UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)



|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
|- | -------------------------------------------------------

| | SECURITIES EXCHANGE ACT OF 1934
| | -------------------------------

For the quarterly period ended March 31, 2011

OR



| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
| | --------------------------------------------------------

| | SECURITIES EXCHANGE ACT OF 1934
| | -------------------------------

Commission file number 033-20018

PRUCO LIFE INSURANCE COMPANY OF NEW
JERSEY

in respect of

PRUCO LIFE OF NEW JERSEY VARIABLE CONTRACT REAL PROPERTY ACCOUNT

(Exact name of registrant as specified in its charter)



|                                |  |  |  |                                  
|------------------------------- |  |  |  | ---------------------------------
|New
Jersey                      |  |  |  | 22-2426091                       
|(State or other jurisdiction of |  |  |  | (IRS Employer Identification No.)
|incorporation or organization)  |  |  |  |                                  

213 Washington Street, Newark, New Jersey
07102-2992

(Address of principal executive offices) (Zip Code)

(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. YES
X            NO

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated filer, or a smaller reporting company. See definitions of large accelerated filer, accelerated filer, and smaller reporting company in Rule 12b-2 of the Exchange Act.

(Check one):



|                                                                     |  |                           |  | 
|-------------------------------------------------------------------- |  | ------------------------- |  | 
|Large accelerated filer                                              |  | Accelerated filer        
|Non-accelerated filer X(Do not check if a smaller reporting company) |  | Smaller reporting company

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



---

PRUCO LIFE OF NEW JERSEY VARIABLE CONTRACT REAL PROPERTY ACCOUNT

(Registrant)

INDEX



|                                                                                              |  |      |    | 
|--------------------------------------------------------------------------------------------- |  | ---- | -- | 
|                                                                                              |  | Page |   
|Forward Looking Statement Disclosure                                                          |  |      | 3  | 
|Part I - Financial Information                                                                |  |      |    | 
|Item 1. Financial Statements (Unaudited)                                                      |  |      |    | 
|A. PRUCO LIFE OF NEW JERSEY VARIABLE CONTRACT REAL PROPERTY ACCOUNT                           |  |      |    | 
|Statements of Net Assets  March 31, 2011 and December 31, 2010                               |  |      | 4  | 
|Statements of Operations  Three Months Ended March 31, 2011 and 2010                         |  |      | 4  | 
|Statements of Changes in Net Assets  Three Months Ended March 31, 2011 and
2010              |  |      | 4  | 
|Notes to the Financial Statements of the Real Property Account                                |  |      | 5  | 
|B. THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP                                 |  |      |    | 
|Consolidated Statements of Assets and Liabilities  March 31, 2011 and December 31,
2010      |  |      | 11 | 
|Consolidated Statements of Operations  Three Months Ended March 31, 2011 and
2010            |  |      | 12 | 
|Consolidated Statements of Changes in Net Assets  Three Months Ended March 31, 2011 and
2010 |  |      | 13 | 
|Consolidated Statements of Cash Flows  Three Months Ended March 31, 2011 and
2010            |  |      | 14 | 
|Consolidated Schedules of Investments  March 31, 2011 and December 31,
2010                  |  |      | 15 | 
|Notes to Consolidated Financial Statements of the Partnership                                 |  |      | 17 | 
|Item 2. Management's Discussion and Analysis of Financial Condition and Results of
Operations |  |      | 23 | 
|Item 3. Quantitative and Qualitative Disclosures About Market Risk                            |  |      | 30 | 
|Item 4. Controls and Procedures                                                               |  |      | 30 | 
|Part II - Other Information                                                                   |  |      |    | 
|Item 1A. Risk Factors                                                                         |  |      | 31 | 
|Item 6.    Exhibits                                                                           |  |      | 31 | 
|Signatures                                                                                    |  |      | 32 | 



2



---

Forward-Looking Statement Disclosure

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 fixed
income, equity, real estate and other financial markets; (2) interest rate fluctuations or prolonged periods of low interest rates; (3) reestimates 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 assumptions we use in pricing our products, establishing liabilities and reserves or for other purposes; (5) changes in our
assumptions related to deferred policy acquisition costs; (6) changes in our financial strength or credit ratings; (7) investment losses and defaults; (8) competition in our product lines and for personnel; (9) changes in tax
law; (10) regulatory or legislative changes, including the recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act; (11) adverse determinations in litigation or regulatory matters and our exposure to contingent
liabilities; (12) 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; (13) ineffectiveness of risk management
policies and procedures in identifying, monitoring and managing risks; (14) 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 Form 10-K for the year ended December 31, 2010 for discussion of certain risks relating to the
operation of the Partnership and investment in our securities.



3



---

FINANCIAL STATEMENTS OF

PRUCO LIFE OF NEW JERSEY VARIABLE CONTRACT REAL PROPERTY ACCOUNT

STATEMENTS OF NET ASSETS

March 31, 2011 and December 31, 2010



|                                                                                               |  |                           |           |  |                    |   |           | 
|---------------------------------------------------------------------------------------------- |  | ------------------------- | --------- |  | ------------------ | - | --------- | 
|                                                                                               |  | March 31, 2011(unaudited) |           |  | December 31,2010   |  
|ASSETS                                                                                         |  |                           |           |  |                    |   |           | 
|Investment in The Prudential Variable Contract Real Property Partnership                       |  | $                         | 7,621,257 |  |                    | $ | 7,285,446 | 
|                                                                                               |  |                           |           |  |                    |   |           | 
|Net Assets                                                                                     |  | $                         | 7,621,257 |  |                    | $ | 7,285,446 | 
|                                                                                               |  |                           |           |  |                    |   |           | 
|NET ASSETS,representing:                                                                       |  |                           |           |  |                    |   |           | 
|Equity of contract owners                                                                      |  | $                         | 5,628,196 |  |                    | $ | 5,392,667 | 
|Equity of Pruco Life Insurance Company of New Jersey                                           |  |                           | 1,993,061 |  |                    |   | 1,892,779 | 
|                                                                                               |  |                           |           |  |                    |   |           | 
|                                                                                               |  | $                         | 7,621,257 |  |                    | $ | 7,285,446 | 
|                                                                                               |  |                           |           |  |                    |   |           | 
|                                                                                               |  |                          
|Units outstanding                                                                              |  |                           | 2,959,631 |  |                    |   | 2,955,276 | 
|                                                                                               |  |                           |           |  |                    |   |           | 
|                                                                                               |  |                          
|Portfolio shares held                                                                          |  |                           | 256,727   |  |                    |   | 256,727   | 
|Portfolio net asset value per share                                                            |  | $                         | 29.69     |  |                    | $ | 28.38     | 
|                                                                                               |  |                          
|STATEMENTS OF OPERATIONS                                                                       |  |                           |           |  |                    |   |           | 
|For the three months ended March 31, 2011 and 2010                                             |  | 1/1/2011-3/31/2011        |           |  | 1/1/2010-3/31/2010 |  
|                                                                                               |  | (unaudited)               |           |  | (unaudited)        |  
|INVESTMENT INCOME                                                                              |  |                           |           |  |                    |   |           | 
|Net investment income from Partnership operations                                              |  | $                         | 93,586    |  |                    | $ | 80,317    | 
|                                                                                               |  |                           |           |  |                    |   |           | 
|                                                                                               |  |                          
|EXPENSES                                                                                       |  |                           |           |  |                    |   |           | 
|Charges to contract owners for assuming mortality risk and expense risk and for administration |  |                           | 7,731     |  |                    |   | 7,228     | 
|                                                                                               |  |                           |           |  |                    |   |           | 
|NET INVESTMENT INCOME                                                                          |  |                           | 85,855    |  |                    |   | 73,089    | 
|                                                                                               |  |                           |           |  |                    |   |           | 
|                                                                                               |  |                          
|NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS                                         |  |                           |           |  |                    |   |           | 
|Net change in unrealized gain (loss) on investments in Partnership                             |  |                           | 242,225   |  |                    |   | (126,386) | 
|NET GAIN (LOSS) ON INVESTMENTS                                                                 |  |                           | 242,225   |  |                    |   | (126,386) | 
|                                                                                               |  |                           |           |  |                    |   |           | 
|                                                                                               |  |                          
|NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS                                |  | $                         | 328,080   |  |                    | $ | (53,297)  | 
|                                                                                               |  |                           |           |  |                    |   |           | 
|                                                                                               |  |                          
|STATEMENTS OF CHANGES IN NET ASSETS                                                            |  |                           |           |  |                    |   |           | 
|For the three months ended March 31, 2011 and 2010                                             |  | 1/1/2011-3/31/2011        |           |  | 1/1/2010-3/31/2010 |  
|                                                                                               |  | (unaudited)               |           |  | (unaudited)        |  
|OPERATIONS                                                                                     |  |                           |           |  |                    |   |           | 
|Net investment income                                                                          |  | $                         | 85,855    |  |                    | $ | 73,089    | 
|Net change in unrealized gain (loss) on investments in Partnership                             |  |                           | 242,225   |  |                    |   | (126,386) | 
|                                                                                               |  |                           |           |  |                    |   |           | 
|                                                                                               |  |                          
|NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS                                |  |                           | 328,080   |  |                    |   | (53,297)  | 
|                                                                                               |  |                           |           |  |                    |   |           | 
|                                                                                               |  |                          
|CAPITAL TRANSACTIONS                                                                           |  |                           |           |  |                    |   |           | 
|Net (withdrawals) by contract owners                                                           |  |                           | (4,398)   |  |                    |   | (27,887)  | 
|Net contributions (withdrawals) by Pruco Life Insurance Company of New Jersey                  |  |                           | 12,129    |  |                    |   | 35,115    | 
|                                                                                               |  |                           |           |  |                    |   |           | 
|                                                                                               |  |                          
|NET INCREASE (DECREASE) IN NET ASSETS                                                          |  |                           |           |  |                    |   |           | 
|RESULTING FROM CAPITAL TRANSACTIONS                                                            |  |                           | 7,731     |  |                    |   | 7,228     | 
|                                                                                               |  |                           |           |  |                    |   |           | 
|                                                                                               |  |                          
|TOTAL INCREASE (DECREASE) IN NET ASSETS                                                        |  |                           | 335,811   |  |                    |   | (46,069)  | 
|                                                                                               |  |                          
|NET ASSETS                                                                                     |  |                           |           |  |                    |   |           | 
|Beginning of period                                                                            |  |                           | 7,285,446 |  |                    |   | 7,317,018 | 
|                                                                                               |  |                           |           |  |                    |   |           | 
|End of period                                                                                  |  | $                         | 7,621,257 |  |                    | $ | 7,270,949 | 
|                                                                                               |  |                           |           |  |                    |   |           | 
|                                                                                               |  |                           |           |  |                    |   |           | 



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

4



---

NOTES TO THE FINANCIAL STATEMENTS OF

PRUCO LIFE OF NEW JERSEY VARIABLE CONTRACT REAL PROPERTY ACCOUNT

March 31, 2011

(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 or the Company), 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 unaudited interim 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 (U.S. GAAP). The preparation of the financial
statements in conformity with U.S. 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 March 31, 2011 and for the three months ended March 31, 2011 and 2010 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 period.

