<Page>

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

                                    FORM 10-K

(MARK ONE)

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

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001

                                       OR

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


COMMISSION FILE NUMBER 33-86780


                          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)


                                 (800) 778-2255
             -------------------------------------------------------
              (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)


     INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH
FILING REQUIREMENTS FOR THE PAST 90 DAYS.                   YES [X]   NO [ ]

<Page>

                          PRUCO LIFE VARIABLE CONTRACT
                              REAL PROPERTY ACCOUNT
                                  (REGISTRANT)

                                      INDEX
ITEM                                                                      PAGE
 NO.                                                                       NO.
----                                                                      ----
        COVER PAGE

        INDEX                                                               2

PART I

    1.  BUSINESS                                                            3

    2.  PROPERTIES                                                          5

    3.  LEGAL PROCEEDINGS                                                   5

    4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                 5

PART II

    5.  MARKET FOR THE REGISTRANT'S INTERESTS AND RELATED
        SECURITY HOLDER MATTERS                                             6

    6.  SELECTED FINANCIAL DATA                                             6

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

   7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK         18

    8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                        19

    9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
        AND FINANCIAL DISCLOSURE                                           19

PART III

   10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT                 20

   11.  EXECUTIVE COMPENSATION                                             21

   12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT     21

   13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                     21

PART IV

   14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K   22

        EXHIBIT INDEX                                                      22

        SIGNATURES                                                         24

                                       2
<Page>

                                     PART I


ITEM 1.   BUSINESS

Pruco Life Variable Contract Real Property Account (the "Real Property
Account"), the Registrant, was established on August 27, 1986 and commenced
business September 5, 1986. Pursuant to Arizona law, the Real Property Account
was established as a separate investment account of Pruco Life Insurance Company
("Pruco Life"). The Real Property Account was established to provide a real
estate investment option offered in connection with the funding of benefits
under certain variable life insurance and variable annuity contracts (the
"Contracts") issued by Pruco Life.


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


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

          Office Properties - The Partnership owns office properties in Lisle
          and Oakbrook Terrace, Illinois; Brentwood, Tennessee; and Beaverton,
          Oregon. Total square footage owned is approximately 482,000 of which
          89% or 431,000 square feet are leased between 1 and 10 years. The
          Partnership's Morristown, New Jersey property, which had approximately
          85,000 square feet, was sold on October 26, 2000.

          Apartment Complexes - The Partnership owns apartment complexes in
          Atlanta, Georgia and Raleigh, North Carolina. There are a total of 490
          apartment units available of which 82% or 403 units are leased. Leases
          range from month to month to one year. In addition, on September 17,
          1999, the Partnership invested in an apartment complex located in
          Jacksonville, FL. This joint venture investment has a total of 458
          units available of which 402 units or 88% are occupied. Leases range
          from month-to-month to one year. Also, on February 15, 2001, the
          Partnership invested in four apartment complexes located in
          Gresham/Salem, OR. This joint venture investment has a total of 492
          units available of which 458 units or 93% are occupied. Leases range
          from month-to-month to one year.

          Retail Property - The Partnership owns a shopping center in Roswell,
          Georgia. The property is located approximately 22 miles north of
          downtown Atlanta on a 30 acre site. The square footage is
          approximately 316,000 of which 92% or 293,000 square feet is leased
          between 1 and 10 years. On September 30, 1999 the Partnership invested
          in a retail portfolio located in the Kansas City, MO and KS areas.
          This joint venture investment has approximately 488,000 of net
          rentable square feet of which 90% or 440,000 square feet is leased
          between 1 and 20 years. In addition, on May 17, 2001, the Partnership
          invested in a retail center located in the Hampton, VA. This joint
          venture investment has approximately 155,000 of net rentable square
          feet of which 100% or 155,000 square feet is leased between 1 and 20
          years.

          Industrial Properties - The Partnership owns warehouses and
          distribution centers in Bolingbrook, Illinois; Aurora, Colorado; and
          Salt Lake City, Utah. Total square footage owned is approximately
          685,000 of which 83% or 569,000 square feet are leased between 1 and
          10 years.

                                       3
<Page>

          Investment in Real Estate Trust - The Partnership liquidated its
          entire investment in REIT shares during December 2001.


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


For information regarding the Partnership's investments, operations, and other
significant events, see Item 7, Management's Discussion and Analysis of
Financial Condition and Results of Operations, and Item 8, Financial Statements
and Supplementary Data.

REAL ESTATE MARKET
The real estate sector certainly felt the effects of the slowing US economy
during the fourth quarter. The decline in demand for space pushed vacancy rates
up and adversely affected both rents and prices. The hotel sector was hit
hardest and continues to suffer due to demand uncertainty, while the office and
industrial sectors weakened as vacancy rates rose, sharply in some markets where
technology had been a main driver of growth. Unlike the market downturn a decade
ago, however, a large portion of the vacant office space is sublease space which
continues to pay rent and should be absorbed relatively quickly once the economy
begins to recover. Investors continued their interest in apartments to take
advantage of their stabilizing attributes. Overall, private institutional real
estate investment, as measured by the NCREIF Index, produced total returns of
around 7.41% for the year with a total return of 0.74% in the fourth quarter.
The REIT market, as measured by the Morgan Stanley REIT Index (RMS), finished
the year strong registering a total return of 12.8%. In all, both private and
public equity real estate performed much better than most other investment
sectors, helping to fulfill their role as a hedge against market uncertainty.

OFFICE MARKET

Deterioration in office market conditions continued in the fourth quarter of
2001. According to Torto Wheaton Research (TWR), the average vacancy rate rose
to 13.60% in the fourth quarter, up from 12.50% in the third quarter. The
average vacancy rate in downtown areas rose to 10.4%, up from 9.8% as of third
quarter. The suburban markets were hit even harder, with the average vacancy
rate rising to 15.3% in the fourth quarter, up 1.5% from the third quarter.

Based on data from the NCREIF office index, private investment in US office real
estate returned 0.04% during the fourth quarter of 2001, down from 1.49% in the
third quarter. The current quarter's return was composed of 2.11% income and
-2.06% value loss. The one-year total return for the sector was 6.36%. The total
returns for CBD and suburban properties continued to diverge during the fourth
quarter with suburban properties witnessing a decline of 0.09% while CBD
properties returned 0.28%.

INDUSTRIAL MARKET

The trends in the industrial market were similar to those in the office market.
TWR estimates that the overall availability rate for industrial space as of
fourth quarter 2001 was 9.6%, up from 9.0% in the previous quarter, and 6.7%
one-year prior.

                                       4
<Page>

The total return for the industrial sector dropped to 1.18% in the fourth
quarter, down from 2.01% in the third quarter. The one-year return for the
sector was 9.40%, finishing second to apartment sector. The best performing
industrial subtype in the fourth quarter was flex, with a total return of 1.84%,
followed by the warehouse subtype with a return of 1.44%. The R&D subtype lagged
in the fourth quarter, with a total return of -1.78%.

APARTMENT MARKET

M/PF Research reports that the third quarter 2001 average occupancy rate among
US apartments was 95.5%, down 0.6% from the second quarter estimate. They report
that national same-unit rent growth was 1.8% during the one-year period ending
in the third quarter 2001.

According to the NCREIF apartment subindex, private investment in apartments
returned 1.64% during the fourth quarter of 2001, down from a 2.25% return in
the third quarter. Of the fourth quarter's total return, 1.90% was from income
and -0.26% was appreciation. The one-year return for the sector in 2001 was
9.47%, the best of all property type sectors. High-rise apartment properties
returned 0.25% in the fourth quarter, underperforming garden properties (1.77%)
and low-rise properties (2.89%).

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 Item 8, Financial Statements
and Supplementary Data.

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.

                                       5
<Page>

                                     PART II


ITEM 5.  MARKET FOR THE REGISTRANT'S INTERESTS AND RELATED SECURITY HOLDER
         MATTERS

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

As of December 31, 2001, there were approximately 33,391 contract owners of
record investing in the Real Property Account.


ITEM 6.  SELECTED FINANCIAL DATA

<Table>
<Caption>
                                                                             YEAR ENDED, DECEMBER 31,
                                                --------------------------------------------------------------------------------
                                                     2001              2000            1999            1998             1997
                                                    ------            ------          ------          ------           ------
<S>                                             <C>               <C>              <C>             <C>              <C>
RESULTS OF OPERATIONS:

TOTAL INVESTMENT INCOME                         $ 27,480,593      $ 26,387,938     $ 24,835,049    $ 27,163,552     $ 24,481,812
                                                ============      ============     ============    ============     ============

NET INVESTMENT INCOME                           $ 12,350,306      $ 13,638,117     $ 13,279,589    $ 15,833,513     $ 13,789,747

NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENT IN PARTNERSHIP               (2,547,749)        4,487,022      ( 7,217,046)      4,795,111       8,485,232
                                                ------------      ------------     ------------    ------------     ------------
NET INCREASE IN NET ASSETS
 RESULTING FROM OPERATIONS                       $ 9,802,557      $ 18,125,139     $  6,062,543    $ 20,628,624     $ 22,274,979
                                                ============      ============     ============    ============     ============
</Table>

FINANCIAL POSITION:
<Table>
<Caption>
                                                                              DECEMBER 31,
                                                --------------------------------------------------------------------------------
                                                     2001              2000            1999            1998             1997
                                                    ------            ------          ------          ------           ------
<S>                                             <C>               <C>              <C>             <C>              <C>
TOTAL ASSETS                                    $234,594,652      $221,512,296     $225,142,653    $244,249,272     $222,745,135
                                                ============      ============     ============    ============     ============


LONG TERM LEASE OBLIGATION                      $          0      $          0     $          0    $          0     $          0
                                                ============      ============     ============    ============     ============


MORTGAGE LOAN PAYABLE                           $ 28,994,521      $ 10,092,355     $ 10,184,662    $          0     $          0
                                                ============      ============     ============    ============     ============
</Table>

                                       6
<Page>

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

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


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


(a)      LIQUIDITY AND CAPITAL RESOURCES

As of December 31, 2001, the Partnership's liquid assets consisting of cash,
cash equivalents and marketable securities were $26.6 million, an increase of $
11.2 million from December 31, 2000. This increase was due primarily to the
liquidation of the VAL REIT during the fourth quarter, offset by distributions
to partners and the acquisition of real estate investments as described below.
Sources of liquidity include net cash flow from property operations, interest
from short-term investments, and dividends from REIT Shares.


The Partnership's investment policy allows up to 30% investment in cash and
short-term obligations, although the Partnership generally holds approximately
10% of its assets in cash or short-term obligations. At December 31, 2001, 11.3%
of the Partnership's assets consisted of cash and cash equivalents.


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 are utilized for property acquisitions, and returned to
Prudential on an ongoing basis from contract owners' net contributions and other
available cash. The amount of the commitment is reduced by $10 million for every
$100 million in current value net assets of the Partnership. Thus, with $198
million in net assets, the commitment has been automatically reduced to $90
million. As of December 31, 2001, Prudential's equity interest in the
Partnership under this commitment, on a cost basis, was $44 million. Prudential
does not intend to make contributions during the 2002 fiscal year and will begin
to phase out this commitment over the next several years.


The Partnership made $22 million in distributions to the Partners during 2000,
and on October 22,2001, the Partnership made an $ 18 million distribution to the
partners. Distributions made to the Partners during 2001 were based upon the
percentage of assets invested in short-term obligations, taking into
consideration anticipated cash needs of the Partnership including potential
property acquisitions, property dispositions and capital expenditures.
Management anticipates that its current liquid assets and ongoing cash flow from
operations will satisfy the Partnership's needs over the next twelve months and
the foreseeable future.

The Partnership has completed two real estate acquisitions during the year. A
controlling interest in a portfolio of four apartment complexes based in Gresham
and Salem, OR, was acquired in February 2001. This portfolio consists of 492
units containing a total of 419,487 rentable square feet. The acquisition was
financed by contributions of $8.6 million from the Partnership, $0.5 million
from the joint venture partner, and the assumption of a $9.0 million mortgage
loan by the joint venture partnership. Also, in May, the Partnership acquired a
controlling interest in a 154,540 square foot retail center based in Hampton,
VA. The acquisition was financed by contributions of $4.0 million from the
Partnership, $0.4 million from the joint venture partner, and the assumption of
a $10.3 million mortgage loan. During the twelve months of 2001, the Partnership
also spent approximately $4.4 million in capital expenditures. Approximately
$0.6 million was associated with the renovation costs pertaining to the
apartment complex located in Jacksonville, FL. The balance was associated with
leasing activity at the office properties located in Oakbrook Terrace, IL;
Beaverton, OR; Brentwood, TN; Lisele, IL; and the industrial property located in
Salt Lake City, UT. In addition, improvements were done to the retail center
located in Roswell, GA.


                                       7
<Page>

(b) RESULTS OF OPERATIONS

The following is a brief year-to-date comparison of the Partnership's results of
operations for the years ended December 31, 2001, 2000, and 1999.

2001 VS. 2000

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

<Table>
<Caption>
                                                 TWELVE MONTHS ENDED DECEMBER 31,
                                                     2001              2000
                                                 -----------       -----------
<S>                                              <C>                <C>
   NET INVESTMENT INCOME:

   Office properties                              $4,766,035        $5,356,934
   Apartment complexes                             3,735,912         3,446,245
   Retail property                                 2,950,333         2,772,438
   Industrial properties                             545,003         1,257,146
   Equity in income of real estate partnership       686,801           791,596
   Dividend income from real
     estate investment trust                       2,157,647        1,744,6111
   Other (including interest income,
     investment mgt fee,                          (2,491,425)       (1,730,853)
                                                 -----------       -----------
   TOTAL NET INVESTMENT INCOME                   $12,350,306       $13,638,117
                                                 ===========       ===========
   NET UNREALIZED (LOSS) GAIN ON
    REAL ESTATE INVESTMENTS:

   Office properties                                (777,380)        2,434,245
   Apartment complexes                               415,417         2,717,915
   Retail property                                   (94,504)         (264,300)
   Industrial properties                          (2,105,641)         (935,721)
   Interest in real estate partnership               226,024           140,614
   Real estate investment trusts                           0         2,618,815
                                                 -----------       -----------
                                                  (2,336,084)        1,843,078
                                                 -----------       -----------
   NET REALIZED (LOSS) GAIN ON
    REAL ESTATE INVESTMENTS:

   Office properties                                                   186,920
   Apartment complexes                                   -                  -
   Industrial properties                                 -
   Interest in real estate partnership                   -
   Real estate investment trust                     (211,665)        2,457,024
                                                 -----------       -----------
                                                    (211,665)        2,643,944
                                                 -----------       -----------

   NET REALIZED AND UNREALIZED
    (LOSS) GAIN ON REAL ESTATE INVESTMENTS       $(2,547,749)       $4,487,022
                                                 ===========       ===========
</Table>

The partnership's net investment income for the twelve months ended December
31,2001 was $ 12.4 million, a decrease of $ 1.2 million from the corresponding
period in the prior year. This decrease was primarily due to the sales of an
office property located in Morristown, NJ in the fourth quarter of 2000.

