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

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

                                    FORM 10-Q

(MARK ONE)

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

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2003
                               ------------------

                                       OR

[_]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
      SECURITIES EXCHANGE ACT OF 1934

COMMISSION FILE NUMBER 33-20018


                   PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY

                                  IN RESPECT OF

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


                 NEW JERSEY                               22-2426091
     --------------------------------         ---------------------------------
     (STATE OR OTHER JURISDICTION OF          (IRS EMPLOYER IDENTIFICATION NO.)
      INCORPORATION OR ORGANIZATION)


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


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


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

AMENDMENT ______________________________________________________________________

     INDICATE BY CHECK MARK WHETHER THE REGISTRANT IS AN  ACCELERATED  FILER (AS
DEFINED IN RULE 12b-2 OF THE EXCHANGE ACT).           YES [ ]  NO [X]

END OF AMENDMENT _______________________________________________________________

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


<PAGE>


                   PRUCO LIFE OF NEW JERSEY VARIABLE CONTRACT
                              REAL PROPERTY ACCOUNT
                                  (REGISTRANT)


                                      INDEX
                                      -----

                                                                            PAGE
                                                                            ----
PART I--FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

A. PRUCO LIFE OF NEW JERSEY VARIABLE CONTRACT REAL PROPERTY ACCOUNT

         Statements of Net Assets--September 30, 2003 and December 31, 2002..  3

         Statements of Operations--Nine and Three Months Ended
         September 30, 2003 and 2002.........................................  3

         Statements of Changes in Net Assets--
         Nine and Three Months Ended September 30, 2003 and 2002.............  3

         Notes to the Financial Statements of the Account....................  4

B. THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

         Consolidated Statements of Assets and Liabilities--
         September 30, 2003 and December 31, 2002............................  7

         Consolidated Statements of Operations--
         Nine and Three Months Ended September 30, 2003 and 2002.............  8

         Consolidated Statements of Changes in Net Assets--
         Nine and Three Months Ended September 30, 2003 and 2002.............  9

         Consolidated Statements of Cash Flows--
         Nine and Three Months Ended September 30, 2003 and 2002............. 10

         Consolidated Schedules of Investments--
         September 30, 2003 and December 31, 2002............................ 11

         Notes to the Financial Statements of the Partnership................ 12

Item 2. Management's Discussion and Analysis of Financial Condition and
        Results of Operations................................................ 14

Item 3. Quantitative and Qualitative Disclosures About Market Risks.......... 20

Item 4. Controls and Procedures.............................................. 22

PART II--OTHER INFORMATION

Item 5. Submission of Matters to a Vote of Security Holders.................. 22

Item 6. Exhibits and Reports on Form 8-K..................................... 22

Signature Page............................................................... 24




                                       2
<PAGE>


                             FINANCIAL STATEMENTS OF
        PRUCO LIFE OF NEW JERSEY VARIABLE CONTRACT REAL PROPERTY ACCOUNT

<TABLE>
<CAPTION>
STATEMENTS OF NET ASSETS
September 30, 2003 and December 31, 2002
                                           SEPTEMBER 30, 2003
                                               (UNAUDITED)     DECEMBER 31, 2002
                                           ------------------  -----------------
<S>                                            <C>               <C>
ASSETS
Investment in The Prudential Variable Contract
  Real Property Partnership ...........        $8,867,647        $8,854,905
                                               ----------        ----------
Net Assets ............................        $8,867,647        $8,854,905
                                               ==========        ==========
NET ASSETS, representing:
Equity of contract owners .............        $5,753,446        $5,818,363
Equity of Pruco Life Insurance Company
  of New Jersey .......................         3,114,201         3,036,542
                                               ----------        ----------
                                               $8,867,647        $8,854,905
                                               ==========        ==========
Units outstanding .....................         4,059,393         4,041,054
                                               ==========        ==========
Portfolio shares held .................           367,199           367,199
Portfolio net asset value per share ...        $    24.15        $    24.11
Investment in portfolio shares, at cost        $4,271,993        $4,271,993

<CAPTION>
STATEMENTS OF OPERATIONS
For the nine and three months
ended September 30, 2003 and 2002          1/1/2003-9/30/2003  1/1/2002-9/30/2002  7/1/2003-9/30/2003  7/1/2002-9/30/2002
                                               (UNAUDITED)         (UNAUDITED)         (UNAUDITED)         (UNAUDITED)
                                           ------------------  ------------------  ------------------  ------------------
<S>                                            <C>                 <C>                 <C>                 <C>
INVESTMENT INCOME
Net investment income from
  Partnership operations ..............        $   320,282         $   357,448         $    88,956         $   107,767
                                               -----------         -----------         -----------         -----------
EXPENSES
Charges to contract owners for assuming
  mortality risk and expense risk and
  for administration ..................             24,811              25,159               8,340               8,595
                                               -----------         -----------         -----------         -----------
NET INVESTMENT INCOME .................            295,471             332,289              80,616              99,172
                                               -----------         -----------         -----------         -----------
NET REALIZED AND UNREALIZED GAIN
  (LOSS) ON INVESTMENTS
Net change in unrealized gain (loss) on
  investments in Partnership ..........           (329,926)           (333,065)            (96,802)            (13,614)
Net realized gain (loss) on sale of
  investments in Partnership ..........             22,386              17,697                   0              17,767
                                               -----------         -----------         -----------         -----------
NET GAIN (LOSS) ON INVESTMENTS ........           (307,540)           (315,368)            (96,802)              4,153
                                               -----------         -----------         -----------         -----------
NET INCREASE (DECREASE) IN NET
  ASSETS RESULTING FROM OPERATIONS ....        $   (12,069)        $    16,921         $   (16,186)        $   103,325
                                               ===========         ===========         ===========         ===========

<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
For the nine and three months ended
September 30, 2003 and 2002                1/1/2003-9/30/2003  1/1/2002-9/30/2002  7/1/2003-9/30/2003  7/1/2002-9/30/2002
                                               (UNAUDITED)         (UNAUDITED)         (UNAUDITED)         (UNAUDITED)
                                           ------------------  ------------------  ------------------  ------------------
<S>                                            <C>                 <C>                 <C>                 <C>
OPERATIONS
Net investment income .................        $   295,471         $   332,289         $    80,616         $    99,172
Net change in unrealized gain (loss) on
  investments in Partnership ..........           (329,926)           (333,065)            (96,802)            (13,614)
Net realized gain (loss) on sale of
  investments in Partnership ..........             22,386              17,697                   0              17,767
                                               -----------         -----------         -----------         -----------
NET INCREASE (DECREASE) IN NET
  ASSETS RESULTING FROM OPERATIONS ....            (12,069)             16,921             (16,186)            103,325
                                               -----------         -----------         -----------         -----------
CAPITAL TRANSACTIONS
Net withdrawals by contract owners ....            (48,076)           (130,181)            (23,599)            (84,805)
Net contributions by Pruco Life
  Insurance Company of New Jersey .....             72,887             155,340              31,939              93,400
                                               -----------         -----------         -----------         -----------
NET INCREASE IN NET ASSETS RESULTING
  FROM CAPITAL TRANSACTIONS ...........             24,811              25,159               8,340               8,595
                                               -----------         -----------         -----------         -----------
TOTAL INCREASE (DECREASE)
  IN NET ASSETS .......................             12,742              42,080              (7,846)            111,920
NET ASSETS
Beginning of period ...................          8,854,905           8,747,935           8,875,493           8,678,095
                                               -----------         -----------         -----------         -----------
End of period .........................        $ 8,867,647         $ 8,790,015         $ 8,867,647         $ 8,790,015
                                               ===========         ===========         ===========         ===========
</TABLE>

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



                                       3
<PAGE>


                      NOTES TO THE FINANCIAL STATEMENTS OF
        PRUCO LIFE OF NEW JERSEY VARIABLE CONTRACT REAL PROPERTY ACCOUNT
                               SEPTEMBER 30, 2003
                                   (UNAUDITED)


NOTE 1: GENERAL

Pruco Life of New Jersey Variable Contract Real Property Account ("Real Property
Account")  was  established  on October 30, 1987 by  resolution  of the Board of
Directors  of Pruco Life  Insurance  Company of New Jersey  ("Pruco  Life of New
Jersey"),  an  indirect  wholly-owned  subsidiary  of The  Prudential  Insurance
Company of America ("Prudential"),  as a separate investment account pursuant to
New Jersey law.  The assets of the Real  Property  Account are  segregated  from
Pruco Life of New Jersey's  other assets.  The Real Property  account is used to
fund  benefits  under  certain  variable  life  insurance  and variable  annuity
contracts  issued by Pruco Life of New Jersey.  These  products are  Appreciable
Life ("VAL"), Variable Life ("VLI"), Discovery Plus ("SPVA"), and Discovery Life
Plus ("SPVL").

