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| **UNITED STATES****SECURITIES AND EXCHANGE COMMISSION****WASHINGTON, D.C. 20549****FORM 10-K** |

**(Mark One)**

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

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

**OR**

|  | **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE 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****incorporation or organization)** |   | **(IRS Employer Identification No.)**  |

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

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

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

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

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

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

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

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

**DOCUMENTS INCORPORATED BY REFERENCE**

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

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

 

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**PRUCO LIFE VARIABLE CONTRACT****REAL PROPERTY ACCOUNT****(Registrant)**

**INDEX**

 

| **Item** |   |   |                                                                                                                                               | **Page** |   |
|----------|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------|----------|--------|
| **No.**  |   |   |                                                                                                                                               | **No.**  |   |
|          |   |   |                                                                                                                                               |          |   |
|     |   |   | Cover Page                                                                                                                                         |     |   |   |   |
|     |   |   |                                                                                                                                               |     |   |   |   |
|     |   |   | Index                                                                                                                                              |     |   | 2 |   |
|     |   |   |                                                                                                                                               |     |   |   |   |
|     |   |   | Forward-Looking Statement Disclosure                                                                                                               |     |   | 3 |   |
|     |   |   |                                                                                                                                               |     |   |   |   |
| PART I   |   |
|     |   |   |                                                                                                                                               |     |   |   |   |
| 1.       |   |   | Business                                                                                                                                           |     |   | 4 |   |
|     |   |   |                                                                                                                                               |     |   |   |   |
| 1A.      |   |   | Risk Factors                                                                                                                                       |     |   | 6 |   |
|     |   |   |                                                                                                                                               |     |   |   |   |
| 1B.      |   |   | Unresolved Staff Comments                                                                                                                          |     |   | 6 |   |
|     |   |   |                                                                                                                                               |     |   |   |   |
| 2.       |   |   | Properties                                                                                                                                         |     |   | 6 |   |
|     |   |   |                                                                                                                                               |     |   |   |   |
| 3.       |   |   | Legal Proceedings                                                                                                                                  |     |   | 6 |   |
|     |   |   |                                                                                                                                               |     |   |   |   |
| 4.       |   |   | Submission of Matters to a Vote of Security Holders                                                                                                |     |   | 6 |   |
|     |   |   |                                                                                                                                               |     |   |   |   |
| PART II  |   |
|     |   |   |                                                                                                                                               |     |   |   |   |
| 5.       |   |   | Market for the Registrant’s Interests, Related Security Holder Matters and Issuer     Purchases of Equity Securities |     |   | 7 |   |
|     |   |   |                                                                                                                                               |     |   |   |   |
| 6.       |   |   | Selected Financial Data                                                                                                                            |     |   | 7 |   |
|     |   |   |                                                                                                                                               |     |   |   |   |
| 7.       |   |   | Management’s Discussion    and Analysis of Financial Condition and Results of Operations                                                      |     |   | 7 |   |
|     |   |   |                                                                                                                                               |     |   |   |   |
| 7A.      |   |   | Quantitative and Qualitative Disclosures About Market Risk                                                                                         |     |   | 14 |   |
|     |   |   |                                                                                                                                               |     |   |   |   |
| 8.       |   |   | Financial Statements and Supplementary Data                                                                                                        |     |   | 14 |   |
|     |   |   |                                                                                                                                               |     |   |   |   |
| 9.       |   |   | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure                                                               |     |   | 14 |   |
|     |   |   |                                                                                                                                               |     |   |   |   |
| 9A.      |   |   | Controls and Procedures                                                                                                                            |     |   | 14 |   |
|     |   |   |                                                                                                                                               |     |   |   |   |
| 9B.      |   |   | Other Information                                                                                                                                  |     |   | 15 |   |
|     |   |   |                                                                                                                                               |     |   |   |   |
| PART III |   |
|     |   |   |                                                                                                                                               |     |   |   |   |
| 10.      |   |   | Directors and Executive Officers of the Registrant                                                                                                 |     |   | 16 |   |
|     |   |   |                                                                                                                                               |     |   |   |   |
| 11.      |   |   | Executive Compensation                                                                                                                             |     |   | 17 |   |
|     |   |   |                                                                                                                                               |     |   |   |   |
| 12.      |   |   | Security Ownership of Certain Beneficial Owners and Management                                                                                     |     |   | 17 |   |
|     |   |   |                                                                                                                                               |     |   |   |   |
| 13.      |   |   | Certain Relationships and Related Transactions                                                                                                     |     |   | 17 |   |
|     |   |   |                                                                                                                                               |     |   |   |   |
| 14.      |   |   | Principal Accounting Fees and Services                                                                                                             |     |   | 17 |   |
|     |   |   |                                                                                                                                               |     |   |   |   |
| PART IV  |   |
|     |   |   |                                                                                                                                               |     |   |   |   |
| 15.      |   |   | Exhibits, Financial Statement Schedules                                                                                                            |     |   | 18 |   |
|     |   |   |                                                                                                                                               |     |   |   |   |
|     |   |   | Exhibit Index                                                                                                                                      |     |   | 18 |   |
|     |   |   |                                                                                                                                               |     |   |   |   |
|     |   |   | Signatures                                                                                                                                         |     |   | 20 |   |

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**Forward-Looking Statement Disclosure**

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

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**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 separateinvestment account of Pruco Life Insurance Company (“Pruco Life”).The Real Property Account was established to provide a real estate investmentoption offered in connection with the funding of benefits under certain variablelife 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 Prudential, Pruco Life Insurance    Company and Pruco Life Insurance Company of New Jersey, to provide a means    for assets allocated to the real estate    investment option under certain variable life insurance and variable annuity    contractsissued by the respective companies to be invested in a commingled pool.

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

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

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

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

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

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

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

The Partnership’s investments    are maintained so as to meet the diversification requirements set forth in    treasury regulations issued pursuant to Section 817(h) of the Internal Revenue    Code relating to the investments of variable life insurance and variable    annuity  separate accounts. Section 817(h) requires, among other things,    that the partnership will have no more than 55% of the assets invested in    any one investment, no more than 70% of the assets will be invested in any    two investments, no more than 80% of the assets will beinvested in any three investments, and no more than 90% of the assets will be    invested in any four investments. To comply with regulatory requirements    of the State of Arizona, the Partnership will limit additional investments    in    any    one    parcel or related parcels to an amount notexceeding 10% of the Partnership’s gross assets as of the prior fiscal year.

 

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

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

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

**Office Market**

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

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

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

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

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

 

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**Industrial Market**

The industrial sector experienced    a sharp rise in tenant and investor demand last year. Industrial transaction    volume surged to nearly $35 billion, according to Real Capital Analytics,    a New York City-based real estate research firm, an increase of more than    55% above the total volume in 2004. Strong absorption in many industrial    markets    in 2005 likely contributed to the increase. According to TWR, the average    vacancy rate for industrial properties fell 1.7 percentage points last year    to about9.7% at year-end, the lowest level since 3Q01.

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

**Hotel Market**

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

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

**Item 1A. Risk      Factors**

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

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

**Item 1B. Unresolved Staff Comments**

None.

**Item 2. Properties**

Not Applicable.

**Item 3. Legal Proceedings**

None.

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

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

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**PART II**

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

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

As of December 31, 2005, approximately27,562 contract owners of record held investments in the Real Property Account.

| **Item 6. Selected Financial Data** |
|-------------------------------------|

**RESULTS OF OPERATIONS:**

|                                                                 |   | **Year Ended December** **31,** |       |
|----------------------------------------------------------------------|--------|--------------------------------------|------------|
|                                                                 |   |                                      |       |
|                                                                 |   | **2005**                             |       | **2004** |   | **2003** |   | **2002** |   | **2001** |   | **2000** |   | **1999** |   |
|                                                                 |   |                                      |            |   |  |  |   |  |  |   |  |  |   |  |  |   |  |  |   |  |  |   |
| Total Investment Income                                              |   | $                                    | 28,644,271 |   | $ | 29,076,163 |   | $ | 27,060,494 |   | $ | 27,077,048 |   | $ | 27,480,593 |   | $ | 26,387,938 |   | $ | 24,835,049 |   |
|                                                                 |   |                                      |            |   |  |  |   |  |  |   |  |  |   |  |  |   |  |  |   |  |  |   |
| Net Investment Income                                                |   | $                                    | 9,219,171  |   | $ | 7,799,606 |   | $ | 10,613,409 |   | $ | 10,864,043 |   | $ | 12,350,306 |   | $ | 13,638,117 |   | $ | 13,279,589 |   |
|                                             |   |                                 |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Realized and Unrealized (Loss) Gain on Investment in Partnership |   |                                 | 15,460,619 |   |   | 3,280,394 |   |   | (6,467,364 | ) |   | (8,517,663 | ) |   | (2,547,749 | ) |   | 4,487,022 |   |   | (7,217,046 | ) |
|                                                                 |   |                                      |            |   |  |  |   |  |  |   |  |  |   |  |  |   |  |  |   |  |  |   |
| Net Increase in Net Assets Resulting From Operations                 |   | $                                    | 24,679,790 |   | $ | 11,080,000 |   | $ | 4,146,045 |   | $ | 2,346,380 |   | $ | 9,802,557 |   | $ | 18,125,139 |   | $ | 6,062,543 |   |
|                                                                 |   |                                      |            |   |  |  |   |  |  |   |  |  |   |  |  |   |  |  |   |  |  |   |

