UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark
  One)

| | QUARTERLY
        REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES
        EXCHANGE ACT OF 1934 [FEE REQUIRED]
| | ---------------------------------------------------------------------------------------------------------------------

For the quarterly period ended September 30, 2006

OR

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

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(State or other jurisdiction ofincorporation or organization) |  | 22-2426091(IRS Employer Identification No.) | 
| | ----------------------------------------------------------------------- |  | ------------------------------------------- | 

213 Washington Street, Newark, New Jersey 07102-2992

(Address of principal executive offices) (Zip Code)

(973) 802-6000

(Registrants Telephone Number, including area code)

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. YESNO

Indicate
  by check mark whether the Registrant is a large accelerated filer, an accelerated
  filer, or a non-accelerated filer. See definition of accelerated
  filer and large accelerated filer in Rule 12b-2 of the Exchange
  Act (check one).

Large
  accelerated filerAccelerated filerNon-accelerated filer

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






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PRUCO LIFE OF NEW JERSEY VARIABLE CONTRACT REAL PROPERTY ACCOUNT

(Registrant)

INDEX



PageForward-Looking
          Statement Disclosure
      3Part
          I - Financial InformationItem
          1.
      
      Financial
          Statements (Unaudited)A.
          PRUCO LIFE OF NEW JERSEY VARIABLE CONTRACT REAL PROPERTY ACCOUNTStatements
          of Net Assets  September 30, 2006 and December 31, 2005
      4Statements
          of Operations  Nine and Three Months Ended September 30, 2006
          and 2005
      4Statements
          of Changes in Net Assets  Nine and Three Months Ended September
          30, 2006 and 2005
      4Notes
          to the Financial Statements of the Account
      5B.
          THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIPConsolidated
          Statements of Assets and Liabilities  September 30, 2006 and December
          31, 2005
      8Consolidated
          Statements of Operations  Nine and Three Months Ended September
          30, 2006 and 2005
      9Consolidated
          Statements of Changes in Net Assets  Nine Months Ended September
          30, 2006 and 2005
      10Consolidated
          Statements of Cash Flows  Nine Months Ended September 30, 2006
          and 2005
      11Consolidated
          Schedules of Investments  September 30, 2006 and December 31,
          2005
      12Notes
          to Consolidated Financial Statements of the Partnership
      14Item
          2.
      
      Managements
          Discussion and Analysis of Financial Condition and Results of Operations
      16Item
          3.
      
      Quantitative
          and Qualitative Disclosures About Market Risk
      25Item
          4.
      
      Controls
          and Procedures
      25Part
          II - Other InformationItem
          1A.
      
      Risk
          Factors
      26Item
          4.
      
      Submission
          of Matters to a Vote of Security Holders
      26Item
          6.
      
      Exhibits
      26Signatures
      27


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|Forward-Looking
        Statements
|----------------------------------

Certain of the statements included
  in this Quarterly Report on Form 10-Q, including but not limited to those in
  Managements Discussion and Analysis of Financial Condition and Results
  of Operations, constitute forward-looking statements within the meaning of the
  U.S. Private Securities Litigation Reform Act of 1995. Words such as expects,
  believes, anticipates, includes, plans,
  assumes, estimates, projects, intends,
  should, will, shall or variations of such
  words are generally part of forward- looking statements. Forward-looking statements
  are made based on managements current expectations and beliefs concerning
  future developments and their potential effects upon Pruco Life Insurance Company
  of New Jersey, or the Company, or the Pruco Life of New Jersey Variable
  Contract Real Property Account, or the Real Property Account. There
  can be no assurance that future developments affecting the Company and the Real
  Property Account will be those anticipated by management. These forward- looking
  statements are not a guarantee of future performance and involve risks and uncertainties,
  and there are certain important factors that could cause actual results to differ,
  possibly materially, from expectations or estimates reflected in such forward-
  looking statements, including, among others: (1) general economic, market and
  political conditions, including the performance and fluctuations of stock, real
  estate and other financial markets; (2) interest rate fluctuations; (3) re-estimates
  of our reserves for future policy benefits and claims; (4) differences between
  actual experience regarding mortality, morbidity, persistency, surrender experience,
  interest rates, or market returns and the assumption we use in pricing our products,
  establishing liabilities and reserves or for other purposes or goodwill; (5)
  changes in our assumptions related to deferred policy acquisition costs and
  valuation of business acquired; (6) changes in our claims-paying or credit ratings;
  (7) investment losses and defaults; (8) competition in our product lines and
  for personnel; (9) changes in tax law; (10) economic, political, currency and
  other risks relating to our international operations; (11) regulatory or legislative
  changes; (12) adverse determinations in litigation or regulatory matters and
  our exposure to contingent liabilities, including in connection with our divestiture
  or winding down of businesses; (13) domestic or international military actions,
  natural or man-made disasters including terrorist activities or pandemic disease,
  or other events resulting in catastrophic loss of life; (14) ineffectiveness
  of risk management policies and procedures in identifying, monitoring and managing
  risks; (15) effects of acquisitions, divestitures and restructurings, including
  possible difficulties in integrating and realizing the projected results of
  acquisitions; and (16) changes in statutory or U.S. GAAP accounting principles,
  practices or policies. The Company and the Real Property Account do not intend,
  and are under no obligation to, update any particular forward-looking statement
  included in this document. See Risk Factors included in the Annual
  Report on Form 10-K for the year ended December 31, 2005 for discussion
  of certain risks relating to the operation of the Partnership.

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

|STATEMENTS
        OF NET ASSETS                
|------------------------------------------------
|September 30, 2006 and December
        31, 2005



|                                                             |  | September
      30, 2006(unaudited) |           | December
      31, 2005 |   |           |  |  | 
|------------------------------------------------------------ |  | ----------------------------------- | --------- | ----------------------- | - | --------- |  |  | 
|                                                             |  |                                     |           |                         |   |           |  |  | 
|ASSETS                                                       |  |                                     |           |                         |   |           |  |  | 
|Investment in The
        Prudential Variable Contract       |  |                                     |           |                         |   |           |  |  | 
|Real Property Partnership                                    |  | $                                   | 9,670,367 |                         | $ | 8,924,959 |  |  | 
|                                                             |  |                                     |           |                         |   |           |  |  | 
|Net Assets                                                   |  | $                                   | 9,670,367 |                         | $ | 8,924,959 |  |  | 
|                                                             |  |                                     |           |                         |   |           |  |  | 
|NET
        ASSETS,representing:                             |  |                                     |           |                         |   |           |  |  | 
|Equity of contract
        owners                            |  | $                                   | 7,323,295 |                         | $ | 6,812,311 |  |  | 
|Equity of Pruco
        Life Insurance Company of New Jersey |  |                                     | 2,347,072 |                         |   | 2,112,648 |  |  | 
|                                                             |  |                                     |           |                         |   |           |  |  | 
|                                                             |  | $                                   | 9,670,367 |                         | $ | 8,924,959 |  |  | 
|                                                             |  |                                     |           |                         |   |           |  |  | 
|Units outstanding                                            |  |                                     | 3,308,931 |                         |   | 3,374,357 |  |  | 
|Portfolio shares
        held                                |  |                                     | 294,527   |                         |   | 301,619   |  |  | 
|Portfolio net asset
        value per share                  |  | $                                   | 32.83     |                         | $ | 29.59     |  |  | 

|                                                                     
|---------------------------------------------------------------------
|STATEMENTS
        OF OPERATIONS                                     
|For the nine and three months ended September
      30, 2006 and 2005



|                                                                                                               |  | 1/1/2006-9/30/2006 |         | 1/1/2005-9/30/2005 |   | 7/1/2006-9/30/2006 |  | 7/1/2005-9/30/2005 |        
|-------------------------------------------------------------------------------------------------------------- |  | ------------------ | ------- | ------------------ | - | ------------------ |  | ------------------ | -------
|                                                                                                               |  | (unaudited)        |         | (unaudited)        |   | (unaudited)        |  | (unaudited)        |        
|                                                                                                               |  |                    |         |                    |   |                    |  |                    |        
|INVESTMENT INCOME                                                                                              |  |                    |         |                    |   |                    |  |                    |        
|Net investment income from Partnership operations                                                              |  | $                  | 353,798 |                    | $ | 286,842            |  | $                  | 135,461
|                                                                                                               |  |                    |         |                    |   |                    |  |                    |        
|EXPENSES                                                                                                       |  |                    |         |                    |   |                    |  |                    |        
|Charges
        to contract owners for assuming mortality risk and expense
        risk and for administration |  |                    | 30,275  |                    |   | 26,932             |  |                    | 10,363 
|                                                                                                               |  |                    |         |                    |   |                    |  |                    |        
|NET INVESTMENT INCOME                                                                                          |  |                    | 323,523 |                    |   | 259,910            |  |                    | 125,098
|                                                                                                               |  |                    |         |                    |   |                    |  |                    |        
|NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS                                                         |  |                    |         |                    |   |                    |  |                    |        
|Net change in unrealized gain (loss) on investments in Partnership                                             |  |                    | 621,699 |                    |   | 579,832            |  |                    | 64,052 
|Net realized gain (loss) on sale of investments in Partnership                                                 |  |                    | 2,946   |                    |   | 54,559             |  |                    | 1      
|                                                                                                               |  |                    |         |                    |   |                    |  |                    |        
|NET GAIN (LOSS) ON INVESTMENTS                                                                                 |  |                    | 624,645 |                    |   | 634,391            |  |                    | 64,053 
|                                                                                                               |  |                    |         |                    |   |                    |  |                    |        
|NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS                                                |  | $                  | 948,168 |                    | $ | 894,301            |  | $                  | 189,151
|                                                                                                               |  |                    |         |                    |   |                    |  |                    |        

|                                                                       
|-----------------------------------------------------------------------
|STATEMENTS
        OF CHANGES IN NET ASSETS                            
|For the nine and three months
        ended September 30, 2006 and 2005



|                                                                                      |  | 1/1/2006-9/30/2006 |           | 1/1/2005-9/30/2005 |   | 7/1/2006-9/30/2006 |  | 7/1/2005-9/30/2005 |          
|------------------------------------------------------------------------------------- |  | ------------------ | --------- | ------------------ | - | ------------------ |  | ------------------ | ---------
|                                                                                      |  | (unaudited)        |           | (unaudited)        |   | (unaudited)        |  | (unaudited)        |          
|                                                                                      |  |                    |           |                    |   |                    |  |                    |          
|OPERATIONS                                                                            |  |                    |           |                    |   |                    |  |                    |          
|Net investment income                                                                 |  | $                  | 323,523   |                    | $ | 259,910            |  | $                  | 125,098  
|Net change in unrealized
        gain (loss) on investments in Partnership            |  |                    | 621,699   |                    |   | 579,832            |  |                    | 64,052   
|Net realized gain
        (loss) on sale of investments in Partnership                |  |                    | 2,946     |                    |   | 54,559             |  |                    | 1        
|                                                                                      |  |                    |           |                    |   |                    |  |                    |          
|NET
        INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS               |  |                    | 948,168   |                    |   | 894,301            |  |                    | 189,151  
|                                                                                      |  |                    |           |                    |   |                    |  |                    |          
|CAPITAL
        TRANSACTIONS                                                          |  |                    |           |                    |   |                    |  |                    |          
|Net contributions
        (withdrawals) by contract owners                            |  |                    | (193,978  | )                  |   | 23,435             |  |                    | (48,514  
|Net
        contributions (withdrawals) by Pruco Life Insurance Company of New Jersey |  |                    | (8,782    | )                  |   | 3,497              |  |                    | (174,158 
|                                                                                      |  |                    |           |                    |   |                    |  |                    |          
|NET
        INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL TRANSACTIONS     |  |                    | (202,760  | )                  |   | 26,932             |  |                    | (222,672 
|                                                                                      |  |                    |           |                    |   |                    |  |                    |          
|TOTAL
        INCREASE (DECREASE) IN NET ASSETS                                       |  |                    | 745,408   |                    |   | 921,233            |  |                    | (33,521  
|NET ASSETS                                                                            |  |                    |           |                    |   |                    |  |                    |          
|Beginning of period                                                                   |  |                    | 8,924,959 |                    |   | 8,082,948          |  |                    | 9,703,888
|                                                                                      |  |                    |           |                    |   |                    |  |                    |          
|End of period                                                                         |  | $                  | 9,670,367 |                    | $ | 9,004,181          |  | $                  | 9,670,367
|                                                                                      |  |                    |           |                    |   |                    |  |                    |          