The assets of the Real Property Account are invested in The Prudential  Variable
Contract Real Property  Partnership  (the  "Partnership").  The  Partnership  is
organized  under New Jersey law and is registered  under the  Securities  Act of
1933. The Partnership is the investment vehicle for assets allocated to the real
estate  investment  option under  certain  variable  life  insurance and annuity
contracts.  The Real  Property  Account,  along  with the  Pruco  Life  Variable
Contract  Real  Property  Account  and The  Prudential  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.

The interim  financial  data as of September 30, 2003 and for the nine and three
months ended September 30, 2003 and September 30, 2002 is unaudited; however, in
the opinion of management, the interim data includes all adjustments, consisting
only of normal  recurring  adjustments,  necessary  for a fair  statement of the
results for the interim periods.

B. INVESTMENT IN PARTNERSHIP INTEREST

The  investment  in the  Partnership  is based on the  Real  Property  Account's
proportionate  interest of the Partnership's market value. At September 30, 2003
and December 31, 2002 the Real Property  Account's  interest in the  Partnership
was 4.8% or 367,199 shares.

C. INCOME RECOGNITION

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




                                       4
<PAGE>


D. EQUITY OF PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY

Pruco Life of New Jersey  maintains a position in the Real Property  Account for
liquidity purposes  including unit purchases and redemptions,  Partnership share
transactions,  and expense  processing.  The position does not have an effect on
the contract owner's account or the related unit value.


NOTE 3: 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 of New Jersey.

B. ADMINISTRATIVE CHARGES

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

C. COST OF INSURANCE AND OTHER RELATED CHARGES

Contract owner  contributions  are subject to certain  deductions prior to being
invested in the Real Property  Account.  The  deductions for VAL and VLI are (1)
state premium taxes; (2) sales charges which are deducted in order to compensate
Pruco  Life  of New  Jersey  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 of New Jersey for the guaranteed minimum death benefit risk.

D. DEFERRED SALES CHARGE

Subsequent to a contract  owner  redemption,  a deferred sales charge is imposed
upon surrenders of certain variable life insurance contracts to compensate Pruco
Life of New Jersey  for sales and other  marketing  expenses.  The amount of any
sales  charge  will  depend on the number of years that have  elapsed  since the
contract was issued.  No sales charge will be imposed  after the sixth and tenth
year of the  contract  for SPVL and VAL,  respectively.  No sales charge will be
imposed on death benefits.

E. PARTIAL WITHDRAWAL CHARGE

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


NOTE 4: TAXES

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




                                       5
<PAGE>


NOTE 5: NET WITHDRAWALS (CONTRIBUTIONS) BY CONTRACT OWNERS

Net  withdrawals  by contract  owners for the real estate  investment  option in
Pruco Life  Insurance  Company of New Jersey's  variable  insurance and variable
annuity  products  for the nine and three months  ended  September  30, 2003 and
2002, were as follows:

                              NINE MONTHS ENDED            THREE MONTHS ENDED
                                SEPTEMBER 30,                 SEPTEMBER 30,
                             2003           2002          2003           2002
                           --------       --------      --------       --------
                                 (UNAUDITED)                  (UNAUDITED)

VAL                        $ 31,662       $123,791      $  8,628       $ 84,950
VLI                          (7,339)         5,522          (555)         4,300
SPVA                         23,828              0        16,000              0
SPVL                            (75)           868          (474)        (4,445)
                           --------       --------      --------       --------
TOTAL                      $ 48,076       $130,181      $ 23,599       $ 84,805
                           ========       ========      ========       ========


NOTE 6: UNIT INFORMATION

Outstanding  units and unit values at  September  30, 2003 and December 31, 2002
were as follows:

                              SEPTEMBER 30, 2003
                                  (UNAUDITED)           DECEMBER 31, 2002
                              ------------------       ------------------

UNITS OUTSTANDING:                 4,059,393                4,041,054
UNIT VALUE:                   1.95710 to 2.27699       1.97263 to 2.27966







                                       6
<PAGE>


           THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

                CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
                                                                  SEPTEMBER 30, 2003
                                                                       (UNAUDITED)    DECEMBER 31, 2002
                                                                   -----------------  -----------------
<S>                                                                   <C>               <C>
ASSETS
REAL ESTATE INVESTMENTS--At estimated market value:
   Real estate and improvements
      (cost: 09/30/2003--$215,175,886; 12/31/2002--$215,592,277)      $191,039,305      $196,631,183
   Real estate partnership
      (cost: 09/30/2003--$10,797,123; 12/31/2002--$9,931,394) ..         8,961,574         8,978,324
                                                                      ------------      ------------
        Total real estate investments ..........................       200,000,879       205,609,507
   CASH AND CASH EQUIVALENTS ...................................        31,817,774        18,591,149
   OTHER ASSETS (net of allowance for uncollectible accounts:
      09/30/2003--$88,200; 12/31/2002--$69,000) ................         5,095,082         5,519,457
                                                                      ------------      ------------
        Total assets ...........................................      $236,913,735      $229,720,113
                                                                      ============      ============

LIABILITIES
MORTGAGE LOANS PAYABLE .........................................        43,793,110        35,699,108
ACCOUNTS PAYABLE AND ACCRUED EXPENSES ..........................         3,054,881         3,092,098
DUE TO AFFILIATES ..............................................           999,899           907,503
OTHER LIABILITIES ..............................................           901,747           911,245
MINORITY INTEREST ..............................................         3,545,302         4,756,653
                                                                      ------------      ------------
        Total liabilities ......................................        52,294,939        45,366,607
                                                                      ------------      ------------
COMMITMENTS AND CONTINGENCIES
PARTNERS' EQUITY ...............................................       184,618,796       184,353,506
                                                                      ------------      ------------
        Total liabilities and partners' equity .................      $236,913,735      $229,720,113
                                                                      ============      ============
NUMBER OF SHARES OUTSTANDING AT END OF PERIOD ..................         7,644,848         7,644,848
                                                                      ============      ============
SHARE VALUE AT END OF PERIOD ...................................            $24.15            $24.11
                                                                      ============      ============
</TABLE>

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








                                       7
<PAGE>


           THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                            NINE MONTHS ENDED              THREE MONTHS ENDED
                                                              SEPTEMBER 30,                   SEPTEMBER 30,
                                                     ----------------------------     ----------------------------
                                                         2003            2002              2003           2002
                                                     ------------    ------------     ------------    ------------
<S>                                                  <C>             <C>              <C>             <C>
INVESTMENT INCOME:
   Revenue from real estate and improvements ....    $ 18,037,709    $ 19,368,812     $  5,905,056    $  6,121,877
   Equity in income of real estate partnership ..         488,635         160,446          183,672          94,676
   Interest on short-term investments ...........         208,244         373,656           81,022         147,100
                                                     ------------    ------------     ------------    ------------
        Total investment income .................      18,734,588      19,902,914        6,169,750       6,363,653
                                                     ------------    ------------     ------------    ------------
EXPENSES:
   Investment managment fee .....................       1,838,933       1,879,044          652,741         634,957
   Real estate taxes ............................       2,005,379       2,035,545          672,615         641,400
   Administrative ...............................       2,550,588       2,505,801          931,685         898,830
   Operating ....................................       3,693,883       3,753,076        1,375,015       1,231,157
   Interest expense .............................       1,783,992       1,524,079          624,153         506,013
   Minority interest ............................         193,751         155,596           61,551          57,085
                                                     ------------    ------------     ------------    ------------
        Total investment expenses ...............      12,066,526      11,853,141        4,317,760       3,969,442
                                                     ------------    ------------     ------------    ------------
NET INVESTMENT INCOME ...........................       6,668,062       8,049,773        1,851,990       2,394,211
                                                     ------------    ------------     ------------    ------------
REALIZED AND UNREALIZED (LOSS) GAIN ON
   REAL ESTATE INVESTMENTS
Net proceeds from real estate
   investments sold .............................       5,689,488       6,287,075               --       6,281,000
   Less: Cost of real estate investments sold ...       6,620,263       9,101,381               --       9,093,728
         Realization of prior periods' unrealized
         loss on real estate investments sold ...      (1,396,836)     (3,212,838)              --      (3,263,069)
                                                     ------------    ------------     ------------    ------------
   Net realized gain on real estate
   investments sold .............................         466,061         398,532               --         450,341
                                                     ------------    ------------     ------------    ------------
   Change in unrealized loss on real estate
   investments ..................................      (7,454,802)     (7,541,141)    $ (1,570,950)       (139,886)
   Less: Minority interest in unrealized (loss)
   gain on investments ..........................        (585,969)        (45,265)         444,393         170,283
                                                     ------------    ------------     ------------    ------------
   Net unrealized loss on real estate
   investments ..................................      (6,868,833)     (7,495,876)      (2,015,343)       (310,169)
                                                     ------------    ------------     ------------    ------------
NET REALIZED AND UNREALIZED (LOSS) GAIN
   ON REAL ESTATE INVESTMENTS ...................      (6,402,772)     (7,097,344)      (2,015,343)        140,172
                                                     ------------    ------------     ------------    ------------
NET INCREASE (DECREASE) IN NET ASSETS
   RESULTING FROM OPERATIONS ....................    $    265,290    $    952,429     $   (163,353)   $  2,534,383
                                                     ============    ============     ============    ============
</TABLE>