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

|                            |   | **Year Ended December** **31,** |        |
|---------------------------------|--------|--------------------------------------|-------------|
|                            |   |                                      |        |
|                            |   | **2005**                             |        | **2004** |   | **2003** |   | **2002** |   | **2001** |   | **2000** |   | **1999** |   |
|                            |   |                                      |             |   |  |  |   |  |  |   |  |  |   |  |  |   |  |  |   |  |  |   |
| Total Assets                    |   | $                                    | 246,015,115 |   | $ | 240,575,611 |   | $ | 235,627,852 |   | $ | 229,720,113 |   | $ | 234,594,652 |   | $ | 221,512,296 |   | $ | 225,142,653 |   |
|                            |   |                                      |             |   |  |  |   |  |  |   |  |  |   |  |  |   |  |  |   |  |  |   |
| Long Term Lease Obligation      |   | $                                    | 0           |   | $ | 0 |   | $ | 0 |   | $ | 0 |   | $ | 0 |   | $ | 0 |   | $ | 0 |   |
|                            |   |                                      |             |   |  |  |   |  |  |   |  |  |   |  |  |   |  |  |   |  |  |   |
| Mortgage          Loans Payable |   | $                                    | 33,195,607  |   | $ | 43,773,767 |   | $ | 43,934,494 |   | $ | 35,699,108 |   | $ | 28,994,521 |   | $ | 10,092,355 |   | $ | 10,184,662 |   |
|                            |   |                                      |             |   |  |  |   |  |  |   |  |  |   |  |  |   |  |  |   |  |  |   |

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

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

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

**(a) Liquidity and Capital Resources**

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

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

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

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

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

**(b) Results of Operations**

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

**Net Investment Income Overview**

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

**Valuation Overview**

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

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

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

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

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

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

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

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

**OFFICE PORTFOLIO**

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

|  |   |
|--|--------|

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

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**Net Investment Income**

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

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

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

**APARTMENT COMPLEXES**

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

|  |   |
|--|--------|

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

**Net Investment Income**

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

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

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

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**RETAIL PROPERTIES**

| **Year Ended December** **31,** |   | **Net Investment****Income/Loss****2005** |      | **Net Investment****Income/Loss****2004** |   | **Unrealized****Gain/(Loss)****2005** |   | **Unrealized****Gain/(Loss)****2004** |       | **Occupancy****2005** |   | **Occupancy****2004** |   |
|--------------------------------------|--------|-------------------------------------------|-----------|-------------------------------------------|--------|---------------------------------------|--------|---------------------------------------|------------|-----------------------|--------|-----------------------|--------|
|                                      |   |                                           |           |                                      |        |                                       |   |                                       |            |                  |        |                       |   |  |  |   |  |  |   |
| Property                             |   |                                      |      |                                      |   |                                  |   |                                  |       |                  |   |                  |   |   |   |   |   |   |   |
| Roswell, GA                          |   | $                                         | 1,767,394 |                                      | $      | 1,576,783                             |   | $                                     | 1,652,340  |                  | $      | (2,536,369            | )      |   | 94% |   |   | 74% |   |
| Kansas City, KS; Kansas City, MO     |   |                                      | 195,927   |                                      |   | 623,917                               |   |                                  | (5,069,318 | )                     |   | 2,727,694             |   |   | 81% |   |   | 81% |   |
| Hampton, VA                          |   |                                      | 1,272,509 |                                      |   | 1,220,607                             |   |                                  | 5,096,161  |                  |   | 981,574               |   |   | 100% |   |   | 100% |   |
| Ocean City, MD                       |   |                                      | 871,644   |                                      |   | 921,803                               |   |                                  | 1,332,610  |                  |   | 899,597               |   |   | 85% |   |   | 93% |   |
| Westminster, MD (1)                  |   |                                      | (5,704    | )                                         |   | 138,296                               |   |                                  | —     |                  |   | —                |   |   | N/A |   |   | N/A |   |
| Westminster, MD (2)                  |   |                                      | 278,799   |                                      |   | 246,765                               |   |                                  | —     |                  |   | —                |   |   | N/A |   |   | N/A |   |
| CARS Preferred Equity (3)            |   |                                      | 22,223    |                                      |   | —                                |   |                                  | —     |                  |   | —                |   |   | N/A |   |   | N/A |   |
|                                 |   |                                           |      |                                           |   |                                       |   |                                       |       |                  |   |                  |   |   |   |
|                                 |   | $                                         | 4,402,792 |                                      | $      | 4,728,171                             |   | $                                     | 3,011,793  |                  | $      | 2,072,496             |   |   |   |   |   |   |   |
|                                 |   |                                           |      |                                           |   |                                       |   |                                       |       |                  |   |                  |   |   |   |
|                                 |   |                                      |      |                                      |   |                                  |   |                                  |       |                  |   |                  |   |   |   |

|  |   |
|--|--------|

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

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

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

**Net Investment Income**

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

**Unrealized Gain/(Loss)**

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

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**INDUSTRIAL PROPERTIES**

 

| **Year Ended December** **31,** |   | **Net Investment****Income/Loss****2005** |    | **Net Investment****Income/Loss****2004** |   | **Unrealized****Gain/(Loss)****2005** |   | **Unrealized****Gain/(Loss)****2004** |      | **Occupancy****2005** |   | **Occupancy****2004** |   |
|--------------------------------------|--------|-------------------------------------------|---------|-------------------------------------------|--------|---------------------------------------|--------|---------------------------------------|-----------|-----------------------|--------|-----------------------|--------|
|                                      |   |                                           |         |                                      |        |                                       |   |                                       |           |                  |        |                       |   |  |  |   |  |  |   |
| Property                             |   |                                      |    |                                      |   |                                  |   |                                  |      |                  |   |                  |   |   |   |   |   |   |   |
| Aurora, CO                           |   | $                                         | 574,977 |                                      | $      | 936,264                               |   | $                                     | 1,369,434 |                  | $      | (190,659              | )      |   | 78% |   |   | 66% |   |
| Bolingbrook, IL (1)                  |   |                                      | —  |                                      |   | 2,603                                 |   |                                  | —    |                  |   | —                |   |   | N/A |   |   | N/A |   |
| Salt Lake City, UT (1)               |   |                                      | —  |                                      |   | (5,614                                | )      |                                  | —    |                  |   | —                |   |   | N/A |   |   | N/A |   |
|                                 |   |                                           |    |                                           |   |                                       |   |                                       |      |                  |   |                  |   |   |   |
|                                 |   | $                                         | 574,977 |                                      | $      | 933,253                               |   | $                                     | 1,369,434 |                  | $      | (190,659              | )      |   |   |   |   |   |   |
|                                 |   |                                           |    |                                           |   |                                       |   |                                       |      |                  |   |                  |   |   |   |
|                                 |   |                                      |    |                                      |   |                                  |   |                                  |      |                  |   |                  |   |   |   |

|  |   |
|--|--------|

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

**Net Investment Income**

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

**Unrealized Gain/(Loss)**

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

**HOTEL PROPERTY**

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

**Net Investment Income**

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

**Unrealized Gain/(Loss)**

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

**Other**

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

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

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**(c) Inflation**

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

**Critical Accounting Policies**

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

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

**Valuation of Investments**

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

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

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

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

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**Other Estimates**

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

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

*Interest Rate Risk –*The Partnership’s exposure to market rate risk for changes in interest rates relates to approximately 40.37% (as of December 31, 2005) of its investment portfolio consisting primarily of short-term fixed rate commercial paper and fixed and variableinterest 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 holdsinvestments to maturity except under unusual circumstances.

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

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

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

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

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

**Item 8. Financial Statements and Supplementary Data**

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

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

None.

**Item 9A: Controls and Procedures**

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

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**Item 9B: Other Information**

None.

