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

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

                                    FORM 10-K

(MARK ONE)

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

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2004

                                       OR

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


COMMISSION FILE NUMBER 33-86780

                          PRUCO LIFE INSURANCE COMPANY

                                  IN RESPECT OF

               PRUCO LIFE VARIABLE CONTRACT REAL PROPERTY ACCOUNT
--------------------------------------------------------------------------------
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)


                 ARIZONA                              22-1944557
--------------------------------------     -------------------------------------
    (STATE OR OTHER JURISDICTION OF          (IRS EMPLOYER IDENTIFICATION NO.)
    INCORPORATION OR ORGANIZATION)



              213 WASHINGTON STREET, NEWARK, NEW JERSEY 07102-2992
             -------------------------------------------------------
               (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

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

INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS REQUIRED
TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING
THE  PRECEDING 12 MONTHS (OR FOR SUCH  SHORTER  PERIOD THAT THE  REGISTRANT  WAS
REQUIRED  TO FILE  SUCH  REPORTS),  AND  (2) HAS  BEEN  SUBJECT  TO SUCH  FILING
REQUIREMENTS FOR THE PAST 75 DAYS. YES [X] NO [_]

AMENDMENT ______________________________________________________________________

INDICATE BY CHECK MARK  WHETHER THE  REGISTRANT  IS AN  ACCELERATED  FILER   (AS
DEFINED IN RULE 12B-2 OF THE EXCHANGEACT).                      YES  |_| NO  |X|

END OF AMENDMENT _______________________________________________________________

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

<PAGE>



                          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

   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           13

   8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                          14

   9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
       AND FINANCIAL DISCLOSURE                                             14

   9A. CONTROLS AND PROCEDURES                                              14

   9B. OTHER INFORMATION                                                    14

PART III

   10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT                   15

   11. EXECUTIVE COMPENSATION                                               16

   12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
       MANAGEMENT                                                           16

   13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                       16

   14. PRINCIPAL ACCOUNTING FEES AND SERVICES                               16

PART IV

   15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES                              17

       EXHIBIT INDEX                                                        17

       SIGNATURES                                                           19


                                       2
<PAGE>

FORWARD-LOOKING STATEMENT DISCLOSURE


Certain of the statements included in this Annual Report on Form 10-K, including
but not  limited  to  those  in the  Management's  Discussion  and  Analysis  of
Financial  Condition  and  Results  of  Operations,  constitute  forward-looking
statements within the meaning of the U.S. Private  Securities  Litigation Reform
Act of 1995.  Words such as  "expects",  believes",  "anticipates",  "includes",
"plans", "assumes",  "estimates",  "projects",  "intends", or variations of such
words  are  generally  part  of  forward-looking   statements.   Forward-looking
statements  are made based on  management's  current  expectations  and  beliefs
concerning  future  developments  and their  potential  effects  upon Pruco Life
Insurance  Company  ("the  Company") or the  Prudential  Variable  Contract Real
Property Account (the "Real Property Account").  There can be no assurances that
future  developments  affecting the Company or the Real Property Account will be
those  anticipated by  management.  These  forward-looking  statements are not a
guarantee of future performance and involve risks and  uncertainties,  and there
are  certain  important  factors  that  could  cause  actual  results to differ,
possibly   materially,   from  expectations  or  estimates   reflected  in  such
forward-looking  statements,  including  without  limitation:  general economic,
market and political conditions, including the performance of financial markets,
interest rate  fluctuations  and the continuing  negative  impact of the current
economic environment;  various domestic or internationally military or terrorist
activities  or  conflicts,  economic  conditions  in local  markets in which the
properties  in  the  Real  Property  Account  are  located;  volatility  in  the
securities  markets;  reestimates of our reserves for future policy benefits and
claims, changes in our assumptions related to deferred policy acquisition costs;
our exposure to contingent  liabilities;  catastrophe losses;  investment losses
and defaults; changes in our claims-paying or credit ratings; competition in our
product lines and for personnel; fluctuations in foreign currency exchange rates
and foreign  securities  markets;  risks to our  international  operations;  the
impact of  changing  regulation  or  accounting  practices;  adverse  litigation
results and changes in tax law.  The  Company  does not intend,  and is under no
obligation to update and particular  forward-looking  statement included in this
document.


                                       3
<PAGE>

                                     PART I

ITEM 1.   BUSINESS


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

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

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

      Office  Properties--The  Partnership  owns office  properties in Lisle and
      Oakbrook Terrace, Illinois;  Brentwood,  Tennessee; and Beaverton, Oregon.
      Total  square  footage  owned is  approximately  494,284  of which  68% or
      333,951 square feet are leased between 1 and 10 years.

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

      Retail Property--The  Partnership owns retail centers in Roswell, Georgia;
      Kansas  City,  Kansas and  Missouri;  Ocean City,  Maryland;  and Hampton,
      Virginia.  Total square footage owned is approximately  1,163,464 of which
      84% or 979,251 square feet are leased between 1 and 30 years.

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

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

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

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


                                       4
<PAGE>

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

REAL ESTATE MARKET OVERVIEW

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

OFFICE MARKET

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

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

APARTMENT MARKET

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

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

RETAIL MARKET

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

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

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


                                       5
<PAGE>

INDUSTRIAL MARKET

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

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

HOTEL MARKET

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

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

ITEM 2.   PROPERTIES

Not Applicable.

ITEM 3.   LEGAL PROCEEDINGS

None.

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS

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


                                       6
<PAGE>

                                     PART II

ITEM 5.   MARKET FOR THE REGISTRANT'S INTERESTS, RELATED SECURITY HOLDER MATTERS
          AND ISSUER PURCHASERS OF EQUITY SECURITIES


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

As of December 31, 2004,  there were  approximately  24,664  contract  owners of
record investing in the Real Property Account.

ITEM 6.   SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>

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


FINANCIAL POSITION:
<TABLE>
<CAPTION>

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

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

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

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

(A) LIQUIDITY AND CAPITAL RESOURCES

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

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

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


                                       7
<PAGE>

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

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

(B) RESULTS OF OPERATIONS


DECEMBER 31, 2004 VS. DECEMBER 31, 2003

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

                                                                                   TWELVE MONTHS ENDED DECEMBER 31,
                                                                                     2004                    2003
                                                                                   -----------             -----------
NET INVESTMENT INCOME:
<S>                                                                                <C>                     <C>
Office properties......................................................            $ 2,102,465             $ 2,039,750
Apartment complexes....................................................              2,191,107               3,361,638
Retail properties......................................................              4,728,171               6,638,838
Industrial properties..................................................                933,253                 993,962
Hotel property.........................................................                640,660                      --
Other (including interest income,
investment mgt fee, etc.)..............................................             (2,796,050)             (2,420,779)
                                                                                   -----------             -----------
TOTAL NET INVESTMENT INCOME............................................            $ 7,799,606             $10,613,409
                                                                                   ===========             ===========

NET REALIZED GAIN (LOSS) ON REAL ESTATE INVESTMENTS:

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

NET UNREALIZED GAIN (LOSS) ON REAL ESTATE INVESTMENTS:

