##### 



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-K
 (Mark One)þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGEACT OF 1934For the fiscal year ended December 31, 2007ORo
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934Commission file Number 033-08698
 PRUCO LIFE INSURANCE COMPANY
 in respect of
 PRUCO LIFE VARIABLE CONTRACT  REAL PROPERTY ACCOUNT
 (Exact name of registrant as specified in its charter)
 Arizona
    
    22-1944557(State or other jurisdiction of
    
    (IRS Employer Identification No.)incorporation or organization)
 213 Washington Street, Newark, New Jersey 07102-2992
 (Address of principal executive offices) (Zip Code)
 (973) 802-6000
 (Registrants telephone number, including area code)
 SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE
 SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE
 o þ
 o þ
 þ o
 o
  Large Accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ
 DOCUMENTS INCORPORATED BY REFERENCE




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PRUCO LIFE VARIABLE CONTRACT
REAL PROPERTY ACCOUNT
(Registrant)
 INDEX
 Item
    
    
    
    PageNo.
    
    
    
    No.Cover PageIndex
    
    
    2Forward-Looking Statement Disclosure
    
    
    3PART I1.
    
    Business
    
    
    41A.
    
    Risk Factors
    
    
    61B.
    
    Unresolved Staff Comments
    
    
    62.
    
    Properties
    
    
    63.
    
    Legal Proceedings
    
    
    64.
    
    Submission of Matters to a Vote of Security Holders
    
    
    6PART II5.
    
    Market for Registrants Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
    
    
    76.
    
    Selected Financial Data
    
    
    77.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    87A.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    168.
    
    Financial Statements and Supplementary Data
    
    
    179.
    
    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    179A.
    
    Controls and Procedures
    
    
    179B.
    
    Other Information
    
    
    17PART III10.
    
    Directors, Executive Officers and Corporate Governance
    
    
    1811.
    
    Executive Compensation
    
    
    1912.
    
    Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
    
    
    1913.
    
    Certain Relationships and Related Transactions, and Director Independence
    
    
    1914.
    
    Principal Accountant Fees and Services
    
    
    19PART IV15.
    
    Exhibits and Financial Statement Schedules
    
    
    20Exhibit Index
    
    
    20Signatures
    
    
    22
 2




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Forward-Looking Statement Disclosure
  3




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##### 



PART I
 Item 1.
    
    Business
            4




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##### 



MARKET CONDITIONS
  Debt Market
  Public Real Estate Securities
  Property Markets
 Office
 Industrial
 Residential
 Retail
 5




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##### 



Hotel
 Item 1A.
    
    Risk Factors
    Item 1B.
    
    Unresolved Staff Comments
  Item 2.
    
    Properties
  Item 3.
    
    Legal Proceedings
  Item 4.
    
    Submission of Matters to a Vote of Security Holders
  6




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##### 



PART II
 Item 5.     Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
   Item 6.     Selected Financial Data
  RESULTS OF OPERATIONS:
 Year Ended December 31,2007
    
    
    2006
    
    
    2005
    
    
    2004
    
    
    2003Total Investment Income
    
    $
    31,700,063
    
    
    $
    28,623,487
    
    
    $
    28,644,271
    
    
    $
    29,076,163
    
    
    $
    27,060,494Net Investment Income
    
    $
    12,663,580
    
    
    $
    11,161,728
    
    
    $
    9,219,171
    
    
    $
    7,799,606
    
    
    $
    10,613,409Net Realized and
Unrealized Gain (Loss) on
Real Estate 
Investments
    
    
    5,453,595
    
    
    
    18,352,005
    
    
    
    15,460,619
    
    
    
    3,280,394
    
    
    
    (6,467,364
    )Net Increase in Net Assets
Resulting From Operations
    
    $
    18,117,175
    
    
    $
    29,513,733
    
    
    $
    24,679,790
    
    
    $
    11,080,000
    
    
    $
    4,146,045FINANCIAL POSITION:Year Ended December 31,2007
    
    
    2006
    
    
    2005
    
    
    2004
    
    
    2003Total Assets
    
    $
    290,166,898
    
    
    $
    272,136,819
    
    
    $
    246,015,115
    
    
    $
    240,575,611
    
    
    $
    235,627,852Long Term Lease Obligation
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Investment Level Debt
    
    $
    32,121,712
    
    
    $
    32,710,488
    
    
    $
    33,195,607
    
    
    $
    43,773,767
    
    
    $
    43,934,494
 7




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Item 7.     Managements Discussion and Analysis of Financial Condition and Results of Operations
   (a) Liquidity and Capital Resources
     8




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##### 



(b) Results of Operations
  Net Investment Income Overview
  Valuation Overview
  9




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##### 



Twelve Months Ended December 31,2007
    
    
    2006Net Investment Income:Office properties
    
    $
    3,945,096
    
    
    $
    3,407,082Apartment properties
    
    
    2,119,681
    
    
    
    1,059,134Retail properties
    
    
    6,998,954
    
    
    
    6,128,671Industrial property
    
    
    49,279
    
    
    
    773,668Hotel property
    
    
    1,343,200
    
    
    
    1,288,716Land
    
    
    
    
    
    
    (36,582
    )Other (including interest income,
investment mgt fee, etc.)
    
    
    (1,792,630
    )
    
    
    (1,458,961
    )Total Net Investment Income
    
    $
    12,663,580
    
    
    $
    11,161,728Net Realized Gain (Loss) on Real
Estate Investments:Apartment properties
    
    
    
    
    
    
    70,689Retail properties
    
    
    323,649
    
    
    
    Land
    
    
    
    
    
    
    (2,919
    )Industrial property
    
    
    345,832
    
    
    
    Total Net Realized Gain (Loss) on
Real Estate Investments
    
    
    669,481
    
    
    
    67,770Net Unrealized Gain (Loss) on Real
Estate Investments:Office properties
    
    
    1,967,086
    
    
    
    2,514,348Apartment properties
    
    
    3,123,154
    
    
    
    3,588,692Retail properties
    
    
    (2,716,050
    )
    
    
    6,265,806Industrial property
    
    
    
    
    
    
    2,132,560Hotel property
    
    
    2,409,924
    
    
    
    3,782,829Total Net Unrealized Gain (Loss) on
Real Estate Investments
    
    
    4,784,114
    
    
    
    18,284,235Net Realized and Unrealized Gain
(Loss) on Real Estate Investments
    
    $
    5,453,595
    
    
    $
    18,352,005
 10




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##### 



OFFICE PROPERTIES
 Net Investment
    
    
    Net Investment
    
    
    Unrealized
    
    
    UnrealizedIncome/(Loss)
    
    
    Income/(Loss)
    
    
    Gain/(Loss)
    
    
    Gain/(Loss)
    
    
    Occupancy
    
    
    OccupancyYear Ended December 31,
    
    2007
    
    
    2006
    
    
    2007
    
    
    2006
    
    
    2007
    
    
    2006PropertyLisle, IL
    
    $
    650,916
    
    
    $
    376,939
    
    
    $
    804,870
    
    
    $
    (644,356
    )
    
    
    67%
    
    
    
    38%Brentwood, TN
    
    
    1,153,443
    
    
    
    1,084,255
    
    
    
    9,918
    
    
    
    69,832
    
    
    
    100%
    
    
    
    100%Oakbrook Terrace, IL (1)
    
    
    
    
    
    
    1,323
    
    
    
    
    
    
    
    
    
    
    
    N/A
    
    
    
    N/ABeaverton, OR
    
    
    1,093,305
    
    
    
    940,713
    
    
    
    990,238
    
    
    
    1,888,872
    
    
    
    88%
    
    
    
    79%Brentwood, TN
    
    
    1,047,432
    
    
    
    1,003,852
    
    
    
    162,060
    
    
    
    1,200,000
    
    
    
    100%
    
    
    
    100%$
    3,945,096
    
    
    $
    3,407,082
    
    
    $
    1,967,086
    
    
    $
    2,514,348
 
 (1)
    
    The Oakbrook Terrace, Illinois office property was sold on June 8, 2005 but certain post-closing
adjustments were recognized in the year ended December 31, 2006.
 Net Investment Income
  Unrealized Gain/(Loss)
  11




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##### 



APARTMENT PROPERTIES
 Realized /Net Investment
    
    
    Net Investment
    
    
    Unrealized
    
    
    UnrealizedIncome/(Loss)
    
    
    Income/(Loss)
    
    
    Gain/(Loss)
    
    
    Gain/(Loss)
    
    
    Occupancy
    
    
    OccupancyYear Ended December 31,
    
    2007
    
    
    2006
    
    
    2007
    
    
    2006
    
    
    2007
    
    
    2006PropertyAtlanta, GA
    
    $
    447,290
    
    
    $
    505,136
    
    
    $
    (530,277
    )
    
    $
    2,507,734
    
    
    
    92%
    
    
    
    90%Raleigh, NC
    
    
    613,122
    
    
    
    589,289
    
    
    
    (687,270
    )
    
    
    1,080,958
    
    
    
    94%
    
    
    
    92%Jacksonville, FL (1)
    
    
    17,342
    
    
    
    (25,126
    )
    
    
    
    
    
    
    70,520
    
    
    
    N/A
    
    
    
    N/AGresham/Salem, OR (2)
    
    
    
    
    
    
    (10,165
    )
    
    
    
    
    
    
    169
    
    
    
    N/A
    
    
    
    N/AAustin, TX (3)
    
    
    860,746
    
    
    
    
    
    
    
    4,376,151
    
    
    