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**PART III**

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

| **Name**               |   | **Position**                                                              |   | **Age** |   |
|------------------------|--------|---------------------------------------------------------------------------|--------|---------|--------|
|                        |   |                                                                           |   |         |   |
| James J. Avery, Jr.    |   | Vice Chairman and Director                                                |   | 54      |   |
| C. Edward Chaplin      |   | Treasurer and Director                                                    |   | 49      |   |
| Helen M. Galt          |   | Director                                                                  |   | 58      |   |
| Bernard J. Jacob       |   | President and Director                                                    |   | 50      |   |
| Ronald P. Joelson      |   | Director                                                                  |   | 47      |   |
| David R. Odenath, Jr.  |   | Director                                                                  |   | 49      |   |
| John Chieffo           |   | Vice President and Chief Accounting Officer      |   | 42      |   |
| Clifford E. Kirsch     |   | Chief Legal Officer and Secretary                                         |   | 46      |   |
| Melody C. McDaid       |   | Senior Vice President                                                     |   | 56      |   |
| Esther H. Milnes       |   | Senior Vice President                                                     |   | 55      |   |
| James M. O’Connor |   | Senior Vice President and Actuary                                         |   | 50      |   |
| Shirley H. Shao        |   | Senior Vice President and Chief Actuary                                   |   | 51      |   |

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

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

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

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

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

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

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

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

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

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

**JAMES M. O’CONNOR,***Senior Vice President and Actuary –*Vice President, Guaranteed Products since 2001.

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

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

**Code of Ethics**

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

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

**Item 11. Executive Compensation**

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

**Item 12. Security Ownership of Certain Beneficial Owners and Management**

Not applicable.

**Item 13. Certain Relationships and Related Transactions**

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

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

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

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**PART IV**

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

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

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

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

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

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

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

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

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

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

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

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

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

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

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (c)    | The following is a list of Exhibits to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005. The Registrant will furnish a copy of any Exhibit listed below to any security holder of the Registrant who requests it upon payment of a fee of 15cents 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. |

 

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

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

|   |   |                                                                                                                                                                                                                                                                                                              |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | 10.1   | Investment Management Agreement between Prudential Investment Management, Inc. and The Prudential 10.2 Variable Contract Real Property Partnership, filed as Post-Effective Amendment No. 16 to Form S-1, Registration Statement No. 33-20083-01, filedApril 10, 2003, and incorporated herein by reference. |

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

|   |   |                                                                                                                                                                                                                                                        |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | 10.3   | Partnership Agreement of The Prudential Variable Contract Real Property Partnership filed as Exhibit (10C) to Post-Effective Amendment No. 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. |

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

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

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

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

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

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

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

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

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

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**SIGNATURES**

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

**PRUCO LIFE INSURANCE COMPANY****in respect of****Pruco Life Variable****Contract Real Property Account****(Registrant)**

| Date: March 30, 2006 |   |   | By:    |   |   |                               |   |
|---------------------------|--------|--------|--------|--------|--------|-------------------------------|--------|
|                      |   |   |   |   |   | Bernard J. Jacob              |   |
|                      |   |   |   |   |   | President and Director        |   |
|                      |   |   |   |   |   | (Principal Executive Officer) |   |

 

| Date: March 30, 2006 |   |   | By:    |   |   |                                              |   |
|---------------------------|--------|--------|--------|--------|--------|----------------------------------------------|--------|
|                      |   |   |   |   |   | John Chieffo                                 |   |
|                      |   |   |   |   |   | Chief Accounting Officer                     |   |
|                      |   |   |   |   |   | (Principal Accounting and Financial Officer) |   |

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

| **Signature**                  |   | **Title** |                   | **Date** |   |
|--------------------------------|--------|-----------|------------------------|----------|--------|
|                                |   |           |                   |          |   |
|       |   |      |                   |     |   |   |   |
| *                              |   |      | Director               |     |   | March 30, 2006 |   |
| James J. Avery, Jr.            |   |      |                   |     |   |   |   |
|                           |   |      |                   |     |   |   |   |
| *                              |   |      | Treasurer and Director |     |   | March 30, 2006 |   |
| C. Edward Chaplin              |   |      |                   |     |   |   |   |
|                           |   |      |                   |     |   |   |   |
| *                              |   |      | Director               |     |   | March 30, 2006 |   |
| Helen M. Galt                  |   |      |                   |     |   |   |   |
|                           |   |      |                   |     |   |   |   |
| *                              |   |      | Director               |     |   | March 30, 2006 |   |
| Ronald P. Joelson              |   |      |                   |     |   |   |   |
|                           |   |      |                   |     |   |   |   |
| *                              |   |      | Director               |     |   | March 30, 2006 |   |
| David R. Odenath, Jr.          |   |      |                   |     |   |   |   |

 

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

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**PRUCO LIFE VARIABLE CONTRACT REAL PROPERTY ACCOUNT****(Registrant)**

**INDEX**

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

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

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**Report of Independent Registered      Public Accounting Firm**

To the Contract Owners of thePruco Life Variable Contract Real Property Accountand the Board of Directors ofPruco Life Insurance Company

In our opinion, the accompanying    statements of net assets and the related statements of operations and of changes    in net assets present fairly, in all material respects, the financial position    of Pruco Life Variable Contract Real Property Account atDecember 31, 2005 and 2004, and the results of its operations and the changesin its net assets for each of the three years in the period ended December 31,2005, in conformity with accounting principles generally accepted in the UnitedStatesof America. These  financial statements are the responsibility of the managementof Pruco Life Insurance Company; our responsibility is to express an opinionon these financial statements based on our audits. We conducted our audits ofthese financial statements inaccordance with the standards of the Public Company Accounting Oversight Board(United States). Those standards requirethatweplanandperform the audit to obtain reasonable assurance about whether the financialstatements are freeofmaterial misstatement.An audit  includes examining, on a test basis, evidence supporting the amountsand disclosures in the financial statements, assessing the accounting principlesused and significant estimates made by management, and evaluating the overallfinancial statementpresentation. We believe that our audits, which included confirmation of sharesat December 31, 2005 with The Prudential Variable Contract Real PropertyPartnership, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLPNew York, New YorkMarch 30, 2006

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**FINANCIAL STATEMENTS OF****PRUCO LIFE VARIABLE CONTRACT REAL PROPERTY ACCOUNT**