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

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NOTES
  TO THE FINANCIAL STATEMENTS OFPRUCO LIFE OF NEW JERSEY VARIABLE CONTRACT REAL PROPERTY ACCOUNTSeptember 30, 2006(Unaudited)

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

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Pruco Life of New Jersey Variable Contract Real Property Account (the 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), a
wholly-owned subsidiary of The Prudential Insurance Company of America (Prudential), an indirect wholly-owned subsidiary of Prudential Financial, Inc. (PFI), as a separate investment account pursuant to New Jersey law and is registered
under the Securities Act of 1933, as amended. The assets of the Account are segregated from Pruco Life of New Jerseys other assets. The 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 Account are invested in The Prudential Variable Contract Real Property Partnership (the Partnership). The Partnership is the investment vehicle for assets allocated to the real estate investment option under certain variable
life insurance and annuity contracts. The Account, along with the 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 and Pronouncements

| |    |                    
| | -- | -------------------
| | 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, 2006 and for the nine and three months ended September 30, 2006 and 2005 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.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In September 2006, the staff of the U.S. Securities and Exchange Commission, or SEC, issued Staff Accounting Bulletin, or SAB, No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current
Year Financial Statements. The interpretations in this SAB express the staffs views regarding the process of quantifying financial statement misstatements. Specifically, the SEC staff believes that registrants must quantify the impact on
current period financial statements of correcting all misstatements, including both those occurring in the current period and the effect of reversing those that have accumulated from prior periods. This SAB should be applied beginning with the
first fiscal year ending after November 15, 2006, with early adoption encouraged. Since the Accounts method for quantifying financial statement misstatements already considers those occurring in the current period and the effect of reversing
those that have accumulated from prior periods, the adoption of SAB No. 108 should have no effect to the financial position and result of operations of the Account.

| |    |                                   
| | -- | ----------------------------------
| | B. | Investment in Partnership Interest

| |                                                                                                                                                                                                                                                                                          
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The investment in the Partnership
        is based on the Accounts proportionate interest of the Partnerships
        market value. At September 30, 2006 and December 31, 2005 the Accounts
        interest in the Partnership was 4.3% or 294,527 and 301,619 shares, respectively.

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

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

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| | D. | Equity of Pruco Life Insurance Company of New Jersey
| | -- | ----------------------------------------------------

| |                                                                                                                                                                                                                                                                          
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Pruco Life of New Jersey maintains a position in the Account for liquidity purposes, including unit purchases and redemptions, Partnership share transactions, and expense processing. The position does not affect contract owners accounts or
the related unit values.

|        |                     
|------- | --------------------
|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 and SPVL, respectively. Mortality risk is the risk that life insurance contract owners may not live as
long as estimated or annuitants may live longer than estimated and expense risk is the risk that the cost of issuing and administering the policies may exceed related charges by Pruco Life of New Jersey. The mortality risk and expense risk
charges are assessed through reduction in unit values.

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

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

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

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Contract owner contributions are subject to certain deductions prior to being invested in the Account. The deductions for VAL and VLI are (1) state premium taxes; (2) sales charges, not to exceed 5% for VAL and 9% for VLI, which are deducted
in order to compensate Pruco Life of New Jersey for the cost of selling the contract and (3) transaction costs, applicable to VAL, which are deducted from each premium payment to cover premium collection and processing costs. Contracts are
subject to charges on each basic premium for assuming a guaranteed minimum death benefit risk.  This charge compensates Pruco Life of New Jersey for the risk that an insured may die at a time when the death benefit exceeds the benefit that
would have been payable in the absence of a minimum guarantee. These charges are assessed through the redemption of units.

| |    |                      
| | -- | ---------------------
| | D. | Deferred Sales Charge

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

| |    |                          
| | -- | -------------------------
| | 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. This charge is assessed through the redemption of units.

|        |      
|------- | -----
|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 Account form a part of PFIs consolidated federal tax return. Under current federal law, no federal
income taxes are payable by the Account. As such, no provision for the tax liability has been recorded in these financial statements.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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|Note 5: | Net Withdrawals by Contract Owners
|------- | ----------------------------------

| |                                                                                                                                                                                                                                      
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Net contract owner withdrawals for the real estate investment option in Pruco Life of New Jerseys variable insurance and variable annuity products for the nine and three months ended September 30, 2006 and 2005, were as follows:
| |                                                                                                                                                                                                                                      

|      |  | Nine Months EndedSeptember 30,(Unaudited) |          | Three Months EndedSeptember 30,(Unaudited) |  
|----- |  | ----------------------------------------- | -------- | ------------------------------------------ | -
|      |  |                                           |          |                                            |  
|      |  | 2006                                      |          | 2005                                       |  
|      |  |                                           |          |                                            |  
|VAL   |  | $                                         | (149,773 | )                                          | $
|VLI   |  |                                           | (17,803  | )                                          |  
|SPVA  |  |                                           | (25,680  | )                                          |  
|SPVL  |  |                                           | (722     | )                                          |  
|      |  |                                           |          |                                            |  
|TOTAL |  | $                                         | (193,978 | )                                          | $
|      |  |                                           |          |                                            |  



|Note 6: | Partnership Distributions
|------- | -------------------------

| |                                                                                                                                                                                                                                                                                                                                                                            
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | As of September 30, 2006, the Partnership made distributions of $6 million. The Pruco Life of New Jersey Real Property Accounts share of these distributions was $0.2 million. For the year ended December 31, 2005, the Partnership made
distributions of $6 million. The Pruco Life of New Jersey Real Property Accounts share of these distributions was $0.2 million.

|        |                 
|------- | ----------------
|Note 7: | Unit Information

| |                                                                                               
| | ----------------------------------------------------------------------------------------------
| | Outstanding units and unit values at September 30, 2006 and December 31, 2005 were as follows:
| |                                                                                               

|                   |  | September 30, 2006 |                          | December 31, 2005 | 
|------------------ |  | ------------------ | ------------------------ | ----------------- | 
|                   |  |                    |                          |                   | 
|                   |  | (Unaudited)        |                          |                   | 
|                   |  |                    |                          |                   | 
|Units Outstanding: |  |                    | 3,308,931                |                   | 
|Unit Value:        |  |                    | 2.56353
      to 3.06368 |                   | 

|        |                     
|------- | --------------------
|Note 8: | Financial Highlights

| |                                                                                                
| | -----------------------------------------------------------------------------------------------
| | The range of total return for the nine months ended September 30, 2006 and 2005 was as follows:



|                     |  | Nine
      Months EndedSeptember 30, |                      
|-------------------- |  | ------------------------------------ | ---------------------
|                     |  |                                      |                      
|                     |  | 2006                                 |                      
|                     |  |                                      |                      
|                     |  | (Unaudited)                          |                      
|                     |  |                                      |                      
|Total
        Return |  |                                      | 9.94%
      to 10.68%

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THE
  PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIPCONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES

|                                                                                                                              |  | September 30, 2006(Unaudited) |             | December 31, 2005 |  
|----------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------- | ----------- | ----------------- | -
|                                                                                                                              |  |                               |             |                   |  
|ASSETS                                                                                                                        |  |                               |             |                   |  
|                                                                                                                              |  |                               |             |                   |  
|REAL ESTATE INVESTMENTS  At estimated market value:                                                                          |  |                               |             |                   |  
|Real estate and improvements(cost: 09/30/2006  $197,237,275;
 12/31/2005  $183,767,148)                                     |  | $                             | 208,845,670 |                   | $
|Real estate partnerships and preferred equity investments (cost: 09/30/2006  $22,307,181; 
        12/31/2005  $18,578,394) |  |                               | 17,731,816  |                   |  
|Mortgage and other loans receivable (cost: 09/30/2006  $0; 12/31/2005  $4,277,769)                                          |  |                               |            |                   |  
|Other real estate investments (cost: 09/30/06  $2,763,458; 12/31/2005  $0)                                                  |  |                               | 2,763,458   |                   |  
|                                                                                                                              |  |                               |             |                   |  
|Total real estate investments                                                                                                 |  |                               | 229,340,944 |                   |  
|CASH AND CASH EQUIVALENTS                                                                                                     |  |                               | 32,231,239  |                   |  
|OTHER ASSETS (net of allowance for uncollectible accounts: 09/30/2006  $115,781;
12/31/2005  $51,161)                       |  |                               | 3,765,602   |                   |  
|                                                                                                                              |  |                               |             |                   |  
|Total assets                                                                                                                  |  |                               | 265,337,785 |                   |  
|                                                                                                                              |  |                               |             |                   |  
|LIABILITIES & PARTNERS EQUITY                                                                                                |  |                               |             |                   |  
|                                                                                                                              |  |                               |             |                   |  
|INVESTMENT LEVEL DEBT                                                                                                         |  | $                             | 32,787,878  |                   | $
|ACCOUNTS PAYABLE AND ACCRUED EXPENSES                                                                                         |  |                               | 3,225,480   |                   |  
|DUE TO AFFILIATES                                                                                                             |  |                               | 807,015     |                   |  
|OTHER LIABILITIES                                                                                                             |  |                               | 712,051     |                   |  
|MINORITY INTEREST                                                                                                             |  |                               | 5,883,932   |                   |  
|                                                                                                                              |  |                               |             |                   |  
|Total liabilities                                                                                                             |  |                               | 43,416,356  |                   |  
|                                                                                                                              |  |                               |             |                   |  
|COMMITMENTS AND CONTINGENCIES                                                                                                 |  |                               |             |                   |  
|PARTNERS EQUITY                                                                                                              |  |                               | 221,921,429 |                   |  
|                                                                                                                              |  |                               |             |                   |  
|Total liabilities and partners equity                                                                                        |  | $                             | 265,337,785 |                   | $
|                                                                                                                              |  |                               |             |                   |  
|NUMBER OF SHARES OUTSTANDING AT END OF PERIOD                                                                                 |  |                               | 6,758,960   |                   |  
|                                                                                                                              |  |                               |             |                   |  
|SHARE VALUE AT END OF PERIOD                                                                                                  |  | $                             | 32.83       |                   | $
|                                                                                                                              |  |                               |             |                   |  