    
    
    
    
    92%
    
    
    
    N/ACharlotte, NC(4)
    
    
    181,181
    
    
    
    
    
    
    
    (35,450
    )
    
    
    
    
    
    
    87%
    
    
    
    N/A$
    2,119,681
    
    
    $
    1,059,134
    
    
    $
    3,123,154
    
    
    $
    3,659,381
 
 (1)
    
    The Jacksonville, Florida apartment property was sold on November 30, 2005
but certain post-closing
adjustments were recognized during the year ended December 31, 2007 and 2006.(2)
    
    The Gresham, Oregon and Salem, Oregon apartment properties were sold on
August 10, 2005 and
March 10, 2005, respectively, but certain post-closing adjustments were
recognized during the year ended
December 31, 2006.(3)
    
    Net investment income for the year ended December 31, 2007 reflects partial
period results for the Austin, Texas
apartment property that was acquired on May 8, 2007.(4)
    
    Net investment income for the year ended December 31, 2007 reflects partial
period results for the Charlotte, North Carolina apartment property that was acquired on September 6, 2007. Net Investment Income
  Total Realized and Unrealized Gain/(Loss)
  12




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##### 



RETAIL PROPERTIES
 Realized/Net Investment
    
    
    Net Investment
    
    
    Unrealized
    
    
    UnrealizedIncome/(Loss)
    
    
    Income/(Loss)
    
    
    Gain/(Loss)
    
    
    Gain/(Loss)
    
    
    Occupancy
    
    
    OccupancyYear Ended December 31,
    
    2007
    
    
    2006
    
    
    2007
    
    
    2006
    
    
    2007
    
    
    2006PropertyRoswell, GA
    
    $
    2,072,194
    
    
    $
    2,096,974
    
    
    $
    (3,807,895
    )
    
    $
    1,071,439
    
    
    
    82%
    
    
    
    93%Kansas City, KS; MO (1)
    
    
    158,664
    
    
    
    (34,810
    )
    
    
    323,649
    
    
    
    (164,205
    )
    
    
    N/A
    
    
    
    90%Hampton, VA
    
    
    1,299,715
    
    
    
    1,307,686
    
    
    
    492,521
    
    
    
    (107,277
    )
    
    
    100%
    
    
    
    100%Ocean City, MD
    
    
    702,556
    
    
    
    746,520
    
    
    
    (122,583
    )
    
    
    79,619
    
    
    
    67%
    
    
    
    92%Westminster, MD (2)
    
    
    1,576,148
    
    
    
    908,788
    
    
    
    69,981
    
    
    
    5,386,230
    
    
    
    100%
    
    
    
    98%Dunn, NC (3)
    
    
    215,118
    
    
    
    
    
    
    
    651,926
    
    
    
    
    
    
    
    90%
    
    
    
    N/ACARS Preferred Equity (4)
    
    
    974,559
    
    
    
    979,151
    
    
    
    
    
    
    
    
    
    
    
    N/A
    
    
    
    N/AWestminster, MD (5)
    
    
    
    
    
    
    124,362
    
    
    
    
    
    
    
    
    
    
    
    N/A
    
    
    
    N/A$
    6,998,954
    
    
    $
    6,128,671
    
    
    $
    (2,392,401
    )
    
    $
    6,265,806
 
 (1)
    
    Net investment income (loss) for the year ended December 31, 2007 reflects partial period results for the remaining
retail property in Kansas City, Kansas that was sold on June 29, 2007. Net investment income for the year ended
December 31, 2006 reflects results for all four retail properties located in Kansas City, Kansas and Kansas City, Missouri, prior to
the sale of three out of the four centers on May 15, 2006.(2)
    
    Net investment income for the year ended December 31, 2006 reflects partial period results for the
Westminster, Maryland retail property that was acquired on June 13, 2006.(3)
    
    Net investment income for the year ended December 31, 2007 reflects partial period results for the Dunn, North
Carolina retail property that was acquired on August 17, 2007.(4)
    
    Net investment income for the year ended December 31, 2006 reflects partial period results for
the second funding of the Partnerships preferred equity investment, which occurred on February 14, 2006.(5)
    
    Mortgage Loan Receivable (mortgage paid in full on March 3, 2006).
 Net Investment Income
  Total Realized and Unrealized Gain/(Loss)
  13




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##### 



INDUSTRIAL PROPERTY
 Net Investment
    
    
    Net Investment
    
    
    Realized
    
    
    UnrealizedIncome/(Loss)
    
    
    Income/(Loss)
    
    
    Gain/(Loss)
    
    
    Gain/(Loss)
    
    
    Occupancy
    
    
    OccupancyYear Ended December 31,
    
    2007
    
    
    2006
    
    
    2007
    
    
    2006
    
    
    2007
    
    
    2006PropertyAurora, CO (1)
    
    $
    49,279
    
    
    $
    773,668
    
    
    $
    345,832
    
    
    $
    2,132,560
    
    
    
    N/A
    
    
    
    85
    %
 
 (1)
    
    Net investment income (loss) for the year ended December 31,
2007 reflects partial period results for the Aurora, Colorado industrial
property that was sold on February 7, 2007.
 Net Investment Income
  Total Realized and Unrealized Gain/(Loss)
  HOTEL PROPERTY
 Net Investment
    
    
    Net Investment
    
    
    Unrealized
    
    
    UnrealizedIncome/(Loss)
    
    
    Income/(Loss)
    
    
    Gain/(Loss)
    
    
    Gain/(Loss)
    
    
    Occupancy
    
    
    OccupancyYear Ended December 31,
    
    2007
    
    
    2006
    
    
    2007
    
    
    2006
    
    
    2007
    
    
    2006PropertyLake Oswego, OR
    
    $
    1,343,200
    
    
    $
    1,288,716
    
    
    $
    2,409,924
    
    
    $
    3,782,829
    
    
    
    76
    %
    
    
    80
    %
 Net Investment Income
  Unrealized Gain/(Loss)
  14




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##### 



Other
  c) Inflation
  Critical Accounting Policies
   Valuation of Investments
 Real Estate Investments
     15




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##### 



Other Estimates
  Item 7A.
    
    Quantitative and Qualitative Disclosures About Market Risk
 Interest Rate Risk 
  Estimated Market Value
    
    
    AverageMaturity
    
    
    (in $ millions)
    
    
    Interest RateCash and Cash equivalents
    
    0-3 months
    
    
    $
    18.2
    
    
    
    4.64
    %
  Debt (in $ thousands),
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Estimatedincluding current portion
    
    2008
    
    
    2009
    
    
    2010
    
    
    2011
    
    
    2012
    
    
    Thereafter
    
    
    Total
    
    
    Fair ValueWeighted Average Fixed Interest Rate
    
    
    5.35
    %
    
    
    5.74
    %
    
    
    6.75
    %
    
    
    6.75
    %
    
    
    6.75
    %
    
    
    6.75
    %
    
    
    6.14
    %Fixed Rate
    
    $
    16,090
    
    
    $
    9,277
    
    
    $
    565
    
    
    $
    604
    
    
    $
    646
    
    
    $
    4,940
    
    
    $
    32,122
    
    
    $
    32,262Variable Rate
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total Mortgage Loans Payable
    
    $
    16,090
    
    
    $
    9,277
    
    
    $
    565
    
    
    $
    604
    
    
    $
    646
    
    
    $
    4,940
    
    
    $
    32,122
    
    
    $
    32,262
  16




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##### 



Item 8.
    
    Financial Statements and Supplementary Data
  Item 9.
    
    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
  Item 9A.
    
    Controls and Procedures
  Item 9B.
    
    Other Information
  17




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##### 



PART III
 Item 10.     Directors, Executive Officers and Corporate Governance
 JAMES J. AVERY, JR., Director and Vice Chairman
 HELEN M. GALT, Director
 BERNARD J. JACOB, Director and Treasurer
 DAVID R. ODENATH, JR., Director
 SCOTT D. KAPLAN, Director, Chief Executive Officer and President
 TUCKER I. MARR, Chief Financial Officer and Chief Accounting Officer 
 THOMAS C. CASTANO, Chief Legal Officer and Secretary
 JAMES M. OCONNOR, Senior Vice President and Actuary
 SCOTT G. SLEYSTER, Director
 PHILLIP J. GRIGG, Senior Vice President and Chief Actuary
 KENT D. SLUYTER, Senior Vice President
 KENNETH S. SOLON, Senior Vice President
  18




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##### 



Code of Ethics
   Item 11.
    
    Executive Compensation
  Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
  Item 13.
    
    Certain Relationships and Related Transactions, and Director Independence
   Item 14.
    
    Principal Accountant Fees and Services
  19




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##### 



PART IV
 Item 15.
    
    Exhibits and Financial Statement Schedules
 (a)
    
    The following documents are filed as part of this report:
 1.
    
    Financial StatementsSee the Index to Financial Statements and Supplementary Data on page F-1.2.
    
    Financial Statement SchedulesThe 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: PropertiesSchedule IV  Mortgage Loans On Real EstateSee the Index to Financial Statements and Supplementary Data on page F-1.3.
    
    Documents Incorporated by ReferenceSee the following list of exhibits.4.
    