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





                                       8
<PAGE>


           THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

                CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                     NINE MONTHS ENDED SEPTEMBER 30,
                                                                          2003              2002
                                                                     -------------     -------------
<S>                                                                  <C>               <C>
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS:
   Net investment income ........................................    $   6,668,062     $   8,049,773
   Net gain realized on real estate investments sold ............          466,061           398,532
   Net unrealized loss from real estate investments .............       (6,868,833)       (7,495,876)
                                                                     -------------     -------------
   Net increase in net assets resulting from operations .........          265,290           952,429
                                                                     -------------     -------------
NET DECREASE IN NET ASSETS RESULTING
   FROM CAPITAL TRANSACTIONS:
   Withdrawals by partners
      (09/30/2003--0 shares; 09/30/2002--477,261 shares) ........               --       (11,425,060)
                                                                     -------------     -------------
   Net decrease in net assets resulting from capital transactions               --       (11,425,060)
                                                                     -------------     -------------
NET INCREASE (DECREASE) IN NET ASSETS ...........................          265,290       (10,472,631)
NET ASSETS--Beginning of period .................................      184,353,506       198,150,636
                                                                     -------------     -------------
NET ASSETS--End of period .......................................    $ 184,618,796     $ 187,678,005
                                                                     =============     =============
</TABLE>

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










                                       9
<PAGE>


           THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                       NINE MONTHS          NINE MONTHS
                                                                          ENDED                ENDED
                                                                   SEPTEMBER 30, 2003   SEPTEMBER 30, 2002
                                                                   ------------------   ------------------
<S>                                                                    <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net increase increase in net assets resulting from operations       $    265,290       $    952,429
   Adjustments to reconcile net increase (decrease) increase in
      net assets resulting from operations to net cash flows from
      operating activities:
         Net realized and unrealized loss on investments ........         6,402,772          7,097,344
         Equity in income of real estate partnership in excess/
           (less than) distributions ............................           460,343           (160,446)
         Minority interest from operating activities ............           193,751            155,596
         Bad debt expense .......................................           146,108             97,801
         Increase in:
           Dividend receivable ..................................                --             20,802
           Other assets .........................................           278,266            463,056
         (Decrease) Increase in:
           Accounts payable and accrued expenses ................           (37,217)          (619,068)
           Due to affiliates ....................................            92,396             22,981
           Other liabilities ....................................            (9,498)           (53,115)
                                                                       ------------       ------------
   Net cash flows from operating activities .....................         7,792,211          7,977,380
                                                                       ------------       ------------

CASH FLOWS (USED IN) FROM INVESTING ACTIVITIES:
   Net proceeds from real estate investments sold ...............         5,689,488          6,287,075
   Additions to real estate .....................................        (4,640,975)        (1,900,289)
   Additions to real estate partnership .........................        (1,326,071)        (1,473,929)
                                                                       ------------       ------------
   Net cash flows (used in) from investing activities ...........          (277,558)         2,912,857
                                                                       ------------       ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Principal payments on mortgage loan payable ..................          (655,998)          (503,895)
   Proceeds from mortgage loan payable ..........................         8,750,000                 --
   Withdrawls by Partners .......................................                --        (11,425,060)
   Distributions to minority interest partners ..................        (2,382,496)           (86,793)
   Contributions from minority interest partners ................               466             31,371
                                                                       ------------       ------------
   Net cash flows from (used in) financing activities ...........         5,711,972        (11,984,377)
                                                                       ------------       ------------

NET CHANGE IN CASH AND CASH EQUIVALENTS .........................        13,226,625         (1,094,140)

CASH AND CASH EQUIVALENTS--Beginning of period ..................        18,591,149         26,615,645
                                                                       ------------       ------------

CASH AND CASH EQUIVALENTS--End of period ........................      $ 31,817,774       $ 25,521,505
                                                                       ============       ============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for interest ........................      $  1,903,965       $  1,468,032
                                                                       ============       ============
</TABLE>

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








                                       10
<PAGE>


           THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

                             SCHEDULE OF INVESTMENTS

<TABLE>
<CAPTION>
                                                     SEPTEMBER 30, 2003 (UNAUDITED)            DECEMBER 31, 2002
                                                     -----------------------------      ------------------------------
                                                                         ESTIMATED                          ESTIMATED
                                                                          MARKET                             MARKET
                                                         COST              VALUE             COST             VALUE
                                                     -----------------------------------------------------------------
<S>                     <C>                          <C>              <C>               <C>               <C>
REAL ESTATE AND IMPROVEMENTS--
   PERCENTAGE OF NET ASSETS......................                           103.5%                              106.7%

Location                Description
----------------------------------------------------------------------------------------------------------------------
Lisle, IL               Office Building..........    $ 23,013,094     $ 12,162,259      $ 22,857,236      $ 13,854,988
Atlanta, GA             Garden Apartments........      15,781,263       17,504,566        15,715,772        17,523,063
Roswell, GA             Retail Shopping Center...      33,041,816       24,999,955        32,895,282        24,903,969
Raleigh, NC             Garden Apartments........      15,945,326       17,500,000        15,943,836        17,502,998
Brentwood, TN           Office Building..........      10,384,467        9,263,889        10,320,613         9,651,831
Oakbrook Terrace, IL    Office Building..........      14,394,167        9,894,748        14,205,396        11,213,142
Beaverton, OR           Office Building..........      11,890,209       10,000,005        11,890,209        10,800,005
Salt Lake City, UT      Industrial Building......              --               --         6,599,482         5,202,646
Aurora, CO              Industrial Building......      10,697,898        9,938,841        10,294,784        10,557,058
Brentwood, TN           Office Building..........       9,837,482        6,900,042         9,826,195         7,709,345
* Jacksonville, FL      Garden Apartments........      19,937,291       20,800,000        19,745,855        19,800,000
* Gresham/Salem, OR     Garden Apartments........      19,262,541       18,275,000        18,838,570        18,600,000
Hampton, VA             Retail Shopping Center...      18,013,068       20,000,000        16,446,909        19,300,000
* Ocean City, MD        Retail Shopping Center...      12,977,264       13,800,000        10,012,138        10,012,138
                                                     ------------     ------------      ------------      ------------
                                                     $215,175,886     $191,039,305      $215,592,277      $196,631,183
                                                     ============     ============      ============      ============
REAL ESTATE PARTNERSHIP--
   PERCENTAGE OF NET ASSETS......................                             4.9%                                4.9%

Location                Description
----------------------------------------------------------------------------------------------------------------------
Kansas City, KS; MO     Retail Shopping Centers..    $ 10,797,123      $ 8,961,574       $ 9,931,394       $ 8,978,324
                                                     =================================================================

* Real estate partnerships accounted for by the consolidation method.