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


                                       8
<PAGE>

NET INVESTMENT INCOME OVERVIEW

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

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

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

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

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

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

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

VALUATION OVERVIEW

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

OFFICE PORTFOLIO
<TABLE>
<CAPTION>

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


                                       9
<PAGE>

NET INVESTMENT INCOME

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

UNREALIZED GAIN/LOSS

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

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

APARTMENT COMPLEXES
<TABLE>
<CAPTION>

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

NET INVESTMENT INCOME

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

UNREALIZED GAIN/LOSS

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


                                       10
<PAGE>

RETAIL PROPERTIES
<TABLE>
<CAPTION>

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

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

NET INVESTMENT INCOME

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

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

UNREALIZED GAIN/LOSS

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

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


                                       11
<PAGE>

INDUSTRIAL PROPERTIES
<TABLE>
<CAPTION>

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

NET INVESTMENT INCOME

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

UNREALIZED GAIN/LOSS

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

REALIZED GAIN

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

HOTEL PROPERTY
<TABLE>
<CAPTION>

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

* Hotel purchased in December 2003

NET INVESTMENT INCOME

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

UNREALIZED GAIN/LOSS

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

OTHER

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


                                       12
<PAGE>

(C) INFLATION

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

CRITICAL ACCOUNTING POLICIES

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

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

VALUATION OF INVESTMENTS

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

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

Unconsolidated real estate  partnerships are valued at the Partnership's  equity
in net  assets as  reflected  in the  partnership's  financial  statements  with
properties valued as described above.

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

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

As described  above,  the estimated  market value of real estate and real estate
related assets is determined through an appraisal process, except for other real
estate investments, which are determined as stated above. These estimated market
values  may  vary  significantly  from the  prices  at  which  the  real  estate
investments  would sell since market prices of real estate  investments can only
be determined by  negotiation  between a willing buyer and seller.  Although the
estimated  market values represent  subjective  estimates,  management  believes
these estimated market values are reasonable approximations of market prices and
the  aggregate  value of  investments  in real estate is fairly  presented as of
December 31, 2004 and December 31, 2003.

ITEM 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


Interest Rate Risk. The  Partnership's  exposure to market rate risk for changes
in interest rates relates to about 32.85% of its investment portfolio consisting
primarily  of  short-term  fixed rate  commercial  paper and fixed and  variable
interest  rate  debt.  The  Partnership   does  not  use  derivative   financial
instruments. By policy, the Partnership places its investments with high quality
debt security  issuers,  limits the amount of credit exposure to any one issuer,
limits  duration by  restricting  the term,  and holds  investments  to maturity
except under rare circumstances.


                                       13
<PAGE>

The table below presents the amounts and related weighted  interest rates of the
Partnership's cash equivalents and short-term investments at December 31, 2004:

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

The table below discloses the  Partnership's  fixed rate debt as of December 31,
2004. All of the Partnership's  long-term debt bears interest at fixed rates and
therefore the fair value of these  instruments  is affected by changes in market
interest rates. The following table presents principal cash flows (in thousands)
based  upon   maturity   dates  of  the  debt   obligations   and  the   related
weighted-average  interest  rates by expected  maturity dates for the fixed rate
debt.
<TABLE>
<CAPTION>

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

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

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

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

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

None.

ITEM 9A: CONTROLS AND PROCEDURES

In order to ensure that the information we must disclose in our filings with the
Securities  and Exchange  Commission  is recorded,  processed,  summarized,  and
reported  on a timely  basis,  the  Company's  management,  including  our Chief
Executive Officer and Chief Financial  Officer,  have reviewed and evaluated the
effectiveness of our disclosure controls and procedures,  as defined in Exchange
Act Rules  13a-15(e)  and  15d-15(e),  as of December  31,  2004.  Based on such
evaluation,  the Chief  Executive  Officer  and  Chief  Financial  Officer  have
concluded that, as of December 31, 2004, our disclosure  controls and procedures
were effective in timely  alerting them to material  information  relating to us
required to be included in our periodic SEC filings. There has been no change in
our internal control over financial reporting during the year ended December 31,
2004,  that has  materially  affected,  or is  reasonably  likely to  materially
affect, our internal control over financial reporting.

ITEM 9B: OTHER INFORMATION

None.


                                       14
<PAGE>

                                    PART III
<TABLE>
<CAPTION>

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

NAME                                           POSITION                                                           AGE
-----                                          -------                                                           ----
<S>                                           <C>                                                                <C>
James J. Avery, Jr.                            Vice Chairman and Director                                         53
C. Edward Chaplin                              Treasurer and Director                                             48
Helen M. Galt                                  Director                                                           57
Bernard J. Jacob                               President and Director                                             49
Ronald P. Joelson                              Director                                                           46
Andrew J. Mako                                 Director                                                           48
David R. Odenath, Jr.                          Director                                                           48
John Chieffo                                   Vice President and Chief Accounting Officer                        41
Clifford E. Kirsch                             Chief Legal Officer and Secretary                                  45
Melody C. McDaid                               Senior Vice President                                              55
Esther H. Milnes                               Senior Vice President                                              54
James M. O'Connor                              Senior Vice President and Actuary                                  49
Shirley H. Shao                                Senior Vice President and Chief Actuary                            50
</TABLE>

JAMES  J.  AVERY,  JR.,  VICE  CHAIRMAN  AND   DIRECTOR--President,   Prudential
Individual Life Insurance since 1998.

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

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

BERNARD J. JACOB, PRESIDENT AND DIRECTOR--Vice President,  Prudential Individual
Life and Annuities,  since 2004; 2002 to 2004:  Vice President,  Group Executive
Strategy and Business  Development;  prior to 2001:  Executive  Vice  President,
Proact Technologies Corporation.

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

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

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

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

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

MELODY C. MCDAID,  SENIOR VICE  PRESIDENT--Vice  President  and Site  Executive,
Prudential Financial Services Customer Service Office since 1995.

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

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

SHIRLEY H. SHAO,  SENIOR VICE  PRESIDENT AND CHIEF  ACTUARY--Vice  President and
Actuary, Prudential since 1996.

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


                                       15
<PAGE>

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 waiver granted to any of our directors or executive  officers
are available free of charge on our website at www.investor.prudential.com.

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

ITEM 11. EXECUTIVE COMPENSATION

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

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Not applicable.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

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

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.

The Audit  Committee  of the Board of  Directors  of  Prudential  Financial  has
appointed  PricewaterhouseCoopers  LLP  as  the  independent  registered  public
accounting  firm  of  Prudential  Financial  and  certain  of its  domestic  and
international  subsidiaries,  including the Registrant.  The Audit Committee has
established a policy  requiring its  pre-approval  of all audit and  permissible
non-audit services provided by the independent auditor. The specific information
called  for by this item is hereby  incorporated  by  reference  to the  section
entitled "Item  2--Ratification  of the Appointment of Independent  Auditors" in
Prudential  Financial's  definitive  proxy  statement for the Annual  Meeting of
Shareholders  to be held on June 7, 2005,  to be filed with the  Securities  and
Exchange  Commission  pursuant to Regulation  14A within 120 days after the year
ended December 31, 2004.