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

8

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  Index

THE
  PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIPCONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited)

|                                                                                                      |  | For
      the Nine Months Ended 
      September 30, |            | For
      the Three Months Ended 
      September 30, |  
|----------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------- | ---------- | ----------------------------------------------------- | -
|                                                                                                      |  |                                                      |            |                                                       |  
|                                                                                                      |  | 2006                                                 |            | 2005                                                  |  
|                                                                                                      |  |                                                      |            |                                                       |  
|INVESTMENT
        INCOME:                                                                            |  |                                                      |            |                                                       |  
|Revenue from real
        estate and improvements                                                     |  | $                                                    | 18,839,045 |                                                       | $
|Equity in income
        of real estate partnerships                                                  |  |                                                      | 646,978    |                                                       |  
|Interest and equity
        income on mortgage                                                        |  |                                                      |            |                                                       |  
|and other loans
        receivable                                                                    |  |                                                      | 125,510    |                                                       |  
|Income from other
        real estate investments                                                     |  |                                                      | 125,172    |                                                       |  
|Interest on short-term
        investments                                                            |  |                                                      | 1,456,221  |                                                       |  
|                                                                                                      |  |                                                      |            |                                                       |  
|Total investment
        income                                                                       |  |                                                      | 21,192,926 |                                                       |  
|                                                                                                      |  |                                                      |            |                                                       |  
|                                                                                                      |  |                                                      |            |                                                       |  
|INVESTMENT
        EXPENSES:                                                                          |  |                                                      |            |                                                       |  
|Operating                                                                                             |  |                                                      | 4,713,495  |                                                       |  
|Investment management
        fee                                                                     |  |                                                      | 2,298,695  |                                                       |  
|Real estate taxes                                                                                     |  |                                                      | 1,627,836  |                                                       |  
|Administrative                                                                                        |  |                                                      | 2,820,122  |                                                       |  
|Interest expense                                                                                      |  |                                                      | 1,372,094  |                                                       |  
|Minority interest                                                                                     |  |                                                      | 220,627    |                                                       |  
|                                                                                                      |  |                                                      |            |                                                       |  
|Total investment
        expenses                                                                     |  |                                                      | 13,052,869 |                                                       |  
|                                                                                                      |  |                                                      |            |                                                       |  
|NET
        INVESTMENT INCOME                                                                         |  |                                                      | 8,140,057  |                                                       |  
|                                                                                                      |  |                                                      |            |                                                       |  
|                                                                                                      |  |                                                      |            |                                                       |  
|REALIZED
        AND UNREALIZED GAIN (LOSS) ON REAL ESTATE INVESTMENTS:                               |  |                                                      |            |                                                       |  
|Net proceeds from
        real estate investments sold                                                |  |                                                      | 67,770     |                                                       |  
|Less: Cost of real
        estate investments sold                                                    |  |                                                      |           |                                                       |  
|Realization
        of prior years unrealized gain (loss) on real estate investments
        sold    |  |                                                      |           |                                                       |  
|Minority
        interest in realized gain (loss) on real estate investments sold                     |  |                                                      |           |                                                       |  
|                                                                                                      |  |                                                      |            |                                                       |  
|                                                                                                      |  |                                                      |            |                                                       |  
|NET
        GAIN (LOSS) REALIZED ON REAL ESTATE INVESTMENTS SOLD                                      |  |                                                      | 67,770     |                                                       |  
|                                                                                                      |  |                                                      |            |                                                       |  
|Change in unrealized
        gain (loss) on real estate investments                                   |  |                                                      | 16,401,107 |                                                       |  
|Less:
        Minority interest in unrealized gain (loss) on real estate         
        investments |  |                                                      | 2,090,356  |                                                       |  
|                                                                                                      |  |                                                      |            |                                                       |  
|Net unrealized gain
        (loss) on real estate investments                                         |  |                                                      | 14,310,751 |                                                       |  
|                                                                                                      |  |                                                      |            |                                                       |  
|NET
        REALIZED AND UNREALIZED GAIN (LOSS)                                                       |  |                                                      |            |                                                       |  
|ON REAL ESTATE
        INVESTMENTS                                                                    |  |                                                      | 14,378,521 |                                                       |  
|                                                                                                      |  |                                                      |            |                                                       |  
|                                                                                                      |  |                                                      |            |                                                       |  
|INCREASE
        (DECREASE) IN NET ASSETS RESULTING                                                   |  |                                                      |            |                                                       |  
|FROM OPERATIONS                                                                                       |  | $                                                    | 22,518,578 |                                                       | $
|                                                                                                      |  |                                                      |            |                                                       |  

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

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THE
  PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIPCONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS(Unaudited)

|                                                                               |  | For
      the Nine Months Ended 
      September 30, |            
|------------------------------------------------------------------------------ |  | ---------------------------------------------------- | -----------
|                                                                               |  |                                                      |            
|                                                                               |  | 2006                                                 |            
|                                                                               |  |                                                      |            
|INCREASE
        (DECREASE) IN NET ASSETSRESULTING
        FROM OPERATIONS:    |  |                                                      |            
|Net investment income                                                          |  | $                                                    | 8,140,057  
|Net gain (loss)
        realized on real estate investments sold               |  |                                                      | 67,770     
|Net unrealized gain
        (loss) from real estate investments                |  |                                                      | 14,310,751 
|                                                                               |  |                                                      |            
|Increase (decrease)
        in net assets resulting from operations            |  |                                                      | 22,518,578 
|                                                                               |  |                                                      |            
|INCREASE
        (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL TRANSACTIONS: |  |                                                      |            
|Withdrawals                                                                    |  |                                                      | (6,000,000 
|                                                                               |  |                                                      |            
|Increase (decrease)
        in net assets resulting from capital transactions  |  |                                                      | (6,000,000 
|                                                                               |  |                                                      |            
|INCREASE
        (DECREASE) IN NET ASSETS                                      |  |                                                      | 16,518,578 
|NET
        ASSETS  Beginning of period                                       |  |                                                      | 205,402,851
|                                                                               |  |                                                      |            
|NET
        ASSETS  End of period                                             |  | $                                                    | 221,921,429
|                                                                               |  |                                                      |            

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

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THE
  PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIPCONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited)

|                                                                                                                |  | For
      the Nine Months Ended 
      September 30, |            
|--------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------- | -----------
|                                                                                                                |  |                                                      |            
|                                                                                                                |  | 2006                                                 |            
|                                                                                                                |  |                                                      |            
|CASH
        FLOWS FROM OPERATING ACTIVITIES:                                                                   |  |                                                      |            
|Net increase in
        net assets from operations                                                              |  | $                                                    | 22,518,578 
|Adjustments to reconcile
        net increase in net assets to net cash from operating activities               |  |                                                      |            
|Net realized and
        unrealized loss (gain)                                                                 |  |                                                      | (14,378,521
|Distributions in
        excess of (less than) equity in income of real estate partnerships
        operations |  |                                                      | (59,755    
|Minority interest
        in consolidated partnerships                                                          |  |                                                      | 220,627    
|Bad debt expense                                                                                                |  |                                                      | 116,285    
|(Increase) Decrease
        in accrued interest included in mortgage and other loans receivable                 |  |                                                      |           
|(Increase) Decrease
        in accrued interest included in other real estate investments                       |  |                                                      | (125,172   
|(Increase) decrease
        in:                                                                                 |  |                                                      |            
|Other assets                                                                                                    |  |                                                      | (589,493   
|Increase (decrease)
        in:                                                                                 |  |                                                      |            
|Accounts payable
        and accrued expenses                                                                   |  |                                                      | 680,428    
|Due to affiliates                                                                                               |  |                                                      | 46,089     
|Other liabilities                                                                                               |  |                                                      | 239,715    
|                                                                                                                |  |                                                      |            
|Net cash flows from
        (used in) operating activities                                                      |  |                                                      | 8,668,781  
|                                                                                                                |  |                                                      |            
|CASH
        FLOWS FROM INVESTING ACTIVITIES:                                                                   |  |                                                      |            
|Net proceeds from
        real estate investments sold                                                          |  |                                                      | 67,770     
|Acquisition of real
        estate and improvements                                                             |  |                                                      | (12,159,443
|Additions to real
        estate and improvements                                                               |  |                                                      | (1,310,684 
|Contributions to
        real estate partnerships                                                               |  |                                                      | (7,289,487 
|Return of investment
        in real estate partnerships                                                        |  |                                                      | 3,620,455  
|Origination of mortgage
        loan receivable                                                                 |  |                                                      |           
|Collection of mortgage
        loan receivable                                                                  |  |                                                      | 4,277,769  
|Origination of other
        real estate investments                                                            |  |                                                      | (2,638,287 
|                                                                                                                |  |                                                      |            
|Net cash flows from
        (used in) investing activities                                                      |  |                                                      | (15,431,907
|                                                                                                                |  |                                                      |            
|CASH
        FLOWS FROM FINANCING ACTIVITIES:                                                                   |  |                                                      |            
|Withdrawals                                                                                                     |  |                                                      | (6,000,000 
|Principal payments
        on investment level debt                                                             |  |                                                      | (407,729   
|Distributions to
        minority interest partners                                                             |  |                                                      | (65,391    
|                                                                                                                |  |                                                      |            
|Net cash flows from
        (used in) financing activities                                                      |  |                                                      | (6,473,120 
|                                                                                                                |  |                                                      |            
|NET
        CHANGE IN CASH AND CASH EQUIVALENTS                                                                 |  |                                                      | (13,236,246
|CASH
        AND CASH EQUIVALENTS  Beginning of period                                                         |  |                                                      | 45,467,485 
|                                                                                                                |  |                                                      |            
|CASH
        AND CASH EQUIVALENTS  End of period                                                               |  | $                                                    | 32,231,239 
|                                                                                                                |  |                                                      |            
|DISCLOSURE
        OF SUPPLEMENTAL CASH FLOW INFORMATION                                                        |  |                                                      |            
|Cash paid for interest                                                                                          |  | $                                                    | 1,341,565  
|                                                                                                                |  |                                                      |            