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

|                                                                                           |   | **2005** |        | **2004** |   |        |   |   |
|------------------------------------------------------------------------------------------------|--------|----------|-------------|----------|--------|-------------|--------|--------|
|                                                                                           |   |          |        |          |   |        |   |   |
| **ASSETS**                                                                                     |   |     |        |     |   |        |   |   |   |   |
| Investment in The Prudential Variable Contract Real Property Partnership                       |   | $        | 113,200,507 |     | $      | 102,950,783 |   |   |   |   |
|                                                                                           |   |          |        |          |   |        |   |   |
| Net Assets                                                                                     |   | $        | 113,200,507 |     | $      | 102,950,783 |   |   |   |   |
|                                                                                           |   |          |        |          |   |        |   |   |
| **NET ASSETS, representing:**                                                                  |   |     |        |     |   |        |   |   |   |   |
| Equity of contract owners                                                                      |   | $        | 81,885,275  |     | $      | 74,998,880  |   |   |   |   |
| Equity of Pruco Life Insurance Company                                                         |   |     | 31,315,232  |     |   | 27,951,903  |   |   |   |   |
|                                                                                           |   |          |        |          |   |        |   |   |
|                                                                                           |   | $        | 113,200,507 |     | $      | 102,950,783 |   |   |   |   |
|                                                                                           |   |          |        |          |   |        |   |   |
| Units outstanding                                                                              |   |     | 43,195,848  |     |   | 44,185,519  |   |   |   |   |
|                                                                                           |   |          |        |          |   |        |   |   |
| Portfolio shares held                                                                          |   |     | 3,825,616   |     |   | 3,936,848   |   |   |   |   |
| Portfolio net asset value per share                                                            |   | $        | 29.59       |     | $      | 26.15       |   |   |   |   |
|                                                                       |   |     |        |     |   |        |   |   |   |   |
| **STATEMENT OF OPERATIONS**                                                                    |   |     |        |     |   |        |   |   |   |   |
| For the periods ended December 31, 2005, 2004 and 2003                                    |   |     |        |     |   |        |   |   |   |   |
|                                                                                           |   |     | **2005**    |     |   | **2004**    |   |   | **2003** |   |
|                                                                                           |   |          |             |     |        |             |   |        |  |   |
| **INVESTMENT INCOME**                                                                          |   |     |        |     |   |        |   |   |   |   |
| Net investment income from Partnership operations                                              |   | $        | 5,082,863   |     | $      | 4,300,288   |   | $      | 5,820,059 |   |
|                                                                                           |   |          |             |     |        |             |   |        |  |   |
| **EXPENSES**                                                                                   |   |     |        |     |   |        |   |   |   |   |
| Charges to contract owners for assuming mortality risk and expense risk and for administration |   |     | 476,464     |     |   | 459,525     |   |   | 457,425 |   |
|                                                                                           |   |          |             |     |        |             |   |        |  |   |
| **NET INVESTMENT INCOME**                                                                      |   |     | 4,606,399   |     |   | 3,840,763   |   |   | 5,362,634 |   |
|                                                                                           |   |          |             |     |        |             |   |        |  |   |
| **NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS**                                     |   |     |        |     |   |        |   |   |   |   |
| Net change in unrealized gain (loss) on investments from Partnership                           |   |     | 5,096,823   |     |   | 854,775     |   |   | (3,803,218 | ) |
| Realized gain (loss) on sale of investments from Partnership                                   |   |     | 3,428,662   |     |   | 953,830     |   |   | 255,573 |   |
|                                                                                           |   |          |             |     |        |             |   |        |  |   |
| **NET GAIN (LOSS) ON INVESTMENTS**                                                             |   |     | 8,525,485   |     |   | 1,808,605   |   |   | (3,547,645 | ) |
|                                                                                           |   |          |             |     |        |             |   |        |  |   |
| **NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS**                                       |   | $        | 13,131,884  |     | $      | 5,649,368   |   | $      | 1,814,989 |   |
|                                                                                           |   |          |             |     |        |             |   |        |  |   |
| **STATEMENT OF CHANGES IN NET ASSETS**                                                         |   |     |        |     |   |        |   |   |   |   |
| For the periods ended December 31, 2005, 2004 and 2003                                    |   |     |        |     |   |        |   |   |   |   |
|                                                                                           |   |     | **2005**    |     |   | **2004**    |   |   | **2003** |   |
|                                                                                           |   |          |             |     |        |             |   |        |  |   |
| **OPERATIONS**                                                                                 |   |     |        |     |   |        |   |   |   |   |
| Net investment income                                                                          |   | $        | 4,606,399   |     | $      | 3,840,763   |   | $      | 5,362,634 |   |
| Net change in unrealized gain (loss) on investments in Partnership                             |   |     | 5,096,823   |     |   | 854,775     |   |   | (3,803,218 | ) |
| Net realized gain (loss) on sale of investments in Partnership                                 |   |     | 3,428,662   |     |   | 953,830     |   |   | 255,573 |   |
|                                                                                           |   |          |             |     |        |             |   |        |  |   |
| **NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS**                                       |   |     | 13,131,884  |     |   | 5,649,368   |   |   | 1,814,989 |   |
|                                                                                           |   |          |             |     |        |             |   |        |  |   |
| **CAPITAL TRANSACTIONS**                                                                       |   |     |        |     |   |        |   |   |   |   |
| Net withdrawals by contract owners                                                             |   |     | (2,333,786  | )        |   | (3,348,681  | )      |   | (2,684,776 | ) |
| Net contributions (withdrawals) by Pruco Life Insurance Company                                |   |     | (548,374    | )        |   | 501,906     |   |   | (30,554 | ) |
|                                                                                           |   |          |             |     |        |             |   |        |  |   |
| **NET DECREASE IN NET ASSETS RESULTING FROM CAPITAL TRANSACTIONS**                             |   |     | (2,882,160  | )        |   | (2,846,775  | )      |   | (2,715,330 | ) |
|                                                                                           |   |          |             |     |        |             |   |        |  |   |
| **TOTAL INCREASE (DECREASE) IN NET ASSETS**                                                    |   |     | 10,249,724  |     |   | 2,802,593   |   |   | (900,341 | ) |
| **NET ASSETS**                                                                                 |   |     |        |     |   |        |   |   |   |   |
| Beginning of period                                                                            |   |     | 102,950,783 |     |   | 100,148,190 |   |   | 101,048,531 |   |
|                                                                                           |   |          |             |     |        |             |   |        |  |   |
| End of period                                                                                  |   | $        | 113,200,507 |     | $      | 102,950,783 |   | $      | 100,148,190 |   |
|                                                                                           |   |          |             |     |        |             |   |        |  |   |

F-3

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

----

Back to Contents

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

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

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| Pruco Life Variable Contract Real Property Account (the “Account”) was established on August 27, 1986 and commenced business September 5, 1986. Pursuant to Arizona law, the 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”), a wholly-owned subsidiary of Prudential Financial, Inc.(“PFI”) and is registered under the Securities Act  of 1933. The assets of the Account are segregated from Pruco Life’s other assets. The 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 Account are invested in The Prudential Variable Contract Real Property Partnership (the “Partnership”). The Partnership is the investment vehicle for assets allocated to the real estate investment option under certain variable  life insurance and annuity contracts. The Account, along with The 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 Account’s proportionate interest of the Partnership’s market value. At December 31, 2005 and 2004 the Account’s interest in the Partnership was 55.1% or 3,825,616 shares and 55.1% or  3,936,848 shares respectively. |

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

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

|                                          |   |
|-----------------------------------------------|--------|
| **D. Equity of Pruco Life Insurance Company** |

|                                                                                                                                                                                                                                                                                      |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| Pruco Life maintains a position in the Account for property liquidity purposes, including unit purchases and redemptions, Partnership share transactions, and expense processing. The position does not have an effect on the contract owners’  accounts or the related unit values. |

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

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

F-4

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Back to Contents

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

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

| **2005:**                                                |   |    |       |    |   |     |   |     |     |      |   |     |   |   |       |   |
|----------------------------------------------------------|--------|---------|------------|---------|--------|----------|--------|----------|----------|-----------|--------|----------|--------|--------|------------|--------|
|                                                          |   |    |       |    |   |     |   |     |     |      |   |     |   |   |       |   |
|                                                     |   | **VAL** |       | **VLI** |   | **SPVA** |   | **SPVL** |     | **TOTAL** |   |
|                                                     |   |         |            |    |        |          |   |          |          |      |        |          |   |        |            |   |
| Contract Owner Net Payments:                             |   | $       | 3,479,291  |    | $      | 280,783  |   | $        | (3       | )         | $      | 2,705    | )      | $      | 3,757,366  |   |
| Policy Loans:                                            |   |    | (1,420,648 | )       |   | (114,443 | )      |     | 0        |      |   | (51,315  | )      |   | (1,586,406 | )      |
| Policy Loan Repayments and Interest:                     |   |    | 1,617,102  |    |   | 135,706  |   |     | 0        |      |   | 136,594  |   |   | 1,889,402  |   |
| Surrenders, Withdrawals, and Death Benefits:             |   |    | (2,962,740 | )       |   | (208,936 | )      |     | (119,238 | )         |   | (443,597 | )      |   | (3,734,511 | )      |
| Net Transfers To Other Subaccounts or Fixed Rate Option: |   |    | (7,738     | )       |   | (15,129  | )      |     | (4,039   | )         |   | 16,985   |   |   | (9,921     | )      |
| Administrative and Other Charges:                        |   |    | (2,450,927 | )       |   | (175,561 | )      |     | 0        |      |   | (23,228  | )      |   | (2,649,716 | )      |
|                                                     |   |         |            |    |        |          |   |          |          |      |        |          |   |        |            |   |
| **Net Withdrawals by Contract Owners**                   |   | $       | (1,745,660 | )       | $      | (97,580  | )      | $        | (123,280 | )         | $      | (367,266 | )      | $      | (2,333,786 | )      |
|                                                     |   |         |            |    |        |          |   |          |          |      |        |          |   |        |            |   |
|                                                     |   |    |       |    |   |     |   |     |     |      |   |     |   |   |       |   |

| **2004:**                                                |   |    |       |    |   |     |   |     |    |      |   |     |   |   |       |   |
|----------------------------------------------------------|--------|---------|------------|---------|--------|----------|--------|----------|---------|-----------|--------|----------|--------|--------|------------|--------|
|                                                          |   |    |       |    |   |     |   |     |    |      |   |     |   |   |       |   |
|                                                     |   | **VAL** |       | **VLI** |   | **SPVA** |   | **SPVL** |    | **TOTAL** |   |
|                                                     |   |         |            |    |        |          |   |          |         |      |        |          |   |        |            |   |
| Contract Owner Net Payments:                             |   | $       | 3,685,937  |    | $      | 308,369  |   | $        | 0       |      | $      | (1,462   | )      | $      | 3,992,844  |   |
| Policy Loans:                                            |   |    | (1,421,764 | )       |   | (19,257  | )      |     | 0       |      |   | (78,985  | )      |   | (1,520,006 | )      |
| Policy Loan Repayments and Interest:                     |   |    | 1,914,867  |    |   | 52,629   |   |     | 0       |      |   | 100,458  |   |   | 2,067,954  |   |
| Surrenders, Withdrawals, and Death Benefits:             |   |    | (4,228,414 | )       |   | (259,110 | )      |     | (34,417 | )         |   | (226,819 | )      |   | (4,748,760 | )      |
| Net Transfers To Other Subaccounts or Fixed Rate Option: |   |    | (368,082   | )       |   | (16,751  | )      |     | 0       |      |   | (44,349  | )      |   | (429,182   | )      |
| Administrative and Other Charges:                        |   |    | (2,514,926 | )       |   | (172,118 | )      |     | 0       |      |   | (24,487  | )      |   | (2,711,531 | )      |
|                                                     |   |         |            |    |        |          |   |          |         |      |        |          |   |        |            |   |
| **Net Withdrawals by Contract Owners**                   |   | $       | (2,932,382 | )       | $      | (106,238 | )      | $        | (34,417 | )         | $      | (275,644 | )      | $      | (3,348,681 | )      |
|                                                     |   |         |            |    |        |          |   |          |         |      |        |          |   |        |            |   |
|                                                     |   |    |       |    |   |     |   |     |    |      |   |     |   |   |       |   |