                                       16
<PAGE>

                                     PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES


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

       1.     Financial Statements

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

       2.     Financial Statement Schedules

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

              Schedule III. Real Estate Owned: Properties

              Schedule III. Real Estate Owned: Interest in Properties

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

       3.     Documents Incorporated by Reference

              See the following list of exhibits.

       4.     Exhibits

              See the following list of exhibits.

(b)    None.

(c)    The following is a list of Exhibits to the Registrant's  Annual Report on
       Form 10-K for the fiscal year ended  December  31, 2004.  The  Registrant
       will furnish a copy of any Exhibit listed below to any security holder of
       the  Registrant  who  requests  it upon  payment of a fee of 15 cents per
       page.  All  Exhibits are either  contained in this Annual  Report on Form
       10-K or are incorporated by reference as indicated below.

       3.1    The Articles of Incorporation of Pruco Life Insurance  Company (as
              amended through October 19, 1993) are incorporated by reference to
              the  Initial  Registration  Statement  on Form S-6 of  Pruco  Life
              Variable  Appreciable Account as filed July 2, 1996,  Registration
              No. 333-07451.

       3.2    By-Laws of Pruco Life Insurance Company (as amended through May 6,
              1997) are incorporated by reference to Form 10-Q as filed by Pruco
              Life Insurance Company on August 15, 1997.

       3.3    Resolution of the Board of Directors  establishing  the Pruco Life
              Variable Contract Real Property Account,  filed as Exhibit (3C) to
              Form S-1, Registration  Statement No. 33-8698, filed September 12,
              1986, and incorporated herein by reference.

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

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

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

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

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

       9.     None.


                                       17
<PAGE>

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

       10.2   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.    Not applicable.

       24.    Powers of attorney are filed herewith.

       31.1   Section 302 Certification of the Chief Executive Officer.

       31.2   Section 302 Certification of the Chief Financial Officer.

       32.1   Section 906 Certification of the Chief Executive Officer.

       32.2   Section 906 Certification of the Chief Financial Officer.


                                       18
<PAGE>

                                   SIGNATURES

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


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



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


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

<TABLE>
<CAPTION>

SIGNATURE                                                  TITLE                                         DATE
---------                                                  -----                                         ----
<S>                                        <C>                                                    <C>
/s/ Bernard J. Jacob                        President and Director                                  March 31, 2005
--------------------------                  (Principal Executive Officer)
Bernard J. Jacob

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


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

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

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

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

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

*                                           Director                                                March 31, 2005
--------------------------
David R. Odenath, Jr.
</TABLE>



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


                                       19


<PAGE>

               PRUCO LIFE VARIABLE CONTRACT REAL PROPERTY ACCOUNT
                                  (REGISTRANT)

                                      INDEX

<TABLE>
<CAPTION>


                                                                                                                 Page
<S>                                                                                                            <C>
A.   PRUCO LIFE VARIABLE CONTRACT REAL PROPERTY ACCOUNT

     Financial Statements:

         Report of Independent Registered Public Accounting Firm.............................................    F-2

         Statements of Net Assets -- December 31, 2004 and 2003..............................................    F-3

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

         Statements of Changes in Net Assets -- Years Ended December 31, 2004, 2003, 2002....................    F-3

         Notes to Financial Statements ......................................................................    F-4

B.   THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

     Financial Statements:

         Report of Independent Registered Public Accounting Firm.............................................    F-9

         Report of Independent Registered Public Accounting Firm on Financial
           Statement Schedules...............................................................................   F-10

         Statements of Assets and Liabilities -- December 31, 2004 and 2003..................................   F-11

         Statements of Operations -- Years Ended December 31, 2004, 2003 and 2002 ...........................   F-12

         Statements of Changes in Net Assets -- Years Ended December 31, 2004,
           2003 and 2002 ....................................................................................   F-13

         Statements of Cash Flows -- Years Ended December 31, 2004, 2003 and 2002 ...........................   F-14

         Schedule of Investments -- December 31, 2004 and 2003...............................................   F-15

         Notes to Financial Statements.......................................................................   F-19

     Financial Statement Schedules:

         For the period ended December 31, 2004

         Schedule III -- Real Estate Owned: Properties ......................................................   F-26

         Schedule III -- Real Estate Owned: Interest in Properties ..........................................   F-27
</TABLE>

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


                                      F-1
<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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

In our  opinion,  the  accompanying  statements  of net assets  and the  related
statements  of  operations  and  changes in net assets  present  fairly,  in all
material  respects,  the financial position of Pruco Life Variable Contract Real
Property  Account  at  December  31,  2004  and  2003,  and the  results  of its
operations  and the changes in its net assets for each of the three years in the
period  ended  December 31,  2004,  in  conformity  with  accounting  principles
generally accepted in the United States of America.  These financial  statements
are the  responsibility  of the management of the Pruco Life Insurance  Company.
Our responsibility is to express an opinion on these financial  statements based
on our  audits.  We  conducted  our  audits  of these  financial  statements  in
accordance with auditing  standards of the Public Company  Accounting  Oversight
Board  (United  States).  Those  standards  require that we plan and perform the
audit to obtain reasonable  assurance about whether the financial statements are
free of material  misstatement.  An audit includes  examining,  on a test basis,
evidence  supporting the amounts and  disclosures  in the financial  statements,
assessing the  accounting  principles  used and  significant  estimates  made by
management,  and evaluating the overall  financial  statement  presentation.  We
believe that our audits provide a reasonable basis for our opinion.


PricewaterhouseCoopers LLP
New York, New York
March 18, 2005


                                      F-2
<PAGE>

                             FINANCIAL STATEMENTS OF
               PRUCO LIFE VARIABLE CONTRACT REAL PROPERTY ACCOUNT

<TABLE>
<CAPTION>

STATEMENT OF NET ASSETS
December 31, 2004 and 2003
                                                                           2004             2003
                                                                         ---------        ---------
<S>                                                                   <C>               <C>               <C>
ASSETS
   Investment in The Prudential Variable Contract
      Real Property Partnership...............................        $102,950,783      $100,148,190
                                                                      ------------      ------------
   Net Assets.................................................         102,950,783       100,148,190
                                                                      ============      ============
NET ASSETS, representing:
   Equity of contract owners..................................        $ 74,998,880      $ 74,406,535
   Equity of Pruco Life Insurance Company.....................          27,951,903        25,741,655
                                                                      ------------      ------------
      ........................................................        $102,950,783      $100,148,190
                                                                      ============      ============
Units outstanding.............................................          44,185,519        45,311,604
                                                                      ============      ============
Portfolio shares held.........................................           3,936,848         4,061,676
Portfolio net asset value per share...........................        $      26.15      $      24.66

