THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP****For Years Ended December 31, 2005, 2004, and 2003**

**Note 2: Summary of Significant Accounting Policies (continued)**
 C:*Real Estate Investments* –      Real  estate        investments are shown at estimated market value in accordance with the        terms of the        Partnership’s contracts. Properties owned are initially recorded        at the purchase price plus closing costs. Development costs and major        renovations are capitalized as a component of cost, and routine maintenance        and repairs are charged to expense as incurred. Real estate costs include        the cost of acquired property, including all the tangible and intangible        assets. Tangible assets include the value of all land, building and tenant        improvements at the time of acquisition. Intangible assets include the        value of any above and below market leases, in-place leases, and tenant        relationships at the time of acquisition. Market value estimates are        based upon property appraisal reports prepared by independent real estate        appraisers (members of the Appraisal Institute or an equivalent organization)        within a reasonable amount of time following acquisition of the real        estate and no less frequently than annually thereafter. The Chief Real        Estate Appraiser of PIM is responsible to assure        that the valuation process provides independent and reasonable property        market value estimates. American Appraisal Associates (the “Appraisal        Management Firm”), an entity not affiliated with PIM, has been appointed        by PIM to assist the Chief Real Estate Appraiser in maintaining and monitoring        the independence and the accuracy of the appraisal process. Unless a        property is currently held for sale, the market value of real estate        investments does not reflect the transaction sale costs, which may be        incurred upon disposition of the real estate investments.     Unconsolidated real estate partnerships        are valued at the Partnership’s equity in net assets as reflected        in the partnerships' financial statements with properties valued as described        above. Under the equity method, the investment is initially recorded        at the original investment amount, plus or minus additional amounts invested        or distributed, and is subsequently adjusted for the Partnership’s        share of undistributed earnings or losses (including unrealized appreciation        and depreciation) from the underlying entity.     Land and redevelopment properties        held for future development via a forward contract are carried at cost        plus cost incurred to hold the land and redevelopment properties as stated        in the take out provisions of the contract.     As described above, the estimated        market value of real estate and real estate related assets is determined        through an appraisal process. These estimated market values may vary        significantly from the prices at which the real estate investments would        sell, since market prices of real estate investments can only be determined        by negotiation between a willing buyer and seller and could be material        to the consolidated financial statements. Although the estimated market        values represent subjective estimates, management believes these estimated        market values are reasonable approximations of market prices and the        aggregate estimated value of investments in real estate is fairly presented        as of December 31, 2005, and 2004.    D:*Other Real Estate Investments* – Other        real estate investments include short term notes receivable, which are        valued at the amount due and approximate market value.    E:*Cash and Cash Equivalents* – Cash        and cash equivalent are comprised of all short-term investments        and investments in money market funds with a maximum maturity of three        months. Cash equivalents consist of investments in the Prudential Investment        Liquidity Pool offered and managed by an affiliate of PFI and are accounted        for at market value.
 

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**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS      OF****THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP****For Years Ended December 31, 2005, 2004, and 2003**