    ExhibitsSee 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, 2007. The Registrant will furnish a copy of any Exhibit listed
below to any security holder of the Registrant who requests it upon payment of a fee of 15
cents per page. All Exhibits are either contained in this Annual Report on Form 10-K or are
incorporated by reference as indicated below.
 3.1
    
    Amended Articles of Incorporation of Pruco Life Insurance Company filed by Exhibit
1.A.(6)(a) in Form S-6, Registration No. 333-07451, filed July 2,1996, and incorporated
herein by reference.3.2
    
    Amended By-Laws of Pruco Life Insurance Company, filed by Exhibit to Form 10-Q,
Registration No. 033-37587, filed August 15, 1997, and incorporated herein by reference.3.3
    
    Resolution of the Board of Directors establishing the Pruco Life Variable Contract
Real Property Account, filed as Exhibit (3C) in Post-Effective Amendment No. 3 to Form
S-1, Registration Statement No. 33-86780, filed April 9, 1997, and incorporated herein by
reference.4.1
    
    Variable Life Insurance Contract, filed as Exhibit 1.A.(5)(a) to Post-Effective
Amendment No. 24 to Form S-6, Registration Statement No. 2-80513, filed April 30, 1997,
and incorporated herein by reference.4.2
    
    Revised Variable Appreciable Life Insurance Contract with fixed death benefit,
filed as Exhibit 1.A.(5)(f) in Post-Effective Amendment No. 26 to Form S-6, Registration
Statement No. 2-89558, filed April 29, 1997, and incorporated herein by reference.4.3
    
    Revised Variable Appreciable Life Insurance Contract with variable death benefit,
filed as Exhibit 1.A.(5)(g) in Post-Effective Amendment No. 26 to Form S-6, Registration
Statement No. 2-89558, filed April 29, 1997, and incorporated herein by reference.4.4
    
    Single Premium Variable Annuity Contract, filed as Exhibit (4C) in Post-Effective
Amendment No. 3 to Form S-1, Registration Statement No. 33-86780, filed April 9, 1997,
and incorporated herein by reference.4.5
    
    Flexible Premium Variable Life Insurance Contract, filed as Exhibit (D) in
Post-Effective Amendment No. 3 to Form S-1, Registration Statement No. 33-86780, filed
April 9, 1997, and incorporated herein by reference.9.
    
    None.10.1
    
    Investment Management Agreement between Prudential Investment Management, Inc. and
The Prudential 10.2 Variable Contract Real Property Partnership, filed as Exhibit (10A)
in Post-Effective Amendment No. 16 to Form S-1, Registration Statement No. 33-20083-01,
filed April 10, 2003, and incorporated herein by reference.
 20




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##### 



10.2
    
    Administrative Service Agreement among PIM, Prudential Insurance Company of America, Pruco Life Insurance Company, and Pruco Life Insurance Company of New Jersey, filed as
Exhibit (10B) in Post-Effective Amendment No. 17 to Form S-1, Registration Statement No.
33-20083-01, filed April 14, 2004, and incorporated herein by reference.10.3
    
    Partnership Agreement of The Prudential Variable Contract Real Property
Partnership, filed as Exhibit (10C) in Post-Effective Amendment No. 9 to Form S-1,
Registration Statement No. 33-20083-01, filed April 9, 1997, and incorporated herein by
reference.11.
    
    Not applicable.12.
    
    Not applicable.16.
    
    None.18.
    
    None.22.
    
    Not applicable.23.
    
    None.24.
    
    Powers of Attorney are filed herewith.31.1
    
    Section 302 Certification of Chief Executive Officer.31.2
    
    Section 302 Certification of Chief Accounting Officer.32.1
    
    Section 906 Certification of Chief Executive Officer.32.2
    
    Section 906 Certification of Chief Accounting Officer.
 21




---



##### 



SIGNATURES
  PRUCO LIFE INSURANCE COMPANY
in respect of  Pruco Life VariableContract Real Property Account  (Registrant)
 Date: March 21, 2008
    By:
    /s/ Scott D. KaplanScott D. KaplanPresident and Director
(Principal Executive Officer)Date: March 21, 2008
    By:
    /s/ Tucker I. MarrTucker I. MarrChief Accounting Officer
(Principal Accounting and Financial Officer)  Signature
    
    Title
    
    Date* James J. Avery, Jr.

James J. Avery, Jr.
    
    Director
    
    March 21, 2008* Bernard J. Jacob

Bernard J. Jacob
    
    Director
    
    March 21, 2008* Helen M. Galt

Helen M. Galt
    
    Director
    
    March 21, 2008* David R. Odenath, Jr.

David R. Odenath, Jr.
    
    Director
    
    March 21, 2008* Scott G. Sleyster

Scott G. Sleyster
    
    Director
    
    March 21, 2008
 *By:
    /s/ Thomas C. CastanoThomas C. Castano(Attorney-in-Fact)
 22




---



##### 



PRUCO LIFE VARIABLE CONTRACT REAL PROPERTY ACCOUNT
(Registrant)
INDEX
 PageA.  PRUCO LIFE VARIABLE CONTRACT REAL PROPERTY ACCOUNTFinancial Statements:Managements Annual Report on Internal Control Over Financial Reporting
    
    
    F-2Report of Independent Registered Public Accounting Firm
    
    
    F-3Statements of Net Assets  December 31, 2007 and 2006
    
    
    F-4Statements of Operations  Years Ended December 31, 2007, 2006 and 2005
    
    
    F-4Statements of Changes in Net Assets  Years Ended December 31, 2007, 2006 and 2005
    
    
    F-4Notes to Financial Statements
    
    
    F-5B.  THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIPFinancial Statements:Report of Independent Registered Public Accounting Firm
    
    
    F-10Report of Independent Registered Public Accounting Firm on Financial Statement Schedules
    
    
    F-11Consolidated Statements of Assets and Liabilities  December 31, 2007 and 2006
    
    
    F-12Consolidated Statements of Operations  Years Ended December 31, 2007, 2006 and 2005
    
    
    F-13Consolidated Statements of Changes in Net Assets  Years Ended December 31, 2007, 2006
and 2005
    
    
    F-14Consolidated Statements of Cash Flows  Years Ended December 31, 2007, 2006 and 2005
    
    
    F-15Consolidated Schedule of Investments  December 31, 2007 and 2006
    
    
    F-16Notes to Financial Statements
    
    
    F-18Financial Statement Schedules:For the period ended December 31, 2007Schedule III  Real Estate Owned: Properties
    
    
    F-27Schedule IV Mortgage Loans on Real Estate
    
    
    F-28
  F-1




---



##### 



Managements Annual Report on Internal Control Over Financial Reporting
 Internal Control
 Integrated Framework
    March 21, 2008
 F-2




---



##### 



Report of Independent Registered Public Accounting Firm
 
  
 F-3




---



##### 



FINANCIAL STATEMENTS OF
PRUCO LIFE VARIABLE CONTRACT REAL PROPERTY ACCOUNT
 STATEMENTS OF NET ASSETS
 2007
    
    
    2006ASSETSInvestment in The Prudential Variable Contract Real Property Partnership
    
    $
    136,056,513
    
    
    $
    126,078,281Net Assets
    
    $
    136,056,513
    
    
    $
    126,078,281NET ASSETS, representing:Equity of contract owners
    
    $
    93,366,283
    
    
    $
    90,093,068Equity of Pruco Life Insurance Company
    
    
    42,690,230
    
    
    
    35,985,213$
    136,056,513
    
    
    $
    126,078,281Units outstanding
    
    
    42,556,464
    
    
    
    42,285,911Portfolio shares held
    
    
    3,722,570
    
    
    
    3,722,570Portfolio net asset value per share
    
    $
    36.55
    
    
    $
    33.87
 STATEMENTS OF OPERATIONS
For the years ended December 31, 2007, 2006 and 2005
 2007
    
    
    2006
    
    
    2005INVESTMENT INCOMENet investment income from Partnership operations
    
    $
    6,974,604
    
    
    $
    6,150,138
    
    
    $
    5,082,863EXPENSESCharges to contract owners for assuming mortality risk and expense risk and
for administration
    
    
    562,528
    
    
    
    520,933
    
    
    
    476,464NET INVESTMENT INCOME
    
    
    6,412,076
    
    
    
    5,629,205
    
    
    
    4,606,399NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTSNet change in unrealized gain (loss) on investments in Partnership
    
    
    2,634,904
    
    
    
    10,075,522
    
    
    
    5,096,823Net realized gain (loss) on sale of investments allocated from the Partnership
    
    
    368,724
    
    
    
    37,341
    
    
    
    3,428,662NET GAIN (LOSS) ON INVESTMENTS
    
    
    3,003,628
    
    
    
    10,112,863
    
    
    
    8,525,485NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS
    
    $
    9,415,704
    
    
    $
    15,742,068
    
    
    $
    13,131,884
 STATEMENTS OF CHANGES IN NET ASSETS
 2007
    
    
    2006
    
    
    2005OPERATIONSNet investment income
    
    $
    6,412,076
    
    
    $
    5,629,205
    
    
    $
    4,606,399Net change in unrealized gain (loss) on investments in Partnership
    
    
    2,634,904
    
    
    
    10,075,522
    
    
    
    5,096,823Net realized gain (loss) on sale of investments allocated from the Partnership
    
    
    368,724
    
    
    
    37,341
    
    
    
    3,428,662NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS
    
    
    9,415,704
    
    
    
    15,742,068
    
    
    
    13,131,884CAPITAL TRANSACTIONSNet contributions (withdrawals) by contract owners
    
    
    (3,184,369
    )
    
    
    (2,886,469
    )
    
    
    (2,333,786
    )Net contributions (withdrawals) by Pruco Life Insurance Company
    
    
    3,746,897
    
    
    
    22,175
    
    
    