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

11

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THE
  PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIPCONSOLIDATED SCHEDULE OF INVESTMENTS

|                                                                                   |  |                                   |       |                   |   | September
      30, 2006Total RentableSquare FeetUnless OtherwiseIndicated(Unaudited) |      | September
      30, 2006(Unaudited) |                      | December
      31, 2005 |     
|---------------------------------------------------------------------------------- |  | --------------------------------- | ----- | ----------------- | - | ------------------------------------------------------------------------------------- | ---- | ----------------------------------- | -------------------- | ----------------------- | ----
|                                                                                   |  |                                   |       |                   |   |                                                                                       |      |                                     |                      |                        
|Property
        Name                                                              |  | September
      30, 2006Ownership |       | City,
      State |   |                                                                                       | Cost |                                     | EstimatedMarketValue |                         | Cost
|                                                                                   |  |                                   |       |                   |   |                                                                                       |      |                                     |                      |                         |     
|OFFICES                                                                            |  |                                   |       |                   |   |                                                                                       |      |                                     |                      |                         |     
|750
        Warrenville                                                            |  |                                   | WO    |                   |   | Lisle, IL                                                                             |      |                                     | 103,193              |                         |     
|Summit
        @ Cornell Oaks                                                      |  |                                   | WO    |                   |   | Beaverton ,
      OR                                                                  |      |                                     | 72,109               |                         |     
|Westpark                                                                           |  |                                   | WO    |                   |   | Nashville,
      TN                                                                   |      |                                     | 97,199               |                         |     
|Financial
        Plaza                                                            |  |                                   | WO    |                   |   | Brentwood,
      TN                                                                   |      |                                     | 98,049               |                         |     
|                                                                                   |  |                                   |       |                   |   |                                                                                       |      |                                     |                      |                         |     
|                                                                                   |  |                                   |       |                   |   | Offices % as
      of 09/30/2006                                                      |      |                                     | 22                   | %                       |     
|APARTMENTS                                                                         |  |                                   |       |                   |   |                                                                                       |      |                                     |                      |                         |     
|Brookwood
        Apartments                                                       |  |                                   | WO    |                   |   | Atlanta, GA                                                                           |      |                                     | 240 Units            |                         |     
|Dunhill
        Trace Apartments                                                   |  |                                   | WO    |                   |   | Raleigh, NC                                                                           |      |                                     | 250 Units            |                         |     
|                                                                                   |  |                                   |       |                   |   |                                                                                       |      |                                     |                      |                         |     
|                                                                                   |  |                                   |       |                   |   | Apartments
      % as of 09/30/2006                                                   |      |                                     | 17                   | %                       |     
|RETAIL                                                                             |  |                                   |       |                   |   |                                                                                       |      |                                     |                      |                         |     
|Kings
        Market                                                              |  |                                   | WO    |                   |   | Rosewell, GA                                                                          |      |                                     | 314,358              |                         |     
|Hampton
        Towne Center                                                       |  |                                   | WO    |                   |   | Hampton, VA                                                                           |      |                                     | 174,540              |                         |     
|White
        Marlin Mall                                                          |  |                                   | CJV   |                   |   | Ocean City,
      MD                                                                  |      |                                     | 186,016              |                         |     
|Kansas
        City Portfolio                                                      |  |                                   | EJV   |                   |   | Kansas
      City, KS;MO                                                              |      |                                     | 487,660              |                         |     
|Westminster
        Crossing East, LLC                                             |  |                                   | CJV   |                   |   | Westminster,
      MD                                                                 |      |                                     | 89,890               |                         |     
|CARS
        Preferred Equity                                                      |  |                                   | PE    |                   |   | Various                                                                               |      |                                     | N/A                  |                         |     
|                                                                                   |  |                                   |       |                   |   |                                                                                       |      |                                     |                      |                         |     
|                                                                                   |  |                                   |       |                   |   | Retail % as
      of 09/30/2006                                                       |      |                                     | 51                   | %                       |     
|INDUSTRIAL                                                                         |  |                                   |       |                   |   |                                                                                       |      |                                     |                      |                         |     
|Smith
        Road                                                                 |  |                                   | WO    |                   |   | Aurora, CO                                                                            |      |                                     | 277,930              |                         |     
|                                                                                   |  |                                   |       |                   |   |                                                                                       |      |                                     |                      |                         |     
|                                                                                   |  |                                   |       |                   |   | Industrial
      % as of 09/30/2006                                                   |      |                                     | 6                    | %                       |     
|HOTEL                                                                              |  |                                   |       |                   |   |                                                                                       |      |                                     |                      |                         |     
|Portland
        Crown Plaza                                                       |  |                                   | CJV   |                   |   | Portland, OR                                                                          |      |                                     | 161 Rooms            |                         |     
|                                                                                   |  |                                   |       |                   |   |                                                                                       |      |                                     |                      |                         |     
|                                                                                   |  |                                   |       |                   |   | Hotel % as
      of 09/30/2006                                                        |      |                                     | 7                    | %                       |     
|MORTGAGE AND OTHER LOANS RECEIVABLE                                                |  |                                   |       |                   |   |                                                                                       |      |                                     |                      |                        
|Westminster
        West                                                           |  |                                   | Eloan |                   |   | Westminster,
      MD                                                                 |      |                                     |                      |                         |     
|                                                                                   |  |                                   |       |                   |   |                                                                                       |      |                                     |                      |                         |     
|                                                                                   |  |                                   |       |                   |   | Mortgage and
      Other Loans
      Receivable % as of 09/30/2006                    |      |                                     | 0                    | %                       |     
|OTHER REAL ESTATE INVESTMENTS                                                      |  |                                   |       |                   |   |                                                                                       |      |                                     |                      |                        
|Westminster
        East                                                           |  |                                   | Eloan |                   |   | Westminster,
      MD                                                                 |      |                                     |                      |                         |     
|                                                                                   |  |                                   |       |                   |   |                                                                                       |      |                                     |                      |                         |     
|                                                                                   |  |                                   |       |                   |   | Other Real
      Estate
      Investments % as of 09/30/2006                          |      |                                     | 1                    | %                       |     
|                                                                                   |  |                                   |       |                   |   |                                                                                       |      |                                     |                      |                         |     
|Total Real Estate Investments
      as a Percentage of Net Assets as of 09/30/2006 |  |                                   | 102   | %                 | $ | 222,307,914                                                                           |      | $                                   | 229,340,944          |                         | $   
|                                                                                   |  |                                   |       |                   |   |                                                                                       |      |                                     |                      |                         |     
|                                                                                   |  |                                   |       |                   |   |                                                                                       |      |                                     |                      |                         |     

|WO  Wholly Owned Investment
|----------------------------

|CJV  Consolidated Joint
        Venture
|----------------------------------------

|EJV  Joint Venture Investment
        accounted for under the equity method
|----------------------------------------------------------------------------

|PE  Preferred equity
        investments accounted for under the equity method
|-------------------------------------------------------------------------------

|Eloan  Mezzanine loan
        accounted for under the equity method
|--------------------------------------------------------------------

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

12

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THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIPCONSOLIDATED SCHEDULE OF INVESTMENTS

|                                                                |  |                   |            | September
      30, 2006(Unaudited) |   | December
      31, 2005 | 
|--------------------------------------------------------------- |  | ----------------- | ---------- | ----------------------------------- | - | ----------------------- | 
|                                                                |  |                   |            |                                     |   |                         | 
|                                                                |  | Face
      Amount |            | Cost                                |   | EstimatedMarket Value   | 
|                                                                |  |                   |            |                                     |   |                         | 
|CASH
        AND CASH EQUIVALENTS Percentage of
Net Assets      |  |                   |            |                                     |   |                         | 
|Federal Home Loan
        Bank, 1.75%, January 3, 2006          |  | $                 | 488,000    |                                     |   |                        | 
|Federal Home Loan
        Bank, 0 coupon bond, January 30, 2006 |  |                   | 44,184,000 |                                     |   |                        | 
|Federal Home Loan
        Bank, 0 coupon bond, October 5, 2006  |  |                   | 31,231,000 |                                     |   | 31,227,183              | 
|                                                                |  |                   |            |                                     |   |                         | 
|Total
        Cash Equivalents                                  |  |                   |            |                                     |   | 31,227,183              | 
|Cash                                                            |  |                   |            |                                     |   | 1,004,056               | 
|                                                                |  |                   |            |                                     |   |                         | 
|Total
        Cash and Cash Equivalents                         |  |                   |            |                                     | $ | 32,231,239              | 
|                                                                |  |                   |            |                                     |   |                         | 

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

13

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NOTES
  TO CONSOLIDATED FINANCIAL STATEMENTS OFTHE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIPSeptember 30, 2006 and 2005(Unaudited)

|Note 1: | Summary of Significant Accounting Policies and Pronouncements
|------- | -------------------------------------------------------------

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The accompanying unaudited consolidated 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,
2006 are not necessarily indicative of the results that may be expected for the year ended December 31, 2006. For further information, refer to the consolidated financial statements and notes thereto included in each partners Annual Report on
Form 10-K for the Year Ended December 31, 2005.

| |                                                                            
| | ---------------------------------------------------------------------------
| | Real estate investments are reported at their estimated fair market values.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Prudential Variable Contract Real Property Partnership (the Partnership) periodically enters into forward contracts to acquire, for a fixed price, real estate investments to be constructed in accordance with predetermined plans and
specifications or that achieve a certain level of leasing. Where conditions precedent to funding have been met by its development partner, and the Partnerships commitment to fund is firm, the amount of any unrealized gain or loss is recognized
based upon the difference between the estimated investments market value as described above and the Partnerships funding obligation. The funding obligation and related assets are recorded in the consolidated financial statements. As of
September 30, 2006 and December 31, 2005 no such funding obligation existed.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | FASB Interpretation No. 46, Consolidation of Variable Interest Entities (FIN 46), was issued in January 2003. In December 2003, FASB issued a revised interpretation of FIN 46 (FIN 46-R) that supersedes FIN 46. FIN 46-R defers the
effective date for applying the provisions of 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 FASB is
currently considering modifying FIN 46-R to provide an exception for companies that apply the Audit Guide. The Partnership is awaiting the final determination from the FASB in order to evaluate the extent in which, if any, its equity investments
may need to be consolidated as a result of this FIN 46-R.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In September 2006, the staff of the U.S. Securities and Exchange Commission, or SEC, issued Staff Accounting Bulletin, or SAB, No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current
Year Financial Statements. The interpretations in this SAB express the staffs views regarding the process of quantifying financial statement misstatements. Specifically, the SEC staff believes that registrants must quantify the impact on
current period financial statements of correcting all misstatements, including both those occurring in the current period and the effect of reversing those that have accumulated from prior periods. This SAB should be applied beginning with the
first fiscal year ending after November 15, 2006, with early adoption encouraged. Since the Partnerships method for quantifying financial statement misstatements already considers those occurring in the current period and the effect of
reversing those that have accumulated from prior periods, the adoption of SAB No. 108 should have no effect to the financial position and result of operations of the Partnership.