In January 2010, the FASB issued updated guidance that requires new fair value disclosures about significant transfers between Level 1
and 2 measurement categories and separate presentation of purchases, issuances, and settlements within the roll forward of Level 3 activity. Also, this updated fair value guidance clarifies the disclosure requirements about level of disaggregation
and valuation techniques and inputs. This new guidance is effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of
Level 3 activity, which are effective for interim and annual reporting periods beginning after December 15, 2010. The Account adopted the guidance effective for interim and annual reporting periods beginning after December 15, 2009 on
January 1, 2010. The Account adopted the guidance effective for interim and annual reporting periods beginning after December 15, 2010 on January 1, 2011. The required disclosures are provided in Note 9.



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

The investment in the Partnership is based on the Accounts proportionate interest of the Partnerships fair value. At March 31, 2011 and December 31, 2010 the Accounts interest
in the General Partners Controlling Interest was 4.4% or 256,727 shares. Properties owned by the Partnership are illiquid and based on estimated fair value as discussed in the notes to the Partnerships unaudited financial statements.



5



---

NOTES TO THE FINANCIAL STATEMENTS OF

PRUCO LIFE OF NEW JERSEY VARIABLE CONTRACT REAL PROPERTY ACCOUNT

March 31, 2011

(Unaudited)



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

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



|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. For SPVA, there is a deferred sales charge that applies
at the time of a full or partial withdrawal, and the amount of the charge (which declines over time) depends on the number of years that have elapsed since the contract was issued.



6



---

NOTES TO THE FINANCIAL STATEMENTS OF

PRUCO LIFE OF NEW JERSEY VARIABLE CONTRACT REAL PROPERTY ACCOUNT

March 31, 2011

(Unaudited)



|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.

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 three months ended March 31, 2011, and 2010 were as follows:



|                                         |  |      |         |  |  |  |      |   |          |  |  | 
|---------------------------------------- |  | ---- | ------- |  |  |  | ---- | - | -------- |  |  | 
|Three Months Ended March 31,
(Unaudited)
|                                         |  |      |         | 
|                                         |  | 2011 |         |  |  |  | 2010 |   |          | 
|VAL                                      |  | $    | (3,124) |  |  |  |      | $ | (19,207) |  |  | 
|VLI                                      |  |      | (528)   |  |  |  |      |   | (8,560)  |  |  | 
|SPVA                                     |  |      | (0)     |  |  |  |      |   | (0)      |  |  | 
|SPVL                                     |  |      | (746)   |  |  |  |      |   | (120)    |  |  | 
|TOTAL                                    |  | $    | (4,398) |  |  |  |      | $ | (27,887) |  |  | 
|                                         |  |      |         |  |  |  |      |   |          |  |  | 

Note 6:  Partnership Distributions

For the three months ended March 31, 2011, the Partnership made no distribution. For the year ended
December 31, 2010, the Partnership made distributions of $10 million on October 27thand $7.5 million on May 3rd. The Pruco Life of New Jersey Accounts share of these distributions were $0.4 and $0.3 million respectively.

Note 7:  Unit Information

Outstanding units and unit values at March 31,
2011 and December 31, 2010 were as follows:



|                   |  |                    |  |                    |  |  |  | 
|------------------ |  | ------------------ |  | ------------------ |  |  |  | 
|                   |  | March 31, 2011     |  | December 31, 2010  |  |  |  | 
|                   |  | (Unaudited)        |  |                    |  |  | 
|Units
Outstanding: |  | 2,959,631          |  | 2,995,276          |  |  | 
|Unit
Value:        |  | 2.19152 to 2.72659 |  | 2.10140 to 2.60866 |  |  | 



7



---

NOTES TO THE FINANCIAL STATEMENTS OF

PRUCO LIFE OF NEW JERSEY VARIABLE CONTRACT REAL PROPERTY ACCOUNT

March 31, 2011

(Unaudited)

Note 8:  Financial Highlights

The range of total return for the three months ended March 31, 2011 and 2010, were as follows:



|             |  |                                          |                |  |  |  |      |                  |  | 
|------------ |  | ---------------------------------------- | -------------- |  |  |  | ---- | ---------------- |  | 
|             |  | Three Months Ended
March 31, (Unaudited) |                | 
|             |  | 2011                                     |                |  |  |  | 2010 |                 
|Total Return |  |                                          | 4.29% to 4.52% |  |  |  |      | -0.93% to -0.72% | 

Note 9:  Fair Value Disclosure

FASB guidance on fair value measurements and disclosures establishes a framework for measuring fair value that includes a hierarchy used
to classify the inputs used in fair value. The hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three levels. The level in the fair value hierarchy within which the fair value measurement falls is determined
based on the lowest level input that is significant to the fair value measurement. The levels of the fair value hierarchy are as follows:

Level 1  Fair value is based on unadjusted quoted prices in active markets that are accessible to the Company for identical assets or liabilities. These generally provide the most reliable evidence
and should be used to measure fair value whenever available.

Level 2  Fair value is based on inputs, other than Level 1
inputs, that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability through corroboration with observable market data.

Level 3  Fair value is based on significant unobservable inputs for the asset or liability. These inputs reflect the Companys
own assumptions about the assumptions that market participants would use in pricing the asset or liability.

The investment in
the Partnership is based on the Accounts proportionate interest of the Partnerships fair value which approximates the Partnerships net asset value. Properties owned by the Partnership are illiquid and fair value is based on
estimates from property appraisal reports prepared by independent real estate appraisers as discussed in the notes to the Partnerships unaudited financial statements.

The purpose of an appraisal is to estimate the fair value of real estate as of a specific date. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date.

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



8



---

NOTES TO THE FINANCIAL STATEMENTS OF

PRUCO LIFE OF NEW JERSEY VARIABLE CONTRACT REAL PROPERTY ACCOUNT

March 31, 2011

(Unaudited)

In general, the input values used in the appraisal process
are unobservable, therefore unless indicated otherwise; the underlying investments in the Partnership are classified as Level 3 under the fair value hierarchy. The inputs or methodology used for valuing assets are not an indication of the risk
associated with investing in those securities.

Table 1 below summarizes the assets measured at fair value on a recurring
basis and their respective position in the fair value hierarchy.

Table 1:



|                                                                         |  |                                                         |       |  |                                                                |   |   |                                              |  |   |                                              |  |  |   |       | 
|------------------------------------------------------------------------ |  | ------------------------------------------------------- | ----- |  | -------------------------------------------------------------- | - | - | -------------------------------------------- |  | - | -------------------------------------------- |  |  | - | ----- | 
|                                                                         |  | ($ in 000s)
Fair Value Measurements at March 31, 
2011 |      
|                                                                         |  |                                                         |       | 
|Assets:                                                                  |  | AmountsMeasured at FairValue 03/31/2011                 |       |  | Quoted Prices in
Active Markets for Identical Assets (Level 1) |   |   | Significant Other ObservableInputs (Level 2) |  |   | Significant Unobservable Inputs    (Level 3) | 
|                                                                         |  |                                                         |       | 
|Investment in The Prudential Variable Contract Real Property Partnership |  | $                                                       | 7,621 |  |                                                                | $ | - |                                              |  | $ | -                                            |  |  | $ | 7,621 | 
|                                                                         |  |                                                         |       |  |                                                                |   |   |                                              |  |   |                                              |  |  |   |       | 
|                                                                         |  |                                                         |       | 
|Total Assets                                                             |  | $                                                       | 7,621 |  |                                                                | $ | - |                                              |  | $ | -                                            |  |  | $ | 7,621 | 
|                                                                         |  |                                                         |       | 



|                                                                         |  |                                              |       |  |                                                                |   |   |                                               |  |   |                                           |  |  |   |       | 
|------------------------------------------------------------------------ |  | -------------------------------------------- | ----- |  | -------------------------------------------------------------- | - | - | --------------------------------------------- |  | - | ----------------------------------------- |  |  | - | ----- | 
|                                                                         |  | ($ in 000s)                                 |      
|                                                                         |  | Fair Value Measurements at December 31, 2010 |      
|                                                                         |  |                                              |       | 
|Assets:                                                                  |  | AmountsMeasured at
Fair Value12/31/2010      |       |  | Quoted Prices in
Active Markets for Identical Assets (Level 1) |   |   | Significant Other Observable
Inputs (Level 2) |  |   | Significant Unobservable Inputs (Level
3) | 
|                                                                         |  |                                              |       | 
|Investment in The Prudential Variable Contract Real Property Partnership |  | $                                            | 7,285 |  |                                                                | $ | - |                                               |  | $ | -                                         |  |  | $ | 7,285 | 
|                                                                         |  |                                              |       |  |                                                                |   |   |                                               |  |   |                                           |  |  |   |       | 
|                                                                         |  |                                              |       | 
|Total Assets                                                             |  | $                                            | 7,285 |  |                                                                | $ | - |                                               |  | $ | -                                         |  |  | $ | 7,285 | 
|                                                                         |  |                                              |       | 



9



---

Table 2 below provides a reconciliation of the beginning and ending balances for all assets
measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended March 31, 2011 and March 31, 2010.