                                       8
<Page>

Equity in income of real estate partnership was $0.7 million for the twelve
months of 2001, a decrease of $0.1 million, or 13.2%, from $0.8 million in the
corresponding period in 2000. The decrease is primarily due to a temporary
decrease in rental rates at the retail portfolio located in Kansas City, KS and
MO when compared to the prior year.

Dividend income from real estate investment trusts amounted to approximately
$2.2 million for the twelve months ended December 31, 2001, an increase of $0.5
million or 23.7% from approximately $1.7 million in the corresponding period in
2000. This increase was primarily due to an increase in the amount invested in
REIT stocks subsequent to the 3rd quarter 2000.

Interest on short-term investments decreased approximately $1.0 million or 76.9%
for the twelve months ended December 31, 2001 due primarily to a significantly
lower average cash balance compared to the corresponding period in 2000. Cash,
cash equivalents, and marketable securities maintained during the twelve months
ended 2001 averaged approximately $13.0 million when compared to the twelve
months ended December 31, 2000 when the average was approximately $19.1 million.

Operating expenses increased $0.9 million or 21.4%, in the twelve months of 2001
compared to the corresponding period in 2000. These increase were primarily due
to the Partnership's acquisition of a controlling interest in the two
investments discussed previously.

Interest expense increased $1.0 million, or 142.2%, in the twelve months of 2001
compared to the corresponding period in 2000. These increase were primarily due
to the Partnership's acquisition of a $9.0 million and a $10.3 million mortgage
loan in conjunction with the acquisition of a controlling interest in the two
investments discussed previously. Minority interest in consolidated increased
$0.1 million, or 1,256.4%, for the twelve months ended December 31,2001. These
increases were due to the Partnership's acquisition of a controlling interest in
the two investments discussed previously.

OFFICE PROPERTIES

Net investment income from property operations for the office sector decreased
approximately $0.6 million, or 11.0%, for the twelve months ended December
31,2001 when compared to the corresponding period in 2000. This was primarily
due to the sale of the Morristown, NJ office center in October 2000.

The five office properties owned by the Partnership experienced a net unrealized
loss of approximately $0.8 million during the twelve months of 2001. One of the
Brentwood, TN properties experienced a net unrealized loss of approximately $0.7
million primarily due to the near-term expiration and expected move-out of the
single tenant at the property in July 2002. The Beaverton, OR and the Lisle, IL
office properties experienced a net unrealized loss of approximately $0.4
million and $0.2 million, respectively, primarily due to softening market
conditions. Offsetting these unrealized losses was an unrealized gain of
approximately $0.6 million at the office property located in Oakbrook Terrace,
IL. This unrealized gain was attributable to the signing of two new leases,
which brought the leased area from 55% to 79%.

The office properties owned by the Partnership experienced a net unrealized loss
of approximately $2.4 million during 2000. During 2000, the Oakbrook Terrace, IL
property decreased $1.6 million in value due to a lease termination associated
with 45% of the space and weaker market conditions. One of the Brentwood, TN
office properties also experienced a net unrealized loss of approximately $0.8
million primarily due to capital expenditures on the property that were not
reflected as an increase in market value.

Occupancy at one of the Brentwood, TN office properties decreased from 95% at
December 31, 2000 to 74% at December 31, 2001, while occupancy at the other
Brentwood, TN location remained unchanged at 100%. Occupancy at the Lisle, IL
office property increased from 88% at December 31, 2000 to 100% at December 31,
2001. Occupancy at the Beaverton, OR property remained unchanged at 100%.
Occupancy at the Oakbrook Terrace, IL property decreased from 100% at December
31, 2000 to 79% at December 31, 2001. As of December 31, 2001 all vacant spaces
were being marketed.

APARTMENT COMPLEXES

                                       9
<Page>

Net investment income from property operations for the apartment sector was $3.7
million for the twelve months ended December 31, 2001, an increase of $0.3
million, or 8.4%, when compared to the corresponding period in 2000. This
increase was primarily due to the acquisition of the controlling interest in the
apartment complex portfolio located in Gresham and Salem, OR.

The apartment complexes owned by the Partnership experienced a net unrealized
gain of $0.4 million for the twelve months ended December 31, 2001 compared to a
net unrealized gain of $2.7 million for the twelve months ended December 31,
2000. The majority of the unrealized gain experienced in 2001 was primarily due
to the Atlanta, GA apartment complex that experienced an increase in value of
$0.9 million due to sub-metering of the apartments for water usage and lower
real estate taxes than previously estimated. The apartment complex portfolio
located in Gresham and Salem, OR also experienced an increase in value of $0.4
million due to the completion of capital improvements and the reduction of
administrative expense estimates. Offsetting these unrealized gains was the
apartment complex located in Raleigh, NC, which experienced a net unrealized
loss of $0.5 million due to a decrease in occupancy. The apartment complex in
Jacksonville, FL also experienced a decrease in value of $0.4 million due to
higher replacement reserve expenses, higher operating expense projections, and
slightly lower market rent estimates.

The apartment complexes owned by the Partnership experienced a net unrealized
gain of $2.7 million in 2000. The largest share of the unrealized gain for 2000
or $1.7 million was experienced by the apartment complex located in Atlanta, GA
primarily due to increases in rental rates, stabilized occupancy, and lower
operating expense estimates. The apartment complex located in Raleigh, NC also
experienced a net unrealized gain of $0.2 million due to increases in rental
rates.

The occupancy at the Raleigh, NC complex decreased from 92% at December 31, 2000
to 82% at December 31, 2001. Occupancy at the Atlanta, GA complex decreased from
98% at December 31, 2000 to 83% at December 31, 2001. Occupancy at the apartment
complex in Jacksonville, FL decreased from 91% at December 31, 2000 to 88% at
December 31, 2001. Occupancy at the Gresham and Salem, OR apartment complexes
averaged approximately 93% at December 31, 2001. As of December 31, 2001, all
available vacant spaces were being marketed.

RETAIL PROPERTIES

Net investment income for the Partnership's retail properties located in
Roswell, GA and Hampton, VA was approximately $3.0 million for the twelve months
ended December 31, 2001 and approximately $2.8 million for the twelve months
ended December 31, 2000. The increase is primarily due to the acquisition of the
controlling interest in the 154,540 square foot retail center based in Hampton,
VA.

The retail properties experienced a net unrealized loss of $0.1 million and a
net unrealized loss of $0.3 million for the twelve months ended December 31,
2001 and 2000, respectively. The retail center located in Roswell, GA
experienced a loss of $0.6 million for 2001 due to increased capital
expenditures and a slight drop in occupancy. Offsetting this unrealized loss was
an unrealized gain of $0.5 million resulting from the market value appraisal
received on the newly acquired retail center located in Hampton, VA.

The unrealized loss experienced in 2000 was due to the Roswell, GA property due
to lower income projections, coupled with capital expenditures that did not
increase the market value of the property.

Occupancy at the shopping center located in Roswell, GA decreased from 97% at
December 31, 2000 to 92% at December 31, 2001. The newly acquired retail center
in Hampton, VA had an occupancy of 99% at December 31, 2001. As of December 31,
2001, all vacant spaces were being marketed.

                                       10
<Page>

INDUSTRIAL PROPERTIES

Net investment income from property operations for the industrial properties
decreased from $1.3 million for the twelve months ended December 31, 2000 to
$0.5 million for the corresponding period ended December 31, 2001. The majority
of these decreases were due to decreased occupancy at the properties located in
Bolingbrook, IL and Salt Lake City, UT.
Even though the Salt Lake City, UT location increased occupancy for the year,
the new tenants did not move in until the end of the third quarter and there was
significant vacancy at the Bolingbrook, IL facility for a portion of 2001.

The three industrial properties owned by the Partnership experienced a net
unrealized loss of approximately $2.1 million for the twelve months ended
December 31, 2001 compared to a net unrealized loss of approximately $0.9
million in 2000. The majority of the unrealized loss in 2001 was attributable to
the Salt Lake City, UT industrial property. This loss of approximately $1.3
million was due to a decrease in market rents. The Bolingbrook, IL facility
experienced a loss of $0.9 million due to a decrease in rental rates and
softening market conditions

The three industrial properties owned by the Partnership experienced a net
unrealized loss of approximately $0.9 million in 2000. The majority of the
decrease for 2000 was attributable to the Aurora, CO industrial property, which
had a loss of approximately $0.7 million due to more conservative assumptions
regarding rental rates, lease-up time and terminal capitalization rates used by
the appraiser. In addition, capital expenditures were incurred at the property
that were not reflected as an increase in market value. The industrial property
located in Bolingbrook, IL experienced an unrealized loss of $0.4 million in
2000. This loss was due to the expiration of the single tenant lease with no
replacement tenant being signed as of yet. The space was leased during the
fourth quarter of 2000 on a temporary basis, and partially leased at the end of
2001 to a different temporary tenant.

The occupancy at the Bolingbrook, IL property decreased from 100% at December
31, 2000 to 98% at December 31, 2001. The occupancy at the Salt Lake City, Utah
property increased from 34% at December 31, 2000 to 77% at December 30, 2001.
The Aurora, CO property's occupancy rate remained unchanged at 75% at December
31, 2000 and 2001. As of December 31, 2001, all vacant spaces were being
marketed.

EQUITY IN INCOME OF REAL ESTATE PARTNERSHIP

During the twelve months ended December 31, 2001, income from the investment
located in Kansas City, KS and MO amounted to $0.7 million, a decrease of 13.2%
from $0.8 million at December 31, 2000. The decrease is primarily due to a
temporary decrease in rental rates.

The equity investment experienced a net unrealized gain of $0.2 million and $0.1
million for the twelve months ended December 31, 2001 and 2000, respectively.
The unrealized gain of $0.2 million for the twelve months ended December 31,
2001 was primarily due to the addition of a tenant that will provide a
substantial amount of income to the center in rent and the addition of new space
to house this tenant.

The retail portfolio located in Kansas City, KS and MO had an average occupancy
of 90% at December 31, 2001, which remained unchanged from December 31, 2000. As
of December 31, 2001, all vacant spaces were being marketed.

REAL ESTATE INVESTMENT TRUSTS

During the twelve months ended December 31, 2001, the Partnership's remaining
investment in REITS recognized a realized loss of $0.2 million due to the sale
of the Partnership's remaining investment in REITs.

                                       11
<Page>

The Partnership recognized a net realized gain of $2.5 million in 2000 primarily
due to the sale of the Partnership's remaining investment in Prologis REIT
shares and sales of other REIT investments. The Partnership recognized an
unrealized gain of $2.6 million on investments in REITs for the twelve months
ended December 31, 2000, which reflects changes in the market value of REIT
shares held by the Partnership

OTHER

Other net investment income decreased approximately $0.8 million during the
twelve months ended December 31, 2001 when compared to the corresponding period
in 2000. Other net investment income includes interest income from short-term
investments, investment management fees, and expenses not related to property
activities. The decreases discussed above were primarily due to interest income
on short-term investments, which decreased primarily as a result of the
Partnership maintaining a significantly lower cash balance when compared to the
corresponding periods last year coupled with a decrease in interest rates.

2000 VS. 1999

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 twelve months ended December 31, 2000 and December 31, 1999.

<Table>
<Caption>
                                                                     TWELVE MONTHS ENDED DECEMBER 31,
                                                                        2000                 1999
                                                                     -----------          -----------
<S>                                                                  <C>                  <C>
 NET INVESTMENT INCOME:

 Office properties                                                    $5,356,934           $7,133,356
 Apartment complexes                                                   3,446,245            2,556,743
 Retail property                                                       2,772,438           2,676,387
 Industrial properties                                                 1,257,146              894,258
 Equity in income of real estate partnership                             791,596               98,375
 Dividend income from real
   estate investment trust                                             1,744,611            1,221,843
 Other (including interest income,
   investment mgt fee, etc.)                                          (1,730,853)          (1,301,373)
                                                                     -----------          -----------
 TOTAL NET INVESTMENT INCOME                                         $13,638,117          $13,279,589
                                                                     ===========          ===========
 UNREALIZED GAIN (LOSS) ON REAL ESTATE INVESTMENTS:

 Office properties                                                   ($2,434,245)         ($3,267,264)
 Apartment complexes                                                   2,717,915              607,234
 Retail property                                                        (264,300)          (1,770,462)
 Industrial properties                                                  (935,721)             209,503
 Interest in real estate partnerships                                    140,614             (680,870)
 Real estate investment trusts                                         2,618,815           (2,282,044)
                                                                     -----------          -----------
                                                                       1,843,078           (7,183,903)
                                                                     -----------          -----------
 REALIZED GAIN (LOSS) ON REAL ESTATE INVESTMENTS

 Office properties                                                       186,920                  -
 Apartment complexes                                                         -                    -
 Industrial properties                                                       -                 (1,485)
 Interest in real estate partnerships                                        -                 45,126
 Real estate investment trust                                          2,457,024              (76,784)
                                                                     -----------          -----------
                                                                       2,643,944              (33,143)
                                                                     -----------          -----------
 TOTAL REALIZED AND UNREALIZED GAIN
                                                                     -----------          -----------
 (LOSS) ON REAL ESTATE INVESTMENTS                                    $4,487,022          ($7,217,046)
                                                                     ===========          ===========
</Table>

                                       12
<Page>

The Partnership's net investment income in 2000 was $13.6 million, an increase
of $0.3 million from net investment income of $13.3 million in 1999.

Equity in income of real estate partnership increased $0.7 million, or 704.7%,
in 2000 due to the acquisition of an equity investment interest in the retail
portfolio located in the Kansas City, MO area. This interest was not acquired
until September 30, 1999. Therefore, equity in income of real estate
partnerships for the period ended December 31, 1999 represents only three months
of activity, while activity for the period ended December 31, 2000 represents a
full year of activity.

Dividend income from real estate investment trusts was $1.7 million for the year
ended December 31, 2000, an increase of $0.5 million or 42.8% from the
corresponding period in 1999. This increase was primarily due to higher amounts
invested in real estate investment trusts. Amounts invested in REIT shares
averaged approximately $28.6 million during 2000 compared to approximately $22.4
million during 1999.