    (548,374
    )NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL TRANSACTIONS
    
    
    562,528
    
    
    
    (2,864,294
    )
    
    
    (2,882,160
    )TOTAL INCREASE (DECREASE) IN NET ASSETS
    
    
    9,978,232
    
    
    
    12,877,774
    
    
    
    10,249,724NET ASSETSBeginning of period
    
    
    126,078,281
    
    
    
    113,200,507
    
    
    
    102,950,783End of period
    
    $
    136,056,513
    
    
    $
    126,078,281
    
    
    $
    113,200,507
 The accompanying notes are an integral part of these financial statements.
 F-4




---



##### 



NOTES TO THE FINANCIAL STATEMENTS OF
PRUCO LIFE VARIABLE CONTRACT REAL PROPERTY ACCOUNT
December 31, 2007
 Note 1:     General
    Note 2:     Summary of Significant Accounting Policies and Pronouncements
 A. Basis of Accounting
     B. Investment in Partnership Interest
  C. Income Recognition
  F-5




---



##### 



NOTES TO THE FINANCIAL STATEMENTS OF
PRUCO LIFE VARIABLE CONTRACT REAL PROPERTY ACCOUNT
December 31, 2007
 D. Equity of Pruco Life Insurance Company
  Note 3:     Taxes
  Note 4:     Net Withdrawals by Contract Owners
  2007:
    
    VAL
    
    
    VLI
    
    
    SPVA
    
    
    SPVL
    
    
    TOTALContract Owner Net Payments:
    
    $
    3,210,271
    
    
    $
    268,761
    
    
    $
    0
    
    
    $
    (1,657
    )
    
    $
    3,477,375Policy Loans:
    
    
    (1,648,153
    )
    
    
    (88,326
    )
    
    
    0
    
    
    
    (60,989
    )
    
    
    (1,797,468
    )Policy Loan Repayments and Interest:
    
    
    1,803,872
    
    
    
    64,388
    
    
    
    0
    
    
    
    139,306
    
    
    
    2,007,566Surrenders, Withdrawals, and Death Benefits:
    
    
    (3,079,182
    )
    
    
    (184,388
    )
    
    
    (2,252
    )
    
    
    (222,916
    )
    
    
    (3,488,738
    )Net Transfers From/To Other Subaccounts or
Fixed Rate Option:
    
    
    (665,722
    )
    
    
    (37,227
    )
    
    
    0
    
    
    
    (69,088
    )
    
    
    (772,037
    )Administrative and Other Charges:
    
    
    (2,393,570
    )
    
    
    (193,051
    )
    
    
    0
    
    
    
    (24,446
    )
    
    
    (2,611,067
    )Net Withdrawals by Contract Owners
    
    $
    (2,772,484
    )
    
    $
    (169,843
    )
    
    $
    (2,252
    )
    
    $
    (239,790
    )
    
    $
    (3,184,369
    )
 2006:
    
    VAL
    
    
    VLI
    
    
    SPVA
    
    
    SPVL
    
    
    TOTALContract Owner Net Payments:
    
    $
    3,284,594
    
    
    $
    283,122
    
    
    $
    (9
    )
    
    $
    (5,308
    )
    
    $
    3,562,399Policy Loans:
    
    
    (1,463,946
    )
    
    
    (84,509
    )
    
    
    0
    
    
    
    (52,833
    )
    
    
    (1,601,288
    )Policy Loan Repayments and Interest:
    
    
    1,545,182
    
    
    
    127,997
    
    
    
    0
    
    
    
    149,233
    
    
    
    1,822,412Surrenders, Withdrawals, and Death Benefits:
    
    
    (3,153,786
    )
    
    
    (303,089
    )
    
    
    (57,246
    )
    
    
    (403,139
    )
    
    
    (3,917,260
    )Net Transfers From/To Other Subaccounts or
Fixed Rate Option:
    
    
    (102,416
    )
    
    
    (37,252
    )
    
    
    (3,408
    )
    
    
    50,193
    
    
    
    (92,883
    )Administrative and Other Charges:
    
    
    (2,450,224
    )
    
    
    (185,612
    )
    
    
    0
    
    
    
    (24,013
    )
    
    
    (2,659,849
    )Net Withdrawals by Contract Owners
    
    $
    (2,340,596
    )
    
    $
    (199,343
    )
    
    $
    (60,663
    )
    
    $
    (285,867
    )
    
    $
    (2,886,469
    )
 2005:
    
    VAL
    
    
    VLI
    
    
    SPVA
    
    
    SPVL
    
    
    TOTALContract Owner Net Payments:
    
    $
    3,479,291
    
    
    $
    280,783
    
    
    $
    (3
    )
    
    $
    2,705
    
    
    $
    3,757,366Policy Loans:
    
    
    (1,420,648
    )
    
    
    (114,443
    )
    
    
    0
    
    
    
    (51,315
    )
    
    
    (1,586,406
    )Policy Loan Repayments and Interest:
    
    
    1,617,102
    
    
    
    135,706
    
    
    
    0
    
    
    
    136,594
    
    
    
    1,889,402Surrenders, Withdrawals, and Death Benefits:
    
    
    (2,962,740
    )
    
    
    (208,936
    )
    
    
    (119,238
    )
    
    
    (443,597
    )
    
    
    (3,734,511
    )Net Transfers From/To Other Subaccounts or
Fixed Rate Option:
    
    
    (7,738
    )
    
    
    (15,129
    )
    
    
    (4,039
    )
    
    
    16,985
    
    
    
    (9,921
    )Administrative and Other Charges:
    
    
    (2,450,927
    )
    
    
    (175,561
    )
    
    
    0
    
    
    
    (23,228
    )
    
    
    (2,649,716
    )Net Withdrawals by Contract Owners
    
    $
    (1,745,660
    )
    
    $
    (97,580
    )
    
    $
    (123,280
    )
    
    $
    (367,266
    )
    
    $
    (2,333,786
    )
 F-6




---



##### 



NOTES TO THE FINANCIAL STATEMENTS OF
PRUCO LIFE VARIABLE CONTRACT REAL PROPERTY ACCOUNT
December 31, 2007
 Note 5:     Unit Activity
  2007:
    
    
    
    
    
    
    
    VAL
    
    VLI
    
    SPVA
    
    SPVLCompany Contributions:
    
    1,324,544
    
    Contract Owner Contributions:
    
    1,652,356
    
    100,921
    
    0
    
    67,179Company Redemptions:
    
    (30,373)
    
    Contract Owner Redemptions:
    
    (2,535,482)
    
    (152,306)
    
    (816)
    
    (155,468)2006:
    
    
    
    
    
    
    
    VAL
    
    VLI
    
    SPVA
    
    SPVLCompany Contributions:
    
    1,461,314
    
    Contract Owner Contributions:
    
    1,874,121
    
    127,794
    
    0
    
    82,726Company Redemptions:
    
    (1,336,821)
    
    Contract Owner Redemptions:
    
    (2,700,887)
    
    (194,930)
    
    (25,052)
    
    (198,202)2005:
    
    
    
    
    
    
    
    VAL
    
    VLI
    
    SPVA
    
    SPVLCompany Contributions:
    
    1,403,519
    
    Contract Owner Contributions:
    
    2,144,323
    
    142,550
    
    1,350
    
    92,006Company Redemptions:
    
    (1,435,211)
    
    Contract Owner Redemptions:
    
    (2,841,794)
    
    (178,595)
    
    (56,870)
    
    (260,949)
 Note 6:     Purchases and Sales of Investments
  December 31, 2007
    
    
    December 31, 2006
    
    
    December 31, 2005Purchases:
    
    $
    0
    
    
    $
    0
    
    
    $
    0Sales:
    
    $
    0
    
    
    $
    (3,385,228
    )
    
    $
    (3,358,625
    )
 F-7




---



##### 



NOTES TO THE FINANCIAL STATEMENTS OF
PRUCO LIFE VARIABLE CONTRACT REAL PROPERTY ACCOUNT
December 31, 2007
 Note 7:     Financial Highlights
   At year ended
    
    
    For the year endedUnits
    
    Unit Value
    
    Net Assets
    
    
    Investment
    
    
    Expense Ratio**
    
    Total Return***(000s)
    
    Lowest- Highest
    
    (000s)
    
    
    Income Ratio*
    
    
    Lowest-Highest
    
    Lowest-HighestDecember 31, 2007
    
    29,035*
    
    $2.80966 to $3.39532
    
    $
    93,366
    
    
    
    5.28
    %
    
    0.35% to 1.25%
    
    6.58% to 7.54%December 31, 2006
    
    30,059*
    
    $2.63621 to $3.15740
    
    $
    90,093
    
    
    
    5.10
    %
    
    0.35% to 1.25%
    
    13.05% to 14.06%December 31, 2005
    
    31,094*
    
    $2.33181 to $2.76817
    
    $
    81,886
    
    
    
    4.64
    %
    
    0.35% to 1.25%
    
    11.76% to 12.76%December 31, 2004
    
    32,051*
    
    $2.08645 to $2.45484
    
    $
    74,999
    
    
    
    4.15
    %
    
    0.35% to 1.25%
    
    4.74% to 5.68%December 31, 2003
    
    33,530*
    
    $1.99197 to $2.32279
    
    $
    74,407
    
    
    
    5.77
    %
    
    0.35% to 1.25%
    
    0.98% to 1.89%
  
 *
    
    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 risk, expense risk and administrative charges, that result
in direct reductions in the unit values.**
    