Table 2:

|                                                                                                                        |  |                                                                                                                  |       | 
|----------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------- | ----- | 
|                                                                                                                        |  | ($ in 000s)                                                                                                     |      
|                                                                                                                        | 
|                                                                                                                        |  | Fair Value 
MeasurementsUsing Significant UnobservableInputs for the three 
monthsending March 31. 2011(Level 3) |      
|Beginning balance @ 01/01/11                                                                                            |  | $                                                                                                                | 7,285 | 
|Total gains or losses (realized/unrealized)
included in earnings (or changes in net assets) from Partnership operations |  | $                                                                                                                | 242   | 
|Net Investment Income from Partnership operations                                                                       |  | $                                                                                                                | 94    | 
|Acquisition/Additions                                                                                                   |  |                                                                                                                  | -     | 
|Equity Income                                                                                                           |  |                                                                                                                  | -     | 
|Contributions                                                                                                           |  |                                                                                                                  | -     | 
|Disposition/Settlements                                                                                                 |  | $                                                                                                                | -     | 
|Equity losses                                                                                                           |  |                                                                                                                  | -     | 
|Distributions                                                                                                           |  |                                                                                                                  | -     | 
|                                                                                                                        |  |                                                                                                                  |       | 
|Ending balance @ 03/31/2011                                                                                             |  | $                                                                                                                | 7,621 | 
|                                                                                                                        |  |                                                                                                                  |       | 
|                                                                                                                        | 
|The amount of total gains or losses for the period included in earnings                                                 |  |                                                                                                                  |       | 
|(or changes in net assets) attributable to the change in unrealized gains                                               |  |                                                                                                                  |       | 
|                                                                                                                        |  |                                                                                                                  |       | 
|or losses relating to assets still held at the reporting date                                                           |  | $                                                                                                                | 242   | 
|                                                                                                                        |  |                                                                                                                  |       | 
|                                                                                                                        | 
|                                                                                                                        |  | ($ in 000s)                                                                                                     |      
|                                                                                                                        | 
|                                                                                                                        |  | Fair Value MeasurementsUsing
Significant UnobservableInputs for the three monthsending March 31, 2010(Level 3)   |      
|Beginning balance @ 01/01/10                                                                                            |  | $                                                                                                                | 7,317 | 
|Total gains or losses (realized/unrealized) included in earnings (or changes in net assets) from Partnership
operations |  | $                                                                                                                | (126) | 
|Net Investment Income from Partnership operations                                                                       |  | $                                                                                                                | 80    | 
|Acquisition/Additions                                                                                                   |  |                                                                                                                  | -     | 
|Equity Income                                                                                                           |  |                                                                                                                  | -     | 
|Contributions                                                                                                           |  |                                                                                                                  | -     | 
|Disposition/Settlements                                                                                                 |  | $                                                                                                                | -     | 
|Equity losses                                                                                                           |  |                                                                                                                  | -     | 
|Distributions                                                                                                           |  |                                                                                                                  | -     | 
|                                                                                                                        |  |                                                                                                                  |       | 
|Ending balance @ 03/31/2010                                                                                             |  | $                                                                                                                | 7,271 | 
|                                                                                                                        |  |                                                                                                                  |       | 
|                                                                                                                        | 
|The amount of total gains or losses for the period included in earnings                                                 |  |                                                                                                                  |       | 
|(or changes in net assets) attributable to the change in unrealized gains                                               |  |                                                                                                                  |       | 
|                                                                                                                        |  |                                                                                                                  |       | 
|or losses relating to assets still held at the reporting date                                                           |  | $                                                                                                                | (126) | 
|                                                                                                                        |  |                                                                                                                  |       | 



10



---

THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES



|                                                                                      |  |                           |             |  |                   |   |             | 
|------------------------------------------------------------------------------------- |  | ------------------------- | ----------- |  | ----------------- | - | ----------- | 
|                                                                                      |  | March 31, 2011(Unaudited) |             |  | December 31, 2010 |  
|ASSETS                                                                                |  |                           |             |  |                   |   |             | 
|                                                                                      |  |                          
|REAL ESTATE INVESTMENTS - At estimated fair value:                                    |  |                           |             |  |                   |   |             | 
|Real estate and improvements                                                          |  |                           |             |  |                   |   |             | 
|(cost: 3/31/2011 - $194,390,822; 12/31/2010 - $194,140,941)                           |  | $                         | 164,400,000 |  |                   | $ | 158,900,000 | 
|Real estate partnerships and preferred equity investments (cost:                      |  |                           |             |  |                   |   |             | 
|3/31/2011 - $8,445,469; 12/31/2010 - $14,166,536)                                     |  |                           | 7,834,182   |  |                   |   | 12,591,448  | 
|                                                                                      |  |                           |             |  |                   |   |             | 
|                                                                                      |  |                          
|Total real estate investments                                                         |  |                           | 172,234,182 |  |                   |   | 171,491,448 | 
|                                                                                      |  |                          
|CASH AND CASH EQUIVALENTS                                                             |  |                           | 35,856,842  |  |                   |   | 28,881,784  | 
|                                                                                      |  |                          
|OTHER ASSETS, NET                                                                     |  |                           | 2,202,765   |  |                   |   | 2,416,157   | 
|                                                                                      |  |                           |             |  |                   |   |             | 
|                                                                                      |  |                          
|Total assets                                                                          |  | $                         | 210,293,789 |  |                   | $ | 202,789,389 | 
|                                                                                      |  |                           |             |  |                   |   |             | 
|                                                                                      |  |                          
|LIABILITIES & PARTNERS' EQUITY                                                        |  |                           |             |  |                   |   |             | 
|                                                                                      |  |                          
|INVESTMENT LEVEL DEBT (net of unamortized
discount: 3/31/11 $4,095; 12/31/10 $10,237) |  | $                         | 30,388,599  |  |                   | $ | 30,565,616  | 
|                                                                                      |  |                          
|ACCOUNTS PAYABLE AND ACCRUED EXPENSES                                                 |  |                           | 2,296,498   |  |                   |   | 2,870,545   | 
|                                                                                      |  |                          
|DUE TO AFFILIATES                                                                     |  |                           | 587,508     |  |                   |   | 597,136     | 
|                                                                                      |  |                          
|OTHER LIABILITIES                                                                     |  |                           | 940,289     |  |                   |   | 1,028,318   | 
|                                                                                      |  |                           |             |  |                   |   |             | 
|                                                                                      |  |                          
|Total liabilities                                                                     |  |                           | 34,212,894  |  |                   |   | 35,061,615  | 
|                                                                                      |  |                           |             |  |                   |   |             | 
|                                                                                      |  |                          
|COMMITMENTS AND CONTINGENCIES                                                         |  |                           |             |  |                   |   |             | 
|                                                                                      |  |                          
|NET ASSETS, REPRESENTING PARTNERS' EQUITY:                                            |  |                           |             |  |                   |   |             | 
|                                                                                      |  |                          
|GENERAL PARTNERS CONTROLLING INTEREST                                                |  |                           | 172,634,642 |  |                   |   | 165,027,953 | 
|                                                                                      |  |                          
|NONCONTROLLING INTEREST                                                               |  |                           | 3,446,253   |  |                   |   | 2,699,821   | 
|                                                                                      |  |                           |             |  |                   |   |             | 
|                                                                                      |  |                          
|                                                                                      |  |                           | 176,080,895 |  |                   |   | 167,727,774 | 
|                                                                                      |  |                           |             |  |                   |   |             | 
|                                                                                      |  |                          
|Total liabilities and partners' equity                                                |  | $                         | 210,293,789 |  |                   | $ | 202,789,389 | 
|                                                                                      |  |                           |             |  |                   |   |             | 
|                                                                                      |  |                          
|NUMBER OF SHARES OUTSTANDING AT END OF PERIOD                                         |  |                           | 5,815,305   |  |                   |   | 5,815,305   | 
|                                                                                      |  |                           |             |  |                   |   |             | 
|                                                                                      |  |                          
|SHARE VALUE AT END OF PERIOD                                                          |  | $                         | 29.69       |  |                   | $ | 28.38       | 
|                                                                                      |  |                           |             |  |                   |   |             | 

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



11



---

THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)



|                                                                                                                       |  |                                       |           |  |      |   |             | 
|---------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------- | --------- |  | ---- | - | ----------- | 
|                                                                                                                       |  | For the Three Months Ending March 31, |          
|                                                                                                                       |  | 2011                                  |           |  | 2010 |  
|INVESTMENT INCOME:                                                                                                     |  |                                       |           |  |      |   |             | 
|Revenue from real estate and improvements                                                                              |  | $                                     | 5,376,444 |  |      | $ | 5,817,966   | 
|Equity in income of real estate partnerships                                                                           |  |                                       | 451,303   |  |      |   | 249,109     | 
|Interest on short-term investments                                                                                     |  |                                       | 9,132     |  |      |   | 5,853       | 
|                                                                                                                       |  |                                       |           |  |      |   |             | 
|                                                                                                                       |  |                                      
|Total investment income                                                                                                |  |                                       | 5,836,879 |  |      |   | 6,072,928   | 
|                                                                                                                       |  |                                       |           |  |      |   |             | 
|                                                                                                                       |  |                                      
|INVESTMENT EXPENSES:                                                                                                   |  |                                       |           |  |      |   |             | 
|Operating                                                                                                              |  |                                       | 1,541,345 |  |      |   | 1,559,772   | 
|Investment management fee                                                                                              |  |                                       | 574,103   |  |      |   | 575,677     | 
|Real estate taxes                                                                                                      |  |                                       | 381,495   |  |      |   | 650,703     | 
|Administrative                                                                                                         |  |                                       | 874,184   |  |      |   | 1,164,870   | 
|Interest expense                                                                                                       |  |                                       | 246,644   |  |      |   | 253,675     | 
|                                                                                                                       |  |                                       |           |  |      |   |             | 
|                                                                                                                       |  |                                      
|Total investment expenses                                                                                              |  |                                       | 3,617,771 |  |      |   | 4,204,697   | 
|                                                                                                                       |  |                                       |           |  |      |   |             | 
|                                                                                                                       |  |                                      
|NET INVESTMENT INCOME                                                                                                  |  |                                       | 2,219,108 |  |      |   | 1,868,231   | 
|                                                                                                                       |  |                                       |           |  |      |   |             | 
|                                                                                                                       |  |                                      
|UNREALIZED GAIN (LOSS) ON INVESTMENTS:                                                                                 |  |                                       |           |  |      |   |             | 
|Change in unrealized gain (loss) on real estate investments held                                                       |  |                                       | 6,213,920 |  |      |   | (2,743,798) | 
|                                                                                                                       |  |                                       |           |  |      |   |             | 
|                                                                                                                       |  |                                      
|INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS                                                            |  | $                                     | 8,433,028 |  |      | $ | (875,567)   | 
|                                                                                                                       |  |                                       |           |  |      |   |             | 
|                                                                                                                       |  |                                      
|Amounts attributable to noncontrolling interest:                                                                       |  |                                       |           |  |      |   |             | 
|Net investment income (loss) attributable to noncontrolling interest                                                   |  |                                       | 99,227    |  |      |   | 32,867      | 
|Net unrealized gain (loss) attributable to noncontrolling interest                                                     |  |                                       | 727,112   |  |      |   | 144,303     | 
|                                                                                                                       |  |                                       |           |  |      |   |             | 
|                                                                                                                       |  |                                      
|Net increase (decrease) in net assets resulting from operations attributable to the noncontrolling interest            |  | $                                     | 826,339   |  |      | $ | 177,170     | 
|                                                                                                                       |  |                                       |           |  |      |   |             | 
|                                                                                                                       |  |                                      
|Amounts attributable to general partners' controlling interest:                                                        |  |                                       |           |  |      |   |             | 
|Net investment income attributable to general partners' controlling interest                                           |  |                                       | 2,119,881 |  |      |   | 1,835,364   | 
|Net unrealized gain (loss) attributable to general partners' controlling interest                                      |  |                                       | 5,486,808 |  |      |   | (2,888,101) | 
|                                                                                                                       |  |                                       |           |  |      |   |             | 
|                                                                                                                       |  |                                      
|Net increase (decrease) in net assets resulting from operations attributable to general partners' controlling
interest |  | $                                     | 7,606,689 |  |      | $ | (1,052,737) | 
|                                                                                                                       |  |                                       |           |  |      |   |             | 