| **2003:**                                                |   |    |       |    |   |     |   |     |    |      |   |     |   |   |       |   |
|----------------------------------------------------------|--------|---------|------------|---------|--------|----------|--------|----------|---------|-----------|--------|----------|--------|--------|------------|--------|
|                                                          |   |    |       |    |   |     |   |     |    |      |   |     |   |   |       |   |
|                                                     |   | **VAL** |       | **VLI** |   | **SPVA** |   | **SPVL** |    | **TOTAL** |   |
|                                                     |   |         |            |    |        |          |   |          |         |      |        |          |   |        |            |   |
| Contract Owner Net Payments:                             |   | $       | 3,953,704  |    | $      | 313,893  |   | $        | 0       |      | $      | (20      | )      | $      | 4,267,577  |   |
| Policy Loans:                                            |   |    | (1,526,557 | )       |   | 40,619   |   |     | 0       |      |   | (63,800  | )      |   | (1,549,738 | )      |
| Policy Loan Repayments and Interest:                     |   |    | 2,575,253  |    |   | 62,011   |   |     | 0       |      |   | 192,676  |   |   | 2,829,940  |   |
| Surrenders, Withdrawals, and Death Benefits:             |   |    | (4,391,603 | )       |   | (334,013 | )      |     | (59,897 | )         |   | (355,196 | )      |   | (5,140,709 | )      |
| Net Transfers To Other Subaccounts or Fixed Rate Option: |   |    | (146,809   | )       |   | 10,628   |   |     | (10,000 | )         |   | 439      |   |   | (145,742   | )      |
| Administrative and Other Charges:                        |   |    | (2,742,221 | )       |   | (178,603 | )      |     | 0       |      |   | (25,280  | )      |   | (2,946,104 | )      |
|                                                     |   |         |            |    |        |          |   |          |         |      |        |          |   |        |            |   |
| **Net Withdrawals by Contract Owners**                   |   | $       | (2,278,233 | )       | $      | (85,465  | )      | $        | (69,897 | )         | $      | (251,181 | )      | $      | (2,684,776 | )      |
|                                                     |   |         |            |    |        |          |   |          |         |      |        |          |   |        |            |   |

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

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

| **2005:**                  |   |   |       |   |   |                              |   |    |       |     |   |     |   |   |    |   |   |     |   |
|----------------------------|--------|--------|------------|--------|--------|-----------------------------------|--------|---------|------------|----------|--------|----------|--------|--------|---------|--------|--------|----------|--------|
|                            |   |   |       |   |   |                              |   |    |       |     |   |     |   |   |    |   |   |     |   |
|                       |   |   |       |   |   | **VAL**                           |   | **VLI** |       | **SPVA** |   | **SPVL** |   |
|                       |   |   |       |   |   |                                   |   |         |       |          |   |          |   |
| **Company Contributions:** |   |   | 1,403,519  |   |   | **Contract Owner Contributions:** |   |    | 2,144,323  |     |   | 142,550  |   |   | 1,350   |   |   | 92,006   |   |
| **Company Redemptions:**   |   |   | (1,435,211 | )      |   | **Contract Owner Redemptions:**   |   |    | (2,841,794 | )        |   | (178,595 | )      |   | (56,870 | )      |   | (260,949 | )      |
|                       |   |   |       |   |   |                              |   |    |       |     |   |     |   |   |    |   |   |     |   |

| **2004:**                  |   |   |       |   |   |                              |   |    |       |     |   |     |   |   |    |   |   |     |   |
|----------------------------|--------|--------|------------|--------|--------|-----------------------------------|--------|---------|------------|----------|--------|----------|--------|--------|---------|--------|--------|----------|--------|
|                            |   |   |       |   |   |                              |   |    |       |     |   |     |   |   |    |   |   |     |   |
|                       |   |   |       |   |   | **VAL**                           |   | **VLI** |       | **SPVA** |   | **SPVL** |   |
|                       |   |   |       |   |   |                                   |   |         |       |          |   |          |   |
| **Company Contributions:** |   |   | 1,980,971  |   |   | **Contract Owner Contributions:** |   |    | 2,465,812  |     |   | 155,094  |   |   | 0       |   |   | 55,305   |   |
| **Company Redemptions:**   |   |   | (1,628,682 | )      |   | **Contract Owner Redemptions:**   |   |    | (3,748,285 | )        |   | (199,651 | )      |   | (16,953 | )      |   | (189,696 | )      |
|                       |   |   |       |   |   |                              |   |    |       |     |   |     |   |   |    |   |   |     |   |

| **2003:**                  |   |   |       |   |   |                              |   |    |       |     |   |     |   |   |    |   |   |     |   |
|----------------------------|--------|--------|------------|--------|--------|-----------------------------------|--------|---------|------------|----------|--------|----------|--------|--------|---------|--------|--------|----------|--------|
|                            |   |   |       |   |   |                              |   |    |       |     |   |     |   |   |    |   |   |     |   |
|                       |   |   |       |   |   | **VAL**                           |   | **VLI** |       | **SPVA** |   | **SPVL** |   |
|                       |   |   |       |   |   |                                   |   |         |       |          |   |          |   |
| **Company Contributions:** |   |   | 1,814,298  |   |   | **Contract Owner Contributions:** |   |    | 3,017,473  |     |   | 178,515  |   |   | 0       |   |   | 93,841   |   |
| **Company Redemptions:**   |   |   | (1,721,856 | )      |   | **Contract Owner Redemptions:**   |   |    | (4,057,783 | )        |   | (216,005 | )      |   | (35,600 | )      |   | (221,948 | )      |

F-5

----

Back to Contents

| **Note 6:** | **Purchases and Sales of Investments** |
|-------------|----------------------------------------|

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

|       |   | **December** **31, 2005** |       | **December** **31, 2004** |   | **December** **31, 2003** |   |
|------------|--------|--------------------------------|------------|--------------------------------|--------|--------------------------------|--------|
|       |   |                                |            |                           |        |                                |   |  |  |   |
| Purchases: |   | $                              | 0          |                           | $      | 0                              |   | $ | 0 |   |
| Sales:     |   | $                              | (3,358,625 | )                              | $      | (3,306,299                     | )      | $ | (3,172,755 | ) |

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

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

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

|                   |   | **At year ended** |   | **For the year ended** |   |
|------------------------|--------|-------------------|--------|------------------------|--------|
|                   |   |                   |   |                        |   |
|                   |   | **Units**         |   | **Unit Value**         |   | **Net Assets** |   | **Investment** |   | **Expense Ratio**** |   | **Total Return***** |   |
|                   |   | **(000’s)**  |   | **Lowest- Highest**    |   | **(000’s)** |   | **Income Ratio*** |   | **Lowest-Highest** |   | **Lowest-Highest** |   |
|                   |   |                   |        |                   |        |  |   |  |  |   |  |  |   |  |  |   |  |  |   |
| December 31, 2005 |   |              | 31,094 |                   |   | $2.33181 to $2.76817 |   | $ | 81,886 |   |   | 4.64 | % |   | 0.35% to 1.25 | % |   | 11.76% to 12.76% |   |
| December 31, 2004 |   |              | 32,051 |                   |   | $2.08645 to $2.45484 |   | $ | 74,999 |   |   | 4.15 | % |   | 0.35% to 1.25 | % |   | 4.74% to 5.68% |   |
| December 31, 2003 |   |              | 33,530 |                   |   | $1.99197 to $2.32279 |   | $ | 74,407 |   |   | 5.77 | % |   | 0.35% to 1.25 | % |   | 0.98% to 1.89% |   |
| December 31, 2002 |   |              | 34,771 |                   |   | $1.97263 to $2.27966 |   | $ | 75,909 |   |   | 5.59 | % |   | 0.35% to 1.25 | % |   | -0.03% to 0.87% |   |
| December 31, 2001 |   |              | 36,119 |                   |   | $1.97316 to $2.26011 |   | $ | 78,352 |   |   | 5.95 | % |   | 0.35% to 1.25 | % |   | 3.50% to 4.42% |   |

| The table above reflects information for units held by contract owners. Pruco Life also maintains a position in the Real Property Account, to provide for property acquisitions and capital expenditure funding needs. Pruco Life held 12,102,475, 12,134,074, 11,781,786, 11,689,343 and 14,124,785 units representing $31,315,232 $ 27,951,903, $25,741,655,$25,139,441 and $30,205,210 of net assets as of December 31, 2005, 2004, 2003, 2002 and 2001, respectively. Charges for mortality risk, expense risk and administrative expenses are used by Pruco Life to purchase additional units in its account resulting in no impact to its net assets. |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |

|  |   |
|--|--------|

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

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

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

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

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

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

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

F-6

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| **Note 7:** | **Financial Highlights (continued)** |
|-------------|--------------------------------------|