STATEMENT OF OPERATIONS
For the periods ended December 31, 2004, 2003 and 2002
                                                                           2004             2003              2002
                                                                         ---------        ---------         ---------
INVESTMENT INCOME
Net investment income from Partnership operations.............        $  4,300,288      $  5,820,059      $  5,952,587
                                                                      ------------      ------------      ------------
EXPENSES
Charges to contract owners for assuming mortality risk and
       expense risk and for administration....................             459,525           457,425           474,986
                                                                      ------------      ------------      ------------
NET INVESTMENT INCOME.........................................           3,840,763         5,362,634         5,477,601
                                                                      ------------      ------------      ------------
NET REALIZED AND UNREALIZED GAIN
   (LOSS) ON INVESTMENTS
Net change in unrealized gain (loss) on investments from
   Partnership ...............................................             854,775        (3,803,218)       (4,882,490)
Realized gain (loss) on sale of investments from Partnership..             953,830           255,573           215,623
                                                                      ------------      ------------      ------------
NET GAIN (LOSS) ON INVESTMENTS................................           1,808,605        (3,547,645)       (4,666,867)
                                                                      ------------      ------------      ------------
NET INCREASE IN NET ASSETS
   RESULTING FROM OPERATIONS..................................        $  5,649,368      $  1,814,989      $    810,734
                                                                      ============      ============      ============

STATEMENT OF CHANGES IN NET ASSETS
For the periods ended December 31, 2004, 2003 and 2002
                                                                           2004             2003              2002
                                                                         ---------        ---------         ---------
OPERATIONS
Net investment income.........................................        $  3,840,763      $  5,362,634      $  5,477,601
Net change in unrealized gain (loss) on investments
   in Partnership ............................................             854,775        (3,803,218)       (4,882,490)
Net realized gain (loss) on sale of investments in
   Partnership ...............................................             953,830           255,573           215,623
                                                                      ------------      ------------      ------------
NET INCREASE IN NET ASSETS
   RESULTING FROM OPERATIONS..................................           5,649,368         1,814,989           810,734
                                                                      ------------      ------------      ------------
CAPITAL TRANSACTIONS
Net withdrawals by contract owners............................          (3,348,681)       (2,684,776)       (2,895,970)
Net contributions (withdrawals) by Pruco Life Insurance
   Company ...................................................             501,906           (30,554)       (5,423,612)
                                                                      ------------      ------------      ------------
NET DECREASE IN NET ASSETS
   RESULTING FROM CAPITAL TRANSACTIONS........................          (2,846,775)       (2,715,330)       (8,319,582)
                                                                      ------------      ------------      ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS.......................           2,802,593          (900,341)       (7,508,848)
NET ASSETS
   Beginning of period........................................         100,148,190       101,048,531       108,557,379
                                                                      ------------      ------------      ------------
   End of period..............................................        $102,950,783      $100,148,190      $101,048,531
                                                                      ============      ============      ============
</TABLE>


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


                                      F-3
<PAGE>

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

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, 2004 and 2003 the
Account's interest in the Partnership was 55.1% or 3,936,848 shares and 55.1% or
4,061,676 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.


                                      F-4
<PAGE>

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.

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, 2004, 2003 and 2002 were as follows:

<TABLE>
<CAPTION>

2004:
-----
                                              VAL              VLI             SPVA            SPVL           TOTAL
                                          -----------       ---------        --------       ---------      -----------
<S>                                       <C>               <C>              <C>             <C>           <C>
Contract Owner Net Payments:              $ 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)
                                          ===========       =========        ========       =========      ===========

2002:
-----
                                              VAL              VLI             SPVA            SPVL           TOTAL
                                             --------         -------          ------         -------          -------
Contract Owner Net Payments:              $ 4,401,046       $ 330,648        $      0       $     310      $ 4,732,004
Policy Loans:                              (1,591,647)         (5,015)              0         (56,057)      (1,652,719)
Policy Loan Repayments and Interest:        2,046,010          58,158               0         125,801        2,229,969
Surrenders, Withdrawals, and
  Death Benefits:                          (4,311,328)       (325,555)        (64,882)       (322,558)      (5,024,323)
Net Transfers To Other Subaccounts
  or Fixed Rate Option:                       (41,683)         (8,788)         27,098         (67,553)         (90,926)
Administrative and Other Charges:          (2,879,240)       (183,223)              0         (27,512)      (3,089,975)
                                          -----------       ---------        --------       ---------      -----------
NET WITHDRAWALS BY CONTRACT OWNERS        $(2,376,842)      $(133,775)       $(37,784)      $(347,569)     $(2,895,970)
                                          ===========       =========        ========       =========      ===========
</TABLE>


                                      F-5
<PAGE>

NOTE 5: UNIT ACTIVITY


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

2004:
-----
                                                                          VAL          VLI        SPVA        SPVL
                                                                       ----------    --------   --------    ---------
<S>                        <C>                                          <C>           <C>       <C>        <C>
Company Contributions:     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)

2002:
-----
                                                                          VAL          VLI        SPVA        SPVL
                                                                       ----------    --------   --------    ---------
Company Contributions:     1,898,876   Contract Owner Contributions:    2,978,887     181,776         81      76,633
Company Redemptions:      (4,334,318)  Contract Owner Redemptions:     (4,071,866)   (240,790)   (19,328)   (253,050)
</TABLE>

NOTE 6: PURCHASES AND SALES OF INVESTMENTS


The aggregate  costs of purchases and proceeds from sales of  investments in the
Partnership  for the  years  ended  December  31,  2004,  2003 and 2002  were as
follows:


                  DECEMBER 31, 2004     DECEMBER 31, 2003     DECEMBER 31, 2002
                  -----------------     -----------------     -----------------
PURCHASES:                     $0                  $0                     $0
SALES:                $(3,306,299)        $(3,172,755)           $(8,794,568)

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 reflect contract owner units only.

<TABLE>
<CAPTION>

                                   AT YEAR ENDED                                  FOR THE YEAR ENDED
                     ------------------------------------------   ---------------------------------------------------
                      UNITS        UNIT VALUE        NET ASSETS     INVESTMENT    EXPENSE RATIO **   TOTAL RETURN ***
                     (000'S)     LOWEST- HIGHEST       (000'S)    INCOME RATIO *   LOWEST-HIGHEST     LOWEST-HIGHEST
                     -------     ---------------     ----------   --------------  ----------------   ----------------
<S>                <C>       <C>                    <C>               <C>         <C>               <C>
December 31, 2004    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%
</TABLE>

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
12,134,074,   11,781,786,   11,689,343  and  14,124,785  units   representing  $
27,951,903,  $25,741,655,  $25,139,441  and  $30,205,210  of  net  assets  as of
December 31, 2004,  2003,  2002 and 2001,  respectively.  Charges for  mortality
risk,  expense  risk and  administrative  expenses  are  used by  Pruco  Life 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.


                                      F-6
<PAGE>

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

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

CHARGES AND EXPENSES

A.  MORTALITY RISK AND EXPENSE RISK CHARGES

Mortality risk and expense risk charges are determined  daily using an effective
annual  rate  of  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.

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
<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Partners of The Prudential
Variable Contract Real Property Partnership

In  our  opinion,  the  accompanying   consolidated  statements  of  assets  and
liabilities, including the consolidated schedule of investments, and the related
consolidated  statements  of  operations,  of  changes in net assets and of cash
flows present fairly, in all material  respects,  the financial  position of The
Prudential Variable Contract Real Property  Partnership at December 31, 2004 and
2003, and the results of its operations and its cash flows for each of the three
years in the period  ended  December  31,  2004 in  conformity  with  accounting
principles  generally accepted in the United States of America.  These financial
statements are the responsibility of the management of The Prudential  Insurance
Company  of  America.  Our  responsibility  is to  express  an  opinion on these
financial  statements  based on our  audits.  We  conducted  our audits of these
statements in accordance  with the  standards of the Public  Company  Accounting
Oversight  Board  (United  States).  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements,  assessing the accounting  principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.