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



12



---

THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS

(Unaudited)



|                                                                       |  |                                       |             |  |                        |   |           |       |  |   |                                       |  |  |                        |             |  |       |   |           |  |  |   |             | 
|---------------------------------------------------------------------- |  | ------------------------------------- | ----------- |  | ---------------------- | - | --------- | ----- |  | - | ------------------------------------- |  |  | ---------------------- | ----------- |  | ----- | - | --------- |  |  | - | ----------- | 
|                                                                       |  | For the Three Months Ending
March 31, |            
|                                                                       |  | 2011                                  |             |  | 2010                   |  
|                                                                       |  | General Partners'Controlling Interest |             |  | NoncontrollingInterest |   |           | Total |  |   | General Partners'Controlling Interest |  |  | NoncontrollingInterest |             |  | Total |  
|INCREASE (DECREASE) IN NET ASSETS                                      |  |                                       |             |  |                        |   |           |       |  |   |                                       |  |  |                        |             |  |       |   |           |  |  |   |             | 
|RESULTING FROM OPERATIONS:                                             |  |                                       |             |  |                        |   |           |       |  |   |                                       |  |  |                        |             |  |       |   |           |  |  |   |             | 
|Net investment income (loss)                                           |  | $                                     | 2,119,881   |  |                        | $ | 99,227    |       |  | $ | 2,219,108                             |  |  | $                      | 1,835,364   |  |       | $ | 32,867    |  |  | $ | 1,868,231   | 
|Net realized and unrealized gain (loss)
from real estate investments   |  |                                       | 5,486,808   |  |                        |   | 727,112   |       |  |   | 6,213,920                             |  |  |                        | (2,888,101) |  |       |   | 144,303   |  |  |   | (2,743,798) | 
|                                                                       |  |                                       |             |  |                        |   |           |       |  |   |                                       |  |  |                        |             |  |       |   |           |  |  |   |             | 
|Increase (decrease) in net assets resulting
from operations            |  |                                       | 7,606,689   |  |                        |   | 826,339   |       |  |   | 8,433,028                             |  |  |                        | (1,052,737) |  |       |   | 177,170   |  |  |   | (875,567)   | 
|                                                                       |  |                                       |             |  |                        |   |           |       |  |   |                                       |  |  |                        |             |  |       |   |           |  |  |   |             | 
|                                                                       |  |                                       |             |  |                        |  
|INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM CAPITAL TRANSACTIONS: |  |                                       |             |  |                        |   |           |       |  |   |                                       |  |  |                        |             |  |       |   |           |  |  |   |             | 
|Distributions to noncontrolling interest                               |  |                                       | -           |  |                        |   | (79,907)  |       |  |   | (79,907)                              |  |  |                        | -           |  |       |   | (72,256)  |  |  |   | (72,256)    | 
|                                                                       |  |                                       |             |  |                        |   |           |       |  |   |                                       |  |  |                        |             |  |       |   |           |  |  |   |             | 
|                                                                       |  |                                       |             |  |                        |  
|Increase (decrease) in net assets resulting from capital transactions  |  |                                       | -           |  |                        |   | (79,907)  |       |  |   | (79,907)                              |  |  |                        | -           |  |       |   | (72,256)  |  |  |   | (72,256)    | 
|                                                                       |  |                                       |             |  |                        |   |           |       |  |   |                                       |  |  |                        |             |  |       |   |           |  |  |   |             | 
|                                                                       |  |                                       |             |  |                        |  
|INCREASE (DECREASE) IN NET ASSETS                                      |  |                                       | 7,606,689   |  |                        |   | 746,432   |       |  |   | 8,353,121                             |  |  |                        | (1,052,737) |  |       |   | 104,914   |  |  |   | (947,823)   | 
|                                                                       |  |                                       |             |  |                        |  
|NET ASSETS - Beginning of period                                       |  |                                       | 165,027,953 |  |                        |   | 2,699,821 |       |  |   | 167,727,774                           |  |  |                        | 167,204,272 |  |       |   | 2,097,909 |  |  |   | 169,302,181 | 
|                                                                       |  |                                       |             |  |                        |   |           |       |  |   |                                       |  |  |                        |             |  |       |   |           |  |  |   |             | 
|                                                                       |  |                                       |             |  |                        |  
|NET ASSETS - End of period                                             |  | $                                     | 172,634,642 |  |                        | $ | 3,446,253 |       |  | $ | 176,080,895                           |  |  | $                      | 166,151,535 |  |       | $ | 2,202,823 |  |  | $ | 168,354,358 | 
|                                                                       |  |                                       |             |  |                        |   |           |       |  |   |                                       |  |  |                        |             |  |       |   |           |  |  |   |             | 

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



13



---

THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)



|                                                                                                                      |  |                                       |             |  |      |   |             | 
|--------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------- | ----------- |  | ---- | - | ----------- | 
|                                                                                                                      |  | For the Three Months Ended 
March, 31 |            
|                                                                                                                      |  | 2011                                  |             |  | 2010 |  
|CASH FLOWS FROM OPERATING ACTIVITIES:                                                                                 |  |                                       |             |  |      |   |             | 
|Net increase (decrease) in net assets from operations                                                                 |  | $                                     | 8,433,028   |  |      | $ | (875,567)   | 
|Adjustments to reconcile net increase (decrease) in net assets to net cash provided by (used in) operating
activities |  |                                       |             |  |      |   |             | 
|Net realized and unrealized loss (gain)                                                                               |  |                                       | (6,213,920) |  |      |   | 2,743,798   | 
|Amortization of discount on investment level debt                                                                     |  |                                       | 6,142       |  |      |   | (930)       | 
|Amortization of deferred financing costs                                                                              |  |                                       | 8,797       |  |      |   | 17,581      | 
|Distributions in excess of (less than) equity in income of real estate partnerships' operations                       |  |                                       | (147,594)   |  |      |   | 17,793      | 
|Bad debt expense                                                                                                      |  |                                       | (21,777)    |  |      |   | 1,531       | 
|(Increase) decrease in:                                                                                               |  |                                       |             |  |      |   |             | 
|Other assets                                                                                                          |  |                                       | 226,372     |  |      |   | 170,847     | 
|Increase (decrease) in:                                                                                               |  |                                       |             |  |      |   |             | 
|Accounts payable and accrued expenses                                                                                 |  |                                       | (574,047)   |  |      |   | 647,702     | 
|Due to affiliates                                                                                                     |  |                                       | (9,628)     |  |      |   | (14,017)    | 
|Other liabilities                                                                                                     |  |                                       | (88,029)    |  |      |   | (65,617)    | 
|                                                                                                                      |  |                                       |             |  |      |   |             | 
|                                                                                                                      |  |                                      
|Net cash flows provided by (used in) operating activities                                                             |  |                                       | 1,619,344   |  |      |   | 2,643,121   | 
|                                                                                                                      |  |                                       |             |  |      |   |             | 
|                                                                                                                      |  |                                      
|CASH FLOWS PROVIDED FOR INVESTING ACTIVITIES:                                                                         |  |                                       |             |  |      |   |             | 
|Additions to real estate and improvements                                                                             |  |                                       | (249,881)   |  |      |   | (1,329,519) | 
|Return of investment in real estate partnerships                                                                      |  |                                       | 5,868,661   |  |      |   | -           | 
|                                                                                                                      |  |                                       |             |  |      |   |             | 
|                                                                                                                      |  |                                      
|Net cash flows provided by (used in) investing activities                                                             |  |                                       | 5,618,780   |  |      |   | (1,329,519) | 
|                                                                                                                      |  |                                       |             |  |      |   |             | 
|                                                                                                                      |  |                                      
|CASH FLOWS FROM FINANCING ACTIVITIES:                                                                                 |  |                                       |             |  |      |   |             | 
|Principal payments on investment level debt                                                                           |  |                                       | (183,159)   |  |      |   | (137,683)   | 
|Distributions to noncontrolling interest                                                                              |  |                                       | (79,907)    |  |      |   | (72,256)    | 
|                                                                                                                      |  |                                       |             |  |      |   |             | 
|                                                                                                                      |  |                                      
|Net cash flows provided by (used in) financing activities                                                             |  |                                       | (263,066)   |  |      |   | (209,939)   | 
|                                                                                                                      |  |                                       |             |  |      |   |             | 
|                                                                                                                      |  |                                      
|NET CHANGE IN CASH AND CASH EQUIVALENTS                                                                               |  |                                       | 6,975,058   |  |      |   | 1,103,663   | 
|                                                                                                                      |  |                                      
|CASH AND CASH EQUIVALENTS - Beginning of period                                                                       |  |                                       | 28,881,784  |  |      |   | 24,522,159  | 
|                                                                                                                      |  |                                       |             |  |      |   |             | 
|                                                                                                                      |  |                                      
|CASH AND CASH EQUIVALENTS - End of period                                                                             |  | $                                     | 35,856,842  |  |      | $ | 25,625,822  | 
|                                                                                                                      |  |                                       |             |  |      |   |             | 