Interest on short-term investments decreased approximately $0.4 million or 25.0%
for the twelve months ended December 31, 2000 due primarily to a significantly
lower average cash balance. Cash and cash equivalents during 2000 averaged
approximately $16.6 million compared to approximately $32.0 million during 1999.

Operating expenses increased $0.6 million or 15.7% to $4.4 million during the
period ended December 31, 2000 when compared to the corresponding period in
1999. This increase was primarily a result of the Partnership's acquisition of a
controlling interest in the apartment complex located in Jacksonville, FL.

Interest expense increased $0.6 million, or 404.1%, in 2000 when compared to the
corresponding periods in 1999. This increase was due to the Partnership's
acquisition on September 30, 1999 of a controlling interest in the apartment
complex located in Jacksonville, FL, which was acquired subject to $10.2 million
in debt

OFFICE PROPERTIES

Net investment income from property operations for the office sector decreased
approximately $1.8 million, or 24.9%, in 2000 when compared to 1999. This
decrease was primarily due to lower revenue levels experienced by the Oakbrook
Terrace, IL office complex during 2000 as a result of the lease termination fee
received during 1999 coupled with a corresponding decrease in occupancy. A 36%
decrease in occupancy at one of the Brentwood, TN office properties also
contributed to the decrease

The office properties owned by the Partnership experienced a net unrealized loss
of approximately $2.4 million during 2000 compared to a net unrealized loss of
$3.3 million in 1999.

During 2000, the Oakbrook Terrace, IL property decreased $1.6 million in value
due to a lease termination associated with 45% of the space and weaker market
conditions. One of the Brentwood, TN office properties also experienced a net
unrealized loss of approximately $0.8 million primarily due to capital
expenditures on the property that were not reflected as an increase in market
value.

Approximately half of the $3.3 million net unrealized loss in 1999 was
attributable to the office building located in Oakbrook Terrace, IL, which
experienced costs associated with re-leasing and expected vacancy resulting from
the lease termination exercised by a tenant. The Beaverton, OR

                                       13
<Page>

office property also experienced a net unrealized loss of approximately $0.8
million. This decline in value was partially attributable to an anticipated
reduction in investor demand for suburban office properties. The Lisle, IL
office property also experienced a net unrealized loss of approximately $0.7
million primarily due to capital expenditures on the property that were not
reflected as an increase in market value.

The Morristown, NJ office property was sold on October 26, 2000 and resulted in
a realized gain of approximately $0.2 million.

Occupancy at the Lisle, IL office property increased from 88% at December 31,
1999 to 94% at December 31, 2000. Occupancy at one of the Brentwood, TN office
complexes decreased from 95% to 59% from December 31, 1999 to December 31, 2000,
while occupancy at the other Brentwood, TN office property remained unchanged at
100%. Occupancy at the Oakbrook Terrace, IL office complex decreased from 100%
at December 31, 1999 to 52% at December 31, 2000, while occupancy at the
Beaverton, OR office complex decreased from 100% at December 31, 1999 to 95% at
December 31, 2000. As of December 31, 2000 all vacant spaces were being
marketed.

APARTMENT COMPLEXES

Net investment income from property operations for the apartment sector was $3.4
million in 2000, an increase of $0.9 million or 34.8% compared with 1999. This
increase was primarily due to the acquisition of the controlling interest in the
apartment complex located in Jacksonville, FL.

The apartment complexes owned by the Partnership experienced a net unrealized
gain of $2.7 million and $0.6 million in 2000 and 1999, respectively. The
largest share of the unrealized gain for 2000 or $1.7 million was experienced by
the apartment complex located in Atlanta, GA primarily due to increases in
rental rates, stabilized occupancy, and lower operating expense estimates. The
apartment complex located in Raleigh, NC also experienced a net unrealized gain
of $0.2 million due to increases in rental rates.

The occupancy at the Atlanta, GA complex remained unchanged at 98% as of
December 31, 1999 and December 31, 2000. Occupancy at the apartment complex in
Raleigh, NC also remained unchanged at 92% as of December 31, 1999 and December
31, 2000. Occupancy at the Jacksonville, FL apartment complex increased from 89%
as of December 31, 1999 to 91% as of December 31, 2000. This increase is largely
a result of renovations completed at the project. As of December 31, 2000, all
available vacant units were being marketed.

RETAIL PROPERTY
Net investment income for the twelve months ended December 31, 2000 and 1999 for
the Partnership's retail property located in Roswell, GA was approximately $2.7
million for both periods.

The retail property experienced a net unrealized loss of $0.3 million and $1.8
million in 2000 and 1999, respectively. The unrealized loss experienced by the
property in 2000 was due to lower projected income growth, coupled with capital
expenditures that did not increase the market value of the property. The
decrease in value in 1999 was attributable to a declining position of the
property in the market.

Occupancy at the shopping center located in Roswell, GA decreased from 97% as of
December 31, 1999 to 96% as of December 31, 2000. As of December 31, 2000, all
vacant space was being marketed.

                                       14
<Page>

INDUSTRIAL PROPERTIES
Net investment income from property operations for the industrial properties
increased from $0.9 million in 1999 to $1.3 million in 2000. The majority of the
increase was a result of increased occupancy throughout 2000 at the property
located in Aurora, CO.

The three industrial properties owned by the Partnership experienced a net
unrealized loss of approximately $0.9 million and a net unrealized gain of $0.2
million in 2000 and 1999, respectively. The majority of the decrease for 2000
was attributable to the Aurora, CO industrial property, which had a loss of
approximately $0.7 million due to more conservative assumptions regarding rental
rates, lease-up time and terminal capitalization rates used by the appraiser. In
addition, capital expenditures were incurred at the property that was not
reflected as an increase in market value. The industrial property located in
Bolingbrook, IL experienced an unrealized loss of $0.4 million in 2000. This
loss was due to the expiration of the single tenant lease with no replacement
tenant being signed as of yet. A portion of the space was temporarily leased
during the fourth quarter of 2000.

The occupancy at the Bolingbrook, IL property decreased from 100% at December
31, 1999 to 45% at December 31, 2000. As of December 31, 2000 the Salt Lake
City, Utah property was 50% leased with two tenants. However, one tenant for
approximately 33% of the space was bankrupt and had moved out of the space by
year-end. The Salt Lake City, UT property had an occupancy rate of 34% at
December 31, 1999. The Aurora, Co property's occupancy rate remained unchanged
at 75% from December 31, 1999 to December 31, 2000. As of December 31, 2000, all
vacant spaces were being marketed.

EQUITY IN INCOME OF REAL ESTATE PARTNERSHIP

On September 30, 1999, the Partnership invested in an equity joint venture of
retail centers located in the Kansas City, MO area. During the twelve months
ended December 31, 2000, income from this investment amounted to $0.8 million
compared to $0.1 million for the corresponding period in 1999. The increase in
income was attributable to the Partnership holding the investment for a full
year during 2000 as opposed to only three months during 1999. This investment
experienced a net unrealized gain in 2000 of $0.1 million. During 1999, the
investment experienced a net unrealized loss of $0.7 million, primarily due to
capital expenditures on the properties that were not reflected as an increase in
market value.

The retail portfolio located in the Kansas City, MO area had an average
occupancy of 91% as of December 31, 2000 compared to an average occupancy of 90%
as of December 31, 1999. As of December 31, 2000, all vacant spaces were being
marketed.

REAL ESTATE INVESTMENT TRUSTS
The Partnership recognized a net realized gain from real estate investment
trusts of $2.5 million in 2000 primarily due to the sale of the Partnership's
remaining investment in ProLogis REIT shares and sales of other REIT
investments.

The Partnership's investment in REIT shares experienced an unrealized gain of
$2.6 million and an unrealized loss of $2.3 million for the twelve months ended
December 31, 2000 and 1999, respectively. These changes in unrealized gain and
loss reflect changes in the market value of REIT shares held by the Partnership.

OTHER
Other net investment income decreased $0.5 million during 2000 compared to the
corresponding period last year. Other net investment income includes interest
income from short-term investments, investment management fees, and expenses not
related to property activities. The decrease in 2000 was primarily due to lower
interest income on short-term investments primarily as a result of the
Partnership maintaining a significantly lower cash balance as noted previously.


                                       15
<Page>

(c) PER SHARE INFORMATION

Following is an analysis of the Partnership's net investment income and net
realized and unrealized gain (loss) on investments, presented on a per share
basis:

<Table>
<Caption>
                                                                  01/01/2001         01/01/2000     01/01/1999
                                                                      TO                 TO            TO
                                                                  12/31/2001         12/31/2000     12/31/1999
                                                                  ----------         ----------     ----------
<S>                                                               <C>                <C>            <C>
 Revenue from real estate and improvements                          $  2.71            $  2.32        $  2.08
 Equity in income of real estate partnership                        $  0.08            $  0.08        $  0.01
 Dividend income from real estate investment trusts                 $  0.24            $  0.18        $  0.12
 Interest on short-term investments                                 $  0.03            $  0.13        $  0.16
                                                                   --------           --------       --------
 TOTAL INVESTMENT INCOME                                            $  3.06            $  2.71        $  2.37
                                                                   --------           --------       --------
 Investment management fee                                          $  0.30            $  0.28        $  0.26
 Real estate taxes                                                  $  0.30            $  0.25        $  0.25
 Administrative expense                                             $  0.28            $  0.25        $  0.21
 Operating expense                                                  $  0.60            $  0.44        $  0.37
 Interest expense                                                   $  0.20            $  0.07        $  0.01
 Minority interest in consolidated partnership                      $  0.02            $  0.00 *      $  0.00 *
                                                                   --------           --------       --------
 TOTAL INVESTMENT EXPENSES                                          $  1.70            $  1.29        $  1.10
                                                                   --------           --------       --------
 NET INVESTMENT INCOME                                              $  1.36            $  1.42        $  1.27
                                                                   --------           --------       --------
 Net realized gain (loss) on real estate investments sold
      or converted                                                 ($  0.02)           $  0.27       ($  0.00) *
                                                                   --------           --------       --------
 Change in unrealized gain (loss) on real estate investments       ($  0.26)           $  0.23       ($  0.68)
 Minority interest in unrealized gain (loss) on investments         $  0.00 *         ($  0.04)      ($  0.00) *
                                                                   --------           --------       --------
 Net unrealized gain (loss) on real estate investments             ($  0.26)           $  0.19       ($  0.68)
                                                                   --------           --------       --------
 NET REALIZED AND UNREALIZED
      GAIN (LOSS) ON INVESTMENTS                                   ($  0.28)           $  0.46       ($  0.68)
                                                                   ========           ========       ========

 Net change in share value                                          $  1.08            $  1.88        $  0.59

 Share value at beginning of period                                 $ 22.74            $ 20.86        $ 20.27
                                                                   --------           --------       --------
 Share value at end of period                                       $ 23.82            $ 22.74        $ 20.86
                                                                   ========           ========       ========
 Ratio of expenses to average net assets(1)                            7.26%              6.07%          5.33%

 Ratio of net investment income to average net assets(1)               5.93%              6.49%          6.12%

 Number of weighted average shares outstanding during                  8,922              9,831         10,472
 the period (000's)
</Table>


ALL PER SHARE CALCULATIONS ARE BASED ON WEIGHTED AVERAGE SHARES
OUTSTANDING.

(1) Average net assets are calculated based on an average of
ending monthly net assets.

 * Per Share amount less than $0.01 (rounded)

                                       16
<Page>

(d)  INFORMATION CONCERNING FORWARD-LOOKING STATEMENTS

Certain statements contained in Management's Discussion and Analysis may be
considered forward-looking statements. Words such as "expects", "believes",
"anticipates", "intends", "plans", or variations of such words are generally
part of forward-looking statements. Forward-looking statements are made based
upon management's current expectations and beliefs concerning future
developments and their potential effects upon the Partnership. There can be no
assurance that future developments affecting the Partnership will be those
anticipated by management. There are certain important factors that could cause
actual results to differ materially from estimates or expectations reflected in
such forward-looking statements including without limitation, changes in general
economic conditions, including the performance of financial markets and interest
rates; market acceptance of new products and distribution channels; competitive,
regulatory or tax changes that affect the cost or demand for the Partnership's
products; and adverse litigation results. While the Partnership reassesses
material trends and uncertainties affecting its financial position and results
of operations, it does not intend to review or revise any particular
forward-looking statement referenced in this Management's Discussion and
Analysis in light of future events. Readers should consider the information
referred to above when reviewing any forward-looking statements contained in
this Management's Discussion and Analysis.

(e) INFLATION

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


CRITICAL ACCOUNTING POLICIES

The preparation of financial statements in conformity with Generally Accepted
Accounting Principles ("GAAP") requires the application of accounting policies
that often involve a significant degree of judgment. Management, on an ongoing
basis, reviews critical estimates and assumptions. If management determines, as
a result of its consideration of facts and circumstances that modifications in
assumptions and estimates are appropriate, results of operations and financial
position as reported in the Consolidated Financial Statements may change
significantly.


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


VALUATION OF INVESTMENTS
REAL ESTATE INVESTMENTS - The Partnership's investments in real estate are
initially valued at their purchase price. Thereafter, real estate investments
are reported at their estimated market values based upon appraisal reports
prepared by independent real estate appraisers (members of the Appraisal
Institute or an equivalent organization) within a reasonable amount of time
following acquisition of the real estate and no less frequently than annually
thereafter. The Chief Real Estate Appraiser of PIM's Risk Management Unit is
responsible to assure that the valuation process provides objective and accurate
market value estimates.

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

                                       17
<Page>

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.

As described above, the estimated market value of real estate and real estate
related assets is determined through an appraisal process. These estimated
market values may vary significantly from the prices at which the real estate
investments would sell since market prices of real estate investments can only
be determined by negotiation between a willing buyer and seller. Although the
estimated market values represent subjective estimates, management believes
these estimated market values are reasonable approximations of market prices and
the aggregate value of investments in real estate is fairly presented as of
December 31, 2001 and 2000. Further discussion surrounding our policies and
procedures for valuing Real Estate Investments can be found in Footnote 2 to the
Consolidated Financial Statements.

INVESTMENT IN REAL ESTATE INVESTMENT TRUSTS - Shares of real estate investment
trusts (REITs) are generally valued at their quoted market price. These values
may be adjusted for discounts relating to restrictions, if any, on the future
sale of these shares, such as lockout periods or limitations on the number of
shares which may be sold in a given time period. Any such discounts are
determined by the Chief Real Estate Appraiser.

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 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 about 28.06% of its investment portfolio consisting
primarily of short-term fixed rate commercial paper and fixed and variable
interest rate debt. The Partnership does not use derivative financial
instruments. By policy, the Partnership places its investments with high quality
debt security issuers, limits the amount of credit exposure to any one issuer,
limits duration by restricting the term, and holds investments to maturity
except under rare circumstances.