PricewaterhouseCoopers LLP
New York, New York
March 16, 2005


                                      F-8
<PAGE>

           REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON
                          FINANCIAL STATEMENT SCHEDULES


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

Our audits of the consolidated  financial  statements  referred to in our report
dated March 16, 2005  appearing in this Annual  Report also included an audit of
the financial  statement schedules listed in Item 15(a)(2) of this Form 10-K. In
our opinion, these financial statement schedules present fairly, in all material
respects,  the information  set forth therein when read in conjunction  with the
related consolidated financial statements.


PricewaterhouseCoopers LLP
New York, New York
March 16, 2005


                                      F-9
<PAGE>

           THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

                CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>

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


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


                                      F-10
<PAGE>

           THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>

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


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


                                      F-11
<PAGE>

           THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

                CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>

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

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


                                      F-12
<PAGE>

           THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>

                                                                                    YEAR ENDED DECEMBER 31,
                                                                       -----------------------------------------------
                                                                           2004              2003             2002
                                                                       -----------       -----------       -----------
<S>                                                                    <C>               <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

Net increase in net assets from operations ...................         $11,080,000       $ 4,146,045       $ 2,346,380

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

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


                                      F-13
<PAGE>

           THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

                      CONSOLIDATED SCHEDULES OF INVESTMENTS
<TABLE>
<CAPTION>


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

OFFICES
750 WARRENVILLE           WO         LISLE, IL            103,193  $23,173,036  $10,098,838  $23,023,835   $12,110,725
Oakbrook Terrace          WO       Oakbrook, IL           123,734   14,833,796    9,698,734   14,619,120    10,097,932
Summit @ Cornell Oaks     WO      Beaverton , OR           72,109   11,934,209    9,644,005   11,890,209    10,000,005
Westpark                  WO       Nashville, TN           97,199   10,708,970   11,151,327   10,423,727     9,239,260
Financial Plaza           WO       Brentwood, TN           98,049   12,333,151   10,966,233    9,837,482     6,700,041
-----------------------------------------------------------------------------------------------------------------------
                             Offices % as of 12/31/04          28%  72,983,162   51,559,137   69,794,373    48,147,963
APARTMENTS
Brookwood Apartments      WO        Atlanta, GA         240 Units   17,344,994   16,616,914   15,781,263    17,000,000
Dunhill Trace Apartments  WO        Raleigh, NC         250 Units   16,083,715   18,000,660   16,010,326    17,665,000
Riverbend Apartments      CJV    Jacksonville, FL       458 Units   20,015,959   22,600,000   19,946,920    22,400,000
SIMA Apartments           CJV    Gresham/Salem, OR      493 Units   12,004,323   13,900,000   19,281,738    17,975,000
-----------------------------------------------------------------------------------------------------------------------
                            Apartments % as of 12/31/04        38%  65,448,991   71,117,574   71,020,247    75,040,000
RETAIL
King's Market             WO       Rosewell, GA           314,358   33,864,392   21,765,286   33,102,401    23,539,665
Hampton Towne Center      WO        Hampton, VA           174,540   18,031,495   21,000,000   18,013,068    20,000,000
White Marlin Mall         CJV     Ocean City, MD          186,016   15,229,878   19,300,000   13,198,649    15,900,000
Kansas City Portfolio     EJV   Kansas City, KS;MO        487,660   11,286,726   12,126,466   10,609,273     8,721,319
-----------------------------------------------------------------------------------------------------------------------

                              RETAIL % AS OF 12/31/04          40%  78,412,491   74,191,752   74,923,391    68,160,984
INDUSTRIAL
Smith Road                WO        Aurora, CO            277,930   10,692,625   10,204,072   10,806,403    10,508,509
Walsh Higgins             WO    Salt Lake City, UT        182,500           --           --           --            --
-----------------------------------------------------------------------------------------------------------------------
                            Industrial % as of 12/31/04         5%  10,692,625   10,204,072   10,806,403    10,508,509
HOTEL
Portland Crown Plaza      CJV      Portland, OR         161 Rooms    8,334,342    8,300,000    8,008,729     8,008,729
-----------------------------------------------------------------------------------------------------------------------
                              Hotel % as of 12/31/04            4%   8,334,342    8,300,000    8,008,729     8,008,729
LAND
Gateway Village           EJV    Blue Springs, MO                          100          100           --            --
-----------------------------------------------------------------------------------------------------------------------
                               Land % as of 12/31/04            0%         100          100           --            --

MORTGAGE AND OTHER LOANS RECEIVABLE
Westminster West         Eloan    Westminster, MD                    1,332,060    1,332,060           --            --
-----------------------------------------------------------------------------------------------------------------------
      Mortgage and Other Loans Receivable% as of 12/31/04       1%   1,332,060    1,332,060           --            --
OTHER REAL ESTATE INVESTMENTS
Englar Lowes Loan         NR      Westminster, MD              --           --                   500,000       500,000
-----------------------------------------------------------------------------------------------------------------------
      Other Real Estate Investments% as of 12/31/04             0%          --           --      500,000       500,000

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

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


                                      F-14
<PAGE>

           THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

                      CONSOLIDATED SCHEDULE OF INVESTMENTS
<TABLE>
<CAPTION>

                                                                                    DECEMBER 31, 2004         DECEMBER 31, 2003
                                                                                -----------------------  ---------------------------
                                                                                              ESTIMATED                  ESTIMATED
                                                                  FACE AMOUNT      COST      MARKET VALUE     COST      MARKET VALUE
                                                                  -----------  -----------   ------------  -----------  ------------
<S>                                                               <C>         <C>           <C>           <C>          <C>
CASH AND CASH EQUIVALENTS -- PERCENTAGE OF NET ASSETS.....                                           9.4%                  10.4%
Federal National Mortgage Assoc., 1.06%, February 4, 2004.         $5,974,000  $        --   $        --   $ 5,967,907  $ 5,967,907
Federal Home Loan Mortgage Corp., 0.88%, January 2, 2004..         12,331,000           --            --    12,330,520   12,330,520
Federal Home Loan Bank, 6.450%, January 3, 2005...........         19,457,000   19,455,135    19,455,135            --           --
                                                                               -----------   -----------   -----------  -----------
TOTAL CASH EQUIVALENTS....................................                      19,455,135    19,455,135    18,298,427   18,298,427
   CASH...................................................                      (1,897,953)   (1,897,953)      603,387      603,387
                                                                               -----------   -----------   -----------  -----------

   TOTAL CASH AND CASH EQUIVALENTS........................                     $17,557,182   $17,557,182   $18,901,814  $18,901,814
                                                                               ===========   ===========   ===========  ===========
</TABLE>


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


                                      F-15
<PAGE>

                NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF

           THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

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

NOTE 1:   ORGANIZATION

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

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

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

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

Prudential  Real Estate  Investors  ("PREI") is the real estate advisory unit of
Prudential  Investment  Management,  Inc. ("PIM"),  which is an indirectly owned
subsidiary of  Prudential  Financial  Inc.  ("PFI").  PREI  provides  investment
advisory  services to the  Partnership's  partners  pursuant to the terms of the
Advisory Agreement as described in Note 9.