    These ratios represent the annualized contract expenses of the separate account, consisting
primarily of mortality and expense charges, for each period indicated. The ratios include only
those expenses that result in a direct reduction to unit values. Charges made directly to
contract owner accounts through the redemption of units and expenses of the underlying
Partnership are excluded.***
    
    These amounts represent the total return for the periods indicated, including changes in the
value of the underlying Partnership, and reflect deductions for all items included in the
expense ratio. The total return does not include any expense assessed through the redemption
of units; inclusion of these expenses in the calculation would result in a reduction in the
total return presented. Charges and Expenses
 A. Mortality Risk and Expense Risk Charges
  B. Administrative Charges
  F-8




---



##### 



NOTES TO THE FINANCIAL STATEMENTS OF
PRUCO LIFE VARIABLE CONTRACT REAL PROPERTY ACCOUNT
December 31, 2007
 C. Cost of Insurance and Other Related Charges
  D. Deferred Sales Charge
  E. Partial Withdrawal Charge
  Note 8:     Related Party
  F-9




---



##### 



Report of Independent Registered Public Accounting Firm
 
  
 F-10




---



##### 



Report of Independent Registered Public Accounting Firm on
Financial Statement Schedules
 
  
 F-11




---



##### 



THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES
 December 31, 2007
    
    
    December 31, 2006ASSETSREAL ESTATE INVESTMENTS  At estimated market value:Real estate and improvements
(cost: 12/31/2007  $233,233,775; 12/31/2006
 $199,124,056)
    
    $
    251,161,712
    
    
    $
    214,444,568Real estate partnerships and preferred equity
investments (cost:12/31/2007  $14,523,934; 12/31/2006  $22,334,823)
    
    
    14,523,934
    
    
    
    17,941,039Other real estate investments (cost: 12/31/2007 
$3,232,341;
12/31/2006  $2,857,851)
    
    
    3,232,341
    
    
    
    2,857,851Total real estate investments
    
    $
    268,917,987
    
    
    $
    235,243,458CASH AND CASH EQUIVALENTS
    
    
    18,215,871
    
    
    
    33,399,532OTHER ASSETS, NET
    
    
    3,033,040
    
    
    
    3,493,829Total assets
    
    $
    290,166,898
    
    
    $
    272,136,819LIABILITIES & PARTNERS EQUITYINVESTMENT LEVEL DEBT
    
    $
    32,121,712
    
    
    $
    32,710,488ACCOUNTS PAYABLE AND ACCRUED EXPENSES
    
    
    2,184,812
    
    
    
    3,091,930DUE TO AFFILIATES
    
    
    901,371
    
    
    
    789,889OTHER LIABILITIES
    
    
    920,454
    
    
    
    876,487MINORITY INTEREST
    
    
    7,004,790
    
    
    
    5,751,441Total liabilities
    
    
    43,133,139
    
    
    
    43,220,235COMMITMENTS AND CONTINGENCIESPARTNERS EQUITY
    
    
    247,033,759
    
    
    
    228,916,584Total liabilities and partners equity
    
    $
    290,166,898
    
    
    $
    272,136,819NUMBER OF SHARES OUTSTANDING AT END OF PERIOD
    
    
    6,758,960
    
    
    
    6,758,960SHARE VALUE AT END OF PERIOD
    
    $
    36.55
    
    
    $
    33.87
 The accompanying notes are an integral part of these consolidated financial statements.
 F-12




---



##### 



THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP
CONSOLIDATED STATEMENTS OF OPERATIONS
 Year Ended December 31,2007
    
    
    2006
    
    
    2005INVESTMENT INCOME:Revenue from real estate and improvements
    
    $
    28,720,477
    
    
    $
    25,460,860
    
    
    $
    27,087,813Equity in income of real estate partnerships
    
    
    1,136,936
    
    
    
    962,208
    
    
    
    252,618Interest and equity income on mortgage
and other loans receivable
    
    
    
    
    
    
    125,510
    
    
    
    281,134Income from other real estate investments
    
    
    374,491
    
    
    
    219,564
    
    
    
    Interest on short-term investments
    
    
    1,468,159
    
    
    
    1,855,345
    
    
    
    1,022,706Total investment income
    
    
    31,700,063
    
    
    
    28,623,487
    
    
    
    28,644,271INVESTMENT EXPENSES:Operating
    
    
    6,954,999
    
    
    
    6,355,543
    
    
    
    7,420,509Investment management fee
    
    
    3,380,090
    
    
    
    3,075,176
    
    
    
    2,845,519Real estate taxes
    
    
    2,466,704
    
    
    
    2,069,169
    
    
    
    2,382,626Administrative
    
    
    4,056,557
    
    
    
    3,923,413
    
    
    
    4,438,482Interest expense
    
    
    2,019,937
    
    
    
    1,814,686
    
    
    
    2,173,789Minority interest
    
    
    158,196
    
    
    
    223,772
    
    
    
    164,175Total investment expenses
    
    
    19,036,483
    
    
    
    17,461,759
    
    
    
    19,425,100NET INVESTMENT INCOME
    
    
    12,663,580
    
    
    
    11,161,728
    
    
    
    9,219,171REALIZED AND UNREALIZED GAIN (LOSS) ON REAL ESTATE
INVESTMENTS:Net proceeds from real estate investments sold
    
    
    18,353,122
    
    
    
    67,770
    
    
    
    55,054,217Less: Cost of real estate investments sold
    
    
    19,063,985
    
    
    
    
    
    
    
    47,015,948Realization of prior years unrealized
gain (loss) on real estate investments sold
    
    
    (1,380,344
    )
    
    
    
    
    
    
    (655,341
    )Minority interest in realized gain (loss) on real estate
investments sold
    
    
    
    
    
    
    
    
    
    
    2,474,788NET GAIN (LOSS) REALIZED ON REAL ESTATE INVESTMENTS SOLD
    
    
    669,481
    
    
    
    67,770
    
    
    
    6,218,822Change in unrealized gain (loss) on real estate investments
    
    
    5,620,864
    
    
    
    20,294,808
    
    
    
    10,475,654Less: Minority interest in unrealized gain (loss) on real estate investments
    
    
    836,750
    
    
    
    2,010,573
    
    
    
    1,233,857Net unrealized gain (loss) on real estate investments
    
    
    4,784,114
    
    
    
    18,284,235
    
    
    
    9,241,797NET REALIZED AND UNREALIZED GAIN (LOSS)
ON REAL ESTATE INVESTMENTS
    
    
    5,453,595
    
    
    
    18,352,005
    
    
    
    15,460,619INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS
    
    $
    18,117,175
    
    
    $
    29,513,733
    
    
    $
    24,679,790
 The accompanying notes are an integral part of these consolidated financial statements.
 F-13




---



##### 



THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
 Year Ended December 31,2007
    
    
    2006
    
    
    2005INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS:Net investment income
    
    $
    12,663,580
    
    
    $
    11,161,728
    
    
    $
    9,219,171Net gain (loss) realized on real estate
investments sold
    
    
    669,481
    
    
    
    67,770
    
    
    
    6,218,822Net unrealized gain (loss) from real estate
investments
    
    
    4,784,114
    
    
    
    18,284,235
    
    
    
    9,241,797Increase (decrease) in net assets
resulting from operations
    
    
    18,117,175
    
    
    
    29,513,733
    
    
    
    24,679,790INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM CAPITAL TRANSACTIONS:Withdrawals
(2007-0; 2006-182,671; and
2005-198,677 shares, respectively)
    
    
    
    
    
    
    (6,000,000
    )
    
    
    (6,000,000
    )Increase (decrease) in net assets
resulting from capital transactions
    
    
    
    
    
    
    (6,000,000
    )
    
    
    (6,000,000
    )INCREASE (DECREASE) IN NET ASSETS
    
    
    18,117,175
    
    
    
    23,513,733
    
    
    
    18,679,790NET ASSETS   Beginning of period
    
    
    228,916,584
    
    
    
    205,402,851
    
    
    
    186,723,061NET ASSETS   End of period
    
    $
    247,033,759
    
    
    $
    228,916,584
    
    
    $
    205,402,851
 The accompanying notes are an integral part of these consolidated financial statements.
 F-14




---



##### 



THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP
CONSOLIDATED STATEMENTS OF CASH FLOWS
 Year Ended December 31,2007
    
    
    2006
    
    
    2005CASH FLOWS FROM OPERATING ACTIVITIES:Net increase in net assets from operations
    
    $
    18,117,175
    
    
    $
    29,513,733
    
    
    $
    24,679,790Adjustments to reconcile net increase in net assets
to net cash from operating activitiesNet realized and unrealized loss (gain)
    
    
    (5,453,595
    )
    
    
    (18,352,005
    )
    
    
    (15,460,619
    )Amortization of deferred financing costs
    
    
    193,594
    
    
    
    
    
    
    
    (34,620
    )Distributions in excess of (less than) equity in income
of real estate partnerships operations
    
    
    35,287
    
    
    
    (87,396
    )
    
    
    (148,668
    )Minority interest in consolidated partnerships
    
    
    158,196
    
    
    
    223,772
    
    
    
    164,175Bad debt expense
    
    
    101,185
    
    
    
    (239,380
    )
    
    
    240,176(Increase) decrease in accrued interest included in
other real estate investments
    
    
    (374,491
    )
    
    
    (219,564
    )
    
    
    (Increase) decrease in:Other assets
    
    
    166,010
    
    
    
    37,951
    
    
    