The table below presents the amounts and related weighted interest rates of the
Partnership's cash equivalents and short-term investments at December 31, 2001:

<Table>
<Caption>
                                              ESTIMATED MARKET
                                                  VALUE             AVERAGE
                              MATURITY        (IN $ MILLIONS)    INTEREST RATE
                            ----------------------------------------------------
<S>                         <C>               <C>                <C>
Cash equivalents             0-3 months            $25.3             1.51%
Short-term investments       3-12 months            $0                0%
</Table>

                                       18
<Page>

The table below discloses the Partnership's fixed and variable rate debt as of
December 31, 2001. Approximately $19.0 million of the Partnership's long-term
debt bears interest at fixed rates and therefore the fair value of this
instrument 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. The interest rate on the variable rate
debt is equal to the 6-month Treasury rate plus 1.565%. It is subject to a
maximum of 11.345% and a minimum of 2.345%. The interest rate on the variable
rate debt as of December 31, 2001 was 5.735%.

<Table>
<Caption>
December 31, 2001

Debt (in $ thousands),                                                                                              Estimated
including current portion        2002       2003       2004       2005       2006      Thereafter       Total       Fair Value
-------------------------        ----       ----       ----       ----       ----      ----------       -----       ----------
<S>                             <C>        <C>        <C>        <C>        <C>        <C>             <C>          <C>
Fixed Rate                        $536       $577       $619       $665     $8,361        $8,240       $18,998        $18,583
Average Fixed Interest Rate      7.437%     7.449%     7.471%     7.491%     7.491%        6.750%        6.950%
Variable Rate                     $142       $159       $168       $178     $9,350            $0        $9,997        $10,038
</Table>

The Partnership is exposed to market risk from tenants. While the Partnership
has not experienced any significant credit losses, in the event of a significant
rising interest rate environment and/or economic downturn, defaults could
increase and result in losses to the Partnership, which would adversely affect
its operating results and liquidity.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

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

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

None.

                                       19
<Page>

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT


                             DIRECTORS AND OFFICERS

The directors and major officers of Pruco Life, listed with their principal
occupations during the past 5 years, are shown below.

                             DIRECTORS OF PRUCO LIFE

JAMES J. AVERY, JR., VICE CHAIRMAN AND DIRECTOR - President, Prudential
Individual Life Insurance since 1998; 1997 to 1998: Senior Vice President, Chief
Actuary and CFO, Prudential Individual Insurance Group; prior to 1997:
President, Prudential Select.

VIVIAN L. BANTA, PRESIDENT, CHAIRMAN, AND DIRECTOR - Executive Vice President,
Individual Financial Services, U.S. Consumer Group since 2000; 1998 to 1999:
Consultant, Individual Financial Services; 1997 to 1998: Consultant, Morgan
Stanley; prior to 1997: Executive Vice President, Global Investor Service, The
Chase Manhattan Bank.

RICHARD J. CARBONE, DIRECTOR - Senior Vice President and Chief Financial Officer
since 1997; prior to 1997: Controller, Salomon Brothers.

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

JEAN D. HAMILTON, Director - Executive Vice President, Prudential Institutional
since 1998; prior to 1998: President, Diversified Group.

RONALD P. JOELSON, DIRECTOR - Senior Vice President, Prudential Asset, Liability
and Risk Management since 1999; 1996 to 1999: President, Guaranteed Products,
Prudential Institutional.

DAVID R. ODENATH, JR., DIRECTOR - President, Prudential Investments since 1999;
prior to 1999: Senior Vice President and Director of Sales, Investment
Consulting Group, Paine Webber.


                         OFFICERS WHO ARE NOT DIRECTORS

SHAUN M. BYRNES, SENIOR VICE PRESIDENT - Senior Vice President, Director of
Mutual Funds, Annuities & UITs, Prudential Investments (PI) since 2001; 2000 to
2001: Senior Vice President, Director of Research, PI; 1999 to 2000: Senior Vice
President, Director of Mutual Funds, PI; 1997 to 1999: Vice President, Mutual
Funds, PI.

C. EDWARD CHAPLIN, TREASURER - Senior Vice President and Treasurer, Prudential
since 2000; prior to 2000, Vice President and Treasurer, Prudential.

THOMAS F. HIGGINS, SENIOR VICE PRESIDENT - Vice President, Annuity Services,
Prudential Individual Financial Services since 1999; 1998 to 1999: Vice
President, Mutual Funds, Prudential Individual Financial Services; prior to
1998: Principal, Mutual Fund Operations, The Vanguard Group.

                                       20
<Page>

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

ANDREW J. MAKO, EXECUTIVE VICE PRESIDENT - Vice President, Finance, U.S.
Consumer Group since 1999; prior to 1999: Vice President, Business Performance
Management Group.

ESTHER H. MILNES, SENIOR VICE PRESIDENT - Vice President and Chief Actuary,
Prudential Individual Life Insurance since 1999; prior to 1999: Vice President
and Actuary, Prudential Individual Insurance Group.

JAMES B. O'CONNOR, SENIOR VICE PRESIDENT AND ACTUARY - Vice President,
Guaranteed Products since 2001; 1998 to 2000: Corporate Vice President,
Guaranteed Products; prior to 1998: Corporate Actuary, Prudential Investments.

SHIRLEY H. SHAO, SENIOR VICE PRESIDENT AND CHIEF ACTUARY - Vice President and
Associate Actuary, Prudential since 1996; prior to 1996: Vice President and
Assistant Actuary, Prudential Corporate Risk Management.

WILLIAM J. ECKERT, IV, VICE PRESIDENT AND CHIEF ACCOUNTING OFFICER - Vice
President and IFS Controller, Prudential Enterprise Financial Management since
2000; 1999 to 2000: Vice President and Individual Life Controller, Prudential
Enterprise Financial Management; 1997 to 1999: Vice President, Accounting,
Enterprise Financial Management; 1995 to 1997: Vice President, Accounting,
External Financial Reporting.

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

ITEM 11.  EXECUTIVE COMPENSATION

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

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Not applicable.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

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

                                       21
<Page>

                                     PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(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, 2001. 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 as Exhibit 1.A.(6)(a) to Form N-8B-2, File No. 2-80513,
               filed November 22, 1982, and incorporated herein by reference.

        3.2    Amended By-Laws of Pruco Life Insurance Company, filed as Exhibit
               1.A.(6)(b) to Post-Effective Amendment No. 13 to Form S-6, File
               No. 2-89558, filed March 2, 1989, 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) to
               Form S-1, Registration Statement No. 33-8698, filed September 12,
               1986, and incorporated herein by reference.

        4.1    Variable Life Insurance Contract, filed as Exhibit 1.A.(5)(a) to
               Pre-Effective Amendment No. 1 to Form S-6, Registration Statement
               No. 2-80513, filed February 17, 1983, and incorporated herein by
               reference.

        4.2    Revised Variable Appreciable Life Insurance Contract with fixed
               death benefit, filed as Exhibit 1.A.(5)(f) to Post-Effective
               Amendment No. 5 to Form S-6, Registration Statement No. 2-89558,
               filed July 10, 1986, and incorporated herein by reference.

        4.3    Revised Variable Appreciable Life Insurance Contract with
               variable death benefit, filed as Exhibit 1.A.(5)(g) to
               Post-Effective Amendment No. 5 to Form S-6, Registration
               Statement No. 2-89558, filed July 10, 1986, and incorporated
               herein by reference.

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

        4.5    Flexible Premium Variable Life Insurance Contract, filed as
               Exhibit 1.A.(5) to Form S-6, Registration Statement No. 2-99260,
               filed July 29, 1985, and incorporated herein by reference.

                                       22
<Page>

        9.     None.

        10.1   Investment Management Agreement between The Prudential Insurance
               Company of America and The Prudential Variable Contract Real
               Property Partnership filed as Exhibit (10A) to Post- Effective
               Amendment No. 4 to Form S-1, Registration Statement No. 33-8698,
               filed May 2, 1988, and incorporated herein by reference.

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

        10.3   Partnership Agreement of The Prudential Variable Contract Real
               Property Partnership filed as Exhibit (10C) to Post-Effective
               Amendment No. 4 to Form S-1, Registration Statement No. 33-8698,
               filed May 2, 1988, and incorporated herein by reference.

        11.    Not applicable.

        12.    Not applicable.

        13.    None.

        18.    None.

        21.    Not applicable.

        22.    Not applicable.

        23.    None.

        24.    Power of Attorney: J. Avery incorporated by reference to
        Post-Effective Amendment No. 2 to Form S-6, Registration No. 333-07451,
        filed June 25, 1997 on behalf of the Pruco Life Variable Appreciable
        Account. D. Odenath, R. Joelson and W. Eckert incorporated by reference
        to initial registration statement to Form N-4, Registration No.
        333-52754, filed on December 26, 2000 on behalf of the Pruco Life
        Flexible Premium Variable Annuity Account. V. Banta, R. Carbone, H. Galt
        and J. Hamilton incorporated by reference to Post-Effective Amendment
        No. 5 to Form S-6, Registration No.333-85115, filed June 28,2001 on
        behalf of the Pruco Life Variable Universal Account.

        27.    Not applicable.

                                       23
<Page>

                                SIGNATURES


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


                          PRUCO LIFE INSURANCE COMPANY
                                  IN RESPECT OF
                               PRUCO LIFE VARIABLE
                         CONTRACT REAL PROPERTY ACCOUNT
                         ------------------------------
                                  (REGISTRANT)


Date: March 29, 2002           By: /s/ William J. Eckert, IV
      --------------               --------------------------------------------
                                    William J. Eckert, IV
                                    Vice President and Chief Accounting Officer


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


SIGNATURE                            TITLE                           DATE
---------                            -----                           ----

*                              Director                         March 29, 2002
---------------------
James J. Avery, Jr.

*                              President, Chairman              March 29, 2002
---------------------          and Director
Vivian  L. Banta

*                              Director                         March 29, 2002
---------------------
Richard  J. Carbone

*                              Director                         March 29, 2002
---------------------
Helen  M. Galt

*                              Director                         March 29, 2002
---------------------
Jean D. Hamilton

*                              Director                         March 29, 2002
---------------------
Ronald P. Joelson

*                              Director                         March 29, 2002
---------------------
David R. Odenath, Jr.


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

                                       24
<Page>

               PRUCO LIFE VARIABLE CONTRACT REAL PROPERTY ACCOUNT
                                  (REGISTRANT)

                                      INDEX
                                      =====
<Table>
<Caption>
                                                                                                   PAGE
                                                                                                   ====
<S>                                                                                                <C>
A.   PRUCO LIFE VARIABLE  CONTRACT  REAL PROPERTY ACCOUNT

     Financial Statements:

          Report of Independent Accountants                                                        F-2

          Statements of Net Assets = December 31, 2001 and 2000                                    F-3

          Statements of Operations = Years Ended December 31, 2001, 2000, 1999                     F-3

          Statements of Changes in Net Assets = Years Ended December 31, 2001, 2000, 1999          F-3

          Notes to Financial Statements                                                            F-4

B.   THE PRUDENTIAL VARIABLE  CONTRACT  REAL PROPERTY PARTNERSHIP

     Financial Statements:

          Report of Independent Accountants                                                        F-9

          Report of Independent Accountants on Financial Statement Schedules                       F-10

          Statements of Assets and Liabilities = December 31, 2001 and 2000                        F-11

          Statements of Operations = Years Ended December 31, 2001, 2000 and 1999                  F-12

          Statements of Changes in Net Assets = Years Ended December 31, 2001, 2000 and 1999       F-13

          Statements of Cash Flows = Years Ended December 31, 2001, 2000 and 1999                  F-14

          Schedule of Investments = December 31, 2001 and 2000                                     F-15

          Notes to Financial Statements                                                            F-19

     Financial Statement Schedules:

          For the period ended December 31, 2001

          Schedule III = Real Estate Owned: Properties                                             F-27

          Schedule III = Real Estate Owned: Interest in Properties                                 F-28
</Table>

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

                                      F-1
<Page>

                        REPORT OF INDEPENDENT ACCOUNTANTS


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


In our opinion, the accompanying statements of net assets and the related
statements of operations and changes in net assets present fairly, in all
material respects, the financial position of Pruco Life Variable Contract
Real Property Account at December 31, 2001 and 2000, and the results of its
operations and of the changes in its net assets for the three years in the
period ended December 31, 2001, in conformity with accounting principles
generally accepted in the United States of America. These financial
statements are the responsibility of the management of the Pruco Life
Insurance Company; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with auditing standards generally accepted
in the United States of America, which 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, 2001 with The Prudential Variable Contract Real
Property Partnership, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP
New York, New York
March 29, 2002

                                      F-2
<Page>

                                        FINANCIAL STATEMENTS OF
                        PRUCO LIFE VARIABLE CONTRACT REAL PROPERTY ACCOUNT

STATEMENTS OF NET ASSETS
December 31, 2001 and 2000
<Table>
<Caption>
                                                                                2001               2000
                                                                           =============       =============
<S>                                                                        <C>                 <C>
ASSETS
  Investment in The Prudential Variable Contract
    Real Property Partnership (Note 3)                                     $ 108,557,379       $ 112,527,164
                                                                           =============       =============
  Net Assets                                                               $ 108,557,379       $ 112,527,164
                                                                           =============       =============

NET ASSETS, representing:
  Equity of contract owners (Note 4)                                       $  78,352,169       $  78,534,051
  Equity of Pruco Life Insurance Company (Note 2D)                            30,205,210          33,993,113
                                                                           =============       =============
                                                                           $ 108,557,379       $ 112,527,164
                                                                           =============       =============

Units Outstanding                                                             50,243,768          54,268,486
                                                                           =============       =============
</Table>

STATEMENTS OF OPERATIONS
For the years ended December 31, 2001, 2000 and 1999
<Table>
<Caption>
                                                                                2001               2000              1999
                                                                           =============       =============     =============
<S>                                                                        <C>                 <C>               <C>
INVESTMENT INCOME
Net investment income from Partnership operations                          $   6,766,150       $   7,521,480     $   7,491,106
                                                                           =============       =============     =============
EXPENSES
Charges to contract owners for assuming mortality risk and
     expense risk and for administration (Note 5)                                486,471             481,819           514,519
                                                                           =============       =============     =============
NET INVESTMENT INCOME                                                          6,279,679           7,039,661         6,976,587
                                                                           =============       =============     =============
NET REALIZED AND UNREALIZED GAIN
  (LOSS) ON INVESTMENTS
Net change in unrealized gain (loss) on investments in Partnership            (1,302,684)            978,929        (3,986,964)
Realized gain (loss) on sale of investments in Partnership                      (115,961)          1,458,147           (18,696)
                                                                           =============       =============     =============
NET GAIN (LOSS) ON INVESTMENTS                                                (1,418,645)          2,437,076        (4,005,660)
                                                                           =============       =============     =============
NET INCREASE IN NET ASSETS
  RESULTING FROM OPERATIONS                                                $   4,861,034       $   9,476,737     $   2,970,927
                                                                           =============       =============     =============
</Table>