<CAPTION>
                                                                               SEPTEMBER 30, 2003
                                                                                   (UNAUDITED)              DECEMBER 31, 2002
                                                                           --------------------------   -------------------------
                                                                FACE                       ESTIMATED                   ESTIMATED
                                                               AMOUNT         COST       MARKET VALUE      COST      MARKET VALUE
                                                             -----------   -----------   ------------   -----------  ------------
<S>                                                          <C>            <C>            <C>           <C>           <C>
CASH AND CASH EQUIVALENTS--PERCENTAGE OF NET ASSETS ......                                       17.2%                       10.1%
Federal Home Loan Banks, 0.97%, October 1, 2003 ..........   $19,219,000    $19,218,482    $19,218,482   $        --   $        --
Gannett Inc., 1.04%, October 2, 2003 .....................       472,000        471,809        471,809            --            --
Natl Australia Fdg Delaware Inc., 1.01%, October 2, 2003 .       600,000        599,765        599,765            --            --
UBS Fin Del, LLC, 1.03%, October 2, 2003 .................       600,000        599,760        599,760            --            --
Student Loan Marketing Assoc., 1.00%, October 8, 2003 ....    10,000,000      9,994,444      9,994,444            --            --
Federal National Mortgage Assoc., 1.00%, January 02, 2003      6,928,000             --             --     6,927,615     6,927,615
Federal National Mortgage Assoc., 1.27%, January 17, 2003      1,218,000             --             --     1,217,055     1,217,055
Federal Home Loan Mortgage Corp., 1.27%, January 21, 2003      3,461,000             --             --     3,457,581     3,457,581
Federal National Mortgage Assoc., 1.27%, January 21, 2003      1,288,000             --             --     1,286,819     1,286,819
Federal National Mortgage Assoc., 1.22%, February 10, 2003     1,000,000             --             --       998,611
                                                                                                                           998,611
Federal National Mortgage Assoc., 1.22%, February 13, 2003     2,070,000             --             --     2,066,913
                                                                                                                         2,066,913
Federal Farm Credit Banks, 1.22%, February 14, 2003 ......     1,870,000             --             --     1,867,148     1,867,148
                                                                            -----------    -----------   -----------   -----------
TOTAL CASH EQUIVALENTS ...................................                   30,884,260     30,884,260    17,821,742    17,821,742
CASH .....................................................                      933,514        933,514       769,407       769,407
                                                                            -----------    -----------   -----------   -----------
TOTAL CASH AND CASH EQUIVALENTS ..........................                  $31,817,774    $31,817,774   $18,591,149   $18,591,149
                                                                            ===========    ===========   ===========   ===========
</TABLE>

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




                                       11
<PAGE>


                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF

             PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

                           SEPTEMBER 30, 2003 AND 2002

                                   (UNAUDITED)


NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The  accompanying  unaudited  financial  statements  included  herein  have been
prepared  in  accordance  with the  requirements  of Form  10-Q  and  accounting
principles  generally  accepted  in the  United  States of America  for  interim
financial information. In the opinion of management, all adjustments (consisting
only of normal recurring adjustments)  considered necessary for a fair statement
have been included.  Operating  results for the nine months ended  September 30,
2003 are not necessarily  indicative of the results that may be expected for the
year ended  December 31, 2003. For further  information,  refer to the financial
statements and notes thereto included in each Partner's December 31, 2002 Annual
Report on Form 10K.

FASB Interpretation No. 46, "Consolidation of Variable Interest Entities", ("FIN
46") was issued in January  2003.  On October 9, 2003,  FASB  issued  FASB Staff
Position FIN 46-6  deferring 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 to provide an exception for companies  that apply the
Audit  Guide.  The  Prudential  Variable  Contract  Real  Property   Partnership
("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 FIN 46.


NOTE 2: DISCLOSURE OF NON-CASH INVESTING ACTIVITY

On April 15, 2003, a buyout of a minority  partner's  interest in a consolidated
retail  asset  resulted in an increase  in the  Partnership's  basis in the real
estate investment of approximately $1.6 million.


NOTE 3: COMMITMENT FROM PARTNER

In 1986, the Prudential Insurance Company of America ("Prudential") committed to
fund up to $100 million to enable the Prudential Variable Contract Real Property
Partnership to acquire real estate investments. Contributions to the Partnership
under this  commitment  were  utilized for property  acquisitions,  and could be
returned  to  Prudential  on an ongoing  basis  from the  contract  owners'  net
contributions  and other available cash. This commitment  terminated on December
31, 2002. Prudential did not make any contributions during the 2002 fiscal year.
During the period  that this  commitment  was in effect,  Prudential  funded $44
million.


NOTE 4: RELATED PARTY TRANSACTIONS

Pursuant to an investment management agreement, Prudential Investment Management
("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 nine months ended  September 30, 2003 and 2002  investment  management  fees
incurred  by  the  Partnership  were  $1,838,933  and  $1,879,044  respectively.
Management fees incurred by the Partnership for the three months ended September
30, 2003 and 2002 were $652,741 and $634,957, respectively.

The Partnership also reimburses Prudential for certain  administrative  services
rendered by PIM. The amounts  incurred for the nine months ended  September  30,
2003 and 2002 were $87,472 for each period, and are classified as administrative
expense in the Consolidated  Statements of Operations.  Administrative  expenses
incurred by the  Partnership  for the three months ended  September 30, 2003 and
2002 were $29,157 for each period.



                                       12
<PAGE>


                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF

             PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

                           SEPTEMBER 30, 2003 AND 2002

                                   (UNAUDITED)


NOTE 5: DEBT

On June 27, 2003, a wholly owned property  obtained loan financing in the amount
of $8.75 million,  with a fixed interest rate of 3.09%. The loan matures in five
years  with  monthly  payments  of  interest  only and a  balloon  payment  upon
maturity.

NOTE 6: FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
                                                                  FOR THE NINE MONTHS ENDED
                                                          ---------------------------------------
                                                          SEPTEMBER 30, 2003   SEPTEMBER 30, 2002
                                                          ------------------   ------------------
<S>                                                            <C>                  <C>
PER SHARE (UNIT) OPERATING PERFORMANCE:
Net Asset Value, beginning of period ..................        $ 24.11              $ 23.82
                                                               -------              -------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment income, before management fee ..........        $  1.12              $  1.20
Management fee ........................................          (0.24)               (0.23)
Net realized and unrealized (loss) gain on investments           (0.84)               (0.85)
                                                               -------              -------
   Net Increase in Net Assets Resulting from Operations           0.04                 0.12
                                                               -------              -------
NET ASSET VALUE, END OF PERIOD ........................        $ 24.15              $ 23.94
                                                               =======              =======
(a) TOTAL RETURN BEFORE MANAGEMENT FEE: ...............           1.15%                1.44%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (in millions) ...............        $   185              $   188
   Ratios to average net assets (b):
      Management Fee ..................................           1.00%                0.95%
      Net Investment Income, before Management Fee ....           4.62%                5.15%
</TABLE>

(a) Total Return before Management Fee is calculated by 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 period net assets.






                                       13
<PAGE>


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
        FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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

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

(a) LIQUIDITY AND CAPITAL RESOURCES

As of September 30, 2003, the Partnership's liquid assets consisting of cash and
cash  equivalents  were $31.8  million,  an increase of $13.2 million from $18.6
million at December 31, 2002.  This increase was primarily due to an increase in
net cash flows from operations,  the sale of the industrial  property located in
Salt Lake City,  Utah on January 28, 2003, the sale of one of the retail centers
located in Kansas  City,  Missouri on April 23, 2003,  and mortgage  proceeds of
$8.75 million  received in  connection  with  financing  placed on the apartment
complex  located  in  Raleigh,  North  Carolina  on June 27,  2003.  Sources  of
liquidity  include  net  cash  flow  from  property  operations,  interest  from
short-term investments, sales, and financing.

The  Partnership's  investment  policy  allows up to 30%  investment in cash and
short-term  obligations,  although the Partnership generally holds approximately
10% of its assets in cash and  short-term  obligations.  At September  30, 2003,
13.4%  of the  Partnership's  total  assets  consisted  of cash  and  short-term
obligations.

In 1986, the Prudential Insurance Company of America ("Prudential") committed to
fund up to $100  million  to enable  the  Partnership  to  acquire  real  estate
investments.  Contributions  to the Prudential  Variable  Contract Real Property
Partnership  ("Partnership")  under this  commitment  were utilized for property
acquisitions,  and could be returned to  Prudential on an ongoing basis from the
contract  owners' net  contributions  and other  available cash. This commitment
terminated  on December  31,  2002.  Prudential  did not make any  contributions
during the 2002  fiscal  year.  During the period  that this  commitment  was in
effect, Prudential funded $44 million.