NOTE 2:   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


       A:     BASIS OF  PRESENTATION--The  accompanying  consolidated  financial
              statements of the  Partnership  have been  presented on the market
              value basis of accounting in conformity with accounting principles
              generally  accepted  in the United  States of  America.  It is the
              Partnership's policy to consolidate those real estate partnerships
              in  which  it  has  a  controlling   interest.   All   significant
              intercompany  balances and  transactions  have been  eliminated in
              consolidation.

       B:     MANAGEMENT'S  USE OF  ESTIMATES IN THE  FINANCIAL  STATEMENTS--The
              preparation of financial  statements in conformity with accounting
              principles  generally  accepted  in the  United  States of America
              requires  management to make estimates and assumptions that affect
              the amounts reported in the financial  statements and accompanying
              notes. Actual results could differ from those estimates.

       C:     REAL  ESTATE  INVESTMENTS--Real  estate  investments  are shown at
              estimated  market  value  in  accordance  with  the  terms  of the
              Partnership's  contracts.  Properties owned are initially recorded
              at the purchase  price plus closing costs.  Development  costs and
              major  renovations  are  capitalized  as a component of cost,  and
              routine   maintenance  and  repairs  are  charged  to  expense  as
              incurred. Real estate costs include the cost of acquired property,
              including all the tangible and intangible assets.  Tangible assets
              include the value of all land, building and tenant improvements at
              the time of  acquisition.  Intangible  assets include the value of
              any above and


                                      F-16
<PAGE>

                NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF

           THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

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


              below market leases,  in-place leases, and tenant relationships at
              the time of  acquisition.  Market value  estimates  are based upon
              property  appraisal  reports  prepared by independent  real estate
              appraisers  (members of the  Appraisal  Institute or an equivalent
              organization)   within  a  reasonable  amount  of  time  following
              acquisition  of the  real  estate  and  no  less  frequently  than
              annually  thereafter.  The Chief Real Estate  Appraiser  of PIM is
              responsible  to  assure  that  the  valuation   process   provides
              independent  and  reasonable   property  market  value  estimates.
              American Appraisal  Associates (the "Appraisal  Management Firm"),
              an entity not  affiliated  with PIM, has been  appointed by PIM to
              assist  the  Chief  Real  Estate   Appraiser  in  maintaining  and
              monitoring  the  independence  and the  accuracy of the  appraisal
              process.  The market  value of real  estate  investments  does not
              reflect the  transaction  sale costs,  which may be incurred  upon
              disposition of the real estate investments.

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

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

       D:     OTHER  REAL  ESTATE  INVESTMENTS--Other  real  estate  investments
              include notes  receivable,  which are valued at the amount due and
              approximate market value.

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

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

       G:     OTHER  ASSETS--Cash of $212,989 and $216,883 was maintained by the
              wholly owned and consolidated  properties at December 31, 2004 and
              2003,  respectively,  for tenant security deposits and is included
              in Other  Assets on the  Consolidated  Statements  of  Assets  and
              Liabilities.  Other assets also includes tenant  receivable and is
              net of allowance for uncollectible accounts of $46,690 and $76,800
              at December 31, 2004 and 2003, respectively.

       H:     MORTGAGE LOANS  PAYABLE--Mortgage  loans payable are stated at the
              principal  amount  of the  obligation  outstanding.  At times  the
              Partnership  may assume debt in  connection  with the  purchase of
              real estate. For debt assumed, the Partnership allocates a portion
              of the purchase price to the below/above market debt and amortizes
              the premium/discount over the remaining life of the debt.

       I:     DEFERRED  FINANCING  COSTS--Included  in Other Assets are deferred
              financing costs amounting to $391,666 and $313,425,  which are net
              of  accumulated  amortization  of  $878,316  and  $713,990  as  of
              December  31,  2004 and  2003,  respectively,  and which are being
              amortized over the term of the related obligation.


                                      F-17
<PAGE>

                NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF

           THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

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


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

       K:     EQUITY IN INCOME OF REAL ESTATE PARTNERSHIP--Equity in income from
              real estate  partnership  operations  represents the Partnership's
              share of the current  year's  partnership  income as provided  for
              under the terms of the partnership agreements. As is the case with
              wholly-owned real estate, partnership net income is not reduced by
              depreciation or amortization expense. Frequency of distribution of
              income is  determined  by formal  agreements  or by the  executive
              committee of the partnership.

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

       M:     NEW  ACCOUNTING   PRONOUNCEMENTS--FASB   Interpretation   No.  46,
              "Consolidation  of  Variable  Interest  Entities",  ("FIN 46") was
              issued in January  2003. In December  2003,  FASB issued a revised
              interpretation  of FIN 46 ("FIN 46-R"),  which  supersedes FIN 46.
              FIN 46-R defers the effective  date for applying the provisions of
              FIN-46  for  those  companies   currently   accounting  for  their
              investments  in  accordance  with the AICPA  Audit and  Accounting
              Guide,  "Audits of Investment  Companies" (the "Audit Guide"). The
              effective  date is delayed while the AICPA  finalizes the proposed
              Statement of Position ("SOP") on the clarification of the scope of
              the Audit Guide. Following the issuance of the final SOP, the FASB
              will  consider  modifying  FIN 46-R to  provide an  exception  for
              companies that apply the Audit Guide.  The Partnership is awaiting
              the final  determination  from the FASB in order to  evaluate  the
              extent in which,  if any,  its equity  investments  may need to be
              consolidated as a result of this FIN 46-R.

NOTE 3: DISCLOSURE OF SUPPLEMENTAL CASH FLOW INFORMATION AND NON-CASH  INVESTING
        AND FINANCING ACTIVITY

Cash paid for interest during the years ended December 31, 2004,  2003, and 2002
was $2,595,651, $2,462,387, and $1,989,473, respectively.