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

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| Contract owner contributions are subject to certain deductions prior to being invested in the Real Property Account. The deductions for VAL and VLI are (1) state premium taxes; (2) sales charges, not to exceed 5% for VAL and 9% for VLI, which  are deducted in order to compensate Pruco Life 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 the guaranteed minimum death benefit risk. These charges are assessed through the redemption of units. |

|                         |   |
|------------------------------|--------|
| **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 but will not exceed 45% of one scheduled annual premium for VAL contracts and 9% of the initial premium payment for SPVL. No sales charge will be imposed after the sixth and tenth year of the contract  for SPVL and VAL, respectively. No sales charge will be imposed on death benefits. A deferred sales charge is assessed through the redemption of units. |

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

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

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

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

F-7

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**Report of Independent Accountants**

| To the Partners of The PrudentialVariable Contract Real Property Partnership: |
|-------------------------------------------------------------------------------|

In our opinion, the accompanying consolidated statements of assets and liabilities, including the schedule of investments, and the related consolidated statements of operations, of changes in net assets and of cash flows present fairly, in all materialrespects, the financial position of The Prudential Variable Contract Real Property Partnership (the “Partnership”) at December 31, 2005 and 2004, and the results of its operations and its cash flows for each of the three years in the period ended December 31,2005 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the management of The Prudential Insurance Company of America; our responsibility is to express an opinionon 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 reasonableassurance 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 andsignificant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLPNew York, New YorkFebruary 28, 2006

F-8

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**Report of Independent Accountants on****Financial Statement Schedules**

| To the Partners of The PrudentialVariable Contract Real Property Partnership: |
|-------------------------------------------------------------------------------|

Our audits of the consolidated financial statements referred to in our report dated February 28, 2006 appearing in this Annual Report on Form 10-K also included an audit of the financial statement schedules listed in Item 14(a)(2) of this Form 10-K. In ouropinion, 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 LLPNew York, New YorkFebruary 28, 2006

F-9

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

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

F-10

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

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

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

F-11

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

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

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

F-12

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

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

|                                                                                          |   | **Year Ended December** **31,** |        |
|-----------------------------------------------------------------------------------------------|--------|--------------------------------------|-------------|
|                                                                                          |   | **2005**                             |        | **2004** |   | **2003** |   |
|                                                                                          |   |                                      |             |   |  |  |   |  |  |   |
| CASH FLOWS FROM OPERATING ACTIVITIES:                                                         |   |                                 |        |   |   |   |   |   |   |   |
| Net increase in net assets from operations                                                    |   | $                                    | 24,679,790  |   | $ | 11,080,000 |   | $ | 4,146,045 |   |
| Adjustments to reconcile net increase in net assets to net cash from operating activities     |   |                                 |        |   |   |   |   |   |   |   |
| Net realized and unrealized loss (gain)                                                       |   |                                 | (15,460,619 | ) |   | (3,280,394 | ) |   | 6,467,364 |   |
| Amortization of deferred financing costs                                                      |   |                                 | (34,620     | ) |   | (108,232 | ) |   | (523,586 | ) |
| Distributions in excess of (less than) equity in income of real estate partnership operations |   |                                 | (148,668    | ) |   | (209,678 | ) |   | 648,193 |   |
| Minority interest in consolidated partnerships                                                |   |                                 | 164,175     |   |   | 223,316 |   |   | 192,260 |   |
| Bad debt expense                                                                              |   |                                 | 240,176     |   |   | 459,103 |   |   | 185,844 |   |
| (Increase) decrease in:                                                                       |   |                                 |        |   |   |   |   |   |   |   |
| Other assets                                                                                  |   |                                 | 2,815,778   |   |   | (304,747 | ) |   | (502,655 | ) |
| Increase (decrease) in:                                                                       |   |                                 |        |   |   |   |   |   |   |   |
| Accounts payable and accrued expenses                                                         |   |                                 | (550,954    | ) |   | 97,254 |   |   | (93,346 | ) |
| Due to affiliates                                                                             |   |                                 | 39,507      |   |   | (296,513 | ) |   | 110,429 |   |
| Other liabilities                                                                             |   |                                 | (150,564    | ) |   | (324,210 | ) |   | 35,865 |   |
|                                                                                          |   |                                      |             |   |  |  |   |  |  |   |
| Net cash flows from (used in) operating activities                                            |   |                                 | 11,594,001  |   |   | 7,335,899 |   |   | 10,666,413 |   |
|                                                                                          |   |                                      |             |   |  |  |   |  |  |   |
| CASH FLOWS FROM INVESTING ACTIVITIES:                                                         |   |                                 |        |   |   |   |   |   |   |   |
| Net proceeds from real estate investments sold                                                |   |                                 | 41,676,816  |   |   | 7,105,000 |   |   | 5,689,488 |   |
| Acquisition of real estate and improvements                                                   |   |                                 | —      |   |   | — |   |   | (8,008,729 | ) |
| Additions to real estate and improvements                                                     |   |                                 | (6,198,211  | ) |   | (7,746,015 | ) |   | (6,963,127 | ) |
| Contributions to real estate partnerships                                                     |   |                                 | (7,142,900  | ) |   | (467,875 | ) |   | (1,326,071 | ) |
| Origination of mortgage loan receivable                                                       |   |                                 | (2,945,709  | ) |   | (1,332,060 | ) |   | — |   |
| Collection of other real estate investments                                                   |   |                                 | —      |   |   | 4,975,000 |   |   | — |   |
| Origination of other real estate investments                                                  |   |                                 | —      |   |   | (4,475,000 | ) |   | (500,000 | ) |
|                                                                                          |   |                                      |             |   |  |  |   |  |  |   |
| Net cash flows from (used in) investing activities                                            |   |                                 | 25,389,996  |   |   | (1,940,950 | ) |   | (11,108,439 | ) |
|                                                                                          |   |                                      |             |   |  |  |   |  |  |   |
| CASH FLOWS FROM FINANCING ACTIVITIES:                                                         |   |                                 |        |   |   |   |   |   |   |   |
| Withdrawals                                                                                   |   |                                 | (6,000,000  | ) |   | (6,000,000 | ) |   | (6,856,490 | ) |
| Proceeds from investment level debt                                                           |   |                                 | —      |   |   | 8,750,000 |   |   | 8,750,000 |   |
| Principal payments on investment level debt                                                   |   |                                 | (853,525    | ) |   | (8,910,727 | ) |   | (514,614 | ) |
| Contributions from minority interest partners                                                 |   |                                 | —      |   |   | — |   |   | 242,354 |   |
| Distributions to minority interest partners                                                   |   |                                 | (2,220,169  | ) |   | (578,854 | ) |   | (868,559 | ) |
|                                                                                          |   |                                      |             |   |  |  |   |  |  |   |
| Net cash flows from (used in) financing activities                                            |   |                                 | (9,073,694  | ) |   | (6,739,581 | ) |   | 752,691 |   |
|                                                                                          |   |                                      |             |   |  |  |   |  |  |   |
| NET CHANGE IN CASH AND CASH EQUIVALENTS                                                       |   |                                 | 27,910,303  |   |   | (1,344,632 | ) |   | 310,665 |   |
| CASH AND CASH EQUIVALENTS – Beginning of period                                          |   |                                 | 17,557,182  |   |   | 18,901,814 |   |   | 18,591,149 |   |
|                                                                                          |   |                                      |             |   |  |  |   |  |  |   |
| CASH AND CASH EQUIVALENTS – End of period                                                |   | $                                    | 45,467,485  |   | $ | 17,557,182 |   | $ | 18,901,814 |   |
|                                                                                          |   |                                      |             |   |  |  |   |  |  |   |

F-13

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

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**THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP****CONSOLIDATED SCHEDULE OF INVESTMENTS**

 

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

F-14

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

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**THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP****CONSOLIDATED SCHEDULE OF INVESTMENTS**