STATEMENTS OF CHANGES IN NET ASSETS (RETURN)
For the years ended December 31, 2001, 2000, and 1999
<Table>
<Caption>
                                                                                2001               2000              1999
                                                                           =============       =============     =============
<S>                                                                        <C>                 <C>               <C>
OPERATIONS
Net investment income                                                      $   6,279,679       $   7,039,661     $   6,976,587
Net change in unrealized gain (loss) on investments in Partnership            (1,302,684)            978,929        (3,986,964)
Net realized gain (loss) on sale of investments in Partnership                  (115,961)          1,458,147           (18,696)
                                                                           =============       =============     =============
NET INCREASE IN NET ASSETS
  RESULTING FROM OPERATIONS                                                    4,861,034           9,476,737         2,970,927
                                                                           =============       =============     =============
CAPITAL TRANSACTIONS
Net withdrawals by contract owners (Note 7)                                   (3,384,921)         (7,012,328)       (9,241,552)
Net contributions (withdrawals) by Pruco Life Insurance Company               (5,445,898)         (7,662,472)        4,211,673
                                                                           =============       =============     =============
NET DECREASE IN NET ASSETS
  RESULTING FROM CAPITAL TRANSACTIONS                                         (8,830,819)        (14,674,800)       (5,029,879)
                                                                           =============       =============     =============
TOTAL DECREASE IN NET ASSETS                                       (3,969,785)         (5,198,063)       (2,058,952)

NET ASSETS
  Beginning of year                                                          112,527,164         117,725,227       119,784,179
                                                                           =============       =============     =============
  End of year                                                              $ 108,557,379       $ 112,527,164     $ 117,725,227
                                                                           =============       =============     =============
</Table>

           SEE NOTES TO FINANCIAL STATEMENTS ON PAGES F-4 THROUGH F-8

                                      F-3
<Page>

                      NOTES TO THE FINANCIAL STATEMENTS OF
               PRUCO LIFE VARIABLE CONTRACT REAL PROPERTY ACCOUNT
                                DECEMBER 31, 2001

NOTE 1:    GENERAL

Pruco Life Variable Contract Real Property Account (the "Real Property Account")
was established on August 27, 1986 and commenced business September 5, 1986.
Pursuant to Arizona law, the Real Property Account was established as a separate
investment account of Pruco Life Insurance Company ("Pruco Life"), a
wholly=owned subsidiary of The Prudential Insurance Company of America
("Prudential"). The assets of the Real Property Account are segregated from
Pruco Life's other assets. The Real Property account is used to fund benefits
under certain variable life insurance and variable annuity contracts issued by
Pruco Life. These products are Appreciable Life ("VAL"), Variable Life ("VLI"),
Discovery Plus ("SPVA"), and Discovery Life Plus ("SPVL").

The assets of the Real Property Account are invested in The Prudential Variable
Contract Real Property Partnership (the "Partnership"). The Partnership is
organized under New Jersey law and is registered under the Securities Act of
1933. The Partnership is the investment vehicle for assets allocated to the real
estate investment option under certain variable life insurance and annuity
contracts. The Real Property Account, along with The Prudential 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 Real Property Account's
proportionate interest of the Partnership's market value. At December 31, 2001
and 2000 the Real Property Account's interest in the Partnership was 54.8% or
4,556,749 shares and 54.5% or 4,949,340 shares respectively.

C.       INCOME RECOGNITION

Net investment income and realized and unrealized gains and losses are
recognized daily. Amounts are based upon the Real Property Account's
proportionate interest in the Partnership.

D.       EQUITY OF PRUCO LIFE INSURANCE COMPANY

Pruco Life maintains a position in the Real Property Account for property
acquisitions and capital expenditure funding needs. The position is also
utilized for liquidity purposes including unit purchases and redemptions,
Partnership share transactions, and expense processing. The position does not
have an effect on the contract owner's account or the related unit value.

                                      F-4
<Page>

NOTE 3:    INVESTMENT INFORMATION FOR THE PRUDENTIAL VARIABLE CONTRACT REAL
           PROPERTY PARTNERSHIP

The number of shares (rounded) held by the Real Property Account in the
Partnership and the Partnership net asset value per share (rounded) and the
December 31, 2001 and December 31, 2000 were as follows:

<Table>
<Caption>
                                          DECEMBER 31, 2001   DECEMBER 31, 2000
                                          =================   =================
<S>                                       <C>                 <C>
NUMBER OF SHARES (ROUNDED):                   4,556,749          4,949,340
NET ASSET VALUE PER SHARE (ROUNDED):            $23.82             $22.74
</Table>

NOTE 4:      CONTRACT OWNER UNIT INFORMATION

Outstanding contract owner units, unit values and total value of contract owner
equity at December 31, 2001 and December 31, 2000 by product, were as follows:

2001:
<Table>
<Caption>
                                            VAL               VLI               SPVA             SPVL              TOTAL
                                            ===               ===               ====             ====              =====
<S>                                         <C>               <C>               <C>              <C>               <C>
CONTRACT OWNER UNITS OUTSTANDING:            31,552,373        2,322,759           233,556        2,010,295
UNIT VALUE:                                 $   2.17654       $  2.26011        $  1.97316       $  1.97316
                                            ============      ==========        ==========       ==========
TOTAL CONTRACT OWNER EQUITY:                $68,675,002       $5,249,690        $  460,843       $3,966,634        $78,352,169
                                            ===========       ==========        ==========       ==========        ===========
</Table>


2000:
<Table>
<Caption>
                                            VAL               VLI               SPVA             SPVL              TOTAL
                                            ===               ===               ====             ====              =====
<S>                                         <C>               <C>               <C>              <C>               <C>
CONTRACT OWNER UNITS OUTSTANDING:            32,946,644       2,381,202           260,656         2,121,822
UNIT VALUE:                                 $   2.08939      $  2.16437        $  1.90636        $  1.90636
                                            ============      ==========        ==========       ==========
TOTAL CONTRACT OWNER EQUITY:                $68,838,388       $5,153,802        $  496,904       $4,044,957        $78,534,051
                                            ===========       ==========        ==========       ==========        ===========
</Table>


NOTE 5:      CHARGES AND EXPENSES

A.       MORTALITY RISK AND EXPENSE RISK CHARGES

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

B.       ADMINISTRATIVE CHARGES

Administrative charges are determined daily using an effective annual rate of
0.35% applied daily against the net assets representing equity of contract
owners held in each subaccount for SPVA and SPVL. Administrative charges include
costs associated with issuing the contract, establishing and maintaining
records, and providing reports to contract owners.

C.       COST OF INSURANCE AND OTHER RELATED CHARGES

Contract owner contributions are subject to certain deductions prior to being
invested in the Real Property Account. The deductions for VAL and VLI are (1)
state premium taxes; (2) sales charges which are deducted in order to compensate
Pruco Life for the cost of selling the contract and (3) transaction costs,
applicable to VAL, are deducted from each premium payment to cover premium
collection and processing costs. Contracts are also subject to monthly charges
for the costs of administering the contract to compensate Pruco Life for the
guaranteed minimum death benefit risk.

                                      F-5
<Page>

D.       DEFERRED SALES CHARGE

A deferred sales charge is imposed upon the surrender of certain variable life
insurance contracts to compensate Pruco Life 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 sixth and tenth year of the contract for SPVL and VAL, respectively.
No sales charge will be imposed on death benefits.

E.       PARTIAL WITHDRAWAL CHARGE

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


NOTE 6:    TAXES

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


NOTE 7:    NET  WITHDRAWALS BY CONTRACT OWNERS

Contract owner activity for the real estate investment option in Pruco Life's
variable insurance and variable annuity products for the years ended December
31, 2001, 2000 and 1999 were as follows:

2001:
<Table>
<Caption>
                                              VAL               VLI               SPVA             SPVL              TOTAL
                                              ===               ===               ====             ====              =====
<S>                                           <C>               <C>               <C>              <C>               <C>
Contract Owner Net Payments:                  $ 4,273,765       $   380,615       $       (13)     $     (1,874)     $  4,652,493
Policy Loans:                                  (1,856,054)          (86,464)                0           (78,500)       (2,021,018)
Policy Loan Repayments and Interest:            1,881,095            63,019                 0           176,382         2,120,496
Surrenders, Withdrawals, and Death Benefits:   (3,953,623)         (285,065)          (34,082)         (341,668)       (4,614,438)
Net Transfers To Other Subaccounts
    or Fixed Rate Option:                        (492,261)         (17,950)           (19,027)           56,745          (472,493)
Administrative and Other Charges:              (2,837,147)         (183,877)                            (28,937)       (3,049,961)
                                              ===========       ===========       ===========      ============      ============
NET WITHDRAWALS BY CONTRACT OWNERS            $(2,984,225)      $  (129,722)      $   (53,122)     $   (217,852)     $ (3,384,921)
                                              ===========       ===========       ===========      ============      ============
</Table>

2000:
<Table>
<Caption>
                                              VAL               VLI               SPVA             SPVL              TOTAL
                                              ===               ===               ====             ====              =====
<S>                                           <C>               <C>               <C>              <C>               <C>
Contract Owner Net Payments:                  $  4,470,287      $   397,335       $         0      $        (61)     $  4,867,561
Policy Loans:                                  (2,018,495)          (73,712)                0           (77,275)       (2,169,482)
Policy Loan Repayments and Interest:            1,849,555            72,675                 0           152,141         2,074,371
Surrenders, Withdrawals, and Death Benefits:   (4,314,085)         (266,353)          (70,733)         (401,369)       (5,052,540)
Net Transfers To Other Subaccounts
    or Fixed Rate Option:                      (3,377,546)         (145,822)           (7,622)         (171,284)       (3,702,274)
Administrative and Other Charges:              (2,823,304)         (176,525)              (65)          (30,070)       (3,029,964)
                                              ===========       ===========       ===========      ============      ============
NET WITHDRAWALS BY CONTRACT OWNERS            $(6,213,588)      $  (192,402)      $   (78,420)     $   (527,918)     $ (7,012,328)
                                              ===========       ===========       ===========      ============      ============
</Table>

1999:
<Table>
<Caption>
                                              VAL               VLI               SPVA             SPVL              TOTAL
                                              ===               ===               ====             ====              =====
<S>                                           <C>               <C>               <C>              <C>               <C>
Contract Owner Net Payments:                  $ 1,995,536       $   219,516       $         0      $   (191,413)     $  2,023,639
Policy Loans:                                  (2,274,300)          (57,385)                0          (173,486)       (2,505,171)
Policy Loan Repayments and Interest:            2,233,905           112,386                 0           125,962        2,472,253
Surrenders, Withdrawals, and Death Benefits:   (4,042,390)         (360,063)         (391,563)         (360,393)       (5,154,409)
Net Transfers To Other Subaccounts
    or Fixed Rate Option:                      (2,391,648)          (88,091)          (13,158)         (260,510)       (2,753,407)
Administrative and Other Charges:              (3,107,932)         (181,336)             (631)          (34,558)       (3,324,457)
                                              ===========       ===========       ===========      ============      ============
NET WITHDRAWALS BY CONTRACT OWNERS            $(7,586,829)      $  (354,973)      $  (405,352)     $   (894,398)     $ (9,241,552)
                                              ===========       ===========       ===========      ============      ============
</Table>

                                      F-6
<Page>

NOTE 8:  CONTRACT OWNER UNIT ACTIVITY

Transactions in units for the years ended December 31, 2001, 2000 and 1999 were
as follows:

2001:
<Table>
<Caption>
                                                VAL               VLI              SPVA             SPVL
                                                ===               ===              ====             ====
<S>                                          <C>               <C>               <C>              <C>
Contract Owner Contributions:                 2,853,710         202,651                0           121,966
Contract Owner Redemptions:                  (4,247,981)       (261,094)         (27,100)         (233,493)
</Table>

2000:
<Table>
<Caption>
                                                VAL               VLI              SPVA             SPVL
                                                ===               ===              ====             ====
<S>                                          <C>               <C>               <C>              <C>
Contract Owner Contributions:                 2,890,088         216,712               13            72,083
Contract Owner Redemptions:                  (6,033,092)       (309,042)         (43,494)         (362,852)
</Table>

1999:
<Table>
<Caption>
                                                VAL               VLI              SPVA             SPVL
                                                ===               ===              ====             ====
<S>                                          <C>               <C>               <C>              <C>
Contract Owner Contributions:                 2,204,016         176,055               127          (35,621)
Contract Owner Redemptions:                  (6,191,501)       (356,390)         (230,588)        (475,343)
</Table>


NOTE 9:  PURCHASES AND SALES OF INVESTMENTS

The aggregate costs of purchases and proceeds from sales of investments in the
Partnership for the year ended December 31, 2001 were as follows:

<Table>
<S>                           <C>
                  Purchases:  $  0
                  Sales:      $  (9,317,290)
</Table>

                                      F-7
<Page>

NOTE 10:    FINANCIAL HIGHLIGHTS

Pruco Life Insurance Company (the "Company") sells a number of variable
annuity and variable life insurance products, both of which 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
the Company have the lowest and highest total return. Only product designs
within the Real Property Account that had units outstanding during December
31, 2001, were considered when determining the lowest and highest total
return. 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.

<Table>
<Caption>
              At December 31, 2001                          For the year ended December 31, 2001
----------------------------------------------------  -----------------------------------------------
Contract Holder                      Contract Holder                     Expense           Total
     Units        Unit Fair Value      Net Assets      Investment        Ratio**         Return***
    (000's)       Lowest - Higher        (000's)      Income Ratio*  Lowest - Higher  Lowest - Higher
--------------  -------------------  ---------------  -------------  ---------------  ---------------
<C>             <C>                  <C>              <C>            <C>              <C>
    36,119      $1.97316 to 2.26011       $78,352          5.95%      0.35% to 1.25%   3.50% to 4.42%
</Table>

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

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

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


NOTE 11:  RELATED PARTY FOOTNOTE

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

                                      F-8
<Page>

                        REPORT OF INDEPENDENT ACCOUNTANTS


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

In our opinion, the accompanying consolidated statements of assets and
liabilities, including the schedule of investments, and the related consolidated
statements of operations, of changes in net assets and of cash flows present
fairly, in all material respects, the financial position of The Prudential
Variable Contract Real Property Partnership (the "Partnership") at December 31,
2001 and 2000, and the results of its operations and its cash flows for each of
the three years in the period ended December 31, 2001, in conformity with
accounting principles generally accepted in the United States of America. These
financial statements are the responsibility of the management of The Prudential
Insurance Company of America; our responsibility is to express an opinion on
these financial statements based on our audits. We conducted our audits of these
statements in accordance with auditing standards generally accepted in the
United States of America, which require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.