**Note 2: Summary of Significant Accounting Policies (continued)**
 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 $156,268 and $212,989 was maintained by the wholly owned and consolidated        properties at December 31, 2005 and 2004, respectively, for tenant security        deposits and is included in Other Assets on the Consolidated Statements        of Assets and Liabilities. Other assets also includes tenant receivable        and is net of allowance for uncollectible accounts of $51,162 and $46,690        at December 31, 2005 and 2004, respectively.    H*:**Investment Level Debt* – Investment        level debt is stated at the principal amount of the obligations outstanding.        At times the Partnership may assume debt in connection with the purchase        of real estate. For debt assumed, the Partnership allocates a portion        of the purchase price to the below/above market debt and amortizes the        premium/discount over the remaining life of the debt.    I:*Deferred Financing Costs* – Included        in Other Assets are deferred financing costs amounting to $246,495 and        $391,666 which are net of accumulated amortization of $80,227 and $878,316        as of December 31, 2005 and 2004, respectively, and which are being amortized        over the term of the related obligation.    J:*Revenue Recognition*– Revenue        from real estate is recognized when earned in accordance with the terms        of the respective leases. Revenue from certain real estate investments        is net of all or a portion of related real estate expenses, as lease        arrangements vary as to responsibility for payment of these expenses        between tenants and the Partnership. Since real estate is stated at estimated        market value, net income is not reduced by depreciation or amortization        expense.    K:*Equity in Income of Real Estate          Partnership* – Equity in income from real          estate partnership operations represents the Partnership’s share          of the current year’s partnership income as provided for under          the terms of the partnership agreements. As is the case with wholly          owned real estate, partnership net income is not reduced by depreciation          or amortization expense. Frequency of distribution of income is determined          by formal agreements or by the executive committee of the partnership.    L:*Federal Income Taxes* – The        Partnership is not a taxable entity under the provisions of the Internal        Revenue Code. The income and capital gains and losses of the Partnership        are attributed, for federal income tax purposes, to the Partners in the        Partnership. The Partnership may be subject to state and local taxes        in jurisdictions in which it operates.
F-18

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**NOTES TO            THE CONSOLIDATED FINANCIAL STATEMENTS OF****THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP****For Years Ended December 31, 2005, 2004, and 2003** **Note 2: Summary of Significant          Accounting Policies (continued)**    M:*New Accounting Pronouncements*– FASB        Interpretation No. 46, “Consolidation of Variable Interest Entities”,        (“FIN 46”) was issued in January 2003. In December 2003, FASB        issued a revised interpretation of FIN 46 (“FIN 46-R”), which        supersedes FIN 46.   FIN 46-R defers the effective        date for applying the provisions of FIN-46 for those companies currently        accounting for their investments in accordance with the AICPA Audit and        Accounting Guide, “Audits of Investment Companies” (the “Audit        Guide”). The effective date is delayed while the AICPA finalizes        the proposed Statement of Position (“SOP”) on the clarification        of the scope of the Audit Guide. Following the issuance of the final        SOP, the FASB will consider modifying FIN 46-R to provide an exception        for companies that apply the Audit Guide. The Partnership is awaiting        the final determination from the FASB in order to evaluate the extent        in which, if any, its equity investments may need to be consolidated        as a result of this FIN 46-R. **Note 3: Disclosure of Supplemental          Cash Flow Information and Non-Cash Investing and Financing Activity** Cash paid for interest during the        years ended December 31, 2005, 2004, and 2003 was $2,324,397, $2,595,651,        and $2,462,387, respectively. During the fourth quarter of 2005,        a minority interest partner bought out the Account’s investment        in a consolidated real estate partnership resulting in net proceeds of        $15.9 million. This transaction resulted in the assumption of a mortgage        loan by the partner of approximately $10.0 million and a reduction of        the partner’s minority interest of $3.7 million.
F-19

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**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS      OF****THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP****For Years Ended December 31, 2005, 2004, and 2003**

**Note 4: Real Estate Partnership**

Real estate partnership is valued at the Partnership’s    equity in net assets as reflected by the partnership’s financial statements    with properties valued as indicated in Note 2C above. The Partnership’s    combined financial position and results of operations are summarized as follows    (in 000’s):
 **December 31,**   **2005**  **2004**   Partnership Assets and Liabilities         Real estate at estimated market value$34,365 $34,200    Other assets 1,384  1,217          Total assets 35,749  35,417              Investment level debt 18,272  18,564    Other liabilities 551  370          Total liabilities 18,823  18,934              Net assets$16,926 $16,483           Partnership's share of net assets$14,349 $12,127     **Year Ended December 31,**  **2005** **2004** **2003** Partnership Operations    Rental revenue$4,115 $3,125 $3,114    Other revenue —  1,710  1,360        Total revenue 4,115  4,835  4,474        Real estate expenses and taxes 2,326  2,481  2,196    Interst Expense 1,477  1,500  1,555        Total Expenses 3,803  3,981  3,751        Net Investment Income$312 $854 $723               Partnership's equity in income of real estate partnerships$253 $629 $561     
F-20