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



14



---

THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

CONSOLIDATED SCHEDULE OF INVESTMENTS



|                                                                                                      |  |                          |  |                            |             |                                                  |  |                          |             |  |                      |   |             |      |  |   |                      |  |  |   |            | 
|----------------------------------------------------------------------------------------------------- |  | ------------------------ |  | -------------------------- | ----------- | ------------------------------------------------ |  | ------------------------ | ----------- |  | -------------------- | - | ----------- | ---- |  | - | -------------------- |  |  | - | ---------- | 
|                                                                                                      |  |                          |  |                            |             | 2011 Total Rentable
Square Feet
Unless Otherwise |  | March 31,2011(Unaudited) |             |  | December 31,2010     |  
|Property Name                                                                                         |  | March 31,
2011
Ownership |  | City, State                |             | Indicated(Unaudited)                             |  | Cost                     |             |  | Estimated Fair
Value |   |             | Cost |  |   | Estimated Fair
Value | 
|                                                                                                      |  |                          |  |                            |             |                                                  | 
|OFFICES                                                                                               |  |                          |  |                            |             |                                                  |  |                          |             |  |                      |   |             |      |  |   |                      |  |  |   |            | 
|750 Warrenville                                                                                       |  | WO                       |  | Lisle, IL                  |             | 103,193                                          |  | $                        | 26,362,333  |  |                      | $ | 7,200,000   |      |  | $ | 26,339,685           |  |  | $ | 7,200,000  | 
|Summit @ Cornell Oaks                                                                                 |  | WO                       |  | Beaverton , OR             |             | 72,109                                           |  |                          | 12,934,644  |  |                      |   | 6,700,000   |      |  |   | 12,937,126           |  |  |   | 6,700,000  | 
|Westpark                                                                                              |  | WO                       |  | Brentwood, TN              |             | 97,199                                           |  |                          | 14,667,971  |  |                      |   | 11,500,000  |      |  |   | 14,585,669           |  |  |   | 10,400,000 | 
|Financial Plaza                                                                                       |  | WO                       |  | Brentwood, TN              |             | 98,049                                           |  |                          | 12,787,144  |  |                      |   | 9,400,000   |      |  |   | 12,854,615           |  |  |   | 9,500,000  | 
|                                                                                                      |  |                          |  | Offices % as of 3/31/11    |             | 20%                                              |  |                          | 66,752,092  |  |                      |   | 34,800,000  |      |  |   | 66,717,095           |  |  |   | 33,800,000 | 
|                                                                                                      |  |                          |  |                            |             |                                                  | 
|APARTMENTS                                                                                            |  |                          |  |                            |             |                                                  |  |                          |             |  |                      |   |             |      |  |   |                      |  |  |   |            | 
|                                                                                                      |  |                          |  |                            |             |                                                  | 
|Dunhill Trace Apartments                                                                              |  | WO                       |  | Raleigh, NC                |             | 250 Units                                        |  |                          | 16,710,641  |  |                      |   | 18,100,000  |      |  |   | 16,649,083           |  |  |   | 17,400,000 | 
|Broadstone Crossing                                                                                   |  | WO                       |  | Austin, TX                 |             | 225 Units                                        |  |                          | 22,858,398  |  |                      |   | 23,700,000  |      |  |   | 22,854,377           |  |  |   | 23,500,000 | 
|The Reserve At Waterford Lakes                                                                        |  | WO                       |  | Charlotte, NC              |             | 140 Units                                        |  |                          | 13,934,488  |  |                      |   | 10,800,000  |      |  |   | 13,850,701           |  |  |   | 10,200,000 | 
|                                                                                                      |  |                          |  | Apartments % as of 3/31/11 |             | 31%                                              |  |                          | 53,503,527  |  |                      |   | 52,600,000  |      |  |   | 53,354,161           |  |  |   | 51,100,000 | 
|                                                                                                      |  |                          |  |                            |             |                                                  | 
|RETAIL                                                                                                |  |                          |  |                            |             |                                                  |  |                          |             |  |                      |   |             |      |  |   |                      |  |  |   |            | 
|Hampton Towne Center                                                                                  |  | WO                       |  | Hampton, VA                |             | 174,540                                          |  |                          | 18,197,093  |  |                      |   | 17,000,000  |      |  |   | 18,197,093           |  |  |   | 16,300,000 | 
|White Marlin Mall                                                                                     |  | CJV                      |  | Ocean City, MD             |             | 197,098                                          |  |                          | 23,712,456  |  |                      |   | 27,500,000  |      |  |   | 23,707,485           |  |  |   | 26,200,000 | 
|Westminster Crossing East, LLC                                                                        |  | CJV                      |  | Westminster, MD            |             | 89,890                                           |  |                          | 15,068,438  |  |                      |   | 15,100,000  |      |  |   | 15,068,438           |  |  |   | 14,600,000 | 
|CARS Preferred Equity                                                                                 |  | PE                       |  | Various                    |             | N/A                                              |  |                          | 8,445,469   |  |                      |   | 7,834,182   |      |  |   | 14,166,536           |  |  |   | 12,591,448 | 
|Harnett Crossing                                                                                      |  | WO                       |  | Dunn, NC                   |             | 193,325                                          |  |                          | 6,281,294   |  |                      |   | 3,300,000   |      |  |   | 6,239,696            |  |  |   | 3,300,000  | 
|                                                                                                      |  |                          |  | Retail % as of 3/31/11     |             | 41%                                              |  |                          | 71,704,750  |  |                      |   | 70,734,182  |      |  |   | 77,379,248           |  |  |   | 72,991,448 | 
|                                                                                                      |  |                          |  |                            |             |                                                  | 
|HOTEL                                                                                                 |  |                          |  |                            |             |                                                  |  |                          |             |  |                      |   |             |      |  |   |                      |  |  |   |            | 
|Portland Crown Plaza                                                                                  |  | CJV                      |  | Portland, OR               |             | 161 Rooms                                        |  |                          | 10,875,922  |  |                      |   | 14,100,000  |      |  |   | 10,856,973           |  |  |   | 13,600,000 | 
|                                                                                                      |  |                          |  | Hotel % as of 3/31/11      |             | 8%                                               |  |                          | 10,875,922  |  |                      |   | 14,100,000  |      |  |   | 10,856,973           |  |  |   | 13,600,000 | 
|                                                                                                      |  |                          |  |                            |            
|Total Real Estate Investments as a Percentage of General Partners' Controlling Interest as of
3/31/11 |  | 100%                     |  | $                          | 202,836,291 |                                                  |  | $                        | 172,234,182 |  |                      | $ | 208,307,477 |      |  | $ | 171,491,448          | 
|                                                                                                      |  |                          |  |                            |             |                                                  |  |                          |             |  |                      |   |             |      |  |   |                      |  |  |   |            | 

WO - Wholly Owned Investment

CJV - Consolidated Joint Venture

PE - Preferred equity investments

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



15



---

THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

CONSOLIDATED SCHEDULE OF INVESTMENTS



|                                                                                 |  |             |            |       |                            |  |             |                   |  |   |                     |       |  |      |            |  |                     |   |            |  |  |   |            | 
|-------------------------------------------------------------------------------- |  | ----------- | ---------- | ----- | -------------------------- |  | ----------- | ----------------- |  | - | ------------------- | ----- |  | ---- | ---------- |  | ------------------- | - | ---------- |  |  | - | ---------- | 
|                                                                                 |  |             |            |       | March 31, 
2011(Unaudited) |  |             | December 31, 2010 | 
|                                                                                 |  | Face Amount |            |       | Maturity Date              |  |             | Cost              |  |   | EstimatedFair
Value |       |  | Cost |            |  | EstimatedFair
Value |  
|CASH AND CASH EQUIVALENTS - Percentage of General Partners Controlling Interest |  |             |            | 20.8% |                            |  |             |                   |  |   |                     | 17.5% | 
|                                                                                 |  |             |            |       |                            | 
|Investments in Prudential Investment Liquidity Pool:                             |  |             |            |       |                            |  |             |                   |  |   |                     |       |  |      |            |  |                     |   |            |  |  |   |            | 
|Federal Home Loan Bank, 0 coupon bond                                           |  | $           | 4,859,000  |       |                            |  | April, 2011 |                   |  | $ | 4,859,000           |       |  | $    | 4,859,000  |  |                     | $ | 8,181,000  |  |  | $ | 8,181,000  | 
|Federal Home Loan Bank, 0 coupon bond                                           |  |             | 15,000,000 |       |                            |  | June, 2011  |                   |  |   | 14,996,588          |       |  |      | 14,996,588 |  |                     |   | 4,999,740  |  |  |   | 4,999,740  | 
|Federal Home Loan Bank, 0 coupon bond                                           |  |             | 15,000,000 |       |                            |  | June, 2011  |                   |  |   | 14,995,729          |       |  |      | 14,995,729 |  |                     |   | 4,676,891  |  |  |   | 4,676,891  | 
|Federal Home Loan Bank, 0 coupon bond                                           |  |             | -          |       |                            |  | March, 2011 |                   |  |   | -                   |       |  |      | -          |  |                     |   | 9,997,022  |  |  |   | 9,997,022  | 
|                                                                                 |  |             |            |       |                            |  |             |                   |  |   |                     |       |  |      |            |  |                     |   |            |  |  |   |            | 
|                                                                                 |  |             |            |       |                            |  |             |                   |  |   |                     |       |  |      |            |  |                     |   |            |  |  |   |            | 
|                                                                                 |  |             |            |       |                            | 
|Total Cash Equivalents                                                           |  |             |            |       |                            |  |             |                   |  |   | 34,851,317          |       |  |      | 34,851,317 |  |                     |   | 27,854,653 |  |  |   | 27,854,653 | 
|                                                                                 |  |             |            |       |                            | 
|Cash                                                                             |  |             |            |       |                            |  |             |                   |  |   | 1,005,525           |       |  |      | 1,005,525  |  |                     |   | 1,027,131  |  |  |   | 1,027,131  | 
|                                                                                 |  |             |            |       |                            |  |             |                   |  |   |                     |       |  |      |            |  |                     |   |            |  |  |   |            | 
|                                                                                 |  |             |            |       |                            | 
|Total Cash and Cash Equivalents                                                  |  |             |            |       |                            |  |             |                   |  | $ | 35,856,842          |       |  | $    | 35,856,842 |  |                     | $ | 28,881,784 |  |  | $ | 28,881,784 | 
|                                                                                 |  |             |            |       |                            |  |             |                   |  |   |                     |       |  |      |            |  |                     |   |            |  |  |   |            | 