The Partnership did not make any  distributions to the Partners during the first
nine months of 2003. On September 30, 2002 the Partnership made an $11.4 million
distribution to the Partners.  Distributions  may be made to the Partners during
2003 based upon the  percentage of assets  invested in  short-term  obligations,
taking into  consideration  anticipated cash needs of the Partnership  including
potential property acquisitions, property dispositions and capital expenditures.
Management anticipates that its current liquid assets and ongoing cash flow from
operations will satisfy the Partnership's  needs over the next twelve months and
the foreseeable future.

During the first nine months of 2003, the Partnership spent  approximately  $4.6
million in capital  expenditures  on wholly owned and  consolidated  properties.
Approximately  $3.0 million was  associated  with the  development of the retail
center located in Ocean City,  Maryland.  The remaining $1.6 million balance was
primarily associated with leasing,  tenant improvements,  and renovations at the
apartment complexes located in Jacksonville,  Florida and Gresham/Salem, OR, and
the industrial building located in Aurora, Colorado, the office building located
in Oakbrook Terrace,  Illinois,  the office building located in Lisle, Illinois,
and the  retail  center  located  in  Roswell,  Georgia.  The  Partnership  also
increased  its  investment in real estate  partnerships  by  approximately  $1.3
million in connection with the redevelopment and expansion of the retail centers
located in Kansas City, Missouri.




                                       14
<PAGE>


(b) RESULTS OF OPERATIONS

The  following  is  a  brief  year-to-date  and  quarterly   comparison  of  the
Partnership's results of operations for the periods ended September 30, 2003 and
2002.

SEPTEMBER 30, 2003 VS. SEPTEMBER 30, 2002

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

<TABLE>
<CAPTION>
                                                     NINE MONTHS ENDED              QUARTER ENDED
                                                       SEPTEMBER 30,                SEPTEMBER 30,
                                               --------------------------    --------------------------
                                                   2003           2002           2003           2002
                                               -----------    -----------    -----------    -----------
<S>                                            <C>            <C>            <C>            <C>
NET INVESTMENT INCOME:
Office properties ..........................   $ 1,460,220    $ 3,678,701    $   374,433    $ 1,048,974
Apartment complexes ........................     2,771,247      2,386,497        709,341        827,075
Retail property ............................     3,193,642      2,738,307      1,127,740        939,859
Industrial properties ......................       541,673      1,075,228        117,456        358,099
Equity in income of real estate partnership        488,634        160,446        183,671         94,676
Other (including interest income,
   investment mgt fee, etc.) ...............    (1,787,354)    (1,989,406)      (660,651)      (874,472)
                                               -----------    -----------    -----------    -----------
TOTAL NET INVESTMENT INCOME ................   $ 6,668,062    $ 8,049,773    $ 1,851,990    $ 2,394,211
                                               -----------    -----------    -----------    -----------
NET UNREALIZED LOSS ON
   REAL ESTATE INVESTMENTS:
Office properties ..........................   $(5,428,138)   $(4,742,508)   $  (822,110)   $(1,098,172)
Apartment complexes ........................      (571,737)    (1,596,259)        23,389        295,615
Retail property ............................     1,034,852     (1,438,704)      (590,466)      (213,702)
Industrial properties ......................    (1,021,330)       181,838       (313,366)       (21,534)
Interest in real estate partnership ........      (882,480)        99,757       (312,790)       727,624
                                               -----------    -----------    -----------    -----------
TOTAL NET UNREALIZED LOSS ON
   REAL ESTATE INVESTMENTS .................    (6,868,833)    (7,495,876)    (2,015,343)      (310,169)
                                               -----------    -----------    -----------    -----------
NET REALIZED GAIN ON
   REAL ESTATE INVESTMENTS:
Industrial properties ......................       466,061        400,110             --        450,341
Real estate investment trust ...............            --         (1,578)            --             --
                                               -----------    -----------    -----------    -----------
TOTAL NET REALIZED GAIN ON
   REAL ESTATE INVESTMENTS .................       466,061        398,532             --        450,341
                                               -----------    -----------    -----------    -----------
NET REALIZED AND UNREALIZED (LOSS) GAIN ON
   REAL ESTATE INVESTMENTS .................   $(6,402,772)   $(7,097,344)   $(2,015,343)   $   140,172
                                               -----------    -----------    -----------    -----------
</TABLE>


                         NET INVESTMENT INCOME OVERVIEW

The  Partnership's net investment income for the nine months ended September 30,
2003 was $6.7  million,  a  decrease  of $1.4  million  from $8.1  million  when
compared to the  corresponding  period in 2002. The Partnership's net investment
income for the quarter ended September 30, 2003 was $1.9 million,  a decrease of
$0.5  million from $2.4 million  when  compared to the  corresponding  period in
2002.  The decrease is  primarily  due to  increased  vacancy  within the office
portfolio and the sales of the industrial  properties in  Bolingbrook,  Illinois
and Salt Lake City, Utah.

Equity in income of real estate  partnership was $0.5 million for the first nine
months  of  2003,  an  increase  of  $0.3  million  from  $0.2  million  in  the
corresponding  period in 2002.  This  increase  is due to an increase in revenue
associated  with  expansion  of the  existing  grocery  store  anchor  that  was
completed last quarter.

Interest on short-term investments decreased approximately $0.2 million or 44.3%
for the nine months ended  September  30, 2003 due  primarily to lower  interest
rates.

Operating expense increased $0.1 million, or 11.7%, in the third quarter of 2003
compared to the corresponding  period in 2002. The increase was primarily due to
the  Partnership's  acquisition  of a  controlling  interest in a retail  center
located in Ocean City, Maryland in late 2002.



                                       15
<PAGE>


Interest expense  increased $0.3 million,  or 17.1%, in the first nine months of
2003 compared to the corresponding  period in 2002, and $0.1 million,  or 23.3%,
in the third quarter of 2003 compared to the corresponding  period in 2002. This
increase was  primarily  due to the  Partnership's  assumption of a $7.4 million
mortgage loan in conjunction with the acquisition of a controlling interest in a
retail center  located in Ocean City,  Maryland in late 2002 and financing of an
$8.8 million note placed on the apartment  investment located in Raleigh,  North
Carolina on June 27, 2003.

                               VALUATION OVERVIEW

2003 YEAR-TO-DATE

The  Partnership  experienced a net unrealized loss of $6.9 million for the nine
months  ended  September  30,  2003  compared to a net  unrealized  loss of $7.5
million during the  corresponding  period in 2002. The unrealized  losses during
the first nine months of 2003 were experienced in the office, industrial, equity
partnership,  and apartment sectors. The office portfolio recorded an unrealized
loss totaling $5.4 million  primarily due to decreases in occupancy coupled with
soft market  conditions which have resulted in reductions in market rental rates
and  increased  leasing  costs.  The  industrial  property  in Aurora,  Colorado
experienced an unrealized loss of $1.0 million for the first nine months of 2003
due to decreases in market rental rates and capital expenditures at the property
that were not reflected as an increase in market value.  The equity  partnership
sector  experienced  a net  unrealized  loss of $0.9  million  primarily  due to
capital expenditures that were not reflected as an increase in market value. The
apartment  sector also experienced an unrealized loss of $0.6 million due to the
apartment  portfolio located in Gresham/Salem,  Oregon. The decrease is a result
of projected  increases in operating  expenses.  Offsetting some of these losses
were unrealized  gains of $1.0 million in the retail sector.  Increases in value
were  primarily  due to  renovation  and  re-leasing  efforts at the Ocean City,
Maryland  retail  center  and a  strengthening  of  market  fundamentals  at the
Hampton, Virginia retail center.

THIRD QUARTER 2003

The Partnership  experienced a net unrealized loss of $2.0 million for the three
months  ended  September  30,  2003  compared to a net  unrealized  loss of $0.3
million during the  corresponding  period in 2002. The unrealized losses for the
third quarter were primarily  experienced  in the office sector ($0.8  million),
the retail sector ($0.6 million),  the industrial sector ($0.3 million), and the
equity  partnership  sector  ($0.3  million)  for  the  same  reasons  discussed
previously.