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

F-15

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

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

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

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

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

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

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

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

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

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

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

F-16

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

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

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

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

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

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

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

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

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

F-17

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

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

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

|   |   |   |                                                                                                                                                                                                                                                                                                                                                                                                                             |
|--------|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | H:     |        | *Investment Level Debt –*Investment        level debt is stated at the principal amount of the obligations outstanding.        At times the Partnership may assume debt in connection with the purchase        of real estate. For debt assumed, the Partnership allocates a portion        of the purchase price to the below/above market debt and amortizes the    premium/discount over the remaining life of the debt. |

|   |   |   |                                                                                                                                                                                                                                                                                                                                       |
|--------|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | I:     |        | *Deferred Financing Costs –*Included        in Other Assets are deferred financing costs amounting to $246,495 and        $391,666 which are net of accumulated amortization of $80,227 and $878,316        as of December 31, 2005 and 2004, respectively, and which are being amortized    over the term of the related obligation. |

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

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

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

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

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

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

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

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

F-18

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

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

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

|                                   |   | **December 31,** |   |
|----------------------------------------|--------|------------------|--------|
|                                   |   | **2005**         |   | **2004** |   |
|                                   |   |                  |   |  |   |
| Partnership Assets and Liabilities     |   |             |   |   |   |   |   |
| Real estate at estimated market value  |   | $                | 34,365 |   | $ | 34,200 |   |
| Other assets                           |   |             | 1,384  |   |   | 1,217 |   |
|                                   |   |                  |   |  |   |
| Total assets                           |   |             | 35,749 |   |   | 35,417 |   |
|                                   |   |                  |   |  |   |
| Investment level debt                  |   |             | 18,272 |   |   | 18,564 |   |
| Other liabilities                      |   |             | 551    |   |   | 370 |   |
|                                   |   |                  |   |  |   |
| Total liabilities                      |   |             | 18,823 |   |   | 18,934 |   |
|                                   |   |                  |   |  |   |
| Net assets                             |   | $                | 16,926 |   | $ | 16,483 |   |
|                                   |   |                  |   |  |   |
| Partnership’s share of net assets |   | $                | 14,349 |   | $ | 12,127 |   |
|                                   |   |                  |   |  |   |

 

|                                                            |   | **Year Ended December 31,** |   |
|-----------------------------------------------------------------|--------|-----------------------------|--------|
|                                                            |   | **2005**                    |   | **2004** |   | **2003** |   |
|                                                            |   |                             |        |   |  |  |   |  |  |   |
| Partnership Operations                                          |   |                        |   |   |   |   |   |   |   |   |
| Rental revenue                                                  |   | $                           | 4,115  |   | $ | 3,125 |   | $ | 3,114 |   |
| Other revenue                                                   |   |                        | — |   |   | 1,710 |   |   | 1,360 |   |
|                                                            |   |                             |        |   |  |  |   |  |  |   |
| Total revenue                                                   |   |                        | 4,115  |   |   | 4,835 |   |   | 4,474 |   |
|                                                            |   |                             |        |   |  |  |   |  |  |   |
| Real estate expenses and taxes                                  |   |                        | 2,326  |   |   | 2,481 |   |   | 2,196 |   |
| Interst Expense                                                 |   |                        | 1,477  |   |   | 1,500 |   |   | 1,555 |   |
|                                                            |   |                             |        |   |  |  |   |  |  |   |
| Total Expenses                                                  |   |                        | 3,803  |   |   | 3,981 |   |   | 3,751 |   |
|                                                            |   |                             |        |   |  |  |   |  |  |   |
| Net Investment Income                                           |   | $                           | 312    |   | $ | 854 |   | $ | 723 |   |
|                                                            |   |                             |        |   |  |  |   |  |  |   |
| Partnership’s equity in income of real estate partnerships |   | $                           | 253    |   | $ | 629 |   | $ | 561 |   |
|                                                            |   |                             |        |   |  |  |   |  |  |   |

F-19

----

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

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

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

|                                                                                |   | **As of 12/31/05** |   | **As of 12/31/04**     |   | **As of 12/31/05** |   |
|-------------------------------------------------------------------------------------|--------|--------------------|--------|------------------------|--------|--------------------|--------|
|                                                                                |   |                    |   |                        |   |                    |   |
|                                                                                |   |               |   | **Partnership’s** |   |               |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                |   | **100% Principal** |   | **Share of**           |   | **100% Principal** |   |   |   |   |   |   |   |   |   |   |
|                                                                                |   | **Balance**        |   | **Principal Balance**  |   | **Balance**        |   | **Interest** |   | **Maturity** |   |   |   |   |
|                                                                                |   | **Outstanding**    |   | **Outstanding (1)**    |   | **Outstanding**    |   | **Rate (2)** |   | **Date** |   | **Terms (3)** |   |
|                                                                                |   |                    |        |                   |        |                    |   |  |  |   |  |  |   |  |  |   |  |  |   |
| **Mortgages            of Wholly Owned Properties & Consolidated Partnerships** |   |               |   |                   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Jacksonville, FL                                                                    |   | $                  | — |                   | $      | —             |   | $ | 10,000 |   |   | — |   |   | — |   |   | — |   |
| Hampton, VA                                                                         |   |               | 8,671  |                   |   | 8,671              |   |   | 9,075 |   |   | 6.75 | % |   | 2018 |   |   | PP, P&I |   |
| Ocean City, MD                                                                      |   |               | 7,025  |                   |   | 5,220              |   |   | 7,199 |   |   | 7.24 | % |   | 2008 |   |   | PP, P&I |   |
| Raleigh, NC                                                                         |   |               | 8,750  |                   |   | 8,750              |   |   | 8,750 |   |   | 3.09 | % |   | 2008 |   |   | PP, I |   |
| Atlanta, GA                                                                         |   |               | 8,749  |                   |   | 8,749              |   |   | 8,750 |   |   | 4.90 | % |   | 2009 |   |   | PP, P&I |   |
|                                                                                |   |                    |   |                        |   |                    |   |   |   |   |   |   |   |   |   |   |
| Total                                                                               |   | $                  | 33,196 |                   | $      | 31,390             |   | $ | 43,774 |   |   |   |   |   |   |   |   |   |   |
|                                                                                |   |                    |   |                        |   |                    |   |   |   |   |   |   |   |   |   |   |
| **Mortgages on Equity Partnerships**                                                |   |               |   |                   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Kansas          City, MO – Ten Quivira                                         |   | $                  | 6,575  |                   | $      | 4,839              |   | $ | 6,680 |   |   | 8.16 | % |   | 2007 |   |   | PP, P&I |   |
| Kansas City, MO- Ten Quivira Parcel                                                 |   |               | 946    |                   |   | 696                |   |   | 961 |   |   | 8.16 | % |   | 2007 |   |   | PP, P&I |   |
| Kansas          City, MO – Cherokee Hill                                       |   |               | 3,032  |                   |   | 2,232              |   |   | 3,083 |   |   | 7.79 | % |   | 2007 |   |   | PP, P&I |   |
| Kansas          City, KS – Devonshire                                          |   |               | 2,108  |                   |   | 1,551              |   |   | 2,140 |   |   | 8.16 | % |   | 2007 |   |   | PP, P&I |   |
| Kansas          City, MO – Brywood Center                                      |   |               | 5,611  |                   |   | 4,130              |   |   | 5,700 |   |   | 8.16 | % |   | 2007 |   |   | PP, P&I |   |
|                                                                                |   |                    |   |                        |   |                    |   |   |   |   |   |   |   |   |   |   |
| Total                                                                               |   | $                  | 18,272 |                   | $      | 13,448             |   | $ | 18,564 |   |   |   |   |   |   |   |   |   |   |
|                                                                                |   |                    |   |                        |   |                    |   |   |   |   |   |   |   |   |   |   |
|                                                                                |   |               |   |                   |   |               |   |   |   |   |   |   |   |   |   |   |

|  |   |
|--|--------|

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

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

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

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

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

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

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

|   |                         |   | **100% Loan Balance** |   | **Partnership’s Share** |   |
|--------|------------------------------|--------|-----------------------|--------|------------------------------|--------|
|   | **Year Ending December 31,** |   | **(in 000’s)**   |   | **(in 000’s)**          |   |
|   |                              |   |                       |        |                         |        |  |   |
|   | 2006                         |   | $                     | 291    |                         | $      | 214 |   |
|   | 2007                         |   |                  | 17,981 |                         |   | 13,234 |   |
|   |                         |   |                       |        |                         |        |  |   |
|   | Total                        |   | $                     | 18,272 |                         | $      | 13,448 |   |
|   |                         |   |                       |        |                         |        |  |   |