PricewaterhouseCoopers LLP
New York, New York
February  15, 2002

                                      F-9
<Page>

                      REPORT OF INDEPENDENT ACCOUNTANTS ON

                          FINANCIAL STATEMENT SCHEDULES




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

Our audits of the consolidated financial statements referred to in our report
dated February 15, 2002 appearing in this Annual Report on Form 10-K also
included an audit of the financial statement schedules listed in Item 14(a)(2)
of this Form 10-K. In our opinion, these financial statement schedules present
fairly, in all material respects, the information set forth therein when read in
conjunction with the related consolidated financial statements.



PricewaterhouseCoopers LLP
New York, New York
February 15, 2002

                                      F-10
<Page>

             THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

                CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES

<Table>
<Caption>
                                                                            DECEMBER 31, 2001      DECEMBER 31, 2000
                                                                            -----------------      -----------------
<S>                                                                         <C>                    <C>
ASSETS

REAL ESTATE INVESTMENTS - At estimated market value:
  Real estate and improvements
   (cost:  12/31/2001 -- $212,044,159; 12/31/2000 -- $173,748,950)            $197,970,877           $162,213,095
  Real estate partnership (cost: 12/31/2001 -- $7,026,540;
   12/31/2000 -- $5,985,783)                                                     6,712,308              5,445,528
  Real estate investment trusts (cost:  12/31/2001 -- $0;
   12/31/2000 -- $31,896,908)                                                          -               35,224,737
                                                                              ------------           ------------
         Total real estate investments                                         204,683,185            202,883,360

MARKETABLE SECURITIES - At estimated market value
   (cost: 12/31/2001 -- $0; 12/31/2000 -- $4,916,327)                                  -                4,916,494

CASH AND CASH EQUIVALENTS                                                       26,615,645             10,543,821

DIVIDEND RECEIVABLE                                                                 28,455                242,341

OTHER ASSETS (net of allowance for uncollectible
  accounts:  12/31/2001 -- $107,000; 12/31/2000 -- $91,000)                      3,267,367              2,926,280
                                                                              ------------           ------------
         Total assets                                                         $234,594,652           $221,512,296
                                                                              ============           ============
LIABILITIES

MORTGAGE LOANS PAYABLE                                                          28,994,521             10,092,355

ACCOUNTS PAYABLE AND ACCRUED EXPENSES                                            3,469,242              2,517,818

DUE TO AFFILIATES                                                                  896,134                887,434

OTHER LIABILITIES                                                                  972,410                669,209

MINORITY INTEREST                                                                2,111,709                997,401
                                                                              ------------           ------------
         Total liabilities                                                      36,444,016             15,164,217
                                                                              ------------           ------------
COMMITMENTS AND CONTINGENCIES

PARTNERS' EQUITY                                                               198,150,636            206,348,079
                                                                              ------------           ------------
         Total liabilities and partners' equity                               $234,594,652           $221,512,296
                                                                              ============           ============
NUMBER OF SHARES OUTSTANDING AT END OF PERIOD                                    8,317,470              9,075,913
                                                                              ============           ============
SHARE VALUE AT END OF PERIOD                                                        $23.82                 $22.74
                                                                              ============           ============
</Table>


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

                                      F-11
<Page>

                     THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

                                CONSOLIDATED STATEMENTS OF OPERATIONS

<Table>
<Caption>
                                                                                         YEAR ENDED DECEMBER 31,
                                                                             -----------------------------------------------
                                                                                 2001              2000             1999
                                                                             -----------       ------------      -----------
<S>                                                                          <C>               <C>               <C>
INVESTMENT INCOME:
 Revenue from real estate and improvements                                   $24,339,631        $22,570,851      $21,807,346
 Equity in income of real estate partnership                                     686,801            791,596           98,375
 Dividend income                                                               2,157,647          1,744,611        1,221,843
 Interest on short-term investments                                              296,514          1,280,880        1,707,485
                                                                             -----------       ------------      -----------
         Total investment income                                              27,480,593         26,387,938       24,835,049
                                                                             -----------       ------------      -----------
INVESTMENT EXPENSES:
 Operating                                                                     5,328,004          4,390,001        3,794,081
 Investment management fee                                                     2,694,130          2,705,589        2,730,713
 Real estate taxes                                                             2,652,956          2,498,065        2,616,553
 Administrative                                                                2,518,644          2,411,390        2,234,949
 Interest expense                                                              1,776,701            732,991          145,418
 Minority interest                                                               159,852             11,785           33,746
                                                                             -----------       ------------      -----------
         Total investment expenses                                            15,130,287         12,749,821       11,555,460
                                                                             -----------       ------------      -----------
NET INVESTMENT INCOME                                                         12,350,306         13,638,117       13,279,589
                                                                             -----------       ------------      -----------
REALIZED AND UNREALIZED (LOSS) GAIN ON REAL ESTATE
  INVESTMENTS:
 Net proceeds from real estate investments
   sold or converted                                                          53,417,000         46,617,017       21,649,562
 Less:  Cost of real estate investments sold or converted                     50,300,836         55,269,357       19,602,032
           Realization of prior years' unrealized
            gain (loss) on real estate investments sold or converted           3,327,829        (11,296,284)       2,080,673
                                                                             -----------       ------------      -----------

 Net (loss) gain realized on real estate
             investments sold or converted                                      (211,665)         2,643,944          (33,143)
                                                                             -----------       ------------      -----------

 Change in unrealized (loss) gain on real estate investments                  (2,311,404)         2,297,429       (7,145,372)
 Less: Minority interest in unrealized gain on real estate investments            24,680            454,351           38,531
                                                                             -----------       ------------      -----------
 Net unrealized (loss) gain on real estate investments                        (2,336,084)         1,843,078       (7,183,903)
                                                                             -----------       ------------      -----------
NET REALIZED AND UNREALIZED (LOSS) GAIN
 ON REAL ESTATE INVESTMENTS                                                   (2,547,749)         4,487,022       (7,217,046)
                                                                             -----------       ------------      -----------
NET INCREASE IN NET ASSETS RESULTING
 FROM OPERATIONS                                                              $9,802,557        $18,125,139       $6,062,543
                                                                             ===========       ============      ===========
</Table>


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

                                      F-12
<Page>

                     THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

                      CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS

<Table>
<Caption>
                                                                                         YEAR ENDED DECEMBER 31,
                                                                            ------------------------------------------------
                                                                                 2001              2000             1999
                                                                            ------------       ------------     ------------
<S>                                                                         <C>                <C>               <C>
NET INCREASE IN NET ASSETS RESULTING
      FROM OPERATIONS:
 Net investment income                                                       $12,350,306        $13,638,117      $13,279,589
 Net (loss) gain realized on real estate
   investments sold                                                             (211,665)         2,643,944          (33,143)
 Net unrealized (loss) gain from real estate
   investments                                                                (2,336,084)         1,843,078       (7,183,903)
                                                                            ------------       ------------     ------------
         Net increase in net assets resulting from
           operations                                                          9,802,557         18,125,139        6,062,543
                                                                            ------------       ------------     ------------
NET DECREASE IN NET ASSETS RESULTING
 FROM CAPITAL TRANSACTIONS:
Withdrawals by partners
  (2001 -- 758,443; 2000 -- 1,003,008; and
    1999 -- 1,769,354 shares, respectively)                                  (18,000,000)       (22,000,000)     (36,000,000)
                                                                            ------------       ------------     ------------
         Net decrease in net assets resulting from
          capital transactions                                               (18,000,000)       (22,000,000)     (36,000,000)
                                                                            ------------       ------------     ------------
NET DECREASE IN NET ASSETS                                                    (8,197,443)        (3,874,861)     (29,937,457)

NET ASSETS -  Beginning of year                                              206,348,079        210,222,940      240,160,397
                                                                            ------------       ------------     ------------
NET ASSETS -  End of year                                                   $198,150,636       $206,348,079     $210,222,940
                                                                            ============       ============     ============
</Table>


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

                                      F-13
<Page>

               THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

                           CONSOLIDATED STATEMENTS OF CASH FLOWS

<Table>
<Caption>
                                                                                         YEAR ENDED DECEMBER 31,
                                                                            ------------------------------------------------
                                                                                 2001              2000             1999
                                                                            ------------       ------------     ------------
<S>                                                                         <C>                <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net increase in net assets resulting from operations                          $9,802,557        $18,125,139       $6,062,543
Adjustments to reconcile net increase in net assets
   resulting from operations to net cash provided by
   operating activities:
     Net realized and unrealized loss (gain) on
        real estate investments                                                2,547,749         (4,487,022)       7,217,046
     Equity in income of real estate partnership's
        operations in excess of distributions                                   (686,801)          (791,596)         (98,376)
     Minority interest in operating activities                                   159,852             11,785           33,746
     Bad debt expense                                                            108,358             96,785          124,059
      Decrease (increase) in:
         Dividend receivable                                                     213,886           (110,799)          35,733
         Other assets                                                           (449,444)          (169,489)         645,878
      Increase (decrease) in:
         Accounts payable and accrued expenses                                   951,424           (449,796)         982,214
         Due to affiliates                                                         8,700             17,957         (729,058)
         Other liabilities                                                       303,201            143,316           20,952
                                                                            ------------       ------------     ------------
  Net cash flows from operating activities                                    12,959,482         12,386,280       14,294,737
                                                                            ------------       ------------     ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Net proceeds from real estate investments sold                              53,417,000         46,617,017       10,706,996
  Acquisition of real estate                                                 (14,582,383)               -         (7,200,743)
  Acquisition of real estate  partnership                                            -                  -         (5,088,750)
  Acquisition of real estate investment trust                                (18,403,928)       (34,157,332)     (31,239,744)
  Improvements and additional costs on prior purchases:
    Additions to real estate                                                  (4,373,073)        (4,215,157)      (2,516,645)
    Additions to real estate partnership                                        (353,956)            (7,060)             -
  Sale (purchase) of marketable securities, net                                4,916,494         (2,119,486)      12,153,517
                                                                            ------------       ------------     ------------
  Net cash flows from investing activities                                    20,620,154          6,117,982      (23,185,369)
                                                                            ------------       ------------     ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
 Withdrawals by partners                                                     (18,000,000)       (22,000,000)     (36,000,000)
 Principal payments on mortgage loans payable                                   (437,588)           (92,307)         (15,338)
 Distributions to minority interest partners                                         -                  -            (93,425)
 Contributions from minority interest partners                                   929,776            159,197          393,216
                                                                            ------------       ------------     ------------
  Net cash flows from financing activities                                   (17,507,812)       (21,933,110)     (35,715,547)
                                                                            ------------       ------------     ------------
NET CHANGE IN CASH AND CASH
  EQUIVALENTS                                                                 16,071,824         (3,428,848)     (44,606,179)

CASH AND CASH EQUIVALENTS - Beginning of year                                 10,543,821         13,972,669       58,578,848
                                                                            ------------       ------------     ------------
CASH AND CASH EQUIVALENTS - End of year                                      $26,615,645        $10,543,821      $13,972,669
                                                                            ============       ============     ============
</Table>


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

                                      F-14
<Page>

           THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

                             SCHEDULE OF INVESTMENTS
<Table>
<Caption>
                                                                   DECEMBER 31, 2001                DECEMBER 31, 2000
                                                           -------------------------------     -----------------------------
                                                                                ESTIMATED                         ESTIMATED
                                                                                  MARKET                            MARKET
                                                               COST               VALUE             COST            VALUE
<S>                                                        <C>                <C>              <C>              <C>
   REAL ESTATE AND IMPROVEMENTS - PERCENT OF NET ASSETS                              99.9%                             78.6%
   Location              Description
   -------------------------------------------------------------------------------------------------------------------------
   Lisle, IL             Office Building                   $22,561,428         $14,193,539      $22,267,422      $14,134,722
   Atlanta, GA           Garden Apartments                  15,696,606          18,752,139       15,667,354       17,800,002
   Roswell, GA           Retail Shopping Center             32,878,304          26,625,833       32,533,052       26,874,838
   Bolingbrook, IL       Warehouse                           9,039,620           5,826,782        9,012,838        6,664,810
   Raleigh, NC           Garden Apartments                  15,940,839          16,808,160       15,847,460       17,200,000
   Nashville, TN         Office Building                     9,977,669          10,629,012        9,657,787       10,396,565
   Oakbrook Terrace, IL  Office Complex                     14,015,481          14,359,009       13,021,251       12,716,910
   Beaverton, OR         Office Complex                     11,989,204          10,988,123       11,225,040       10,623,809
   Salt Lake City, UT    Industrial Building                 6,568,107           5,487,490        5,640,709        5,900,050
   Aurora, CO            Industrial Building                10,131,517           9,900,000       10,131,358        9,800,714
   Brentwood, TN         Office Complex                      9,612,024           8,900,790        9,609,133        9,600,675
*  Jacksonville, FL      Garden Apartments                  19,711,225          20,400,000       19,135,546       20,500,000
*  Gresham/Salem, OR     Garden Apartments                  18,815,082          19,100,000              -                -
*  Hampton, VA           Retail Shopping Center             15,107,053          16,000,000              -                -
                                                          ------------------------------------------------------------------
                                                          $212,044,159        $197,970,877     $173,748,950     $162,213,095
                                                          ==================================================================

   REAL ESTATE PARTNERSHIP - PERCENT OF NET ASSETS                                    3.4%                              2.6%
   Location        Description
   -------------------------------------------------------------------------------------------------------------------------
   Kansas City, KS; MO   Retail Shopping Center             $7,026,540          $6,712,308       $5,985,783       $5,445,528
</Table>


    * Real estate partnerships accounted for by the consolidation method.