|        |                           
|------- | --------------------------
|Note 2: | Related Party Transactions

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Pursuant to an investment management agreement, Prudential Investment Management, Inc. (PIM), which is an indirectly owned subsidiary of Prudential Financial Inc., 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, 2006 and 2005 investment management fees incurred by the Partnership were $2,298,695 and $2,098,000, respectively.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

| | The Partnership also reimburses PIM for certain administrative services rendered by PIM. The amounts incurred for the nine months ended September 30, 2006 and 2005 were $98,197 and $40,222, respectively, and are classified as
administrative expense in the Consolidated Statements of Operations.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OFTHE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIPSeptember 30, 2006 and 2005(Unaudited)

|Note 3: | Commitments and Contingencies
|------- | -----------------------------

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

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

| |                                                                                              
| | ---------------------------------------------------------------------------------------------
| | As of September 30, 2006, the Partnership had the following outstanding purchase commitments:
| |                                                                                              

|Property Type |  | Commitments(000s) |       
|------------- |  | ------------------ | ------
|              |  |                    |       
|Other         |  | $                  | 20,805
|              |  |                    |       

|        |                     
|------- | --------------------
|Note 4: | Financial Highlights
|        |                     

|                                                               |  | For
      The Nine Months Ended September 30, |      
|-------------------------------------------------------------- |  | --------------------------------------------- | -----
|                                                               |  |                                               |      
|                                                               |  | 2006                                          |      
|                                                               |  |                                               |      
|Per
        Share(Unit) Operating Performance:                 |  |                                               |      
|Net
        Asset Value, beginning of period                   |  | $                                             | 29.59
|Income
        From Investment Operations:                     |  |                                               |      
|Investment
        income, before management fee               |  |                                               | 1.50 
|Management
        fee                                         |  |                                               | (0.33
|Net
        realized and unrealized gain (loss) on investments |  |                                               | 2.07 
|                                                               |  |                                               |      
|Net
        Increase in Net Assets Resulting from Operations   |  |                                               | 3.24 
|                                                               |  |                                               |      
|Net
        Asset Value, end of period                         |  | $                                             | 32.83
|                                                               |  |                                               |      
|                                                               |  |                                               |      
|Total
        Return, before Management Fee (a):               |  |                                               | 12.14
|Ratios/Supplemental
        Data:                              |  |                                               |      
|Net
        Assets, end of period (in millions)                |  | $                                             | 222  
|Ratios
        to average net assets (b):                      |  |                                               |      
|Total Portfolio
        Level Expenses                         |  |                                               | 1.15 
|Investment Income
        before Management Fee                |  |                                               | 4.87 

|
|

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

| | 
| | 
| | 

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

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

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|ITEM 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|------- | -------------------------------------------------------------------------------------

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | All of the assets of the Real Property Account, or the Account, are invested in the Partnership. Accordingly, the liquidity and capital resources and results of operations for the Account are contingent upon those of the Partnership. Therefore,
this managements discussion and analysis addresses these items at the Partnership level. The partners in the Partnership are Prudential, Pruco Life Insurance Company, and Pruco Life Insurance Company of New Jersey, or collectively, the
Partners.

| |                                                                                                                                                                                                                                                                                               
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The following discussion and analysis of the liquidity and capital resources and results of operations of the Partnership should be read in conjunction with the unaudited Consolidated Financial Statements of the Account and the Partnership and
the related Notes included in this filing.

| |     |                                
| | --- | -------------------------------
| | (a) | Liquidity and Capital Resources

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | As of September 30, 2006, the Partnerships liquid assets, consisting of cash and cash equivalents, were approximately $32.2 million, a decrease of approximately $13.3 million from $45.5 million at December 31, 2005. The decrease was
primarily due to an additional funding for a preferred equity investment in a private real estate investment trust, or REIT, the acquisition of a retail property and a distribution to the Partners, as discussed below. Partially offsetting the decrease
were proceeds received in connection with a loan payoff, as described below, and the cash flows from the Accounts operating activities. Sources of liquidity included net cash flow from property operations, sales, financings and interest from
short-term investments. The Partnership uses cash for its real estate investment activities and for distribution to its partners. As of September 30, 2006, approximately 12.1% of the Partnerships total assets consisted of cash and cash
equivalents.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | During the nine months ended September 30, 2006, the Partnership completed the second funding of its preferred equity investment in its existing Capital Automotive, or CARS, REIT for $7.3 million. CARS owns approximately 364
properties, which are leased to sixty automobile dealership operators throughout the United States. This investment is expected to pay to investors an annual preferred return of 7.5% for years one through five, 8.75% during years six and
seven, and 12% for all subsequent years. In addition, the Partnership invested $14.8 million in June to acquire an 89,849 square-foot retail property located in Westminster, Maryland.

| |                                                                                                                                                                                                                                                      
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Dispositions for the nine months ended September 30, 2006 included the sale of a portfolio of three retail properties located in Kansas City, Kansas and Kansas City, Missouri resulting in net proceeds of $3.6 million after the repayment of debt.

| |                                                                                                                    
| | -------------------------------------------------------------------------------------------------------------------
| | The Partnership made $6.0 million in distributions to the Partners during the nine months ended September 30, 2006.

| |                                                                                                                                                                                                                                                              
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Partnerships Leasehold Mortgage Loan that was originated in January 2004 for a borrowers redevelopment of a retail center in Westminster, Maryland was paid in full by the borrower in March 2006, resulting in proceeds of approximately
$4.3 million.
| |                                                                                                                                                                                                                                                              

| | During the nine months ended September 30, 2006, the Partnership spent approximately $1.3 million on capital improvements to various existing properties. Approximately $0.4 million was associated with leasing expenses at the office
property in Lisle, Illinois, approximately $0.2 million with the renovation of an apartment complex in Atlanta, Georgia and approximately $0.2 million with the budgeted capital projects at the industrial property in Aurora, Colorado. The remaining
$0.5 million was associated with minor capital improvements and transaction costs associated with leasing expenses of various other properties.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| | (b) | Results of Operations
| | --- | ---------------------

| |                                                                                                                                                 
| | ------------------------------------------------------------------------------------------------------------------------------------------------
| | The following is a comparison of the Partnerships results of operations for the nine and three month periods ended September 30, 2006 and 2005.

| |                               
| | ------------------------------
| | Net Investment Income Overview

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Partnerships net investment income for the nine months ended September 30, 2006 was approximately $8.1 million, an increase of $1.5 million from $6.6 million for the prior year period. The office, retail, industrial and hotel sector
investments posted increases of approximately $0.2 million, $1.3 million, $0.2 million and $0.2 million, respectively, from the prior year period. Partially offsetting this increase was a decrease in net investment income in the apartment sector of
approximately $0.9 million. In addition, the land sector posted a $0.1 million decrease in net investment income during the nine months ended September 30, 2006. Other net investment income increased $0.7 million during the nine months
ended September 30, 2006 from the prior year period. The components of this net investment income are discussed below by property type sector.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Partnerships net investment income for the quarter ended September 30, 2006 was $3.1 million, an increase of $0.7 million from $2.4 million for the prior year period. The office, retail and industrial sector investments posted increases of
approximately $0.1, $0.9 and $0.1 million from the prior year period. Partially offsetting this increase was a decrease in net investment income in the apartment sector of approximately $0.5 million. Other net investment income increased $0.1
million for the quarter ended September 30, 2006 from the prior year period. The components of this net investment income are discussed below by property type sector.

| |                   
| | ------------------
| | Valuation Overview

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Partnership recorded an aggregate net realized gain of approximately $0.1 million for the nine months ended September 30, 2006, compared to an aggregate net realized gain of $1.3 million for the prior year period. The Partnership
recorded an aggregate net unrealized gain of approximately $14.3 million for the nine months ended September 30, 2006, compared to an aggregate net unrealized gain of $13.4 million for the prior year period. The aggregate net realized and
unrealized gain of $14.4 million for the nine months ended September 30, 2006 was attributable to valuation gains in all property type sectors. Partially offsetting these gains for the nine months ended September 30, 2006 was a slight realized
loss recorded in the land sector. The components of these valuation gains and/or losses are discussed below by property type sector.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

| | The Partnership did not record any net realized gains and/or losses for the quarter ended September 30, 2006. The Partnership recorded an aggregate net realized loss of $0.3 million for the prior year period. The Partnership recorded an
aggregate net unrealized gain of approximately $1.5 million for the quarter ended September 30, 2006, compared to an aggregate net unrealized gain of $9.5 million for the prior year period. The aggregate net unrealized gain of $1.5 million for
the quarter ended September 30, 2006 was attributable to valuation gains in the office, retail and industrial property sectors. Partially offsetting these gains was a net unrealized loss of approximately $0.2 million recorded in the apartment
sector. The components of these valuation gains and/or losses are discussed below by property type sector.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| | The following table presents a comparison of the Partnerships sources of net investment income, and realized and unrealized gains or losses by investment type for the nine and three month periods ended September 30, 2006 and 2005.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                        

|                                                                                        |  | Nine
      Months Ended 
      September 30, |            | Three
      Months Ended 
      September 30, |  
|--------------------------------------------------------------------------------------- |  | -------------------------------------------- | ---------- | --------------------------------------------- | -
|                                                                                        |  |                                              |            |                                               |  
|                                                                                        |  | 2006                                         |            | 2005                                          |  
|                                                                                        |  |                                              |            |                                               |  
|Net
        Investment Income:                                                          |  |                                              |            |                                               |  
|Office properties                                                                       |  | $                                            | 2,503,937  |                                               | $
|Apartment complexes                                                                     |  |                                              | 779,306    |                                               |  
|Retail properties                                                                       |  |                                              | 4,426,107  |                                               |  
|Industrial properties                                                                   |  |                                              | 578,378    |                                               |  
|Hotel property                                                                          |  |                                              | 963,740    |                                               |  
|Land                                                                                    |  |                                              | (43,508    | )                                             |  
|Other (including
        interest income, investment mgt fees, etc.)                    |  |                                              | (1,067,903 | )                                             |  
|                                                                                        |  |                                              |            |                                               |  
|Total Net Investment
        Income                                                     |  | $                                            | 8,140,057  |                                               | $
|                                                                                        |  |                                              |            |                                               |  
|Net
        Realized Gain (Loss) on Real Estate Investments:                            |  |                                              |            |                                               |  
|Apartment Complex                                                                       |  | $                                            | 70,689     |                                               | $
|Office Building                                                                         |  |                                              |           |                                               |  
|Land                                                                                    |  |                                              | (2,919     | )                                             |  
|                                                                                        |  |                                              |            |                                               |  
|Total Net Realized
        Gain (Loss) on Real Estate Investments                       |  | $                                            | 67,770     |                                               | $
|                                                                                        |  |                                              |            |                                               |  
|Net
        Unrealized Gain (Loss) on Real Estate Investments:                          |  |                                              |            |                                               |  
|Office properties                                                                       |  | $                                            | 2,493,348  |                                               | $
|Apartment complexes                                                                     |  |                                              | 797,104    |                                               |  
|Retail properties                                                                       |  |                                              | 5,758,846  |                                               |  
|Industrial properties                                                                   |  |                                              | 1,463,579  |                                               |  
|Hotel property                                                                          |  |                                              | 3,797,874  |                                               |  
|                                                                                        |  |                                              |            |                                               |  
|Total Net Unrealized
        Gain (Loss) on Real Estate
             Investments        |  | $                                            | 14,310,751 |                                               | $
|                                                                                        |  |                                              |            |                                               |  
|Net Realized
        and Unrealized Gain (Loss) on Real Estate
             Investments |  | $                                            | 14,378,521 |                                               | $
|                                                                                        |  |                                              |            |                                               |  