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



16



---

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF

THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

March 31, 2011 and December 31, 2010

(Unaudited)

Note 1:    Summary of Significant Accounting Policies



| | A. | Basis of Presentation - The accompanying consolidated financial statements of The Prudential Variable Contract Real Property Partnership (the
Partnership) 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 that are applicable to real estate investment companies. 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 three months ended March 31, 2011 are not necessarily indicative of
the results that may be expected for the year ended December 31, 2011. For further information, refer to the audited consolidated financial statements and notes of the Partnership for the year ended December 31, 2010. The Partnership has
evaluated subsequent events through May 11, 2011, the date these financial statements were available to be issued.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | B. | Accounting Pronouncements Adopted - In January 2010, the FASB issued updated guidance that requires new fair value disclosures for
significant transfers between Level 1 and 2 measurement categories and separate presentation of purchases, issuances, and settlements within the roll forward of Level 3 activity. Also, this updated fair value guidance clarifies the disclosure
requirements about level of disaggregation and valuation techniques and inputs. This guidance is effective for interim and annual reporting periods beginning after December 15, 2009, except disclosures about purchases, sales, issuances, and
settlements in the roll forward of Level 3 activity, which are effective for interim and annual reporting periods beginning after December 15, 2010. The Partnership adopted the guidance effective for interim and annual reporting periods
beginning after December 15, 2009 on January 1, 2010. The Partnership adopted the guidance effective for interim and annual reporting periods beginning after December 15, 2010 on January 1, 2011. The required disclosures are
provided in Note 3.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Note 2:  Disclosure of Supplemental Cash Flow Information and Non-Cash Investing and
Financing Activity

Cash paid for interest during the three months ended March 31, 2011 and March 31, 2010, was
$237,847 and $236,094, respectively.



17



---

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF

THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

March 31, 2011 and December 31, 2010

(Unaudited)

Note 3:  Fair Value Measurements

Valuation Methods:

Real estate investments are carried at fair value.
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.

In general fair 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. (PIM), which is an indirectly owned subsidiary of Prudential Financial, Inc. (PFI), is responsible to assure
that the valuation process provides independent and reasonable property fair value estimates. An unaffiliated third party has been appointed by PIM to assist the Chief Real Estate Appraiser in maintaining and monitoring the independence and the
accuracy of the appraisal process. The fair value of real estate investments does not reflect the transaction sale costs, which may be incurred upon disposition of the real estate investments.

The purpose of an appraisal is to estimate the fair value of real estate as of a specific date. In accordance with FASB authoritative
guidance on fair value measurements and disclosures, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The estimate of fair
value is based on the conventional approaches to value, all of which require the exercise of subjective judgment. The three approaches are: (1) current cost of reproducing the real estate less deterioration and functional and economic
obsolescence; (2) discounting a series of income streams and reversion at a specific yield or by directly capitalizing a single year income estimate by an appropriate factor; and (3) value indicated by recent sales of comparable real
estate in the market. Key inputs and assumptions include rental income and expense amounts, related rental income and expense growth rates, discount rates and capitalization rates. In the reconciliation of these three approaches, the independent
appraiser uses one or a combination of them, to come up with the approximated value for the type of real estate in the market.

Fair Value
Measurements:

FASB authoritative guidance on fair value measurements and disclosures establishes a fair value measurement
framework, provides a single definition of fair value and requires expanded disclosure summarizing fair value measurements. This guidance provides a three-level hierarchy based on the inputs used in the valuation process. The levels in the fair
value hierarchy within which the fair value measurements falls is determined based on the lowest level input that is significant to the fair value measurement. The levels of the fair value hierarchy are as follows;

Level 1  Fair value is based on unadjusted quoted prices in active markets that are accessible to the entity for identical assets
or liabilities. These generally provide the most reliable evidence and should be used to measure fair value whenever available.

Level 2  Fair value is based on inputs, other than Level 1 inputs, that are observable for the asset or liability, either directly
or indirectly, for substantially the full term of the asset or liability through corroboration with observable market data.

Level 3  Fair value is based on significant unobservable inputs for the asset or liability. These inputs reflect the entitys
own assumptions about how market participants would price the asset or liability.

For items classified as Level 3, a
reconciliation of the beginning and ending balances, as shown in table 2 below, is also required.

During the three months ended
March 31, 2011 and 2010, there were no transfers between Level 1 and Level 2.



18



---

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF

THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

March 31, 2011 and December 31, 2010

(Unaudited)



Note 3:  Fair Value Measurements (continued)



Table 1 below summarizes the assets measured at fair value on a recurring basis and
their respective position in the fair value hierarchy.



|                                                          |  |                        |         |  |                                                    |   |         |                                                                |  |   |                                               |  |  |                                           |   |  |  |   |         | 
|--------------------------------------------------------- |  | ---------------------- | ------- |  | -------------------------------------------------- | - | ------- | -------------------------------------------------------------- |  | - | --------------------------------------------- |  |  | ----------------------------------------- | - |  |  | - | ------- | 
|Table 1                                                   |  |                        |         |  |                                                    |   |         |                                                                |  |   |                                               |  |  |                                           |   |  |  |   |         | 
|                                                          |  |                        |         |  |                                                    |   |         | (in 000's)                                                     |  |   |                                               | 
|                                                          |  |                       
|                                                          |  |                        |         |  | Fair value measurements at March 31, 2011 using    |  
|                                                          |  |                        |         |  |                                                   
|Assets:                                                   |  | Cost at        3/31/11 |         |  | Amounts measured at fair value
3/31/11             |   |         | Quoted prices
in active
markets for
identical assets (level 1) |  |   | Significant other observable
inputs (level 2) |  |  | Significant unobservable inputs (level 3) |  
|                                                          |  |                        |         |  |                                                    |   |         |                                                                |  |   |                                               |  |  |                                           |   |  |  |   |         | 
|Real estate and improvements                              |  | $                      | 194,391 |  |                                                    | $ | 164,400 |                                                                |  | $ | -                                             |  |  | $                                         | - |  |  | $ | 164,400 | 
|Real estate partnerships and
preferred equity investments |  |                        | 8,445   |  |                                                    |   | 7,834   |                                                                |  |   | -                                             |  |  |                                           | - |  |  |   | 7,834   | 
|                                                          |  |                        |         |  |                                                    |   |         |                                                                |  |   |                                               |  |  |                                           |   |  |  |   |         | 
|                                                          |  |                        |         | 
|Total                                                     |  | $                      | 202,836 |  |                                                    | $ | 172,234 |                                                                |  | $ | -                                             |  |  | $                                         | - |  |  | $ | 172,234 | 
|                                                          |  |                        |         | 
|                                                          |  |                        |         | 
|                                                          |  |                        |         |  |                                                    |   |         | (in 000's)                                                     |  |   |                                               | 
|                                                          |  |                        |         |  | Fair value measurements at December 31, 2010 using |  
|Assets:                                                   |  | Cost
at12/31/10        |         |  | Amountsmeasured atfair value12/31/2010             |   |         | Quoted pricesin activemarkets foridentical assets(level 1)     |  |   | Significantotherobservableinputs (level 2)    |  |  | Significantunobservableinputs (level 3)   |  
|Real estate and improvements                              |  | $                      | 194,141 |  |                                                    | $ | 158,900 |                                                                |  | $ | -                                             |  |  | $                                         | - |  |  | $ | 158,900 | 
|Real estate partnerships and
preferred equity investments |  |                        | 14,166  |  |                                                    |   | 12,591  |                                                                |  |   | -                                             |  |  |                                           | - |  |  |   | 12,591  | 
|                                                          |  |                        |         |  |                                                    |   |         |                                                                |  |   |                                               |  |  |                                           |   |  |  |   |         | 
|                                                          |  |                        |         | 
|Total                                                     |  | $                      | 208,307 |  |                                                    | $ | 171,491 |                                                                |  | $ | -                                             |  |  | $                                         | - |  |  | $ | 171,491 | 
|                                                          |  |                        |         | 



19



---

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF

THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

March 31, 2011 and December 31, 2010

(Unaudited)



Note 3:  Fair Value Measurements (continued)



Table 2 below provides a reconciliation of the beginning and ending balances for all
assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three month periods ended March 31, 2011 and March 31, 2010.



|                                                                                                                              |  |                             |         |   |                                                            |   |        |       |  |   |         |  
|----------------------------------------------------------------------------------------------------------------------------- |  | --------------------------- | ------- | - | ---------------------------------------------------------- | - | ------ | ----- |  | - | ------- | -
|Table 2                                                                                                                       |  |                             |         |   |                                                            |   |        |       |  |   |         |  
|(in 000's)
Fair value measurements using significant unobservable inputs
for the three months ending March 31, 2011 (Level 3) | 
|                                                                                                                              |  | Real estate andimprovements |         |   | Real estate andpartnerships andpreferred equityinvestments |   |        | Total | 
|                                                                                                                              |  |                             |         |  
|                                                                                                                              |  |                             |        
|Beginning balance @ 1/1/11                                                                                                    |  | $                           | 158,900 |   |                                                            | $ | 12,591 |       |  | $ | 171,491 |  
|                                                                                                                              |  |                             |        
|Net gains (losses) realized/unrealized included in earnings (or changes in net assets)                                        |  |                             | 5,250   |   |                                                            |   | 964    |       |  |   | 6,214   |  
|Equity income (losses)/interest income                                                                                        |  |                             | -       |   |                                                            |   | 451    |       |  |   | 451     |  
|Acquisitions, issuances and contributions                                                                                     |  |                             | 250     |   |                                                            |   | -      |       |  |   | 250     |  
|Disposition, settlements and distributions                                                                                    |  |                             | -       |   |                                                            |   | (6,172 | )     |  |   | (6,172  | )
|                                                                                                                              |  |                             |         |  
|Ending balance @ 3/31/11                                                                                                      |  | $                           | 164,400 |   |                                                            | $ | 7,834  |       |  | $ | 172,234 |  
|                                                                                                                              |  |                             |         |  
|                                                                                                                              |  |                             |        
|Unrealized gains (losses) for the period relating to level 3 assets still held at the reporting date                          |  | $                           | 5,250   |   |                                                            | $ | 964    |       |  | $ | 6,214   |  
|                                                                                                                              |  |                             |         |  
|                                                                                                                             
|(in 000s)
Fair value measurements using significant unobservable inputs
for the three months ending March 31, 2010 (Level 3) | 
|                                                                                                                              |  | Real estate andimprovements |         |   | Real estate andpartnerships andpreferred equityinvestments |   |        | Total | 
|                                                                                                                              |  |                             |         |  
|                                                                                                                              |  |                             |        
|Beginning balance @ 1/1/10                                                                                                    |  | $                           | 167,100 |   |                                                            | $ | 10,045 |       |  | $ | 177,145 |  
|                                                                                                                              |  |                             |        
|Net gains (losses) realized/unrealized included in earnings (or changes in net assets)                                        |  |                             | (3,029  | ) |                                                            |   | 286    |       |  |   | (2,743  | )
|Equity income (losses)/interest income                                                                                        |  |                             | -       |   |                                                            |   | 249    |       |  |   | 249     |  
|Acquisitions, issuances and contributions                                                                                     |  |                             | 1,329   |   |                                                            |   | -      |       |  |   | 1,329   |  
|Disposition, settlements and distributions                                                                                    |  |                             | -       |   |                                                            |   | (268   | )     |  |   | (268    | )
|                                                                                                                              |  |                             |         |  
|Ending balance @ 3/31/10                                                                                                      |  | $                           | 165,400 |   |                                                            | $ | 10,312 |       |  | $ | 175,712 |  
|                                                                                                                              |  |                             |         |  
|                                                                                                                              |  |                             |        
|Unrealized gains (losses) for the period relating to level 3 assets still held at the reporting date                          |  | $                           | (3,029  | ) |                                                            | $ | 286    |       |  | $ | (2,743  | )
|                                                                                                                              |  |                             |         |  