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**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS      OF****THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP****For Years Ended December 31, 2005, 2004, and 2003**

**Note 5: Investment Level Debt**

Debt includes mortgage loans payable as summarized below (in    000’s):
 **As of 12/31/05**  **As of 12/31/04** **As of 12/31/05**    ******100%      Principal      Balance      Outstanding**  **Partnership's      Share of      Principal       Balance      Outstanding****1** ******100%      Principal      Balance      Outstanding** **Interest      Rate****2** **Maturity      Date** **Terms****3**      **Mortgages of Wholly Owned Properties & Consolidated          Partnerships**         Jacksonville, FL$– $– $10,000 – – –Hampton, VA 8,671  8,671  9,075 6.75% 2018 PP, P&IOcean City, MD 7,025  5,220  7,199 7.24% 2008 PP, P&IRaleigh, NC 8,750  8,750  8,750 3.09% 2008 PP, IAtlanta, GA 8,749  8,749  8,750 4.90% 2009 PP, P&I         Total$33,196 $31,390 $43,774                              **Mortgages on Equity Partnerships**              Kansas City, MO - Ten Quivira$6,575 $4,839 $6,680 8.16% 2007 PP, P&IKansas City, MO- Ten Quivira Parcel 946  696  961 8.16% 2007 PP, P&IKansas City, MO - Cherokee Hill 3,032  2,232  3,083 7.79% 2007 PP, P&IKansas City, KS - Devonshire 2,108  1,551  2,140 8.16% 2007 PP, P&IKansas City, MO - Brywood Center 5,611  4,130  5,700 8.16% 2007 PP, P&I         Total$18,272 $13,448 $18,564               1.Represents the Partnership's interest in the        loan based upon the estimated percentage of net assets which would be        distributed to the Partnership if the partnership were liquidated at        December 31, 2005. It does not represent the Partnership's legal obligation. 2.The Partnership's weighted average interest        rate at December 31, 2005 and 2004 were 6.14% and 5.84%, respectively.        The weighted average interest rates were calculated using the Partnership's        annualized interest expense for each loan (derived using the same percentage        as that in (*) above) divided by the Partnership's share of total debt. 3.Loan Terms PP=Prepayment penalties applicable        to loan, I=Interest only, P&I=Principal and Interest
F-21
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**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS      OF****THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP****For Years Ended December 31, 2005, 2004, and 2003**

**Note 5: Investment Level Debt, (continued)**

As of December 31, 2005, mortgage loans payable on wholly owned    properties and consolidated partnerships are payable as follows:
Year Ending December 31, (in 000's)               2006 $ 549             2007   588             2008  16,026             2009  9,277             2010   565     Thereafter  6,191              Total $33,196    
The mortgage loans payable of wholly owned properties and consolidated    partnerships are secured by real estate investments with an estimated market    value of $84.0 million.

As of December 31, 2005, principal amounts of mortgage loans    payable on the equity partnerships are payable as follows:
  100% Loan Balance Partnership's Share Year Ending December 31, (in 000's) (in 000's)       2006 $291 $214    2007  17,981  13,234        Total $18,272 $13,448     
Based on borrowing rates available to the Partnership at December    31, 2005 for loans with similar terms and average maturities, the Partnership’s    mortgages on wholly owned properties and consolidated partnerships have an    estimated fair value of approximately $33.8 million, and a carrying value    of $33.2 million. The Partnership’s share of equity partnership debt    has an estimated fair value of approximately $13.2 million and a carrying    value of $13.4 million. Different assumptions or changes in future market    conditions could significantly affect estimated fair value.