|OFFICE PORTFOLIO
|----------------
|                

|Nine
        Months Ended September 30,  |  | Net
      InvestmentIncome/(Loss)2006 |           | Net
      InvestmentIncome/(Loss)2005 |   | UnrealizedGain/(Loss)2006 |   | Realized
      / UnrealizedGain/(Loss)2005 |           | Occupancy2006 |   | Occupancy2005 |  
|---------------------------------------- |  | ------------------------------------- | --------- | ------------------------------------- | - | ------------------------- | - | ------------------------------------------ | --------- | ------------- | - | ------------- | -
|                                         |  |                                       |           |                                       |   |                           |   |                                            |           |               |   |               |  
|Property                                 |  |                                       |           |                                       |   |                           |   |                                            |           |               |   |               |  
|                                         | 
|Lisle,
        IL                        |  | $                                     | 324,823   |                                       | $ | 304,006                   |   | $                                          | 292,021   |               | $ | (98,838       | )
|Brentwood,
        TN                    |  |                                       | 756,318   |                                       |   | 745,503                   |   |                                            | (299,760  | )             |   | 1,300,782     |  
|Oakbrook
        Terrace, IL (1)         |  |                                       | 1,323     |                                       |   | 202,894                   |   |                                            |          |               |   | 1,174,380     |  
|Beaverton,
        OR                    |  |                                       | 679,636   |                                       |   | 620,283                   |   |                                            | 1,901,087 |               |   | 832,446       |  
|Brentwood,
        TN (2)                |  |                                       | 741,837   |                                       |   | 467,539                   |   |                                            | 600,000   |               |   | 1,333,767     |  
|                                         |  |                                       |           |                                       |   |                           |   |                                            |           |               |   |               |  
|                                         |  | $                                     | 2,503,937 |                                       | $ | 2,340,225                 |   | $                                          | 2,493,348 |               | $ | 4,542,537     |  
|                                         |  |                                       |           |                                       |   |                           |   |                                            |           |               |   |               |  
|                                         |  |                                       |           |                                       |   |                           |   |                                            |           |               |   |               |  
|Three
        Months Ended September 30, |  |                                       |           |                                       |   |                           |   |                                            |           |               |   |               |  
|                                         |  |                                       |           |                                       |   |                           |   |                                            |           |               |   |               |  
|Property                                 |  |                                       |           |                                       |   |                           |   |                                            |           |               |   |               |  
|                                         | 
|Lisle,
        IL                        |  | $                                     | 138,253   |                                       | $ | 65,716                    |   | $                                          | (307,979  | )             | $ | 300,016       |  
|Brentwood,
        TN                    |  |                                       | 266,463   |                                       |   | 248,520                   |   |                                            | (167,389  | )             |   | 1,193,449     |  
|Oakbrook
        Terrace, IL             |  |                                       |          |                                       |   | (50,650                   | ) |                                            |          |               |   | 1,085         |  
|Beaverton,
        OR                    |  |                                       | 213,570   |                                       |   | 221,588                   |   |                                            | 780,987   |               |   | 886,642       |  
|Brentwood,
        TN                    |  |                                       | 234,115   |                                       |   | 217,826                   |   |                                            |          |               |   | 1,199,958     |  
|                                         |  |                                       |           |                                       |   |                           |   |                                            |           |               |   |               |  
|                                         |  | $                                     | 852,401   |                                       | $ | 703,000                   |   | $                                          | 305,619   |               | $ | 3,581,150     |  
|                                         |  |                                       |           |                                       |   |                           |   |                                            |           |               |   |               |  

|
|
|

|    |                                                                                                                                                                                           
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The Oakbrook Terrace, Illinois
        office property was sold on June 8, 2005 but certain post-closing adjustments
        were recognized for the nine months ended September 30, 2006.
|    |                                                                                                                                                                                           

|(2) | Net Investment Income for
        the nine months ended September 30, 2005 reflects a partial period rent
        abatement that was provided to the tenant as part of the lease.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| | Net Investment Income
| | ---------------------

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Net investment income for the Partnerships office properties was approximately $2.5 million for the nine months ended September 30, 2006, an increase of approximately $0.2 million from the prior year period. The increase for the nine months
ended September 30, 2006 was primarily due to (a) increased rents and lower operating expenses at the office property in Lisle, Illinois; (b) stabilized occupancy and increased rents at the office properties in Brentwood, Tennessee; and (c)
increased occupancy at the office property in Beaverton, Oregon. Partially offsetting this increase was the loss of income from the Oakbrook Terrace, Illinois office property that was sold on June 8, 2005.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Net investment income for the Partnerships office properties was approximately $0.9 million for the quarter ended September 30, 2006, an increase of approximately $0.1 million from the prior year period. The increase for the quarter ended
September 30, 2006 was primarily due to increased rents and lower operating expenses at the office property in Lisle, Illinois and increased rents at the office properties in Brentwood, Tennessee. Partially offsetting the increase was higher
operating expenses at the office property in Beaverton, Oregon.

| |                                          
| | -----------------------------------------
| | Total Realized and Unrealized Gain/(Loss)

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The office properties owned by the Partnership recorded an aggregate net unrealized gain of approximately $2.5 million during the nine months ended September 30, 2006, compared to an aggregate net realized and unrealized gain of $4.5
million for the prior year period. The net unrealized gain of $2.5 million for the nine months ended September 30, 2006 was primarily due to strengthening market fundamentals and investor demand in the office sector in Beaverton, Oregon as
well as improving market conditions at the office properties in Lisle, Illinois and Brentwood, Tennessee. Partially offsetting these unrealized gains was a net unrealized loss at the office property in Brentwood, Tennessee due to capital costs
including tenant improvements and leasing commissions expended in connection with recent leasing efforts and increased operating expenses largely due to higher utility costs.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

| | The office properties owned by the Partnership recorded an aggregate net unrealized gain of approximately $0.3 million during the quarter ended September 30, 2006, compared to an aggregate net realized and unrealized gain of $3.6 million
for the prior year period. The net unrealized gain of $0.3 million for the quarter ended September 30, 2006 was due to continued improving market conditions and increased occupancy at the office property in Beaverton, Oregon. Partially
offsetting this unrealized gain were net unrealized losses of approximately $0.3 million and $0.2 million at the office properties in Lisle, Illinois and Brentwood, Tennessee, respectively, due to capital expenses including tenant improvements and
leasing commissions expended in connection with recent leasing efforts.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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|APARTMENT COMPLEXES
|-------------------
|                   

|Nine
        Months Ended September 30,  |  | Net
      InvestmentIncome/(Loss)2006 |         | Net
      InvestmentIncome/(Loss)2005 |   | Realized
      / UnrealizedGain/(Loss)2006 |  | Realized
      / UnrealizedGain/(Loss)2005 |          | Occupancy2006 |   | Occupancy2005 |  
|---------------------------------------- |  | ------------------------------------- | ------- | ------------------------------------- | - | ------------------------------------------ |  | ------------------------------------------ | -------- | ------------- | - | ------------- | -
|                                         |  |                                       |         |                                       |   |                                            |  |                                            |          |               |   |               |  
|Property                                 |  |                                       |         |                                       |   |                                            |  |                                            |          |               |   |               |  
|                                         |  |                                       |         |                                       |   |                                            |  |                                            |          |               |   |               |  
|Atlanta,
        GA                      |  | $                                     | 351,593 |                                       | $ | 68,002                                     |  | $                                          | 170,649  |               | $ | 215,223       |  
|Raleigh,
        NC                      |  |                                       | 437,763 |                                       |   | 503,143                                    |  |                                            | 626,455  |               |   | 938,718       |  
|Jacksonville,
        FL (1)             |  |                                       |        |                                       |   | 792,840                                    |  |                                            | 70,520   |               |   | 189,443       |  
|Gresham/Salem,
        OR (1)            |  |                                       | (10,050 | )                                     |   | 354,293                                    |  |                                            | 169      |               |   | 85,989        |  
|                                         |  |                                       |         |                                       |   |                                            |  |                                            |          |               |   |               |  
|                                         |  | $                                     | 779,306 |                                       | $ | 1,718,278                                  |  | $                                          | 867,793  |               | $ | 1,429,373     |  
|                                         |  |                                       |         |                                       |   |                                            |  |                                            |          |               |   |               |  
|Three
        Months Ended September 30, |  |                                       |         |                                       |   |                                            |  |                                            |          |               |   |               |  
|                                         |  |                                       |         |                                       |   |                                            |  |                                            |          |               |   |               |  
|Property                                 |  |                                       |         |                                       |   |                                            |  |                                            |          |               |   |               |  
|                                         |  |                                       |         |                                       |   |                                            |  |                                            |          |               |   |               |  
|Atlanta,
        GA                      |  | $                                     | 114,657 |                                       | $ | 25,165                                     |  | $                                          | (137,072 | )             | $ | 122,663       |  
|Raleigh,
        NC                      |  |                                       | 122,231 |                                       |   | 238,548                                    |  |                                            | (71,488  | )             |   | (51,434       | )
|Jacksonville,
        FL (1)             |  |                                       |        |                                       |   | 391,924                                    |  |                                            |         |               |   | (114,826      | )
|Gresham/Salem,
        OR (1)            |  |                                       | (50     | )                                     |   | 39,651                                     |  |                                            |         |               |   | (271,277      | )
|                                         |  |                                       |         |                                       |   |                                            |  |                                            |          |               |   |               |  
|                                         |  | $                                     | 236,838 |                                       | $ | 695,288                                    |  | $                                          | (208,560 | )             | $ | (314,874      | )
|                                         |  |                                       |         |                                       |   |                                            |  |                                            |          |               |   |               |  

|
|
|

|    |                                                                                                                                                                                                                                                                                                                        
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The Salem, Oregon, Gresham,
        Oregon and Jacksonville, Florida apartment properties were sold on March
        10, 2005, August 10, 2005 and November 30, 2005, respectively, but certain
        post-closing adjustments were recognized for the nine and three month
        periods ended September 30, 2006.