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


                                      F-18
<PAGE>

                NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF

           THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

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


NOTE 4:   REAL ESTATE PARTNERSHIP

Real extate  partnership is valued at the Partnership's  equity in net assets as
relfected by the  partnership's  financial  statements with properties valued as
indicated in Note 2C above. The  partnership's  combined  financial  position at
December  31,  2004 and 2003,  and  results of  operations  for the years  ended
December 31, 2004, 2003, and 2002 are summarized as follows (in 000's):
<TABLE>
<CAPTION>

                                                                                 DECEMBER 31,
                                                                            2004              2003
                                                                           -------           -------
<S>                                                                        <C>               <C>               <C>
Partnership Assets and Liabilities
   Real estate at estimated market value......................             $34,200           $29,450
   Other assets...............................................               1,217             1,536
                                                                           -------           -------
   Total assets...............................................              35,417            30,986
                                                                           -------           -------
   Mortgage loans payable.....................................              18,564            18,834
   Other liabilities..........................................                 370               321
                                                                           -------           -------
   Total liabilities..........................................              18,934            19,155
                                                                           -------           -------
   Net Assets.................................................             $16,483           $11,831
                                                                           =======           =======
Partnership's Share of Net Assets.............................             $12,127           $ 8,721
                                                                           =======           =======

      YEAR ENDED DECEMBER 31,
                                                                            2004              2003              2002
                                                                           -------           -------           -------
Partnership Operations
   Rental revenue.............................................             $ 3,125           $ 3,114           $ 3,017
   Other revenue..............................................               1,710             1,360             1,153
                                                                           -------           -------           -------
   Total revenue..............................................               4,835             4,474             4,170
                                                                           -------           -------           -------
   Real estate expenses and taxes.............................               2,481             2,196             2,065
   Interest expense...........................................               1,500             1,555             1,652
                                                                           -------           -------           -------
   Total expenses.............................................               3,981             3,751             3,717
                                                                           -------           -------           -------
   Net Investment Income......................................             $   854           $   723           $   453
                                                                           =======           =======           =======
Partnership's equity in income of real estate partnerships....             $   629           $   561           $   276
                                                                           =======           =======           =======
</TABLE>

NOTE 5: MORTGAGE LOANS PAYABLE:

Debt includes mortgage loans payable as summarized below (in 000's):
<TABLE>
<CAPTION>

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

MORTGAGES ON EQUITY PARTNERSHIPS

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

TOTAL  MORTGAGE  LOANS PAYABLE                      $62,338      $53,820      $62,768            5.84%

</TABLE>

*    Represents the Partnership's  interest in the loan based upon the estimated
     percentage of net assets which would be distributed  to the  Partnership if
     the partnership were liquidated at December 31, 2004. It does not represent
     the Partnership's legal obligation.

**   The  Partnership's  weighted average interest rate at December 31, 2004 and
     2003 were 5.84% and 6.33%,  respectively.  The  weighted  average  interest
     rates were calculated using the Partnership's  annualized  interest expense
     for each loan  (derived  using the same  percentage  as that in (*)  above)
     divided by the Partnership's share of total debt.

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


                                      F-19
<PAGE>

                NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF

           THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

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


NOTE 5: MORTGAGE LOANS PAYABLE: (CONTINUED)

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

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

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

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

<TABLE>
<CAPTION>

                                                                     100% LOAN BALANCE     PARTNERSHIP'S SHARE
YEAR ENDING DECEMBER 31,                                                  (000'S)                (000'S)
------------------------                                             -----------------     -------------------
<S>                                                                      <C>                     <C>
   2005.......................................................           $   291                 $   214
   2006.......................................................               315                     232
   2007.......................................................            17,958                  13,211
                                                                         -------                 -------

   Total......................................................           $18,564                 $13,657
                                                                         =======                 =======
</TABLE>

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

NOTE 6: CONCENTRATION OF RISK ON REAL ESTATE INVESTMENTS

At December  31,  2004,  the  Partnership  had real estate  investments  located
throughout the United States. The diversification of the Partnership's  holdings
based on the  estimated  market  values  and  established  NCREIF  regions is as
follows:
<TABLE>
<CAPTION>

                                                                         ESTIMATED
                                                                       MARKET VALUE
   REGION                                                                 (000'S)               REGION %
   ------                                                              -------------           ----------
<S>                                                                     <C>                      <C>
   East North Central.........................................          $ 19,798                     9%
   Mideast....................................................            59,633                    28%
   Mountain...................................................            10,204                     5%
   Pacific....................................................            31,844                    15%
   Southeast..................................................            83,100                    37%
   West North Central.........................................            12,126                     6%
                                                                        --------                  -----
   Total......................................................          $216,705                   100%
                                                                        ========                  =====
</TABLE>

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



                                      F-20
<PAGE>

                NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF

           THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

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


NOTE 7: PURCHASE COMMITMENT OBLIGATIONS

PURCHASE COMMITMENTS:


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

As of December 31, 2004, the Partnership had the following  outstanding purchase
commitments:


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

NOTE 8: LEASING ACTIVITY


The  Partnership   leases  space  to  tenants  under  various   operating  lease
agreements.  These  agreements,  without giving effect to renewal options,  have
expiration  dates ranging from 2005 to 2050. At December 31, 2004, the aggregate
future minimum base rental payments under  non-cancelable  operating  leases for
wholly owned and consolidated joint venture properties by year are as follows:


YEAR ENDING DECEMBER 31,                                                 (000'S)
-----------------------                                                  -------
   2005.......................................................           $11,978
   2006.......................................................            11,392
   2007.......................................................            10,464

   2008.......................................................             9,346

   2009.......................................................             6,672
   Thereafter.................................................            18,900
                                                                         -------
   Total......................................................           $68,752
                                                                         =======

NOTE 9: COMMITMENTS AND CONTINGENCIES


In  1986,  Prudential  committed  to fund  up to  $100  million  to  enable  the
Partnership to acquire real estate investments. Contributions to the Partnership
under this commitment have been utilized for property acquisitions,  and were to
be  returned  to  Prudential  on an ongoing  basis  from  contract  owners'  net
contributions  and other  available  cash. The amount of the commitment has been
reduced by $10 million for every $100 million in current value net assets of the
Partnership.  As of December 31,  2004,  the cost basis of  Prudential's  equity
interest  in the  Partnership  under  this  commitment  (held  through  the Real
Property  Accounts) was $44 million.  Prudential  terminated  this commitment on
December 31, 2002.

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


                                      F-21
<PAGE>

                NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF

           THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

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


NOTE 10: OTHER RELATED PARTY TRANSACTIONS

Pursuant to an investment  management  agreement,  PIM charges the Partnership a
daily investment  management fee at an annual rate of 1.25% of the average daily
gross asset valuation of the Partnership. For the years ended December 31, 2004,
2003 and 2002  management  fees incurred by the  Partnership  were $2.7 million,
$2.5 million, and $2.5 million for each of the three years, respectively.

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

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


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

NOTE 11: FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>

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

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

        Net Investment Income + Net Realized and Unrealized Gains/Losses
        ----------------------------------------------------------------
Beg. Net Asset Value + Time Weighted Contributions - Time Weighted Distributions

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

NOTE 12: SUBSEQUENT EVENTS

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


                                      F-22
<PAGE>

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

                                                  INITIAL COSTS TO THE
                                                       PARTNERSHIP          COSTS
                                                 --------------------    CAPITALIZED
                                   ENCUMBRANCES            BUILDING &   SUBSEQUENT TO
DESCRIPTION                         AT 12/31/04   LAND    IMPROVEMENTS   ACQUISITION
-----------                        ------------   ----    ------------  -------------
<S>                               <C>          <C>         <C>           <C>
PROPERTIES:
Office Building
Lisle, IL......................        None    1,780,000   15,743,881    5,649,155
Garden Apartments
Atlanta, GA....................   8,750,000    3,631,212   11,168,904    2,544,878(b)
Retail Shopping Center
Roswell, GA....................        None    9,454,622   21,513,677    2,896,093
Garden Apartments
Raleigh, NC....................   8,750,000    1,623,146   14,135,553      325,016
Office Building
Nashville, TN..................        None    1,797,000    6,588,451    2,323,519
Office Park
Oakbrook Terrace, IL...........        None    1,313,310   11,316,883    2,203,603