F-22
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**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS      OF****THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP****For Years Ended December 31, 2005, 2004, and 2003**

**Note 6: Purchase Commitment Obligations**

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

As of December 31, 2005, the Partnership had the following outstanding    purchase commitments:
 Commitments Property Type(000's)  Apartments$20,805 Retail 23,044   Total$43,849   
**NOTE 7: Concentration of Risk on Real Estate Investments**

At December 31, 2005, the Partnership had real estate investments    located throughout the United States. The diversification of the Partnership’s    holdings based on the estimated market values and established NCREIF regions    is as follows:
  Estimated     Market Value           Region (in 000's) Region %    East North Central $10,000 5.07%Mideast  71,080 36.03%Midwest  1,053 0.53%Mountain  11,705 5.93%Northeast  1,469 0.74%Northwest  107 0.05%Pacific  20,866 10.58%Southeast  71,119 36.05%Southwest  1,777 0.90%West  896 0.45%West North Central  7,184 3.64%                 Total $197,255 100.00%    
F-23
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**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS      OF****THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP****For Years Ended December 31, 2005, 2004, and 2003**

**NOTE 7: Concentration of Risk on Real Estate Investments,      (continued)**

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

**Note 8: Leasing Activity**

The Partnership leases space to tenants under various operating    lease agreements. These agreements, without giving effect to renewal options,    have expiration dates ranging from 2006 to 2025. At December 31, 2005, the    aggregate future minimum base rental payments under non-cancelable operating    leases for wholly owned and consolidated joint venture properties by year    are as follows:
Year Ending December 31, (in 000's)              2006 $11,829            2007  11,218            2008  10,252            2009  7,458            2010  6,188    Thereafter  18,316             Total $65,261    
**Note 9: Commitments and Contingencies**

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

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

**Note 10: Other Related Party Transactions**

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

F-24 
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**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS      OF****THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP****For Years Ended December 31, 2005, 2004, and 2003**

**Note 10: Other Related Party Transactions, continued**

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

During the years ended December 31, 2005, 2004 and 2003, the    Partnership made the following distributions to the Partners:
Year Ended December 31,  (000's)   2005 $6,000 2004 $6,000 2003 $6,856 
F-25
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**THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP****SCHEDULE III – REAL ESTATE OWNED: PROPERTIES****DECEMBER** **31, 2005**
  **Initial    Costs to the Partnership**   **Gross          Amount at Which          Carried    at Close of Year**            **Description** **Encumbrances    at 12/31/05** **Land** **Building &    Improvements** **CostsCapitalizedSubsequent toAcquisition**  **Land** **Building &    Improvements**  **Total** **Year of    Construction** **Date    Acquired**             Properties:                                          Office    Building    Lisle, IL None 1,780,000 15,743,881 5,649,154  1,949,206 21,223,829  23,173,035 1985 Apr., 1988                      Garden    Apartments    Atlanta, GA 8,749,000 3,631,212 11,168,904 3,681,260(b) 4,860,054 13,621,322  18,481,376 1987 Apr., 1988                       Retail Shopping Center    Roswell, GA None 9,454,622 21,513,677 6,678,432  11,135,594 26,511,137  37,646,731 1988 Jan., 1989                       Garden Apartments    Raleigh, NC 8,750,000 1,623,146 14,135,553 412,083  1,707,038 14,463,744  16,170,782 1995 Jun., 1995                       Office    Building    Nashville, TN None 1,797,000 6,588,451 2,518,474  1,855,338 9,048,587  10,903,925 1982 Oct., 1995                       Retail Shopping CenterOcean City, MD 7,025,473 1,517,099 8,495,039 5,316,698  1,517,099 13,811,737  15,328,836 1986 Nov., 2002                       Hotel    Portland, OR — 1,500,000 6,508,729 815,056  1,500,000 7,323,785  8,823,785 1989 Dec., 2003                       Office Building    Beaverton, OR None 816,415 9,897,307 1,332,852  845,887 11,200,687  12,046,574 1995 Dec., 1996                       Industrial Building    Aurora, CO None 1,338,175 7,202,411 2,283,033  1,415,159 9,408,460  10,823,619 1997 Sep., 1997                       Office Complex    Brentwood, TN None 2,425,000 7,063,755 2,844,396  2,463,600 9,869,551  12,333,151 1987 Oct., 1997                       Retail Shopping Center    Hampton, VA 8,671,134 2,339,100 12,767,956 2,928,278  4,839,418 13,195,916  18,035,334 1998 May, 2001                                      33,195,607 28,221,769 121,085,663 34,459,716  34,088,393 149,678,755  183,767,148                                          **2005** **2004** **2003**                    (a)Balance at beginning of year 224,584,885  223,943,870  215,592,277            Additions:                         Acquisitions    —  8,008,729                 Improvements, etc. 6,187,973  7,502,358  6,942,346                            Deletions:                         Sale (47,005,710) (6,861,343) (6,599,482)                      Balance at end of year 183,767,148  224,584,885  223,943,870                              (b)Net of $1,000,000 settlement received from lawsuit.              
F-26