    2,815,778Increase (decrease) in:Accounts payable and accrued expenses
    
    
    (907,118
    )
    
    
    546,878
    
    
    
    (550,954
    )Due to affiliates
    
    
    111,482
    
    
    
    28,963
    
    
    
    39,507Other liabilities
    
    
    43,967
    
    
    
    404,151
    
    
    
    (150,564
    )Net cash flows from (used in) operating activities
    
    
    12,191,692
    
    
    
    11,857,103
    
    
    
    11,594,001CASH FLOWS FROM INVESTING ACTIVITIES:Net proceeds from real estate investments sold
    
    
    18,353,122
    
    
    
    67,770
    
    
    
    41,676,816Acquisition of real estate and improvements
    
    
    (42,218,143
    )
    
    
    (12,159,443
    )
    
    
    Additions to real estate and improvements
    
    
    (3,179,960
    )
    
    
    (3,197,470
    )
    
    
    (6,198,211
    )Contributions to real estate partnerships
    
    
    
    
    
    
    (7,289,487
    )
    
    
    (7,142,900
    )Return of investment in real estate partnerships
    
    
    
    
    
    
    3,620,455
    
    
    
    Origination of mortgage loan receivable
    
    
    
    
    
    
    
    
    
    
    (2,945,709
    )Collection of mortgage loan receivable
    
    
    
    
    
    
    4,277,769
    
    
    
    Origination of other real estate investments
    
    
    
    
    
    
    (2,638,287
    )
    
    
    Net cash flows from (used in) investing activities
    
    
    (27,044,981
    )
    
    
    (17,318,693
    )
    
    
    25,389,996CASH FLOWS FROM FINANCING ACTIVITIES:Withdrawals
    
    
    
    
    
    
    (6,000,000
    )
    
    
    (6,000,000
    )Principal payments on investment level debt
    
    
    (588,776
    )
    
    
    (485,119
    )
    
    
    (853,525
    )Contributions to minority interest partners
    
    
    294,143
    
    
    
    
    
    
    
    Distributions to minority interest partners
    
    
    (35,739
    )
    
    
    (121,244
    )
    
    
    (2,220,169
    )Net cash flows from (used in) financing activities
    
    
    (330,372
    )
    
    
    (6,606,363
    )
    
    
    (9,073,694
    )NET CHANGE IN CASH AND CASH
EQUIVALENTS
    
    
    (15,183,661
    )
    
    
    (12,067,953
    )
    
    
    27,910,303CASH AND CASH EQUIVALENTS  Beginning of period
    
    
    33,399,532
    
    
    
    45,467,485
    
    
    
    17,557,182CASH AND CASH EQUIVALENTS  End of period
    
    $
    18,215,871
    
    
    $
    33,399,532
    
    
    $
    45,467,485
 The accompanying notes are an integral part of these consolidated financial statements.
 F-15




---



##### 



THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP
CONSOLIDATED SCHEDULE OF INVESTMENTS
 2007 Total RentableSquare Feet

    
    December 31,Unless Otherwise

    
    2007
    
    
    2006December 31, 2007
    
    
    
    
    
    
    Indicated
    
    
    
    
    
    Estimated
    
    
    
    
    
    
    EstimatedProperty Name
    
    Ownership
    
    
    City, State
    
    
    (Unaudited)
    
    Cost
    
    
    Market Value
    
    
    Cost
    
    
    Market ValueOFFICES750 Warrenville
    
    WO
    
    Lisle, IL
    
    
    103,193
    
    
    $
    24,512,521
    
    
    $
    11,500,000
    
    
    $
    24,517,391
    
    
    $
    10,700,000Summit @ Cornell Oaks
    
    WO
    
    Beaverton , OR
    
    
    72,109
    
    
    
    12,401,252
    
    
    
    13,800,000
    
    
    
    12,091,490
    
    
    
    12,500,000Westpark
    
    WO
    
    Nashville, TN
    
    
    97,199
    
    
    
    11,323,885
    
    
    
    13,100,000
    
    
    
    11,033,804
    
    
    
    12,800,000Financial Plaza
    
    WO
    
    Brentwood, TN
    
    
    98,049
    
    
    
    12,371,092
    
    
    
    13,700,000
    
    
    
    12,333,152
    
    
    
    13,500,000Offices % as of 12/31/07
    
    
    21
    %
    
    
    60,608,750
    
    
    
    52,100,000
    
    
    
    59,975,837
    
    
    
    49,500,000APARTMENTSBrookwood Apartments
    
    WO
    
    Atlanta, GA
    
    240 Units
    
    
    
    19,548,293
    
    
    
    20,200,000
    
    
    
    18,918,016
    
    
    
    20,100,000Dunhill Trace Apartments
    
    WO
    
    Raleigh, NC
    
    250 Units
    
    
    
    16,375,037
    
    
    
    19,800,000
    
    
    
    16,287,767
    
    
    
    20,400,000Broadstone Crossing
    
    WO
    
    Austin, TX
    
    225 Units
    
    
    
    22,723,849
    
    
    
    27,100,000
    
    
    
    
    
    
    
    The Reserve At Waterford Lakes
    
    WO
    
    Charlotte, NC
    
    140 Units
    
    
    
    13,535,450
    
    
    
    13,500,000
    
    
    
    
    
    
    
    Apartments % as of 12/31/07
    
    
    33
    %
    
    
    72,182,629
    
    
    
    80,600,000
    
    
    
    35,205,783
    
    
    
    40,500,000RETAILKings Market
    
    WO
    
    Rosewell, GA
    
    
    314,358
    
    
    
    37,883,222
    
    
    
    24,700,000
    
    
    
    37,775,326
    
    
    
    28,400,000Hampton Towne Center
    
    WO
    
    Hampton, VA
    
    
    174,540
    
    
    
    18,050,090
    
    
    
    26,500,000
    
    
    
    18,042,611
    
    
    
    26,000,000White Marlin Mall
    
    CJV
    
    Ocean City, MD
    
    
    186,016
    
    
    
    17,016,325
    
    
    
    23,900,000
    
    
    
    15,538,779
    
    
    
    22,900,000Westminster Crossing East, LLC
    
    CJV
    
    Westminster, MD
    
    
    89,890
    
    
    
    12,405,500
    
    
    
    17,861,712
    
    
    
    12,358,340
    
    
    
    17,744,568Kansas City Portfolio
    
    EJV
    
    Kansas City, KS;MO
    
    
    487,660
    
    
    
    140,911
    
    
    
    140,911
    
    
    
    7,816,531
    
    
    
    3,422,747CARS Preferred Equity
    
    PE
    
    Various
    
    
    N/A
    
    
    
    14,383,023
    
    
    
    14,383,023
    
    
    
    14,518,292
    
    
    
    14,518,292Harnett Crossing
    
    CJV
    
    Dunn, NC
    
    
    193,235
    
    
    
    5,958,844
    
    
    
    7,200,000
    
    
    
    
    
    
    
    Retail % as of 12/31/07
    
    
    47
    %
    
    
    105,837,915
    
    
    
    114,685,646
    
    
    
    106,049,879
    
    
    
    112,985,607INDUSTRIALSmith Road
    
    WO
    
    Aurora, CO
    
    
    277,930
    
    
    
    
    
    
    
    
    
    
    
    11,286,560
    
    
    
    14,300,000Industrial % as of 12/31/07
    
    
    0
    %
    
    
    
    
    
    
    
    
    
    
    11,286,560
    
    
    
    14,300,000HOTELPortland Crown Plaza
    
    CJV
    
    Portland, OR
    
    161 Rooms
    
    
    
    9,128,415
    
    
    
    18,300,000
    
    
    
    8,940,820
    
    
    
    15,100,000Hotel % as of 12/31/07
    
    
    7
    %
    
    
    9,128,415
    
    
    
    18,300,000
    
    
    
    8,940,820
    
    
    
    15,100,000OTHER REAL ESTATE INVESTMENTSWestminster East
    
    Eloan
    
    Westminster, MD
    
    
    
    
    
    
    3,232,341
    
    
    
    3,232,341
    
    
    
    2,857,851
    
    
    
    2,857,851Other Real EstateInvestments % as of 12/31/07
    
    
    
    1
    %
    
    
    3,232,341
    
    
    
    3,232,341
    
    
    
    2,857,851
    
    
    
    2,857,851Total Real Estate Investments as a Percentage of Net Assets as of 12/31/07
    
    
    109
    %
    
    $
    250,990,050
    
    
    $
    268,917,987
    
    
    $
    224,316,730
    
    
    $
    235,243,458
 
 The accompanying notes are an integral part of these consolidated financial statements.
 F-16




---



##### 



THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP
CONSOLIDATED SCHEDULE OF INVESTMENTS
 December 31, 2007
    
    
    December 31, 2006Estimated
    
    
    
    
    
    
    EstimatedFace Amount
    
    
    Cost
    
    
    Market Value
    
    
    Cost
    
    
    Market ValueCASH AND CASH EQUIVALENTS  Percentage of Net Assets
    
    
    
    
    
    
    
    
    
    
    7.4
    %
    
    
    
    
    
    
    14.6
    %Federal Home Loan Bank, 0 coupon bond, January, 2008
    
    $
    2,065,813
    
    
    $
    2,065,813
    
    
    $
    2,065,813
    
    
    $
    7,245,028
    
    
    $
    7,245,028Federal Home Loan Bank, 0 coupon bond, January, 2008
    
    
    4,998,313
    
    
    
    4,998,313
    
    
    
    4,998,313
    
    
    