OFFICE PORTFOLIO

<TABLE>
<CAPTION>
                            NET            NET
                        INVESTMENT     INVESTMENT     UNREALIZED     UNREALIZED
                          INCOME         INCOME      (LOSS)/GAIN    (LOSS)/GAIN    OCCUPANCY      OCCUPANCY
PROPERTY                 09/30/03       09/30/02      09/30/03       09/30/02      09/30/03       09/30/02
--------               -----------    -----------    -----------    -----------    ----------     ---------
<S>                    <C>            <C>            <C>             <C>               <C>           <C>
YEAR TO DATE
------------
Lisle, IL ...........  $   567,140    $ 1,103,532    $(1,848,587)   $  (634,358)       47%           100%
Brentwood, TN .......      502,303        433,032       (451,796)    (1,466,128)       78%            78%
Oakbrook Terrace, IL       (43,049)       845,475     (1,507,165)    (1,147,282)       36%            79%
Beaverton, OR .......      726,221        832,033       (800,000)       (89,123)       81%           100%
Brentwood, TN .......     (292,395)       408,412       (820,590)    (1,405,617)        0%             0%
Morristown, NJ ......           --         56,217             --             --
                       -----------    -----------    -----------    -----------
                       $ 1,460,220    $ 3,678,701    $(5,428,138)   $(4,742,508)
                       -----------    -----------    -----------    -----------
QUARTER TO DATE
---------------
Lisle, IL ...........  $    57,497    $   345,997    $  (493,587)   $  (430,000)
Brentwood, TN .......      195,321        151,392        300,000        (37,115)
Oakbrook Terrace, IL       (20,286)       303,890       (128,523)       (26,230)
Beaverton, OR .......      231,611        282,098       (400,000)      (300,000)
Brentwood, TN .......      (89,710)       (34,403)      (100,000)      (304,827)
                       -----------    -----------    -----------    -----------
                       $   374,433    $ 1,048,974    $  (822,110)   $(1,098,172)
                       -----------    -----------    -----------    -----------
</TABLE>




                                       16
<PAGE>


                              NET INVESTMENT INCOME

Net investment  income from property  operations for the office sector decreased
approximately  $0.7 million,  or 64.3%, for the quarter ended September 30, 2003
when compared to the  corresponding  period in 2002. Net investment  income from
property  operations  for the office sector also  decreased  approximately  $2.2
million, or 60.3%, for the nine months ended September 30, 2003 when compared to
the corresponding period in 2002. Increased vacancy and weak market fundamentals
were the primary  reasons that net  investment  income  decreased for the office
sector.

                                 UNREALIZED LOSS

THIRD QUARTER 2003:

The five office properties owned by the Partnership experienced a net unrealized
loss of approximately  $0.8 million during the third quarter of 2003,  primarily
due to softening market conditions.

THIRD QUARTER 2002:

The five office properties owned by the Partnership experienced a net unrealized
loss of  approximately  $1.1  million  during  the third  quarter  of 2002.  The
unrealized  losses are primarily  due to impending  tenant  rollover,  softening
office  market   conditions,   and  increasing  capital  costs  associated  with
re-tenanting.

2003 YEAR-TO-DATE:

The five office properties owned by the Partnership experienced a net unrealized
loss of  approximately  $5.4 million  during the first nine months of 2003.  The
losses were  primarily  due to  decreased  occupancy,  lower market  rents,  and
increased lease up costs.

2002 YEAR-TO-DATE:

The five office properties owned by the Partnership experienced a net unrealized
loss of  approximately  $4.7 million  during the first nine months of 2002.  The
decrease in values was  primarily  due to a reduction  in market  rental  rates,
softening  market  conditions,  and a  decrease  in  occupancy  due  to  various
near-term lease expirations, and the move-out of the single tenant occupying all
of the space at one of the buildings in Brentwood, Tennessee.

As of September 30, 2003 all vacant spaces were being marketed.

APARTMENT COMPLEXES

<TABLE>
<CAPTION>
                            NET            NET
                        INVESTMENT     INVESTMENT     UNREALIZED     UNREALIZED
                          INCOME         INCOME      (LOSS)/GAIN    (LOSS)/GAIN    OCCUPANCY      OCCUPANCY
PROPERTY                 09/30/03       09/30/02      09/30/03       09/30/02      09/30/03       09/30/02
--------               -----------    -----------    -----------    -----------    ----------     ---------
<S>                    <C>            <C>            <C>             <C>               <C>           <C>
YEAR TO DATE
------------
Atlanta, GA ........   $   632,012   $   551,120    $   (83,988)   $  (557,139)        91%           88%
Raleigh, NC ........       625,173       777,592         (4,488)      (308,160)        93%           90%
Jacksonville, FL ...       929,282       625,896        265,710       (405,558)        91%           92%
Gresham/Salem, OR ..       584,780       431,889       (748,971)      (325,402)        93%           96%
                       -----------   -----------    -----------    -----------
                       $ 2,771,247   $ 2,386,497    $  (571,737)   $(1,596,259)
                       -----------   -----------    -----------    -----------
QUARTER TO DATE
---------------
Atlanta, GA ........   $   189,497   $   205,592    $   (21,962)   $        --
Raleigh, NC ........       180,600       187,656         (1,490)       300,000
Jacksonville, FL ...       287,459       236,766        272,706        (12,493)
Gresham/Salem, OR ..        51,785       197,061       (225,865)         8,108
                       -----------   -----------    -----------    -----------
                       $   709,341   $   827,075    $    23,389    $   295,615
                       -----------   -----------    -----------    -----------
</TABLE>




                                       17
<PAGE>


                              NET INVESTMENT INCOME

Net investment income from property operations for the apartment sector was $0.7
million for the quarter ended September 30, 2003, a decrease of $0.1 million, or
14.2%,  when  compared  to the  corresponding  period in 2002.  The  decrease is
primarily  due to a decrease in occupancy at the  apartment  complex  located in
Gresham/Salem,  Oregon.  Net investment income from property  operations for the
apartment  sector was $2.8 million for the nine months ended September 30, 2003,
an increase of $0.4 million, or 16.1%, when compared to the corresponding period
in 2002.  The  increases  were  mainly due to the effect of a  reclassification,
which took place in 2003, of 2002 repairs and  maintenance  expenses to building
improvements  for the apartment  complex  located in  Gresham/Salem,  Oregon and
increased   operational   efficiencies  at  the  apartment  complex  located  in
Jacksonville, Florida during 2003.

                              UNREALIZED GAIN/LOSS

THIRD QUARTER 2003:

The apartment  complexes owned by the  Partnership  experienced a net unrealized
gain of $0.02 million in the third quarter of 2003.

THIRD QUARTER 2002:

The apartment  complexes owned by the  Partnership  experienced a net unrealized
gain  of $0.3  million  in the  third  quarter  of  2002,  primarily  due to the
apartment complex located in Raleigh, North Carolina,  which increased occupancy
from the previous quarter and decreased operating expenses.

2003 YEAR-TO-DATE:

The apartment  complexes owned by the  Partnership  experienced a net unrealized
loss of $0.6 million for the nine months ended  September 30, 2003 compared to a
net  unrealized  loss of $1.6  million for the nine months ended  September  30,
2002.  The  unrealized  loss for 2003 was mainly  attributable  to the apartment
complex  located  in  Gresham/Salem,  Oregon  due to an  increase  in  projected
operating expenses.

2002 YEAR-TO-DATE:

The apartment  complexes owned by the  Partnership  experienced a net unrealized
loss of $1.6  million  for the nine  months  ended  September  30,  2002.  These
unrealized losses were due to softening market  conditions,  which have resulted
in  lower  short-term   occupancy  and  income  projections,   increased  rental
concessions, and increases in operating expense levels.

As of September 30, 2003, all available vacant units were being marketed.

RETAIL PROPERTIES

<TABLE>
<CAPTION>
                            NET            NET
                        INVESTMENT     INVESTMENT     UNREALIZED     UNREALIZED
                          INCOME         INCOME      (LOSS)/GAIN    (LOSS)/GAIN    OCCUPANCY      OCCUPANCY
PROPERTY                 09/30/03       09/30/02      09/30/03       09/30/02      09/30/03       09/30/02
--------               -----------    -----------    -----------    -----------    ----------     ---------
<S>                    <C>            <C>            <C>             <C>               <C>           <C>
YEAR TO DATE
------------
Roswell, GA ........   $ 1,983,560   $ 2,199,652    $   (50,548)   $(1,728,342)         93%          92%
Hampton, VA ........       781,543       538,655        570,136        289,638         100%          99%
Ocean City, MD* ....       428,539           N/A        515,264            N/A          97%          N/A
                       -----------   -----------    -----------    -----------
                       $ 3,193,642   $ 2,738,307    $ 1,034,852    $(1,438,704)
                       -----------   -----------    -----------    -----------
QUARTER TO DATE
---------------
Roswell, GA ........   $   641,069   $   741,287    $  (500,000)   $  (300,000)
Hampton, VA ........       292,863       198,572          3,520         86,298
Ocean City, MD* ....       193,808           N/A        (93,986)           N/A
                       -----------   -----------    -----------    -----------
                       $ 1,127,740   $   939,859    $  (590,466)   $  (213,702)
                       -----------   -----------    -----------    -----------
</TABLE>

* Center purchased in November 2002




                                       18
<PAGE>


                              NET INVESTMENT INCOME

Net investment income for the Partnership's  retail properties was approximately
$1.1  million for the quarter  ended  September  30,  2003,  an increase of $0.2
million,  or 20.0%,  when  compared  to the  corresponding  period in 2002.  Net
investment income for the Partnership's retail properties was approximately $3.2
million  for the nine  months  ended  September  30,  2003,  an increase of $0.5
million,  or 16.6%,  when  compared to the  corresponding  period in 2002.  This
increase was primarily  due to the  Partnership's  acquisition  of a controlling
interest in a retail center located in Ocean City,  Maryland in late 2002.  Also
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 commencing on the buyout date and going forward.