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**Mortgage Loan Receivable**

**THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP****SCHEDULEIV – MORTGAGE LOANS ON REAL ESTATE****DECEMBER 31, 2005**
**Description****Interest****Rate****Final Maturity****Date****Periodic****payment****Terms****Prior****Liens****Face****Amount of****Mortgages****Carrying****Amount of****Mortgages****Principal amount****of Loans****Subject to****Delinquent****Principal or****Interest**                                       Loans Receivables:                                             Westminster West                        Westminster, MD  10.00% 1/11/2007  I only  —            4,277,769              4,277,769   —                                —  4,277,769   4,277,769   —                                                    **2005****2004**                                                         Balance at beginning of year   1,332,060   0                   Additions during the period:                             New Mortgage loans                              Other – drawdown on loan              2,752,035                 1,277,764                        Other – accrued interest                 493,674                     54,296                   Deductions during the period:                              Cost of real estate sold                              Foreclosures                              Cost of mortgages sold                              Amortization of premium                              Other – accrued interest             payment   (300,000)                                  Balance at end of year   4,277,769   1,332,060                                                                                                     
F-27

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**POWER OF ATTORNEY**

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

     IN WITNESS WHEREOF,    I have hereunto set my hand this 14th day of February 2006.

/s/ Frederic K. BeckerFrederic K. BeckerDirector

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**POWER OF ATTORNEY**

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

     IN WITNESS WHEREOF,    I have hereunto set my hand this 14th day of February 2006.

/s/ Gordon M. BethuneGordon M. BethuneDirector

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**POWER OF ATTORNEY**

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

     IN WITNESS WHEREOF,    I have hereunto set my hand this 14th day of February 2006.

 /s/ Gaston CapertonGaston CapertonDirector

 

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**POWER OF ATTORNEY**

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

     IN WITNESS WHEREOF,    I have hereunto set my hand this 14th day of February 2006.

/s/ Gilbert F. CasellasGilbert F. CasellasDirector

 

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**POWER OF ATTORNEY**

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

     IN WITNESS WHEREOF,    I have hereunto set my hand this 14th day of February 2006.

/s/ James G. CullenJames G. CullenDirector

 

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**POWER OF ATTORNEY**

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

     IN WITNESS WHEREOF,    I have hereunto set my hand this 14th day of February 2006.

/s/ William H. Gray III  William H. Gray IIIDirector

 

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**POWER OF ATTORNEY**

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

     IN WITNESS WHEREOF,    I have hereunto set my hand this 14th day of February 2006.

/s/ Jon F. HansonJon F. HansonDirector

 

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**POWER OF ATTORNEY**

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

     IN WITNESS WHEREOF,    I have hereunto set my hand this 14th day of February 2006.

/s/ Constance J. HornerConstance J. HornerDirector

 

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**POWER OF ATTORNEY**

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

     IN WITNESS WHEREOF,    I have hereunto set my hand this 14th day of February 2006.

/s/ Karl J. KrapekKarl J. Krapek  Director

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**POWER OF ATTORNEY**

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

     IN WITNESS WHEREOF,    I have hereunto set my hand this 14th day of February 2006.

/s/ Arthur F. RyanArthur F. RyanDirector

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**POWER OF ATTORNEY**

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

     IN WITNESS WHEREOF,    I have hereunto set my hand this 14th day of February 2006.

/s/ James A. UnruhJames A. UnruhDirector