Office Building

Beaverton, OR..................        None      816,415    9,897,307    1,220,487
Industrial Building
Aurora, CO.....................        None    1,338,175    7,202,411    2,152,039
Office Complex
Brentwood, TN..................        None    2,425,000    7,063,755    2,844,396
Retail Shopping Center
Hampton, VA....................   9,074,608    2,339,100   12,767,956    2,924,439
                                 ----------   ----------  -----------   ----------
                                 26,574,608   26,517,980  117,398,778   25,083,625
                                 ==========   ==========  ===========   ==========
</TABLE>


<TABLE>
<CAPTION>

                                                              GROSS AMOUNT AT WHICH
                                                            CARRIED AT CLOSE OF YEAR
                                    --------------------------------------------------------------------------
                                              BUILDING &      2004                       YEAR OF       DATE
DESCRIPTION                         LAND     IMPROVEMENTS     SALES   TOTAL (a)(b)(c) CONSTRUCTION   ACQUIRED
-----------                         ----     ------------     -----   --------------- ------------  ----------
<S>                               <C>         <C>           <C>        <C>                <C>      <C>
PROPERTIES:
Office Building
Lisle, IL......................   1,958,000   21,215,036                23,173,036         1985     Apr., 1988
Garden Apartments
Atlanta, GA....................   4,206,097   13,138,897                17,344,994         1987     Apr., 1988
Retail Shopping Center
Roswell, GA....................  11,135,594   22,728,798                33,864,392         1988     Jan., 1989
Garden Apartments
Raleigh, NC....................   1,623,146   14,460,569                16,083,715         1995     Jun., 1995
Office Building
Nashville, TN..................   1,797,378    8,911,592                10,708,970         1982     Oct., 1995
Office Park
Oakbrook Terrace, IL...........   1,313,821   13,519,975                14,833,796         1988     Dec., 1995

Office Building

Beaverton, OR..................     845,887   11,088,322                11,934,209         1995     Dec., 1996
Industrial Building
Aurora, CO.....................   1,415,159    9,277,466                10,692,625         1997     Sep., 1997
Office Complex
Brentwood, TN..................   2,453,117    9,880,034                12,333,151         1987     Oct., 1997
Retail Shopping Center
Hampton, VA....................   3,462,107   14,569,388                18,031,495         1998      May, 2001
                                 ----------  -----------   ----------  -----------
                                 30,210,306  138,790,077            0  169,000,383
                                 ==========  ===========   =========== ===========
</TABLE>

<TABLE>
<CAPTION>

                                                             2004         2003          2002         2001
                                                          -----------  -----------   -----------  -----------

<S>                                                       <C>          <C>           <C>          <C>
(a) Balance at beginning of year....                      163,507,834  150,548,805   158,410,798  154,613,404

   Additions:
      Acquistions...................                               --           --             0            0
      Improvements, etc.............                        5,492,550    1,545,443     1,231,735    3,797,394
      Conversions from JV to WO.....                               --   18,013,068             0            0
   Deletions:
      Sale..........................                               --   (6,599,482)   (9,093,728)           0
                                                          -----------  -----------   -----------  -----------
Balance at end of year..............                      169,000,384  163,507,834   150,548,805  158,410,798
                                                          ===========  ===========   ===========  ===========
(b) Net of $1,000,000 settlement received from lawsuit.
</TABLE>


                                      F-23
<PAGE>

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


                                    INITIAL COSTS TO THE PARTNERSHIP        COSTS
                                   -----------------------------------   CAPITALIZED
                                   ENCUMBRANCES            BUILDING &   SUBSEQUENT TO
DESCRIPTION                         AT 12/31/04   LAND    IMPROVEMENTS   ACQUISITION
-----------                       -------------   ----    ------------  ------------
<S>                               <C>          <C>         <C>           <C>
INTEREST IN PROPERTIES:
Garden Apartments
Jacksonville, FL................. 10,000,000   2,750,000   14,650,743    2,615,216
Retail Shopping Center
Kansas City MO and KS*            13,657,622   5,710,916   15,211,504    3,174,520

Garden Apartments
Gresham/Salem, OR................         --   3,063,000   15,318,870      483,796
Retail Shopping Center
Ocean City, MD...................  7,199,158   1,517,099    8,495,039    5,217,740
Hotel
Portland, OR.....................         --   1,500,000    6,508,729      325,613
Land
Blue Springs, MO.................         --         100           --           --
                                  ----------  ----------   ----------   ----------
                                  30,856,780  14,541,115   60,184,885   11,816,885
                                  ==========  ==========   ==========   ==========
</TABLE>



<TABLE>
<CAPTION>

                                                                     GROSS AMOUNT AT WHICH
                                                                   CARRIED AT CLOSE OF YEAR
                                     --------------------------------------------------------------------------------
                                                BUILDING &                                 YEAR OF           DATE
DESCRIPTION                          LAND      IMPROVEMENTS      SOLD        TOTAL      CONSTRUCTION       ACQUIRED
-----------                          ----      ------------  -----------  ----------   --------------     -----------
<S>                                <C>           <C>         <C>         <C>          <C>                <C>
INTEREST IN PROPERTIES:
Garden Apartments
Jacksonville, FL.................  2,750,000     17,265,959               20,015,959              1973    Sept., 1999
Retail Shopping Center
Kansas City MO and KS*             5,710,916     18,386,024               24,096,940   Various Ranging    Sept., 1999
                                                                                        From 1972-1992
Garden Apartments
Gresham/Salem, OR................  3,063,000     15,802,666  (6,861,343)  12,004,323   Various Ranging     Feb., 2001
Retail Shopping Center
Ocean City, MD...................  1,517,099     13,712,779               15,229,878              1986     Nov., 2002
Hotel
Portland, OR.....................  1,500,000      6,834,342                8,334,342              1989     Dec., 2003
Land
Blue Springs, MO.................        100             --                      100
                                  ----------     ----------  ----------   ----------
                                  14,541,115     72,001,770  (6,861,343)  79,681,542
                                  ==========     ==========  ==========   ==========
</TABLE>

<TABLE>
<CAPTION>

                                                              2004          2003         2002         2001
                                                           ----------   ----------    ----------   ----------
<S>                                                        <C>          <C>           <C>          <C>
(a) Balance at beginning of year.                          71,045,309   74,974,865    60,659,900   25,121,329
   Additions:
      Acquistions................                                   0    8,008,729    10,012,138   33,488,926
      Improvements, etc..........                           2,444,168    3,392,575     4,097,329    1,674,862
   Deletions:
      Sale.......................                         (6,861,343)            0             0            0
      Conversions from JV to WO..                                  --  (16,446,908)
   Encumbrances on Joint Ventures
      accounted for by the equity method                      243,195    1,116,048       205,498      374,783
                                                           ----------   ----------    ----------   ----------
   Balance at end of year........                          66,871,329   71,045,309    74,974,865   60,659,900
                                                           ==========   ==========    ==========   ==========
</TABLE>

* Partnership interest accounted for by the equity method.


                                      F-24