                              UNREALIZED LOSS/GAIN

THIRD QUARTER 2003:

The retail properties  experienced a net unrealized loss of $0.6 million for the
quarter  ended  September  30,  2003.  These  unrealized  losses were  primarily
experienced  by the retail center  located in Roswell,  Georgia due decreases in
market rental rates and shorter-term lease renewals.

THIRD QUARTER 2002:

The retail properties  experienced a net unrealized loss of $0.2 million for the
quarter ended September 30, 2002. The retail center located in Roswell,  Georgia
experienced an unrealized  loss of $0.3 million due to lower market rents due to
deteriorating market conditions.  This loss was offset by a gain of $0.1 million
at the Hampton, Virginia retail center due to an increase in occupancy.

2003 YEAR-TO-DATE:

The retail properties  experienced a net unrealized gain of $1.0 million for the
nine  months  ended   September  30,  2003.  This  gain  in  value  was  due  to
strengthening market fundamentals, and renovation and releasing efforts.

2002 YEAR-TO-DATE:

The retail properties  experienced a net unrealized loss of $1.4 million for the
nine months ended  September 30, 2002.  This was primarily  attributable  to the
center  located in Roswell,  Georgia due to  increased  risk that a major tenant
would not renew its lease,  coupled with a deterioration  in the market position
of the property and lower market rents.

As of September 30, 2003, all vacant spaces were being marketed.

INDUSTRIAL PROPERTIES

<TABLE>
<CAPTION>
                            NET            NET        UNREALIZED/    UNREALIZED/
                        INVESTMENT     INVESTMENT     REALIZED       REALIZED
                          INCOME         INCOME      (LOSS)/GAIN    (LOSS)/GAIN    OCCUPANCY      OCCUPANCY
PROPERTY                 09/30/03       09/30/02      09/30/03       09/30/02      09/30/03       09/30/02
--------               -----------    -----------    -----------    -----------    ----------     ---------
<S>                     <C>            <C>            <C>            <C>              <C>            <C>
YEAR TO DATE
------------
Aurora, CO ..........   $   527,986    $   515,978    $(1,021,330)   $   493,792       79%           75%
Bolingbrook, IL .....          (146)       229,583             --        400,110      Sold September 2002
Salt Lake City, UT ..        13,833        329,667        466,061       (311,954)      Sold January 2003
                        -----------    -----------    -----------    -----------
                        $   541,673    $ 1,075,228    $  (555,269)   $   581,948
                        -----------    -----------    -----------    -----------
QUARTER TO DATE
---------------
Aurora, CO ..........   $   119,414    $   160,418    $  (313,366)   $      (473)
Bolingbrook, IL .....            --         75,249             --        450,341
Salt Lake City, UT ..        (1,958)       122,432             --        (21,061)
                        -----------    -----------    -----------    -----------
                        $   117,456    $   358,099    $  (313,366)   $   428,807
                        -----------    -----------    -----------    -----------
</TABLE>




                                       19
<PAGE>


                              NET INVESTMENT INCOME

Net investment  income from property  operations  for the industrial  properties
decreased  from $0.4 million for the quarter  ended  September  30, 2002 to $0.1
million for the  corresponding  period ended  September 30, 2003. Net investment
income from property  operations  for the industrial  properties  decreased from
$1.1  million for the nine months ended  September  30, 2002 to $0.5 million for
the corresponding period ended September 30, 2003. The majority of this decrease
was due to the sale of the industrial property located in Bolingbrook,  Illinois
during the third quarter of 2002 and the sale of the industrial property located
in Salt Lake City, Utah during the first quarter of 2003.

                              UNREALIZED LOSS/GAIN

THIRD QUARTER 2003:

The Aurora,  Colorado industrial property owned by the Partnership experienced a
net  unrealized  loss  of  approximately  $0.3  million  for the  quarter  ended
September 30, 2003. The unrealized loss  experienced in the third quarter is due
to capital  expenditures  at the property that were not reflected as an increase
in market value.

2003 YEAR-TO-DATE:

The Aurora,  Colorado industrial property owned by the Partnership experienced a
net  unrealized  loss of  approximately  $1.0  million for the nine months ended
September  30, 2003  compared to a net  unrealized  gain of  approximately  $0.5
million for the nine months  ended  September  30,  2002.  The  unrealized  loss
experienced in 2003 is due to soft market conditions and capital expenditures at
the property that were not reflected as an increase in market value.

2002 YEAR-TO-DATE:

The  two  industrial  properties  owned  by the  Partnership  experienced  a net
unrealized  gain of  approximately  $0.2  million  for  the  nine  months  ended
September 30, 2002. The majority of the unrealized gain in 2002 was attributable
to an increase in market rents.

As of September 30, 2003, all vacant spaces were being marketed.

                                  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.

On September 12, 2002 the industrial  property located in Bolingbrook,  Illinois
was sold for a realized gain of $0.4 million.

EQUITY IN INCOME OF REAL ESTATE PARTNERSHIP

<TABLE>
<CAPTION>
                            NET            NET
                        INVESTMENT     INVESTMENT     UNREALIZED     UNREALIZED
                          INCOME         INCOME      (LOSS)/GAIN    (LOSS)/GAIN    OCCUPANCY      OCCUPANCY
PROPERTY                 09/30/03       09/30/02      09/30/03       09/30/02      09/30/03       09/30/02
--------               -----------    -----------    -----------    -----------    ----------     ---------
<S>                      <C>            <C>           <C>             <C>             <C>            <C>
YEAR TO DATE
------------
Kansas City, KS; MO...   $488,634       $160,446      $(882,480)      $ 99,757        86%            84%

QUARTER TO DATE
---------------
Kansas City, KS; MO...   $183,671       $ 94,676      $(312,790)      $727,624
</TABLE>




                                       20
<PAGE>


                              NET INVESTMENT INCOME

During the quarter ended September 30, 2003, income from the investment  located
in Kansas City,  Kansas and Missouri  amounted to $0.2 million from $0.1 million
at September 30, 2002.  During the nine months ended September 30, 2003,  income
from the investment located in Kansas City, Kansas and Missouri amounted to $0.5
million  from $0.2 million at September  30,  2002.  This  increase is due to an
increase in revenue  associated  with  expansion of the existing  grocery  store
anchor that was  completed  last quarter.

                              UNREALIZED LOSS/GAIN

THIRD QUARTER 2003:

The equity  investment  experienced a net unrealized  loss of $0.3 million and a
net unrealized gain of $0.7 million for the quarter ended September 30, 2003 and
2002,  respectively.  The unrealized loss of $0.3 million experienced during the
third quarter of 2003 was due to capital expenditures that were not reflected as
an increase in market value.

THIRD QUARTER 2002:

The unrealized gain of $0.7 million experienced during the third quarter of 2002
was due to renovations from the expansion of the existing grocery store anchor.

2003 YEAR-TO-DATE:

The equity investment  experienced a net unrealized loss of $0.9 million for the
nine months ended  September 30, 2003 and a net unrealized  gain of $0.1 million
for the nine months ends September 30, 2002.  The  unrealized  loss for 2003 was
primarily due to  renovations  from the expansion of the existing  grocery store
anchor, which were not reflected as an increase in market value.

2002 YEAR-TO-DATE:

The unrealized gain of $0.1 million for the nine months ended September 30, 2002
was primarily  due to  renovations  from the  expansion of the existing  grocery
store anchor.