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

                                      F-15
<Page>


                   THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

                               SCHEDULE OF INVESTMENTS

<Table>
<Caption>
                                                                 DECEMBER 31, 2000
                                                           -------------------------------
                                                                                ESTIMATED
                                                                                  MARKET
                                                               COST               VALUE
                                                           -------------------------------
<S>                                                        <C>                 <C>

REAL ESTATE INVESTMENT TRUSTS (PERCENT OF NET ASSETS)                                17.1%
-------------------------------------------------------------------------------------------
Alexandria Real Est Equities (5,000 shares)                   $181,188            $185,938
AMB Property Corporation (30,000 shares)                       706,770             774,375
AMLI Residential Properties (30,000 shares)                    706,800             740,625
Apartment Inv & Mgmt Co, Class A (28,900 shares)             1,218,828           1,443,194
Archstone Communities Trust (25,000 shares)                    592,188             643,750
Avalonbay Communities Inc (15,000 shares)                      683,900             751,875
Boston Properties Inc (25,000 shares)                          995,339           1,087,500
Brandywine Realty Trust (15,000 shares)                        321,338             310,313
CBL & Associates Prop (30,800 shares)                          741,988             779,625
Cabot Industrial Trust (40,000 shares)                         820,726             767,500
Centerpoint Properties Corp. (18,600 shares)                   632,302             878,850
Cousins Properties (20,000 shares)                             551,200             558,750
Crescent Real Estate Eqt Co (25,000 Shares)                    565,563             556,250
Duke - Weeks Realty Corporation (47,000 shares)              1,070,320           1,157,375
Equity Office Properties Trust (77,400 shares)               2,215,533           2,525,175
Equity Residential Property Trust  (30,000 shares)           1,450,732           1,659,375
Essex Property Trust, Inc (15,000 shares)                      593,700             821,250
First Industrial Realty Trust (25,000 shares)                  781,100             850,000
Franchise Finance Cp Amer (51,300 shares)                    1,228,281           1,195,931
Gables Residential Trust (25,000 shares)                       632,750             700,000
General Growth Properties (22,000 shares)                      714,894             796,125
Highwoods Properties Inc (30,000 shares)                       758,832             746,250
Host Marriot Corp (105,000 shares)                           1,114,575           1,358,438
Innkeepers USA Trust (50,000 shares)                           512,375             553,125
IRT Property (45,000 shares)                                   406,395             365,625
Kilroy Realty Corp. (30,000 shares)                            746,886             856,875
Kimco Realty (15,000 shares)                                   612,612             662,813
Liberty Property LP (35,000 shares)                            899,563             999,688
Macerich Co (30,000 shares)                                    670,490             575,625
MeriStar Hospitality Corp (37,500 shares)                      636,151             738,281
Mission West Properties (88,200 shares)                        697,122           1,223,775
Parkway Properties Inc (25,000 shares)                         782,750             742,188
Public Storage Inc (5,000 shares)                              113,763             121,563
Reckson Assoc Realty Corp. (32,500 shares)                     805,150             814,531
Regency Realty Corp (25,000 shares)                            576,600             592,188
Saul Centers Inc (1,700 shares)                                 29,085              31,663
Shurgard Storage Centers (20,000 shares)                       478,500             488,750
Simon Property Group Inc (45,000 shares)                     1,032,357           1,080,000
Spieker Properties (27,000 shares)                           1,197,078           1,353,375
Summit Properties Inc (12,000 shares)                          292,832             312,000
Vornado Realty Trust (29,800 shares)                         1,028,569           1,141,713
Washington Reit (40,000 shares)                                759,220             945,000
Public Storage Inc, Preferred Stock (15,000 shares)            340,569             337,500
                                                           -------------------------------
TOTAL REAL ESTATE INVESTMENT TRUSTS                        $31,896,908         $35,224,737
                                                           ===============================
</Table>


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

                                      F-16
<Page>

            THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

                                SCHEDULE OF INVESTMENTS

<Table>
<Caption>
                                                                       DECEMBER 31, 2001
                                                          ----------------------------------------------
                                                                                             ESTIMATED
                                                          FACE AMOUNT         COST          MARKET VALUE
                                                          -----------      -----------      ------------
<S>                                                       <C>              <C>              <C>
CASH AND CASH EQUIVALENTS (PERCENT OF NET ASSETS)                                                  13.4%

Federal Home Loan Mortgage 1.51%, January 2, 2002         $25,334,000      $25,331,875       $25,331,875
                                                          -----------      -----------       -----------

TOTAL CASH EQUIVALENTS                                     25,334,000       25,331,875        25,331,875

CASH                                                        1,283,770        1,283,770         1,283,770
                                                          -----------      -----------       -----------
TOTAL CASH AND CASH EQUIVALENTS                           $26,617,770      $26,615,645       $26,615,645
                                                          ===========      ===========       ===========
</Table>


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

                                      F-17
<Page>

           THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

                             SCHEDULE OF INVESTMENTS

<Table>
<Caption>
                                                                                            DECEMBER 31, 2000
                                                                            ------------------------------------------------
                                                                                                                  ESTIMATED
                                                                            FACE AMOUNT            COST         MARKET VALUE
                                                                            -----------         -----------     ------------
<S>                                                                         <C>                 <C>              <C>
MARKETABLE SECURITIES (PERCENT OF NET ASSETS)                                                                           2.4%

Associates First Capital B.V., 6.55%, January 29, 2001                          699,000             687,681          687,681
New Center Asset Trust, 6.52%, January 30, 2001                               1,614,000           1,587,692        1,587,692
Lasalle National Bank, 6.71%, February 1, 2001                                  969,000             968,792          968,959
B-One Australia Ltd., 6.55%, February 13, 2001                                1,700,000           1,672,162        1,672,162
                                                                            -----------         -----------      -----------
TOTAL MARKETABLE SECURITIES                                                 $ 4,982,000         $ 4,916,327      $ 4,916,494
                                                                            ===========         ===========      ===========
CASH AND CASH EQUIVALENTS (PERCENT OF NET ASSETS)                                                                       5.1%

J.P. Morgan & Co, 6.55%, January 2, 2001                                    $   546,000         $   545,603      $   545,603
Alcoa Inc., 6.55%, January 4, 2001                                              634,000             633,193          633,193
Merrill Lynch & Co., 6.53%, Inc., January 10, 2001                              300,000             299,347          299,347
Bankamerica Corp., 6.55%, January 11, 2001                                      680,000             678,020          678,020
General Motors Acceptance Corp., Inc., 6.60%, January 17, 2001                  600,000             597,910          597,910
Paccar Financial Corp., 6.67%, January 18, 2001                                 661,000             657,693          657,693
General Electric Capital Corp., 6.55%, January 22, 2001                         700,000             691,085          691,085
Countrywide Home Loans, 6.60%, January 25, 2001                                 560,000             556,201          556,201
Duke Energy Corp., 6.50%, January 25, 2001                                      682,000             678,552          678,552
Caterpillar Financial Svcs Corp., 6.50%, January 26, 2001                       625,000             621,727          621,727
Verizon Global Funding Corp., 6.55%, January 26, 2001                           500,000             496,179          496,179
Ciesco L.P., 6.54%, January 30, 2001                                          1,675,000           1,652,178        1,652,178
Eastman Kodak Co., 6.53%, February 9, 2001                                      800,000             787,230          787,230
                                                                            -----------         -----------      -----------
TOTAL CASH EQUIVALENTS                                                        8,963,000           8,894,919        8,894,919

CASH                                                                          1,648,902           1,648,902        1,648,902
                                                                            -----------         -----------      -----------
TOTAL CASH AND CASH EQUIVALENTS                                             $10,611,902         $10,543,821      $10,543,821
                                                                            ===========         ===========      ===========
</Table>


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

                                      F-18
<Page>

                        NOTES TO FINANCIAL STATEMENTS OF
           THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP
                FOR YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999

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 and 2B below, reduced by any liabilities of the
Partnership. The periodic adjustments to property values described in Notes 2A
and 2B below and other adjustments to previous estimates are made on a
prospective basis. There can be no assurance that all such adjustments to
estimates will be made timely.

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

Prudential Real Estate Investors ("PREI") is part of the Prudential
Investment Management Unit ("PIM") and is a division of Prudential Investment
Management, Inc., a subsidiary of Prudential. PREI provides investment
advisory services to the Partnership's Partners pursuant to the terms of the
Advisory Agreement as described in Note 9.

NOTE 2:  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         A:    BASIS OF PRESENTATION - The accompanying consolidated financial
               statements are presented on the accrual basis of accounting. It
               is the Partnership's policy to consolidate those real estate
               partnerships in which it has a controlling financial interest.
               All significant intercompany balances and transactions have been
               eliminated in the consolidation.

         B:    REAL ESTATE INVESTMENTS - The Partnership's investments in real
               estate are initially valued at their purchase price. Thereafter,
               real estate investments are reported at their estimated market
               values based upon appraisal reports prepared by independent real
               estate appraisers (members of the Appraisal Institute or an
               equivalent organization) within a reasonable amount of time
               following acquisition of the real estate and no less frequently
               than annually thereafter. The Chief Real Estate Appraiser of
               PIM's Risk Management Unit is responsible to assure that the
               valuation process provides objective and accurate market value
               estimates. American Appraisal Associates (the "Appraisal
               Management Firm"), an entity not affiliated with Prudential, has
               been appointed by PIM to assist the Chief Real Estate Appraiser
               in maintaining and monitoring the objectivity and accuracy of the
               appraisal process. The Appraisal Management Firm, under the
               supervision of the Chief Real Estate Appraiser, approves the
               selection and scheduling of external appraisals; engages all
               external appraisers; reviews and provides comments on all

                                      F-19
<Page>

               external appraisals; prepares all quarterly update appraisals;
               assists in developing policies and procedures; and assists in the
               evaluation of the performance and competency of external
               appraisers, among other responsibilities.

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

               The estimate of market value generally is a correlation of three
               approaches, all of which require the exercise of subjective
               judgment. The three approaches are: (1) current cost of
               reproducing the real estate less deterioration and functional and
               economic obsolescence; (2) discounting of a series of income
               streams and reversion at a specified yield or by directly
               capitalizing a single year income estimate by an appropriate
               factor; and (3) value indicated by recent sales of comparable
               properties in the market. In the reconciliation of these three
               approaches, the one most heavily relied upon is the one then
               recognized as the most appropriate by the independent appraiser
               for the type of real estate in the market.

               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.

               As described above, the estimated market value of real estate and
               real estate related assets is determined through an appraisal
               process. These estimated market values may vary significantly
               from the prices at which the real estate investments would sell
               since market prices of real estate investments can only be
               determined by negotiation between a willing buyer and seller.
               Although the estimated market values represent subjective
               estimates, management believes these estimated market values are
               reasonable approximations of market prices and the aggregate
               value of investments in real estate is fairly presented as of
               December 31, 2001 and 2000.

         C:    INVESTMENT IN REAL ESTATE INVESTMENT TRUSTS - Shares of real
               estate investment trusts (REITs) are generally valued at their
               quoted market price. These values may be adjusted for discounts
               relating to restrictions, if any, on the future sale of these
               shares, such as lockout periods or limitations on the number of
               shares which may be sold in a given time period. Any such
               discounts are determined by the Chief Real Estate Appraiser. On
               March 30, 1999, the Partnership converted 506,894 shares of
               Meridian REIT to 557,583 shares of ProLogis REIT, with a fair
               value of $10.9 million, and cash of $1.0 million (or total fair
               value of $11.9 million) as a result of ProLogis' acquisition of
               Meridian Industrial Trust. Management continued applying a 3%
               discount to the market value of the ProLogis REIT shares through
               June 29, 1999 because of the restriction which limits the number
               of shares that can be publicly traded during any six month period
               to 30% of the total shares originally acquired. The application
               of the 3% discount was discontinued on June 30, 1999 because this
               restriction no longer applied.

         D:    REVENUE RECOGNITION - Revenue from real estate is 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 and taxes, as lease
               arrangements vary as to responsibility for payment of these
               expenses between tenants and the Partnership. Since real estate
               is stated at

                                      F-20
<Page>

               estimated market value, net income is not reduced by depreciation
               or amortization expense. Dividend income is accrued at the
               ex-dividend date.

         E:    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 committees of the partnerships.

         F:    MORTGAGE LOANS PAYABLE - Mortgage loans payable are stated at the
               principal amount of the obligation outstanding.

         G:    CASH AND CASH EQUIVALENTS - For purposes of the Consolidated
               Statements of Cash Flows, all short-term investments with an
               original maturity of three months or less are considered to be
               cash equivalents. Cash equivalents consist of investments in
               the Prudential Investment Liquidity Pool offered and managed
               by an affiliate of Prudential and are accounted for at market
               value.

               Cash of $160,635 and $79,300 at December 31, 2001 and 2000,
               respectively, was maintained by the properties for tenant
               security deposits and is included in Other Assets on the
               Consolidated Statements of Assets and Liabilities.

         H:    MARKETABLE SECURITIES - Marketable securities are highly liquid
               investments with maturities of more than three months when
               purchased and are carried at estimated market value.

         I:    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.

         J:    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 reported amounts of assets and liabilities at the date of the
               financial statements and the reported amounts of revenues and
               expenses during the reporting period. Actual results could differ
               from those estimates.

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, 2001, 2000, and 1999 was $1,776,701, $732,991, and $145,418, respectively.

During the first and second quarters of 2001, in conjunction with the
acquisition of two real estate investments, the consolidated partnerships
assumed mortgage loan financing of $9.0 million and $10.3 million, respectively.