| | Net Investment Income
| | ---------------------

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Net investment income for the Partnerships apartment properties was $0.8 million for the nine months ended September 30, 2006, a decrease of approximately $0.9 million from the prior year period. Net investment income for the Partnerships
apartment properties was approximately 0.2 million for the quarter ended September 30, 2006, a decrease of approximately $0.5 million from the prior year period. The decrease for the nine and three month periods ended September 30, 2006
was primarily due to the loss of income on the Salem, Oregon, Gresham, Oregon and Jacksonville, Florida apartment properties that were sold on March 10, 2005, August 10, 2005 and November 30, 2005, respectively, and a decrease in
occupancy at the apartment property in Raleigh, North Carolina. Partially offsetting the decrease was an increase in net investment income for the apartment property in Atlanta, Georgia due to increased occupancy, reduced operating
expenses and lowered rental concessions, e.g. less free rent.

| |                                          
| | -----------------------------------------
| | Total Realized and Unrealized Gain/(Loss)

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The apartment properties owned by the Partnership recorded an aggregate net realized and unrealized gain of $0.9 million for the nine months ended September 30, 2006, compared to an aggregate net realized and unrealized gain of $1.4
million for the prior year period. The aggregate net realized and unrealized gain for the nine months ended September 30, 2006 was primarily due to valuation gains resulting from the strengthening of both market and property fundamentals,
which included reduced rental concessions and increased rental rates, at the apartment properties in Atlanta, Georgia and Raleigh, North Carolina. In addition, the Jacksonville, Florida apartment property that was sold in November 2005
recognized realized gains of approximately $0.1 million due to the disbursement of reserved funds that were escrowed at closing for any post-closing operating adjustments.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

| | The apartment properties owned by the Partnership recorded an aggregate net unrealized loss of approximately $0.2 million for the quarter ended September 30, 2006, compared to an aggregate net realized and unrealized loss of
approximately $0.3 million for the prior year period. The aggregate net unrealized loss for the quarter ended September 30, 2006 was due to capital expenditures for property improvements at the apartment properties in Atlanta, Georgia and
Raleigh, North Carolina that did not translate into valuation gains.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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|RETAIL PROPERTIES
|-----------------
|                 

|Nine Months Ended September 30,  |  | Net InvestmentIncome/(Loss)2006 |           | Net InvestmentIncome/(Loss)2005 |   | UnrealizedGain/(Loss)2006 |   | UnrealizedGain/(Loss)2005 |           | Occupancy2006 |   | Occupancy2005 |  
|-------------------------------- |  | ------------------------------- | --------- | ------------------------------- | - | ------------------------- | - | ------------------------- | --------- | ------------- | - | ------------- | -
|                                 |  |                                 |           |                                 |   |                           |   |                           |           |               |   |               |  
|Property                         |  |                                 |           |                                 |   |                           |   |                           |           |               |   |               |  
|                                 |  |                                 |           |                                 |   |                           |   |                           |           |               |   |               |  
|Roswell, GA                      |  | $                               | 1,573,010 |                                 | $ | 1,224,536                 |   | $                         | 1,101,171 |               | $ | 2,704,664     |  
|Kansas City, KS; MO (1)          |  |                                 | (56,085   | )                               |   | 141,470                   |   |                           | (345,788  | )             |   | (740,065      | )
|Hampton, VA                      |  |                                 | 983,373   |                                 |   | 947,392                   |   |                           | (105,132  | )             |   | 4,100,000     |  
|Ocean City, MD                   |  |                                 | 645,473   |                                 |   | 654,659                   |   |                           | 122,365   |               |   | 974,113       |  
|Westminster, MD (2)              |  |                                 | 464,981   |                                 |   | (469                      | ) |                           | 4,986,230 |               |   |              |  
|Westminster, MD (3)              |  |                                 | 124,362   |                                 |   | 190,518                   |   |                           |          |               |   |              |  
|CARS Preferred Equity (4)        |  |                                 | 690,993   |                                 |   |                          |   |                           |          |               |   |              |  
|                                 |  |                                 |           |                                 |   |                           |   |                           |           |               |   |               |  
|                                 |  | $                               | 4,426,107 |                                 | $ | 3,158,106                 |   | $                         | 5,758,846 |               | $ | 7,038,712     |  
|                                 |  |                                 |           |                                 |   |                           |   |                           |           |               |   |               |  
|Three Months Ended September 30, |  |                                 |           |                                 |   |                           |   |                           |           |               |   |               |  
|                                 |  |                                 |           |                                 |   |                           |   |                           |           |               |   |               |  
|Property                         |  |                                 |           |                                 |   |                           |   |                           |           |               |   |               |  
|Roswell, GA                      |  | $                               | 533,961   |                                 | $ | 410,255                   |   | $                         | 486,624   |               | $ | 2,787,772     |  
|Kansas City, KS; MO (1)          |  |                                 | 57,905    |                                 |   | (65,481                   | ) |                           | 117,840   |               |   | 222,040       |  
|Hampton, VA                      |  |                                 | 331,673   |                                 |   | 332,042                   |   |                           |          |               |   | 2,900,000     |  
|Ocean City, MD                   |  |                                 | 243,574   |                                 |   | 181,924                   |   |                           | (28,645   | )             |   | 100,787       |  
|Westminster, MD (2)              |  |                                 | 359,841   |                                 |   | (469                      | ) |                           | (3,735    | )             |   |              |  
|Westminster, MD (3)              |  |                                 |          |                                 |   | 70,080                    |   |                           |          |               |   |              |  
|CARS Preferred Equity            |  |                                 | 251,823   |                                 |   |                          |   |                           |          |               |   |              |  
|                                 |  |                                 |           |                                 |   |                           |   |                           |           |               |   |               |  
|                                 |  | $                               | 1,778,777 |                                 | $ | 928,351                   |   | $                         | 572,084   |               | $ | 6,010,599     |  
|                                 |  |                                 |           |                                 |   |                           |   |                           |           |               |   |               |  

|
|
|

|    |                                                                                                                                                                                                                                                                                                                                                                                                   
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Net investment income (loss)
        for the nine months ended September 30, 2006 reflects partial period results
        for the three Kansas City, Kansas and Kansas City, Missouri retail properties
        that were sold on May 15, 2006. Occupancy for the nine and three month
        periods ended September 30, 2006 reflects remaining retail property in
        Kansas City, Kansas.

|    |                                                                                                                                                                                                             
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Net investment income for
        the nine months ended September 30, 2006 reflects partial period results
        for the Westminster, Maryland retail property that was acquired on June
        13, 2006.

|    |                                                                           
|--- | --------------------------------------------------------------------------
|(3) | Mortgage Loan Receivable (mortgage
        paid in full on March 3, 2006).

|    |                                                                                                                                                                                
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(4) | Net investment income for
        the nine months ended September 30, 2006 reflects partial period results
        for the second funding, which occurred on February 14, 2006.



| | Net Investment Income
| | ---------------------

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Net investment income for the Partnerships retail properties was $4.4 million for the nine months ended September 30, 2006, an increase of approximately $1.3 million from the prior year period. The increase in net investment income for the
nine months ended September 30, 2006 was primarily due to (a) stabilized occupancy and increased rents at the retail center in Roswell, Georgia; (b) income received from the preferred equity investments made by the Partnership on December
16, 2005 and February 14, 2006, respectively; (c) the acquisition of a retail property in Westminster, Maryland in June 2006; and (d) increased rents at the retail property in Hampton, Virginia. Partially offsetting the increase was higher expenses
at the retail properties in Kansas City, Kansas and Kansas City, Missouri due to the prepayment of the existing mortgage on the three properties upon their respective sales in May 2006 and the loss of interest income for the Mortgage Loan
Receivable made by the Partnership that was paid in full by the borrower on March 7, 2006.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

| | Net investment income for the Partnerships retail properties was approximately $1.8 million for the quarter ended September 30, 2006, an increase of approximately $0.9 million from the prior year period. The Roswell, Georgia retail property
recorded an increase of approximately $0.1 million for the quarter ended September 30, 2006 from the prior year period due to stabilized occupancy and increased rents, as discussed above. In addition, the recently acquired Westminster,
Maryland retail property and CARS Preferred Equity investment contributed approximately $0.4 million and $0.3 million, respectively, of net investment income for the quarter ended September 30, 2006 for the reasons discussed above. The
Kansas City, Kansas retail property contributed to the increase in net investment income for the quarter ended September 30, 2006, primarily due to increased occupancy and lower expenses.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| | Unrealized Gain/(Loss)
| | ----------------------

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The retail properties owned by the Partnership recorded an aggregate net unrealized gain of $5.8 million for the nine months ended September 30, 2006, compared to an aggregate net unrealized gain of $7.0 million for the prior year period. The
unrealized gain for the nine months ended September 30, 2006 was primarily due to the acquisition of the retail property in Westminster, Maryland at cost, which resulted in $5.0 million in valuation gains. In addition, unrealized gains of
approximately $1.1 million and $0.1 million were recorded at the retail properties in Roswell, Georgia due to higher occupancy and continued investor demand and in Ocean City, Maryland due to strengthening market fundamentals,
respectively. Partially offsetting these gains for the nine months ended September 30, 2006 were unrealized losses of approximately $0.3 million recorded at the retail properties in Kansas City, Kansas and Kansas City, Missouri due to the three
properties having been sold slightly below their previously appraised values and $0.1 million recorded at the retail property in Hampton, Virginia that reflects updated market conditions.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The retail properties owned by the Partnership recorded an aggregate net unrealized gain of $0.6 million for the quarter ended September 30, 2006, compared to an aggregate net unrealized gain of $6.0 million for the prior year period. The
unrealized gain for the quarter ended September 30, 2006 was primarily due to continued investor demand at the retail property in Roswell, Georgia and strengthening market fundamentals at the remaining retail property in Kansas City,
Kansas. These unrealized gains were partially offset by slight unrealized losses recorded at the retail properties in Ocean City, Maryland and Westminster, Maryland.



|INDUSTRIAL PROPERTY
|-------------------
|                   

|Nine Months Ended September 30,          |  | Net InvestmentIncome/(Loss)2006 |         | Net InvestmentIncome/(Loss)2005 |   | UnrealizedGain/(Loss)2006 |  | UnrealizedGain/(Loss)2005 |           | Occupancy2006 |   | Occupancy2005 |  
|---------------------------------------- |  | ------------------------------- | ------- | ------------------------------- | - | ------------------------- |  | ------------------------- | --------- | ------------- | - | ------------- | -
|                                         |  |                                 |         |                                 |   |                           |  |                           |           |               |   |               |  
|Property                                 |  |                                 |         |                                 |   |                           |  |                           |           |               |   |               |  
|Aurora, CO                               |  | $                               | 578,378 |                                 | $ | 397,619                   |  | $                         | 1,463,579 |               | $ | 922,495       |  
|                                         |  |                                 |         |                                 |   |                           |  |                           |           |               |   |               |  
|Three
        Months Ended September 30, |  |                                 |         |                                 |   |                           |  |                           |           |               |   |               |  
|                                         |  |                                 |         |                                 |   |                           |  |                           |           |               |   |               |  
|Property                                 |  |                                 |         |                                 |   |                           |  |                           |           |               |   |               |  
|Aurora, CO                               |  | $                               | 199,418 |                                 | $ | 149,259                   |  | $                         | 840,782   |               | $ | (73,265       | )

| |                      
| | ---------------------
| | Net Investment Income

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Net investment income for the Partnerships industrial property was $0.6 million for the nine months ended September 30, 2006, an increase of approximately $0.2 million from the prior year period. Net investment income for the Partnerships
industrial property was $0.2 million for the quarter ended September 30, 2006, an increase of approximately $0.1 million from the prior year period. The increase for both the nine and three month periods ended September 30, 2006 were
primarily due to higher occupancy, increased rents and reduced operating expenses, compared to the prior year periods.