F-20

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

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

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

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

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

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

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

|        |                                                 |
|-------------|------------------------------------------------------|
| **Note 7:** | **Concentration of Risk on Real Estate Investments** |

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

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

F-21

----

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

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

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

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

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

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

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

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

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

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

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

F-22

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

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

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

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

 

|   | **Year Ending December 31,** |   | **(in 000’s)** |   |
|--------|------------------------------|--------|---------------------|--------|
|   |                              |   |                     |        |   |
|   | 2005                         |   | $                   | 6,000  |   |
|   | 2004                         |   | $                   | 6,000  |   |
|   | 2003                         |   | $                   | 6,856  |   |

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

|                                                   |   | **For the Year Ended December 31,** |   |
|--------------------------------------------------------|--------|-------------------------------------|--------|
|                                                   |   | **2005**                            |   | **2004** |   | **2003** |   | **2002** |   | **2001** |   |
|                                                   |   |                                     |        |   |  |  |   |  |  |   |  |  |   |  |  |   |
| *Per Share(Unit) Operating Performance:*               |   |                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Asset Value, beginning of period                   |   | $                                   | 26.15  |   | $ | 24.66 |   | $ | 24.11 |   | $ | 23.82 |   | $ | 22.74 |   |
| *Income From Investment Operations:*                   |   |                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investment income, before management fee               |   |                                | 1.67   |   |   | 1.44 |   |   | 1.71 |   |   | 1.63 |   |   | 1.66 |   |
| Management fee                                         |   |                                | (0.40  | ) |   | (0.36 | ) |   | (0.33 | ) |   | (0.30 | ) |   | (0.30 | ) |
| Net realized and unrealized gain (loss) on investments |   |                                | 2.17   |   |   | 0.41 |   |   | (0.83 | ) |   | (1.04 | ) |   | (0.28 | ) |
|                                                   |   |                                     |        |   |  |  |   |  |  |   |  |  |   |  |  |   |
| Net Increase in Net Assets Resulting from Operations   |   |                                | 3.44   |   |   | 1.49 |   |   | 0.55 |   |   | 0.29 |   |   | 1.08 |   |
|                                                   |   |                                     |        |   |  |  |   |  |  |   |  |  |   |  |  |   |
| *Net Asset Value, end of period*                       |   | $                                   | 29.59  |   | $ | 26.15 |   | $ | 24.66 |   | $ | 24.11 |   | $ | 23.82 |   |
|                                                   |   |                                     |        |   |  |  |   |  |  |   |  |  |   |  |  |   |
| *Total Return, before Management Fee (a):*             |   |                                | 14.76  | % |   | 7.61 | % |   | 3.63 | % |   | 2.52 | % |   | 6.14 | % |
| *Ratios/Supplemental Data:*                            |   |                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Assets, end of period (in millions)                |   | $                                   | 205    |   | $ | 187 |   | $ | 182 |   | $ | 184 |   | $ | 198 |   |
| Ratios to average net assets (b):                      |   |                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total Portfolio Level Expenses                         |   |                                | 1.46   | % |   | 1.43 | % |   | 1.35 | % |   | 1.28 | % |   | 1.27 | % |
| Net Investment Income                                  |   |                                | 4.89   | % |   | 5.76 | % |   | 7.12 | % |   | 6.85 | % |   | 7.11 | % |
|                                                   |   |                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|  |   |
|--|--------|

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

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

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

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

F-23

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**THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP****SCHEDULE III – REAL ESTATE OWNED: PROPERTIES****DECEMBER** **31, 2005**

|                                  |   | **Initial    Costs to the Partnership** |   |       |   | **Gross          Amount at Which          Carried    at Close of Year** |   |
|---------------------------------------|--------|-----------------------------------------|--------|------------|--------|-------------------------------------------------------------------------|--------|
|                                  |   |                                    |        |       |   |                                                                    |        |   |
| **Description**                       |   | **Encumbrances    at 12/31/05**         |   | **Land**   |   | **Building &    Improvements**                                      |   | **CostsCapitalizedSubsequent toAcquisition** |   |   | **Land** |   | **Building &    Improvements** |   |   | **Total** |   | **Year of    Construction** |   | **Date    Acquired** |   |
|                                       |   |                                         |   |            |   |                                                                         |   |  |   |   |  |   |  |   |   |  |   |  |   |  |   |
| Properties:                           |   |                                    |   |       |   |                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                       |   |                                    |   |       |   |                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Office    Building    Lisle, IL       |   | None                                    |   | 1,780,000  |   | 15,743,881                                                              |   | 5,649,154 |   |   | 1,949,206 |   | 21,223,829 |   |   | 23,173,035 |   | 1985 |   | Apr., 1988 |   |
|                                       |   |                                    |   |       |   |                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Garden    Apartments    Atlanta, GA   |   | 8,749,000                               |   | 3,631,212  |   | 11,168,904                                                              |   | 3,681,260 | (b) |   | 4,860,054 |   | 13,621,322 |   |   | 18,481,376 |   | 1987 |   | Apr., 1988 |   |
|                                  |   |                                    |   |       |   |                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Retail Shopping Center    Roswell, GA |   | None                                    |   | 9,454,622  |   | 21,513,677                                                              |   | 6,678,432 |   |   | 11,135,594 |   | 26,511,137 |   |   | 37,646,731 |   | 1988 |   | Jan., 1989 |   |
|                                  |   |                                    |   |       |   |                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Garden Apartments    Raleigh, NC      |   | 8,750,000                               |   | 1,623,146  |   | 14,135,553                                                              |   | 412,083 |   |   | 1,707,038 |   | 14,463,744 |   |   | 16,170,782 |   | 1995 |   | Jun., 1995 |   |
|                                  |   |                                    |   |       |   |                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Office    Building    Nashville, TN   |   | None                                    |   | 1,797,000  |   | 6,588,451                                                               |   | 2,518,474 |   |   | 1,855,338 |   | 9,048,587 |   |   | 10,903,925 |   | 1982 |   | Oct., 1995 |   |
|                                  |   |                                    |   |       |   |                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Retail Shopping CenterOcean City, MD  |   | 7,025,473                               |   | 1,517,099  |   | 8,495,039                                                               |   | 5,316,698 |   |   | 1,517,099 |   | 13,811,737 |   |   | 15,328,836 |   | 1986 |   | Nov., 2002 |   |
|                                  |   |                                    |   |       |   |                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Hotel    Portland, OR                 |   | —                                  |   | 1,500,000  |   | 6,508,729                                                               |   | 815,056 |   |   | 1,500,000 |   | 7,323,785 |   |   | 8,823,785 |   | 1989 |   | Dec., 2003 |   |
|                                  |   |                                    |   |       |   |                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Office Building    Beaverton, OR      |   | None                                    |   | 816,415    |   | 9,897,307                                                               |   | 1,332,852 |   |   | 845,887 |   | 11,200,687 |   |   | 12,046,574 |   | 1995 |   | Dec., 1996 |   |
|                                  |   |                                    |   |       |   |                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Industrial Building    Aurora, CO     |   | None                                    |   | 1,338,175  |   | 7,202,411                                                               |   | 2,283,033 |   |   | 1,415,159 |   | 9,408,460 |   |   | 10,823,619 |   | 1997 |   | Sep., 1997 |   |
|                                  |   |                                    |   |       |   |                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Office Complex    Brentwood, TN       |   | None                                    |   | 2,425,000  |   | 7,063,755                                                               |   | 2,844,396 |   |   | 2,463,600 |   | 9,869,551 |   |   | 12,333,151 |   | 1987 |   | Oct., 1997 |   |
|                                  |   |                                    |   |       |   |                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Retail Shopping Center    Hampton, VA |   | 8,671,134                               |   | 2,339,100  |   | 12,767,956                                                              |   | 2,928,278 |   |   | 4,839,418 |   | 13,195,916 |   |   | 18,035,334 |   | 1998 |   | May, 2001 |   |
|                                  |   |                                         |   |            |   |                                                                         |   |  |   |   |  |   |  |   |   |  |   |   |   |   |   |
|                                  |   | 33,195,607                              |   | 28,221,769 |   | 121,085,663                                                             |   | 34,459,716 |   |   | 34,088,393 |   | 149,678,755 |   |   | 183,767,148 |   |   |   |   |   |
|                                  |   |                                         |   |            |   |                                                                         |   |  |   |   |  |   |  |   |   |  |   |   |   |   |   |

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

F-24

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

F-25

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**POWER OF ATTORNEY**

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

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

     

 

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

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**POWER OF ATTORNEY**

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

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

     

 

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

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**POWER OF ATTORNEY**

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

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

     

 

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

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**POWER OF ATTORNEY**

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

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

     

 

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

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Back to Contents

**POWER OF ATTORNEY**

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

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

     

 

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

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**POWER OF ATTORNEY**

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

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

     

 

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

----