    24,914,167
    
    
    
    24,914,167Federal Home Loan Bank, 0 coupon bond, January, 2008
    
    
    9,997,633
    
    
    
    9,997,633
    
    
    
    9,997,633
    
    
    
    
    
    
    
    Total Cash Equivalents
    
    
    
    
    
    
    17,061,759
    
    
    
    17,061,759
    
    
    
    32,159,195
    
    
    
    32,159,195Cash
    
    
    
    
    
    
    1,154,112
    
    
    
    1,154,112
    
    
    
    1,240,337
    
    
    
    1,240,337Total Cash and Cash Equivalents
    
    
    
    
    
    $
    18,215,871
    
    
    $
    18,215,871
    
    
    $
    33,399,532
    
    
    $
    33,399,532
 The accompanying notes are an integral part of these consolidated financial statements.
 F-17




---



##### 



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF  THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP  For Years Ended December 31, 2007, 2006, and 2005
 Note 1:
    Organization
     ®
 Note 2:
    Summary of Significant Accounting Policies
 A:
    
    Basis of Presentation The accompanying consolidated financial statements of the
Partnership have been presented on the market value basis of accounting in conformity
with accounting principles generally accepted in the United States of America. The
consolidated financial statements of Partnership include wholly owned entities, and those
real estate partnerships in which the Partnership has a controlling interest. All
significant inter-company balances and transactions have been eliminated in
consolidation.B:
    
    Managements Use of Estimates in the Financial Statements The preparation of
financial statements in conformity with accounting principles generally accepted in the
United States of America requires management to make estimates and assumptions that
affect the amounts reported in the consolidated financial statements and accompanying
notes. Actual results could differ from those estimates.
 F-18




---



##### 



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF  THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP  For Years Ended December 31, 2007, 2006, and 2005
 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. An unaffiliated third party appraisal firm 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.
     D:
    
    Other Real Estate Investments Other real estate investments include short-term
notes receivable, which are valued at the amount due and approximate market value.E:
    
    Cash and Cash Equivalents Cash and cash equivalent are comprised of all
short-term investments and investments in money market funds with a maximum maturity of
three months. Cash equivalents consist of investments in the Prudential Investment
Liquidity Pool offered and managed by an affiliate of PFI and are accounted for at market
value.F:
    
    Other Assets Restricted cash of $186,736 and $167,311 was maintained by the
wholly owned and consolidated properties at December 31, 2007 and 2006, respectively, for
tenant security deposits and is included in Other Assets on the Consolidated Statements
of Assets and Liabilities. Other assets also include tenant receivables and are net of
allowance for uncollectible accounts of $39,764 and $211,058 at December 31, 2007 and
2006, respectively.
 F-19




---



##### 



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF  THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP  For Years Ended December 31, 2007, 2006, and 2005
 Note 2:
    Summary of Significant Accounting Policies (continued)
 G:
    
    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.H:
    
    Deferred Financing Costs Included in Other Assets are deferred financing costs
amounting to $36,072 and $309,894 which are net of accumulated amortization of $273,822
and $80,227 as of December 31, 2007 and 2006, respectively, and which are being amortized
over the term of the related obligation.I:
    
    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.J:
    
    Equity in Income of Real Estate Partnerships 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.K:
    
    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.L:
    
    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) that supersedes FIN 46. FIN
46-R defers the effective date for applying the provisions of FIN46 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 FASB is
currently considering 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.
 F-20




---



##### 



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF  THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP  For Years Ended December 31, 2007, 2006, and 2005
 Note 2:
    Summary of Significant Accounting Policies (continued)
 L:
    
    New Accounting Pronouncements (continued)
     Note 3:
    Disclosure of Supplemental Cash Flow Information and Non-Cash Investing and Financing
Activity
 F-21




---



##### 



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF  THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP  For Years Ended December 31, 2007, 2006, and 2005
 Note 4:
    Real Estate Partnerships and Preferred Equity Investments
  December 31,2007
    
    
    2006Partnership Assets and LiabilitiesReal estate at estimated market value
    
    $
    14,383
    
    
    $
    22,018Other assets
    
    
    452
    
    
    
    453Total assets
    
    
    14,835
    
    
    
    22,471Investment level debt
    
    
    
    
    
    
    2,978Other liabilities
    
    
    242
    
    
    
    253Total liabilities
    
    
    242
    
    
    
    3,231Net assets
    
    $
    14,593
    
    
    $
    19,240Partnerships share of net assets
    
    $
    14,524
    
    
    $
    17,941
 Year Ended December 31,2007
    
    
    2006
    
    
    2005Partnership OperationsRental revenue
    
    $
    1,598
    
    
    $
    3,364
    
    
    $
    4,115Other revenue
    
    
    
    
    
    
    
    
    
    
    Total revenue
    
    
    1,598
    
    
    
    3,364
    
    
    
    4,115Real estate expenses and taxes
    
    
    235
    
    
    
    1,017
    
    
    
    2,326Interest Expense
    
    
    134
    
    
    
    1,396
    
    
    
    1,477Total Expenses
    
    
    369
    
    
    
    2,413
    
    
    
    3,803Net Investment Income
    
    $
    1,229
    
    
    $
    951
    
    
    $
    312Partnerships equity in income of real estate partnerships
    
    $
    1,137
    
    
    $
    962
    
    
    $
    253
 F-22




---



##### 



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF  THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP  For Years Ended December 31, 2007, 2006, and 2005 Note 5:
    Investment Level Debt
 As of 12/31/07
    
    
    As of 12/31/06
    
    
    As of 12/31/07(Unaudited)Partnerships100% Principal
    
    
    Share of
    
    
    100% PrincipalBalance
    
    
    Principal Balance
    
    
    Balance
    
    
    Interest
    
    
    MaturityOutstanding
    
    

Outstanding(1)
    
    
    Outstanding
    
    

Rate(2)
    
    
    Date
    
    

Terms
(3)Mortgages of Wholly Owned Properties & Consolidated PartnershipsHampton, VA
    
    $
    7,778
    
    
    $
    7,778
    
    
    $
    8,239
    
    
    
    6.75
    %
    
    
    2018
    
    
    PP, P&IOcean City, MD
    
    
    6,847
    
    
    
    4,991
    
    
    
    6,973
    
    
    
    7.24
    %
    
    
    2008
    
    
    PP, P&IRaleigh, NC
    
    
    8,750
    
    
    
    8,750
    
    
    
    8,750
    
    
    
    3.09
    %
    
    
    2008
    
    
    PP, IAtlanta, GA
    
    
    8,747
    
    
    
    8,747
    
    
    
    8,748
    
    
    
    4.90
    %
    
    
    2009
    
    
    PP, P&ITotal
    
    $
    32,122
    
    
    $
    30,266
    
    
    $
    32,710Mortgages on Equity PartnershipsKansas City, MO  Cherokee Hill
    
    $
    
    
    
    $
    
    
    
    $
    2,978
    
    
    
    
    
    
    
    
    
    
    PP, P&ITotal
    
    $
    
    
    
    $
    
    
    
    $
    2,978
 
 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, 2007. It does not represent the Partnerships legal obligation.2.
    
    The Partnerships weighted average interest rate was 6.14% at December 31, 2007 and 2006, 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 (1) 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
   Year Ending December 31,
    
    (in 000s)2008
    
    $
    16,0902009
    
    
    9,2772010
    
    
    5652011
    
    
    6042012
    
    
    646Thereafter
    
    
    4,940Total
    
    $
    32,122
 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, 2007, 2006, and 2005
 NOTE 6:     Concentration of Risk on Real Estate Investments
  EstimatedMarket ValueRegion
    
    (in 000s)
    
    
    Region %East North Central
    
    $
    13,871
    
    
    
    5.16
    %Mideast
    
    
    115,050
    
    
    
    42.78
    %Mountain
    
    
    1,719
    
    
    
    0.64
    %Northeast
    
    
    296
    
    
    
    0.11
    %Pacific
    
    
    33,290
    
    
    
    12.38
    %Southeast
    
    
    74,078
    
    
    
    27.54
    %Southwest
    
    
    30,434
    
    
    
    11.32
    %West North Central
    
    
    180
    
    
    
    0.07
    %Total
    
    $
    268,918
    
    
    
    100.00
    %
  Note 7:     Leasing Activity
  Year Ending December 31,
    
    (in 000s)2008
    
    $
    13,8252009
    
    
    11,1232010
    
    
    9,8312011
    
    
    7,5742012
    
    
    5,309Thereafter
    
    
    21,082Total
    
    $
    68,744
 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, 2007, 2006, and 2005
 Note 8:     Commitments and Contingencies
   Note 9:     Other Related Party Transactions
   Year Ended December 31,
    
    (000s)2007
    
    $     2006
    
    $6,0002005
    
    $6,000
 F-25




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##### 



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF
THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP
For Years Ended December 31, 2007, 2006, and 2005
 Note 10:     Financial Highlights
 2007
    
    
    2006
    
    
    2005
    
    
    2004
    
    
    2003Per Share(Unit) Operating Performance:Net Asset Value, beginning of period
    
    $
    33.87
    
    
    $
    29.59
    
    
    $
    26.15
    
    
    $
    24.66
    
    
    $
    24.11Income From Investment Operations:Investment income, before management fee
    
    
    2.37
    
    
    
    2.07
    
    
    
    1.67
    
    
    
    1.44
    
    
    
    1.71Investment Management fee
    
    
    (0.50
    )
    
    
    (0.45
    )
    