20



---

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF

THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

March 31, 2011 and December 31, 2010

(Unaudited)



Note 4:  Investment Level Debt

Investment level debt includes mortgage loans payable on wholly owned properties and consolidated partnerships and is stated at the
principal amount of the obligations outstanding. At times the Partnership may assume debt in connection with the purchase of real estate. For debt assumed, the Partnership allocates a portion of the purchase price to the below/above market debt and
amortizes the premium/discount over the remaining life of the debt.

Based on borrowing rates available to the Partnership at
March 31, 2011 for loans with similar terms and average maturities, the Partnerships mortgages on wholly owned properties and consolidated partnerships have an estimated fair value of approximately $30 million, and a carrying value (cost)
of $30 million. Different assumptions or changes in future market conditions could significantly affect estimated fair value.

Note
5:  Risk

A.  Valuation Risk

The estimated fair value of real estate and real estate related assets is generally determined through an appraisal process. These
estimated fair values may vary significantly from the prices at which the real estate investments would sell, since market prices of real estate investments can only be determined by negotiation between a willing buyer and seller. These differences
could be material to the financial statements. Although the estimated fair values represent subjective estimates, management believes that these estimated fair values are reasonable approximations of market prices and the aggregate estimated value
of investments in real estate are fairly presented as of March 31, 2011 and December 31, 2010.

B.  Financing, Covenant, and Repayment Risks

In the normal course of business, the Partnership enters into loan agreements with certain lenders to finance its real estate investment
transactions. Unfavorable economic conditions could increase related borrowing costs, limit access to the capital markets or result in a decision by lenders not to extend credit to the Partnership. There is no guarantee that the Partnerships
borrowing arrangements or ability to obtain leverage will continue to be available, or if available, will be available on terms and conditions acceptable to the Partnership. Further, these loan agreements contain, among other conditions, events of
default and various covenants and representations. In the normal course of business, the Partnership may be in the process of renegotiating terms for loans outstanding that have passed their maturity dates. At March 31, 2011 the Partnership had
no outstanding matured loans.

A decline in market value of the Partnerships assets may also have particular adverse
consequences in instances where the Partnership borrowed money based on the fair value of specific assets. A decrease in market value of these assets may result in the lender requiring the Partnership to post additional collateral or otherwise repay
these loans.

In the event the Partnerships current portfolio and investment obligations are not refinanced or extended
when they become due and/or the Partnership is required to repay such borrowings and obligations, management anticipates that the repayment of these obligations will be provided by operating cash flow, new debt refinancing, and real estate
investment sales.

Note 6: 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 Partnership's management,
the outcome of such matters will not have a significant effect on the financial position of the Partnership.



21



---

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF

THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

March 31, 2011 and December 31, 2010

(Unaudited)



Note 7:  Related Party Transactions

Pursuant to an investment management agreement, PIM charges the Partnership a daily investment management fee at an annual rate of 1.25%
of the average daily gross asset valuation of the Partnership. For the periods ended March 31, 2011 and March 31, 2010, management fees incurred by the Partnership were $574,103 and $575,677, respectively. The Partnership also reimburses
PIM for certain administrative services rendered by PIM. The amounts incurred for the three months ended March 31, 2011 and March 31, 2010, were $13,407 and $13,407, respectively, and are classified as administrative expenses in the
Consolidated Statements of Operations.

Note 8:  Financial Highlights



|                                                                                                                       |  |                                      |        |  |      |   |          |      |  |   |          |  |  |      |        |  |  |   |            | 
|---------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------ | ------ |  | ---- | - | -------- | ---- |  | - | -------- |  |  | ---- | ------ |  |  | - | ---------- | 
|                                                                                                                       |  | For The Three Months Ended March 31, |       
|                                                                                                                       |  | 2011                                 |        |  | 2010 |   |          | 2009 |  |   | 2008     |  |  | 2007 |       
|Per Share(Unit) Operating Performance:                                                                                 |  |                                      |        |  |      |   |          |      |  |   |          |  |  |      |        |  |  |   |            | 
|Net Asset Value attributable to general partners' controlling interest, beginning of period                            |  | $                                    | 28.38  |  |      |   | $ 25.88  |      |  |   | $ 31.65  |  |  | $    | 36.55  |  |  |   | $    33.87 | 
|Income From Investment Operations:                                                                                     |  |                                      |        |  |      |   |          |      |  |   |          |  |  |      |        |  |  |   |            | 
|Net investment income attributable to general partners' controlling interest, before management fee                    |  |                                      | 0.46   |  |      |   | 0.37     |      |  |   | 0.42     |  |  |      | 0.61   |  |  |   | 0.52       | 
|Investment Management fee attributable to general partners' controlling interest                                       |  |                                      | (0.09) |  |      |   | (0.09)   |      |  |   | (0.11)   |  |  |      | (0.13) |  |  |   | (0.12)     | 
|Net realized and unrealized gain (loss) on investments attributable to general partners' controlling interest          |  |                                      | 0.94   |  |      |   | (0.45)   |      |  |   | (3.74)   |  |  |      | (0.10) |  |  |   | 0.33       | 
|                                                                                                                       |  |                                      |        |  |      |   |          |      |  |   |          |  |  |      |        |  |  |   |            | 
|Net Increase (decrease) in Net Assets Resulting from Operations attributable to general partners' controlling interest |  |                                      | 1.31   |  |      |   | (0.17)   |      |  |   | (3.43)   |  |  |      | 0.38   |  |  |   | 0.73       | 
|                                                                                                                       |  |                                      |        |  |      |   |          |      |  |   |          |  |  |      |        |  |  |   |            | 
|                                                                                                                       |  |                                      |        |  |     
|Net Asset Value attributable to general partners' controlling interest, end of period                                  |  | $                                    | 29.69  |  |      | $ | 25.71    |      |  | $ | 28.22    |  |  | $    | 36.93  |  |  | $ | 34.60      | 
|                                                                                                                       |  |                                      |        |  |      |   |          |      |  |   |          |  |  |      |        |  |  |   |            | 
|                                                                                                                       |  |                                      |        |  |     
|Total Return attributable to general partners controlling interest, before Management Fee:                            |  |                                      | 4.96%  |  |      |   | -0.29%   |      |  |   | -10.50%  |  |  |      | 1.38%  |  |  |   | 2.53%      | 
|Total Return attributable to general partners controlling interest, after Management Fee (a):                         |  |                                      | 4.61%  |  |      |   | -0.63%   |      |  |   | -10.83%  |  |  |      | 1.03%  |  |  |   | 2.17%      | 
|Ratios/Supplemental Data:                                                                                              |  |                                      |        |  |      |   |          |      |  |   |          |  |  |      |        |  |  |   |            | 
|Net Assets attributable to general partners' controlling interest, end of period (in millions)                         |  | $                                    | 173    |  |      |   | $    166 |      |  |   | $    191 |  |  | $    | 250    |  |  |   | $    234   | 
|Ratios to average net assets for the period ended (b):                                                                 |  |                                      |        |  |      |   |          |      |  |   |          |  |  |      |        |  |  |   |            | 
|Total Portfolio Level Expenses                                                                                         |  |                                      | 0.42%  |  |      |   | 0.39%    |      |  |   | 0.32%    |  |  |      | 0.35%  |  |  |   | 0.38%      | 
|Net Investment Income, before Management Fee                                                                           |  |                                      | 1.63%  |  |      |   | 1.38%    |      |  |   | 1.25%    |  |  |      | 1.66%  |  |  |   | 1.53%      | 

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



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

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



22



---

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 general 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 March 31, 2011, the
Partnerships liquid assets, consisting of cash and cash equivalents, were approximately $35.9 million, an increase of approximately $7.0 million from $28.9 million at December 31, 2010. The increase was primarily due to the partial
capital redemption of $5.9 million from the Capital Automotive Real Estate Services (or CARS) preferred equity investment. Partially offsetting this increase is the funding of capital expenditures to existing properties. Sources of
liquidity included net cash flow from property operations, capital redemptions, and interest from short-term investments. The Partnership uses cash for its real estate investment activities and for its distributions to its partners. As of
March 31, 2011, approximately 17.1% of the Partnerships total assets consisted of cash and cash equivalents.

During the three months ended March 31, 2011, the Partnership extended the maturity of the $15.3 million loan at the retail property
in Ocean City, Maryland from April 1, 2011 to June 1, 2011.

During the three months ended March 31, 2011, the
Partnership spent approximately $0.2 million on capital improvements. The $0.2 million funded minor capital improvements and transaction costs associated with leasing expenses at various properties.

(b) Results of Operations

The following is a comparison of the Partnerships results of operations for the three-month periods ended March 31, 2011 and
2010.