| |                       
| | ----------------------
| | Unrealized Gain/(Loss)
| |                       

| | The industrial property owned by the Partnership recorded a net unrealized gain of approximately $1.5 million for the nine months ended September 30, 2006, compared to a net unrealized gain of $0.9 million for the prior year period. The
industrial property owned by the Partnership recorded a net unrealized gain of approximately $0.8 million for the quarter ended September 30, 2006, compared to a net unrealized loss of approximately $0.1 million for the prior year period. The
net unrealized gain for both the nine and three month periods ended September 30, 2006 was primarily due to continued improving market fundamentals and investor demand in the industrial sector at Aurora, Colorado.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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|HOTEL PROPERTY
|--------------
|              

|Nine
        Months Ended September 30,  |  | Net
      InvestmentIncome/(Loss)2006 |         | Net
      InvestmentIncome/(Loss)2005 |   | UnrealizedGain/(Loss)2006 |  | UnrealizedGain/(Loss)2005 |           | Occupancy2006 |   | Occupancy2005 | 
|---------------------------------------- |  | ------------------------------------- | ------- | ------------------------------------- | - | ------------------------- |  | ------------------------- | --------- | ------------- | - | ------------- | 
|                                         |  |                                       |         |                                       |   |                           |  |                           |           |               |   |               | 
|Property                                 |  |                                       |         |                                       |   |                           |  |                           |           |               |   |               | 
|Lake
        Oswego, OR                  |  | $                                     | 963,740 |                                       | $ | 771,163                   |  | $                         | 3,797,874 |               | $ | 721,839       | 
|                                         |  |                                       |         |                                       |   |                           |  |                           |           |               |   |               | 
|Three
        Months Ended September 30, |  |                                       |         |                                       |   |                           |  |                           |           |               |   |               | 
|                                         |  |                                       |         |                                       |   |                           |  |                           |           |               |   |               | 
|Property                                 |  |                                       |         |                                       |   |                           |  |                           |           |               |   |               | 
|Lake
        Oswego, OR                  |  | $                                     | 430,337 |                                       | $ | 384,709                   |  | $                         | (33,119   | )             | $ | 48,026        | 

| |                      
| | ---------------------
| | Net Investment Income

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Net investment income for the Partnerships hotel property was $1.0 million for the nine months ended September 30, 2006, an increase of approximately $0.2 million from the prior year period. Net investment income for the Partnerships hotel
property was $0.4 million for the quarter ended September 30, 2006, a slight increase from the prior year period. The increase for both the nine and three month periods ended September 30, 2006 was primarily due to higher average daily rates
generated at the hotel compared to the prior year periods.

| |                       
| | ----------------------
| | Unrealized Gain/(Loss)

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The hotel property owned by the Partnership recorded a net unrealized gain of $3.8 million for the nine months ended September 30, 2006, compared to a net unrealized gain of $0.7 million for the prior year period. The hotel property owned by
the Partnership recorded a slight net unrealized loss for the quarter ended September 30, 2006, compared to a slight net unrealized gain for the prior year period. The net unrealized gain for the nine months ended September 30, 2006 reflects
the continued strengthening of market and property fundamentals.

| |              
| | -------------
| | LAND PROPERTY

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Blue Springs, Missouri land property was sold on November 28, 2005, but certain post-closing adjustments were recognized during the nine months ended September 30, 2006, which resulted in a slight decrease to net investment income.
The same land property also recorded a slight realized loss during the nine months ended September 30, 2006, which reflects a post-closing adjustment to the $0.6 million gain recognized during the fourth quarter of 2005 when the land was
sold.

| |      
| | -----
| | Other

| |                                                                                                                                                                                                                                                                                                                                                                               
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Other net investment income increased $0.7 million for the nine months ended September 30, 2006 from the prior year period and also increased $0.1 million during the quarter ended September 30, 2006 from the prior year period. Other net
investment income includes interest income from short-term investments, investment management fees, and portfolio level expenses.

| |              
| | -------------
| | (c) Inflation

| |                                                                                                                                                                                                                                                                                                                                          
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Partnerships leases with a majority of its commercial tenants provide for recoveries of expenses based upon the tenants proportionate share of, and/or increases in, real estate taxes and certain operating costs, which may partially reduce
the Partnerships exposure 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, or U.S. GAAP, requires the application of accounting policies that often involve a significant degree of
judgment. Management reviews critical estimates and assumptions on an ongoing basis. If management determines, as a result of its consideration of facts and circumstances, that modifications in assumptions and estimates are appropriate,
results of operations and financial position as reported in the unaudited Consolidated Financial Statements of the Account and the Partnership may change significantly.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

| |                         
| | ------------------------
| | Valuation of Investments

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

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

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Partnership periodically enters into forward contracts to acquire, for a fixed price, real estate investments to be constructed in accordance with predetermined plans and specifications or that achieve a certain level of leasing. Where
conditions precedent to funding have been met by its development partner, and the Partnerships commitment to fund is firm, the amount of any unrealized gain or loss is recognized based upon the difference between the estimated
investments market value as described above and the Partnerships funding obligation. The funding obligation and related assets are recorded in the consolidated financial statements. However, land while held for development, is carried at
acquisition cost plus the cost incurred to hold the land, according to take out provisions in the developer/partner contract.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | As described above, the estimated market value of real estate and real estate related assets is determined through an appraisal process. These estimated market values may vary significantly from the prices at which the real estate investments
would sell, because market prices of real estate investments can only be determined by negotiation between a willing buyer and seller and could be material to the consolidated financial statements. Although the estimated market values
represent subjective estimates, management believes that these estimated market values are reasonable approximations of market prices and that the aggregate estimated value of investments in real estate is fairly presented as of September
30, 2006 and December 31, 2005.

| |                
| | ---------------
| | Other Estimates
| |                

| | The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the unaudited Consolidated Financial
Statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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|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 approximately 29.30% of its investment portfolio as of September 30, 2006, which consists 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 unusual 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, 2006:
| |                                                                                                                                                                 

|                          |  | Maturity |                  | EstimatedMarket Value(millions) |   | AverageInterest Rate | 
|------------------------- |  | -------- | ---------------- | ------------------------------- | - | -------------------- | 
|                          |  |          |                  |                                 |   |                      | 
|Cash and Cash equivalents |  |          | 0-3
      months |                                 | $ | 32.2                 | 

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The table below discloses the Partnerships debt as of September 30, 2006. All of the Partnerships long-term debt bears interest at fixed rates and therefore the fair value of these instruments is affected by changes in market interest rates. The
following table presents principal cash flows based upon maturity dates of the debt obligations and the related weighted-average interest rates by expected maturity dates for the fixed rate debt.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                            

|Debt
        (in $ thousands), including current portion |  | 2006 |      | 2007 |   | 2008 |   | 2009 |        | 2010 |   | Thereafter |   | Total |      | EstimatedFair Value |  
|-------------------------------------------------------- |  | ---- | ---- | ---- | - | ---- | - | ---- | ------ | ---- | - | ---------- | - | ----- | ---- | ------------------- | -
|                                                         |  |      |      |      |   |      |   |      |        |      |   |            |   |       |      |                     |  
|Average Fixed Interest Rate                              |  |      | 5.38 | %    |   | 5.35 | % |      | 5.74   | %    |   | 6.75       | % |       | 6.75 | %                   |  
|Fixed Rate                                               |  | $    | 142  |      | $ | 589  |   | $    | 16,026 |      | $ | 9,275      |   | $     | 565  |                     | $
|Variable Rate                                            |  |      |     |      |   |     |   |      |       |      |   |           |   |       |     |                     |  
|                                                         |  |      |      |      |   |      |   |      |        |      |   |            |   |       |      |                     |  
|Total Mortgage Loans Payable                             |  | $    | 142  |      | $ | 589  |   | $    | 16,026 |      | $ | 9,275      |   | $     | 565  |                     | $
|                                                         |  |      |      |      |   |      |   |      |        |      |   |            |   |       |      |                     |  

| |                                                                                                                                                                                                                                                                                                                                                                                                                    
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Partnership is exposed
        to market risk from tenants. While the Partnership has not experienced
        any significant credit losses, in the event of significant increases in
        interest rates and/or an economic downturn, delinquencies could increase
        and result in losses to the Partnership and the Account that could 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 SEC is recorded,
        processed, summarized, and reported on a timely basis, the Companys
        management, including our Chief Executive Officer and Chief Financial
        Officer, have reviewed and evaluated the effectiveness of our disclosure
        controls and procedures, as defined in Exchange Act Rules 13a-15(e) and
        15d-15(e) under the Securities Exchange Act of 1934, as amended, as of
        September 30, 2006. Based on such evaluation, the Chief Executive Officer
        and Chief Financial Officer have concluded that, as of September 30, 2006,
        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, as defined in Exchange Act Rule 13a - 15(f)
        and 15d - 15(f), during the quarter ended September 30, 2006, that has
        materially affected, or is reasonably likely to materially affect, our
        internal control over financial reporting.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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PART II  OTHER INFORMATION

|Item 1A. | Risk Factors
|-------- | ------------

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | You should carefully consider the risks described under Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2005. These risks could materially affect our business, results of operations or financial condition or
cause our actual results to differ materially from those expected or those expressed in any forward looking statements made by or on behalf of the Company. These risks are not exclusive, and additional risks to which we are subject include,
but are not limited to, the factors mentioned under Forward-Looking Statements, above, and the risks of our businesses described elsewhere in our Annual Report on Form 10-K and this Quarterly Report on Form 10-Q.

|        |                                                    
|------- | ---------------------------------------------------
|Item 4. | 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

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

| |      |                                                         
| | ---- | --------------------------------------------------------
| | 31.2 | Section 302 Certification of the Chief Financial Officer

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

| | 32.2 | Section 906 Certification of the Chief Financial Officer
| | ---- | --------------------------------------------------------

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SIGNATURES

Pursuant to the requirements 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 JERSEYin respect of
Pruco Life of New Jersey Variable 
Contract Real Property Account 
(Registrant)



---



|Date: November 10, 2006 |  | By: | /s/ Scott D. Kaplan                   
|----------------------- |  | --- | --------------------------------------
|                        |  |     |                                       
|                        |  |     | Scott D. KaplanChief Executive Officer

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