    
    (0.40
    )
    
    
    (0.36
    )
    
    
    (0.33
    )Net realized and unrealized gain (loss) on investments
    
    
    0.81
    
    
    
    2.66
    
    
    
    2.17
    
    
    
    0.41
    
    
    
    (0.83
    )Net Increase in Net Assets Resulting from Operations
    
    
    2.68
    
    
    
    4.28
    
    
    
    3.44
    
    
    
    1.49
    
    
    
    0.55Net Asset Value, end of period
    
    $
    36.55
    
    
    $
    33.87
    
    
    $
    29.59
    
    
    $
    26.15
    
    
    $
    24.66Total Return, before Management Fee (a):
    
    
    9.44
    %
    
    
    16.03
    %
    
    
    14.76
    %
    
    
    7.61
    %
    
    
    3.63
    %Ratios/Supplemental Data:Net Assets, end of period (in millions)
    
    $
    247
    
    
    $
    229
    
    
    $
    205
    
    
    $
    187
    
    
    $
    182Ratios to average net assets for the year ended (b):Total Portfolio Level Expenses
    
    
    1.55
    %
    
    
    1.51
    %
    
    
    1.46
    %
    
    
    1.43
    %
    
    
    1.35
    %Investment Income before Management Fee
    
    
    6.76
    %
    
    
    6.58
    %
    
    
    4.89
    %
    
    
    5.76
    %
    
    
    7.12
    %
 
 (a)
    
    Total Return, before management fee is calculated by geometrically linking quarterly returns which
are calculated using the formula below:Net Investment Income + Net Realized and Unrealized Gains/(Losses)
Beg. Net Asset Value + Time Weighted Contributions  Time Weighted Distributions(b)
    
    Average net assets are based on beginning of quarter net assets. F-26




---



##### 



THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP
 SCHEDULE III  REAL ESTATE OWNED: PROPERTIES
DECEMBER 31, 2007
 Costs
    
    
    Gross Amount at WhichInitial Costs to the Partnership
    
    
    Capitalized
    
    
    
    Carried at Close of YearEncumbrances
    
    
    
    
    
    
    Building &
    
    
    Subsequent to
    
    
    
    
    
    
    Building &
    
    
    2007
    
    
    
    
    
    
    Year of
    
    
    DateDescription
    
    at 12/31/07
    
    
    Land
    
    
    Improvements
    
    
    Acquisition
    
    
    Land
    
    
    Improvements
    
    
    Sales
    
    
    Total
    
    
    Construction
    
    
    AcquiredProperties:Office Building
Lisle, IL
    
    
    None
    
    
    
        1,780,000
    
    
    
        15,743,881
    
    
    
        6,988,640
    
    
    
        1,949,206
    
    
    
        22,563,315
    
    
    
    
    
    
    
        24,512,521
    
    
    
        1985
    
    
    Apr., 1988Garden Apartments
Atlanta, GA
    
    
    8,747,000
    
    
    
    3,631,212
    
    
    
    11,168,904
    
    
    
    4,748,177
    (b)
    
    
    4,937,369
    
    
    
    14,610,924
    
    
    
    
    
    
    
    19,548,293
    
    
    
    1987
    
    
    Apr., 1988Retail Shopping
Center 
Roswell, GA
    
    
    None
    
    
    
    9,454,622
    
    
    
    21,513,677
    
    
    
    6,914,923
    
    
    
    11,135,593
    
    
    
    26,747,629
    
    
    
    
    
    
    
    37,883,222
    
    
    
    1988
    
    
    Jan., 1989Garden Apartments
Raleigh, NC
    
    
    8,750,000
    
    
    
    1,623,146
    
    
    
    14,135,553
    
    
    
    616,338
    
    
    
    1,773,244
    
    
    
    14,601,793
    
    
    
    
    
    
    
    16,375,037
    
    
    
    1995
    
    
    Jun., 1995Hotel
Portland, OR
    
    
    
    
    
    
    1,500,000
    
    
    
    6,508,729
    
    
    
    1,119,686
    
    
    
    1,500,000
    
    
    
    7,628,415
    
    
    
    
    
    
    
    9,128,415
    
    
    
    1989
    
    
    Dec., 2003Office Building
Nashville, TN
    
    
    None
    
    
    
    1,797,000
    
    
    
    6,588,451
    
    
    
    2,938,434
    
    
    
    1,855,339
    
    
    
    9,468,546
    
    
    
    
    
    
    
    11,323,885
    
    
    
    1982
    
    
    Oct., 1995Office Building
Beaverton, OR
    
    
    None
    
    
    
    816,415
    
    
    
    9,897,307
    
    
    
    1,687,530
    
    
    
    845,887
    
    
    
    11,555,365
    
    
    
    
    
    
    
    12,401,252
    
    
    
    1995
    
    
    Dec., 1996Industrial Building 
Aurora, CO
    
    
    None
    
    
    
    1,338,175
    
    
    
    7,202,411
    
    
    
    2,747,794
    
    
    
    1,415,159
    
    
    
    9,873,221
    
    
    
    (11,288,380
    )
    
    
    
    
    
    
    1997
    
    
    Sep., 1997Office Complex
Brentwood, TN
    
    
    None
    
    
    
    2,425,000
    
    
    
    7,063,755
    
    
    
    2,882,337
    
    
    
    2,463,601
    
    
    
    9,907,491
    
    
    
    
    
    
    
    12,371,092
    
    
    
    1987
    
    
    Oct., 1997Retail Shopping
Center 
Hampton, VA
    
    
    7,777,948
    
    
    
    2,339,100
    
    
    
    12,767,956
    
    
    
    2,943,034
    
    
    
    4,839,418
    
    
    
    13,210,672
    
    
    
    
    
    
    
    18,050,090
    
    
    
    1998
    
    
    May, 2001Retail Shopping Center 
Westminster, MD
    
    
    
    
    
    
    3,031,735
    
    
    
    9,326,605
    
    
    
    47,160
    
    
    
    3,031,735
    
    
    
    9,373,765
    
    
    
    
    
    
    
    12,405,500
    
    
    
    2005
    
    
    June, 2006Retail Shopping Center 
Ocean City, MD
    
    
    6,846,764
    
    
    
    1,517,099
    
    
    
    8,495,039
    
    
    
    7,004,187
    
    
    
    1,517,099
    
    
    
    15,499,226
    
    
    
    
    
    
    
    17,016,325
    
    
    
    1986
    
    
    Nov., 2002Garden Apartments
Austin, TX
    
    
    
    
    
    
    2,577,097
    
    
    
    20,125,169
    
    
    
    21,583
    
    
    
    2,577,097
    
    
    
    20,146,752
    
    
    
    
    
    
    
    22,723,849
    
    
    
    2007
    
    
    May, 2007Retail Shopping Center
Dunn, NC
    
    
    None
    
    
    
    586,500
    
    
    
    5,372,344
    
    
    
    
    
    
    
    586,500
    
    
    
    5,372,344
    
    
    
    
    
    
    
    5,958,844
    
    
    
    1984
    
    
    Aug., 2007Garden Apartments
Charlotte, NC
    
    
    
    
    
    
    1,350,000
    
    
    
    12,184,750
    
    
    
    700
    
    
    
    1,350,000
    
    
    
    12,185,450
    
    
    
    
    
    
    
    13,535,450
    
    
    
    1998
    
    
    Sep., 200732,121,712
    
    
    
    35,767,101
    
    
    
    168,094,531
    
    
    
    40,660,523
    
    
    
    41,777,247
    
    
    
    202,744,908
    
    
    
    (11,288,380
    )
    
    
    233,233,775
 2007
    
    
    2006
    
    
    2005(a)
    
    Balance at beginning of year
    
    
    199,124,056
    
    
    
    183,767,148
    
    
    
    224,584,885Additions:Acquistions
    
    
    42,195,860
    
    
    
    12,358,340
    
    
    
    Improvements, etc.
    
    
    3,202,239
    
    
    
    2,998,568
    
    
    
    6,187,973Conversions from JV to WO
    
    
    
    
    
    
    
    
    
    
    Deletions:Sale
    
    
    (11,288,380
    )
    
    
    
    
    
    
    (47,005,710
    )Balance at end of year
    
    
    233,233,775
    
    
    
    199,124,056
    
    
    
    183,767,148(b)
    
    Net of $1,000,000 settlement received from lawsuit.


F-27



---



##### 



THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP
SCHEDULE IV  MORTGAGE LOANS ON REAL ESTATE
DECEMBER 31, 2007
 Principal amountof LoansFace
    
    
    
    
    
    
    Subject toPeriodic
    
    
    
    
    
    
    Amount
    
    
    Carrying Amount
    
    
    DelinquentInterest
    
    
    Final Maturity
    
    
    payment
    
    
    Prior
    
    
    of
    
    
    of
    
    
    Principal orDescription
    
    Rate
    
    
    Date
    
    
    Terms
    
    
    Liens
    
    
    Mortgages
    
    
    Mortgages
    
    
    InterestLoans Receivables:Westminster, MD
    
    
    10.00
    %
    
    
    3/3/2006
    *
    
    I only
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 2007
    
    
    2006Balance at beginning of year
    
    
    
    
    
    4,277,769Additions during the period:New Mortgage loansOther  drawdown on loanOther  accrued interestDeductions during the period:Cost of real estate soldForeclosuresCost of mortgages sold
    
    
    
    
    
    (4,277,769
    )Amortization of premiumOther  accrued interest paymentBalance at end of year
  F-28