As of September 30, 2003, all vacant spaces were being marketed.

OTHER

Other net investment  income  increased $0.2 million during the quarter and nine
months ended September 30, 2003 compared to the  corresponding  periods in 2002.
Other  net  investment   income   includes   interest   income  from  short-term
investments,  investment  management  fees, and expenses not related to property
activities.

(c) INFORMATION CONCERNING FORWARD-LOOKING STATEMENTS

Certain  statements  contained in  Management's  Discussion  and Analysis may be
considered  forward-looking  statements.  Words such as  "expects",  "believes",
"anticipates",  "intends",  "plans",  or  variations of such words are generally
part of forward-looking  statements.  Forward-looking  statements are made based
upon   management's   current   expectations  and  beliefs   concerning   future
developments and their potential  effects upon the Partnership.  There can be no
assurance  that future  developments  affecting  the  Partnership  will be those
anticipated by management.  There are certain important factors that could cause
actual results to differ materially from estimates or expectations  reflected in
such forward-looking statements including without limitation,



                                       21
<PAGE>


changes in general economic  conditions,  including the performance of financial
markets and interest rates;  market  acceptance of new products and distribution
channels; competitive,  regulatory or tax changes that affect the cost or demand
for the  Partnership's  products;  and  adverse  litigation  results.  While the
Partnership #

reassesses  material trends and uncertainties  affecting its financial  position
and results of operations, it does not intend to review or revise any particular
forward-looking   statement  referenced  in  this  Management's  Discussion  and
Analysis in light of future  events.  Readers  should  consider the  information
referred to above when  reviewing any  forward-looking  statements  contained in
this Management's Discussion and Analysis.

(d) 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.

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

VALUATION OF INVESTMENTS

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

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

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

As described  above,  the estimated  market value of real estate and real estate
related  assets is  determined  through an appraisal  process.  These  estimated
market  values may vary  significantly  from the prices at which the real estate
investments  would sell since market prices of real estate  investments can only
be determined by  negotiation  between a willing buyer and seller.  Although the
estimated  market values represent  subjective  estimates,  management  believes
these estimated market values are reasonable approximations of market prices and
the  aggregate  value of  investments  in real estate is fairly  presented as of
September 30, 2003 and December 31, 2002.

OTHER ESTIMATES

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



                                       22
<PAGE>


ITEM 3. 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 40.96% of its investment portfolio consisting
primarily  of  short-term  fixed rate  commercial  paper and fixed and  variable
interest  rate  debt.  The  Partnership   does  not  use  derivative   financial
instruments. By policy, the Partnership places its investments with high quality
debt security  issuers,  limits the amount of credit exposure to any one issuer,
limits  duration by  restricting  the term,  and holds  investments  to maturity
except under rare circumstances.

The table below presents the amounts and related weighted  interest rates of the
Partnership's cash equivalents and short-term investments at September 30, 2003:

                                               ESTIMATED MARKET
                                                     VALUE           AVERAGE
                                  MATURITY      (IN $ MILLIONS)   INTEREST RATE
                                 ----------    ----------------   -------------
Cash equivalents.............    0-3 months          $31.8            0.98%


The table below discloses the  Partnership's  fixed and variable rate debt as of
September 30, 2003.  Approximately $34.1 million 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.  The interest rate on the variable rate
debt is equal to the  6-month  Treasury  rate plus  1.565%.  It is  subject to a
maximum of 11.345% and a minimum of 2.345%.  The  interest  rate on the variable
rate debt as of September 30, 2003 was 3.235%.

SEPTEMBER 30, 2003

<TABLE>
<CAPTION>
DEBT (IN $ THOUSANDS),            10/1/2003-                                                                 ESTIMATED
INCLUDING CURRENT PORTION         12/31/2003   2004      2005       2006      2007   THEREAFTER     TOTAL   FAIR VALUE
-------------------------         ----------   ----      ----       ----      ----   ----------     -----   ----------

<S>                                  <C>       <C>      <C>        <C>        <C>      <C>         <C>        <C>
Average Fixed Interest Rate......    5.91%     6.31%      6.29%       5.67%   5.65%       6.75%       7.39%
Fixed Rate.......................    $173      $719     $  774     $ 8,479    $588     $23,374     $34,107    $34,351
Variable Rate....................      73       242        250       9,121      --          --       9,686      9,442
                                    ---------------------------------------------------------------------------------
Total Mortgage Loans Payable.....    $246      $961     $1,024     $17,600    $588     $23,374     $43,793    $43,793
                                    ---------------------------------------------------------------------------------
</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 4. 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 President
and Chief Accounting  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 September 30, 2003. Based on such evaluation, the
President and Chief Accounting  Officer have concluded that, as of September 30,
2003, 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 quarter  ended  September  30,  2003,  that has
materially affected,  or is reasonably likely to materially affect, our internal
control over financial reporting.





                                       23
<PAGE>


                                     PART II

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

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


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)   EXHIBITS

      2.      Not applicable.

      3.1     Amended Articles of Incorporation of Pruco Life Insurance  Company
              of New  Jersey  filed  as  Exhibit  1.A.(6)(a)  to Post  Effective
              Amendment No. 17 to Form S-6, Registration  Statement No. 2-89780,
              filed March 1, 1991, and incorporated herein by reference.

      3.2     Amended  By-Laws of Pruco Life  Insurance  Company of New  Jersey,
              filed as Exhibit 1.A.(6)(b) to Post-Effective  Amendment No. 17 to
              Form S-6, Registration Statement No. 2-89780, filed March 1, 1991,
              and incorporated herein by reference.

      3.3     Resolution of the Board of Directors  establishing  the Pruco Life
              of New Jersey Variable  Contract Real Property  Account,  filed as
              Exhibit (3C) to Form S-1,  Registration  Statement  No.  33-20018,
              filed February 5, 1988, and incorporated herein by reference.

      4.1     Variable  Life  Insurance  Contract  filed as Exhibit A(5) to Form
              N-8B-2,  Registration  Statement  No.  2-81243,  filed January 10,
              1983, and incorporated herein by reference.

      4.2     Revised Variable  Appreciable  Life Insurance  Contract with fixed
              death  benefit,  filed as  Exhibit  1.A.(5)(c)  to  Post-Effective
              Amendment No. 5 to Form S-6,  Registration  Statement No. 2-89780,
              filed July 11, 1986, and incorporated herein by reference.

      4.3     Revised Variable Appreciable Life Insurance Contract with variable
              death  benefit,  filed as  Exhibit  1.A.(5)(d)  to  Post-Effective
              Amendment No. 5 to Form S-6,  Registration  Statement No. 2-89780,
              filed July 11, 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.  2-99916,  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. 2-99537,
              filed August 8, 1985, and incorporated herein by reference.

      9.      None.

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

      10.2    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. 2 to Form S-1, Registration  Statement No. 33-20018,
              filed April 6, 1990, and incorporated herein by reference.

      11.     Not applicable.

      12.     Not applicable.

      18.     None.

      22.     Not applicable.

      23.     None.



                                       24
<PAGE>


      24.     Not applicable

      27.     Not applicable.

      31.1    Certification of President required pursuant to Exchange Act Rules
              13a-15(e) and 15d-15(e), as adopted pursuant to Section 302 of the
              Sarbanes-Oxley Act of 2002.

      31.2    Certification  of Chief Accounting  Officer  required  pursuant to
              Exchange Act Rules 13a-15(e) and 15d-15(e), as adopted pursuant to
              Section 302 of the Sarbanes-Oxley Act of 2002.

      32.1    Certification of President required pursuant to 18 U.S.C.  Section
              1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
              of 2002.

      32.2    Certification of Chief Accounting  Officer required pursuant to 18
              U.S.C.  Section  1350,  as adopted  pursuant to Section 906 of the
              Sarbanes-Oxley Act of 2002.

(b)   REPORT ON FORM 8-K

      None.










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<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 OF NEW JERSEY
                                  IN RESPECT OF
        PRUCO LIFE OF NEW JERSEY VARIABLE CONTRACT REAL PROPERTY ACCOUNT
        ----------------------------------------------------------------
                                  (REGISTRANT)


Date:  November 14, 2003                         By: /s/ Andrew J. Mako
      ------------------                             -------------------------
                                                     Andrew J. Mako
                                                     President and Director




Date:  November 14, 2003                         By: /s/ William J. Eckert, IV
      ------------------                             -------------------------
                                                     William J. Eckert, IV
                                                     Chief Accounting Officer










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