During 1999, in conjunction with the acquisition of a real estate investment of
one property, a consolidated partnership assumed mortgage loan financing of
approximately $10.2 million

                                      F-21

<Page>

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 2B above. The partnership's combined financial position at
December 31, 2001 and 2000, and results of operations for the years ended
December 31, 2001, 2000, and 1999 are summarized as follows:

<Table>
<Caption>
                                                                      DECEMBER 31,
                                                        2001             2000
                                                     -----------------------------
<S>                                                  <C>             <C>
Partnership Assets and Liabilities
      Real Estate at estimated market value          $28,300,000     $27,080,000
      Other Assets                                     1,877,122       1,470,801
                                                     -----------     -----------
      Total Assets                                    30,177,122      28,550,801
                                                     -----------     -----------
      Mortgage loans payable                          20,648,892      20,669,422
      Other Liabilities                                  918,664         665,365
                                                     -----------     -----------
      Total Liabilities                               21,567,556      21,334,787
                                                     -----------     -----------

      Net Assets                                     $ 8,609,566     $ 7,216,014
                                                     ===========     ===========
Partnership's Share of Net Assets                    $ 6,712,308     $ 5,445,528
                                                     ===========     ===========
</Table>

<Table>
<Caption>
                                                                YEAR ENDED DECEMBER 31,
                                                        2001                2000               1999
                                                     ------------------------------------------------
<S>                                                  <C>                 <C>                 <C>
Partnership Operations
      Rental Revenue                                 $4,497,459          $4,223,801          $926,283
      Real Estate Expenses and Taxes                  3,536,948           3,292,500           795,115
                                                     ----------          ----------          --------
      Net Investment Income                            $960,511            $931,301          $131,168
                                                     ==========          ==========          ========
Partnership's Share of Net Investment Income           $686,801            $791,596           $98,375
                                                     ==========          ==========          ========
</Table>







                                      F-22
<Page>


NOTE 5:  MORTGAGE LOANS PAYABLE:

Debt includes mortgage loans payable as summarized below:

<Table>
<Caption>
                                    PARTNERSHIP DEBT AS OF 12/31/01   PARTNERSHIP DEBT AS OF 12/31/00      AS OF 12/31/01
                                    -------------------------------   -------------------------------   --------------------
                                                      PARTNERSHIP'S                    PARTNERSHIP'S
                                         100% LOAN       SHARE OF       100% LOAN         SHARE OF      INTEREST    MATURITY
                                          BALANCE     LOAN BALANCE *     BALANCE       LOAN BALANCE *     RATE**      DATE
                                          -------     --------------     -------       -------------      ------      ----
<S>                                      <C>           <C>              <C>               <C>              <C>         <C>
MORTGAGES OF WHOLLY OWNED PROPERTIES & CONSOLIDATED PARTNERSHIPS
Riverbend Apartments                     9,996,863     9,293,084        10,092,355        9,208,265        5.74%***    2006
SIMA Apartment Portfolio                 8,863,334     8,493,733                --               --        7.97%       2006
Hampton Towne Center                    10,134,324     8,709,438                --               --        6.75%       2018
                                        ----------    ----------        ----------        ---------
Total                                   28,994,521    26,496,255        10,092,355        9,208,265
</Table>



MORTGAGE LOANS ON EQUITY PARTNERSHIP

<Table>
<Caption>
<S>                               <C>                <C>                <C>           <C>          <C>      <C>
KCP - Ten Quiviria                6,946,631            5,121,057         6,953,113      5,246,819   8.16%    2007
KCP - Ten Quiviria Parcel           999,306              736,688         1,000,238        754,780   8.16%    2007
KCP - Cherokee Hill               3,212,174            2,368,015         3,215,341      2,426,296   7.79%    2007
KCP - Devonshire                  2,226,609            1,641,456         2,228,686      1,681,767   8.16%    2007
KCP - Willow Creek                1,336,251              985,084         1,338,590      1,010,100   8.63%    2005
KCP - Brywood Center              5,927,921            4,370,064         5,933,453      4,477,383   8.16%    2007
                                 ----------           ----------        ----------     ----------
Total                            20,648,892           15,222,363        20,669,422     15,597,146

TOTAL MORTGAGE LOANS PAYABLE                         $41,718,618                      $24,805,410   7.28%
</Table>


*    Represents the Partnership's interest in the loan based upon the estimated
     percentage of net assets which would be distributed to the Partnership if
     the partnership were liquidated at December 31, 2001 or 2000. It does not
     represent the Partnership's legal obligation.

**   The Partnership's weighted average interest rate at December 31, 2001 and
     2000 were 7.28% and 8.05%, 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.

***  Variable Rate Debt.

The interest rate on the variable rate debt is adjusted annually. The rate is
equal to the 6-month Treasury rate plus 1.565%. It is subject to a maximum of
11.345% and a minimum of 2.345%. The change from year to year may not be more
than 2%. At December 31, 2001 and 2000, the rate was 5.735% and 7.735%,
respectively.

As of December 31, 2001, the mortgage loans payable were payable as follows:

<Table>
<Caption>
   YEAR ENDING DECEMBER 31,                             (000'S)
   ------------------------                          ----------
<S>                                                        <C>
            2002                                           $678
            2003                                            736
            2004                                            787
            2005                                            843
            2006                                         17,711
       Thereafter                                         8,240
                                                     ----------
            Total                                       $28,995
                                                     ==========
</Table>



                                      F-23
<Page>

The mortgages payable are secured by real estate investments with an estimated
market value of $55,500,000. Based on borrowing rates available to the
Partnership at December 31, 2001 for loans with similar terms and average
maturities, the carrying value of the Partnership's mortgages on the
consolidated partnerships approximates its estimated fair value. Different
assumptions or changes in future market conditions could significantly affect
estimated market value.

NOTE 6:  CONCENTRATION RISK OF REAL ESTATE INVESTMENTS

At December 31, 2001, the Partnership had real estate investments located
throughout the United States. The diversification of the account's holdings
based on the estimated market values and established NCREIF regions is as
follows:

The above future minimum base rental payments exclude residential lease
agreements, which accounted for 24% of the Partnership's 2001 annual rental
income.

<Table>
<Caption>
                                           ESTIMATED
                                         MARKET VALUE
     REGION               REGION %          (000'S)
---------------------------------------------------------
<S>                          <C>                  <C>
Southeast                    42%                  $85,308
East North Central           17%                   34,379
Mideast                      16%                   32,808
Pacific                      15%                   30,088
Mountain                     7%                    15,388
West North Central           3%                    $6,712
                                                 --------
       Total                                     $204,683
                                                 ========
</Table>





                                      F-24
<Page>

 NOTE 7:  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 2002 to 2018. At December 31, 2001, the aggregate
future minimum base rental payments under non-cancelable operating leases by
year and in the aggregate are as follows:

<Table>
<Caption>
    YEAR ENDING DECEMBER 31,                        (000'S)
    ------------------------                      ---------
<S>                                                 <C>
           2002                                     $11,725
           2003                                       9,149
           2004                                       7,208
           2005                                       6,716
           2006                                       5,990
         Thereafter                                  21,295
                                                  ---------
           Total                                    $62,083
                                                  =========
</Table>

The above future minimum base rental payments exclude residential lease
agreements, which accounted for 24% of the Partnership's 2001 annual rental
income.

NOTE 8:  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 are utilized for property acquisitions, and returned to
Prudential on an ongoing basis from contract owners' net contributions and other
available cash. The amount of the commitment is reduced by $10 million for every
$100 million in current value net assets of the Partnership. Thus, with $198
million in net assets, the commitment has been automatically reduced to $90
million. As of December 31, 2001, the cost basis of Prudential's equity interest
in the Partnership under this commitment (held through the Real Property
Accounts) was $44 million. Prudential intends to terminate this commitment at
the end of the 2002 fiscal year.

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 Partnership.


                                      F-25
<Page>

NOTE 9:  RELATED PARTY TRANSACTIONS

Pursuant to an investment management agreement, Prudential 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, 2001, 2000 and 1999 management fees incurred by the Partnership
were $2.7 million for each of the three years.

The Partnership also reimburses Prudential for certain administrative services
rendered by Prudential. The amounts incurred for the years ended December 31,
2001, 2000 and 1999 were $118,972; $116,630; and $116,463, respectively, and are
classified as administrative expenses in the Consolidated Statements of
Operations.

During the years ended December 31, 2001, 2000 and 1999, the Partnership made
the following distributions to the Partners:

<Table>
<Caption>
        YEAR ENDING DECEMBER 31,                        (000'S)
        ------------------------                        --------
<S>                                                     <C>
                2001                                    $18,000
                2000                                     22,000
                1999                                     36,000
</Table>

                                      F-26
<Page>

<Table>
<Caption>
                      THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP
                            SCHEDULE III - REAL ESTATE OWNED: PROPERTIES
                                          DECEMBER 31, 2001
                      ----------------------------------------------------------


                        INITIAL COSTS TO THE PARTNERSHIP
                      -----------------------------------    COSTS
                                                          CAPITALIZED
                                              BUILDING &  SUBSEQUENT TO
DESCRIPTION           ENCUMBRANCES    LAND   IMPROVEMENTS  ACQUISITION
--------------------- ------------ --------- ------------ -------------
Properties:

Office Building
<S>                     <C>        <C>        <C>            <C>
Lisle, IL               None       1,780,000  15,743,881     5,037,547

Garden Apartments
Atlanta, GA             None       3,631,212  11,168,904       896,490 (b)

Retail Shopping Center
Roswell, GA             None       9,454,622  21,513,677     1,910,005

Office/Warehouse
Bolingbrook, IL         None       1,373,199   7,302,518       363,903

Garden Apartments
Raleigh, NC             None       1,623,146  14,135,553       182,140

Office Building
Brentwood, TN           None       1,797,000   6,588,451     1,592,218

Office Park
Oakbrook Terrace, IL    None       1,313,310  11,316,883     1,385,288

Office Building
Beaverton, OR           None         816,415   9,897,307     1,275,482

Industrial Building
Salt Lake City, UT      None         582,457   4,805,676     1,179,974

Industrial Building
Aurora, CO              None       1,338,175   7,202,411     1,590,931

Office Complex
Brentwood, TN           None       2,425,000   7,063,755       123,268

                                  ---------- -----------   -----------
                                  26,134,536 116,739,016    15,537,246
                                  ========== ===========   ===========

<Caption>
                      THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP
                            SCHEDULE III - REAL ESTATE OWNED: PROPERTIES
                                          DECEMBER 31, 2001
                      ------------------------------------------------------------

                                            GROSS AMOUNT AT WHICH
                                           CARRIED AT CLOSE OF YEAR
                       -----------------------------------------------------------

                                 BUILDING &                    YEAR OF      DATE
DESCRIPTION              LAND   IMPROVEMENTS TOTAL (A)(B)(C) CONSTRUCTION ACQUIRED
--------------------- --------- ------------ --------------- ------------ --------
Properties:

Office Building
<S>                    <C>        <C>          <C>              <C>       <C>
Lisle, IL              1,780,000  20,781,428   22,561,428        1985     Apr., 1988

Garden Apartments
Atlanta, GA            3,631,212  12,065,394   15,696,606        1987     Apr., 1988

Retail Shopping Center
Roswell, GA            9,462,951  23,415,353   32,878,304        1988     Jan., 1989

Office/Warehouse
Bolingbrook, IL        1,373,199   7,666,421    9,039,620        1989     Feb., 1990

Garden Apartments
Raleigh, NC            1,623,146  14,317,693   15,940,839        1995     Jun., 1995

Office Building
Brentwood, TN          1,797,377   8,180,292    9,977,669        1982     Oct., 1995

Office Park
Oakbrook Terrace, IL   1,313,821  12,701,660   14,015,481        1988     Dec., 1995

Office Building
Beaverton, OR            844,751  11,144,453   11,989,204        1995     Dec., 1996

Industrial Building
Salt Lake City, UT       702,323   5,865,784    6,568,107        1997     Jul., 1997

Industrial Building
Aurora, CO             1,415,159   8,716,358   10,131,517        1997     Sep., 1997

Office Complex
Brentwood, TN          2,453,117   7,158,906    9,612,023        1987     Oct., 1997

                      ---------- -----------  -----------
                      26,397,056 132,013,742  158,410,798
                      ========== ===========  ===========
</Table>

<Table>
<Caption>
                                                    2001                 2000                   1999
                                             -----------------     ------------------     ----------------
<S>                                          <C>                    <C>                   <C>
(a)       Balance at beginning of year            154,613,404            172,606,825          170,045,055
            Additions:
             Acquisitions                                   0                      0                    0
             Improvements, etc.                     3,797,394              2,480,354            2,561,770
            Deletions:
             Sale                                           0            (20,473,775)                   0
                                             -----------------     ------------------     ----------------
          Balance at end of year                  158,410,798            154,613,404          172,606,825
                                             =================     ==================     ================
</Table>
(b)       Net of $1,000,000 settlement received from lawsuit.

                                      F-27
<Page>

           THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP
            SCHEDULE III - REAL ESTATE OWNED: INTEREST IN PROPERTIES
                                DECEMBER 31, 2001

<Table>
<Caption>
                                              INITIAL COSTS TO THE
                                                  PARTNERSHIP                COSTS
                                          -----------------------------    CAPITALIZED
                           ENCUMBRANCES                   BUILDING &       SUBSEQUENT TO
     DESCRIPTION           AT 12/31/01       LAND        IMPROVEMENTS      ACQUISITION
-----------------------  ---------------  -----------   ----------------  ----------------
<S>                         <C>            <C>            <C>               <C>
Interest in Properties:

Garden Apartments
Jacksonville, FL             9,996,863      2,750,000     14,650,743        2,310,482

Retail Shopping Center
Kansas City MO and KS *     15,222,363      5,710,916     15,211,504          223,293

Garden Apartments
Gresham/Salem, OR            8,863,334      3,063,000     15,318,870          433,212

Retail Shopping Center
Hampton, VA                 10,134,324      2,339,100     12,767,956                0

                         ---------------  -----------   ----------------  ----------------
                            44,216,884     13,863,016     57,949,073        2,966,987
                         ===============  ===========   ================  ================
<Caption>
                                                            GROSS AMOUNT AT WHICH
                                                           CARRIED AT CLOSE OF YEAR
                            ----------------------------------------------------------------------------------------
                                            BUILDING &                            YEAR OF                DATE
                                LAND        IMPROVEMENTS    TOTAL(a)(b)(c)      CONSTRUCTION            ACQUIRED
-----------------------     ------------ ----------------- ----------------   ----------------      ----------------
     DESCRIPTION
<S>                         <C>            <C>              <C>                <C>                    <C>
Interest in Properties:

Garden Apartments
Jacksonville, FL             2,750,000     16,961,225       19,711,225             1973               Sept., 1999

Retail Shopping Center
Kansas City MO and KS *      5,710,916     15,434,797       21,145,713         Various Ranging        Sept., 1999
                                                                               From 1972-1992
Garden Apartments
Gresham/Salem, OR            3,063,000     15,752,082       18,815,082         Various Ranging        Feb., 2001
                                                                               From 1971-1983

Retail Shopping Center       2,339,100     12,767,956       15,107,056              1998              May, 2001

                            ------------ ----------------- ----------------
Hampton, VA                 13,863,016     60,916,060       74,779,076
                            ============ ================= ================
</Table>

<Table>
<Caption>
                                                       2001           2000             1999
                                                    ----------      ----------     -----------
<S>                                                 <C>             <C>            <C>
(a)    Balance at beginning of year                 25,121,329      22,587,869               0
         Additions:
          Acquisitions                              33,488,926               0      38,556,018
          Improvements, etc.                         1,674,862       2,162,457               0
         Deletions:
          Sale                                               0               0               0

       Encumbrances on Joint Ventures
         accounted for by the equity method            374,783         371,003     (15,968,149)

       Balance at end of year                       60,659,900      25,121,329      22,587,869
                                                    ----------      ----------     -----------
</Table>

* Partnership interest accounted for by the equity method.

                                      F-28