Net Investment Income Overview

The Partnerships net investment income attributable to the general partners controlling interest for the three months ended March 31, 2011 was approximately $2.1 million, an increase of
approximately $0.3 million from the prior year period. The increase in net investment income attributable to the general partners controlling interest was primarily due to a $0.4 million increase in the retail sector investments net
investment income from the prior year period. Partially offsetting these increases was a decrease of approximately $0.1 million from the prior year period in net investment income attributable to the general partners controlling interest from
the apartment sector. The components of this net investment income and/or loss attributable to the general partners controlling interest are discussed below by investment type.

Valuation Overview

The Partnership recorded net unrealized gains attributable to the general partners controlling interest of approximately $5.5 million for the three-month period ended March 31, 2011. This is
compared with net unrealized losses attributable to the general partners controlling interest of approximately $2.9 million for the prior year period. The net unrealized gains attributable to the general partners controlling interest for
the three-month period ended March 31, 2011 were due to valuation increases in all property sector investments. The components of these valuation gains and/or losses attributable to the general partners controlling interest are discussed
below by property type.



23



---

The following table presents a comparison of the Partnerships sources of net
investment income attributable to the general partners controlling interest, and unrealized gains or losses attributable to the general partners controlling interest by investment type for the three-month periods ended March 31,
2011 and 2010.



|                                                            |  |                              |           |  |      |   |             | 
|----------------------------------------------------------- |  | ---------------------------- | --------- |  | ---- | - | ----------- | 
|                                                            |  | Three Months Ended March 31, |          
|                                                            |  | 2011                         |           |  | 2010 |  
|Net Investment Income:                                      |  |                              |           |  |      |   |             | 
|                                                            |  |                              |           |  |      |   |             | 
|Office properties                                           |  | $                            | 574,722   |  |      | $ | 566,455     | 
|Apartment properties                                        |  |                              | 689,046   |  |      |   | 833,305     | 
|Retail properties                                           |  |                              | 1,496,120 |  |      |   | 1,075,752   | 
|Hotel property                                              |  |                              | 36,947    |  |      |   | 29,730      | 
|Other (including interest income, investment mgt fee, etc.) |  |                              | (676,954) |  |      |   | (669,878)   | 
|                                                            |  |                              |           |  |      |   |             | 
|Total Net Investment Income                                 |  | $                            | 2,119,881 |  |      | $ | 1,835,364   | 
|                                                            |  |                              |           |  |      |   |             | 
|                                                            |  |                              |           |  |      |   |             | 
|Net Unrealized Gain (Loss) on Real Estate Investments:      |  |                              |           |  |      |   |             | 
|                                                            |  |                             
|Office properties                                           |  | $                            | 965,004   |  |      | $ | (1,130,237) | 
|Apartment properties                                        |  |                              | 1,350,634 |  |      |   | (131,805)   | 
|Retail properties                                           |  |                              | 2,747,073 |  |      |   | (1,623,544) | 
|Hotel property                                              |  |                              | 424,097   |  |      |   | (2,515)     | 
|                                                            |  |                              |           |  |      |   |             | 
|                                                            |  |                              |           |  |      |   |             | 
|Net Unrealized Gain (Loss) on Real EstateInvestments        |  | $                            | 5,486,808 |  |      | $ | (2,888,101) | 
|                                                            |  |                              |           |  |      |   |             | 



24



---

OFFICE PROPERTIES



|                            |  |                                 |         |  |                                 |   |           |                           |  |   |                           |  |  |               |             |  |               |  |      |  |  |  |      | 
|--------------------------- |  | ------------------------------- | ------- |  | ------------------------------- | - | --------- | ------------------------- |  | - | ------------------------- |  |  | ------------- | ----------- |  | ------------- |  | ---- |  |  |  | ---- | 
|Three Months EndedMarch 31, |  | Net InvestmentIncome/(Loss)2011 |         |  | Net InvestmentIncome/(Loss)2010 |   |           | UnrealizedGain/(Loss)2011 |  |   | UnrealizedGain/(Loss)2010 |  |  | Occupancy2011 |             |  | Occupancy2010 | 
|                            | 
|Property                    |  |                                 |         |  |                                 |   |           |                           |  |   |                           |  |  |               |             |  |               |  |      |  |  |  |      | 
|Lisle, IL                   |  | $                               | 61,386  |  |                                 | $ | 53,025    |                           |  | $ | (22,647)                  |  |  | $             | 349,559     |  |               |  | 49%  |  |  |  | 48%  | 
|Brentwood, TN               |  |                                 | 92,586  |  |                                 |   | (117,634) |                           |  |   | 1,017,698                 |  |  |               | (489,575)   |  |               |  | 97%  |  |  |  | 70%  | 
|Beaverton, OR               |  |                                 | 135,240 |  |                                 |   | 317,433   |                           |  |   | 2,482                     |  |  |               | (987,100)   |  |               |  | 85%  |  |  |  | 88%  | 
|Brentwood, TN               |  |                                 | 285,510 |  |                                 |   | 313,631   |                           |  |   | (32,529)                  |  |  |               | (3,121)     |  |               |  | 100% |  |  |  | 100% | 
|                            |  |                                 |         |  |                                 |   |           |                           |  |   |                           | 
|                            |  | $                               | 574,722 |  |                                 | $ | 566,455   |                           |  | $ | 965,004                   |  |  | $             | (1,130,237) |  |               |  |      |  |  |  |      | 
|                            |  |                                 |         |  |                                 |   |           |                           |  |   |                           | 

Net Investment Income

Net investment income attributable to the general partners controlling interest for the Partnerships office properties was
approximately $0.6 million for the three months ended March 31, 2011, which is relatively unchanged from the prior year period.

Unrealized Gain/(Loss)

The office properties owned by the Partnership
recorded a net unrealized gain attributable to the general partners controlling interest of approximately $1.0 million during the three months ended March 31, 2011, compared with a net unrealized loss attributable to the general
partners controlling interest of approximately $1.1 million for the prior year period. The net unrealized gain attributable to the general partners controlling interest for the three months ended March 31, 2011 was primarily due to
a $1.0 million valuation gain at one of the properties in Brentwood, Tennessee based on lower investment rates and increased revenue due to higher occupancy. Investment rates include direct and terminal capitalization rates, and discount rates,
which reflect investors yield requirements on investments.



25



---

APARTMENT PROPERTIES



|                            |  |                                 |         |  |                                 |   |         |                           |  |   |                           |  |  |               |           |  |               |  |     |  |  |  |     | 
|--------------------------- |  | ------------------------------- | ------- |  | ------------------------------- | - | ------- | ------------------------- |  | - | ------------------------- |  |  | ------------- | --------- |  | ------------- |  | --- |  |  |  | --- | 
|Three Months EndedMarch 31, |  | Net InvestmentIncome/(Loss)2011 |         |  | Net InvestmentIncome/(Loss)2010 |   |         | UnrealizedGain/(Loss)2011 |  |   | UnrealizedGain/(Loss)2010 |  |  | Occupancy2011 |           |  | Occupancy2010 | 
|                            | 
|Property                    |  |                                 |         |  |                                 |   |         |                           |  |   |                           |  |  |               |           |  |               |  |     |  |  |  |     | 
|Atlanta, GA(1)              |  | $                               | (6,664) |  |                                 | $ | 202,511 |                           |  | $ | -                         |  |  | $             | 112,262   |  |               |  | N/A |  |  |  | 95% | 
|Raleigh, NC                 |  |                                 | 234,851 |  |                                 |   | 190,010 |                           |  |   | 638,442                   |  |  |               | (214,388) |  |               |  | 98% |  |  |  | 96% | 
|Austin, TX                  |  |                                 | 317,691 |  |                                 |   | 310,978 |                           |  |   | 195,979                   |  |  |               | (640)     |  |               |  | 98% |  |  |  | 94% | 
|Charlotte, NC               |  |                                 | 143,168 |  |                                 |   | 129,806 |                           |  |   | 516,213                   |  |  |               | (29,039)  |  |               |  | 97% |  |  |  | 91% | 
|                            |  |                                 |         |  |                                 |   |         |                           |  |   |                           | 
|                            |  | $                               | 689,046 |  |                                 | $ | 833,305 |                           |  | $ | 1,350,634                 |  |  | $             | (131,805) |  |               |  |     |  |  |  |     | 
|                            |  |                                 |         |  |                                 |   |         |                           |  |   |                           | 



|(1) | The Atlanta, Georgia property was sold on September 29, 2010. The income
(loss) in 2011 is a result of post-closing adjustments.
|--- | --------------------------------------------------------------------------------------------------------------------------------

Net Investment Income

Net investment income attributable to the general partners controlling interest for the Partnerships apartment properties was
approximately $0.7 million for the three months ended March 31, 2011, a decrease of approximately $0.1 million from the prior year period. The decrease was primarily due to lost revenue as a result of the disposition of the property in Atlanta,
Georgia on September 29, 2010.

Unrealized Gain/(Loss)

The apartment properties owned by the Partnership recorded a net unrealized gain attributable to the general partners controlling
interest of approximately $1.4 million for the three months ended March 31, 2011, compared with a net unrealized loss attributable to the general partners controlling interest of approximately $0.1 million for the prior year period. The
net unrealized gain attributable to the general partners controlling interest for the three month period ended March 31, 2011 was due to valuation increases at each existing property as a result of decreased investment rates and more
favorable market leasing assumptions.



26



---

RETAIL PROPERTIES



|                            |  |                                  |           |  |                                  |   |           |                             |  |   |                           |   |  |               |             |  |               |  |      |  |  |  |      | 
|--------------------------- |  | -------------------------------- | --------- |  | -------------------------------- | - | --------- | --------------------------- |  | - | ------------------------- | - |  | ------------- | ----------- |  | ------------- |  | ---- |  |  |  | ---- | 
|Three Months EndedMarch 31, |  | Net InvestmentIncome/ (Loss)2011 |           |  | Net Investment
Income/(Loss)2010 |   |           | Unrealized Gain/(Loss) 2011 |  |   | UnrealizedGain/(Loss)2010 |   |  | Occupancy2011 |             |  | Occupancy2010 | 
|                            | 
|Property                    |  |                                  |           |  |                                  |   |           |                             |  |   |                           |   |  |               |             |  |               |  |      |  |  |  |      | 
|Roswell,
GA(1)              |  | $                                | 74,293    |  |                                  | $ | -         |                             |  | $ | -                         |   |  | $             | -           |  |               |  | N/A  |  |  |  | N/A  | 
|Hampton, VA                 |  |                                  | 244,335   |  |                                  |   | 232,579   |                             |  |   | 700,000                   |   |  |               | (1,910,800) |  |               |  | 94%  |  |  |  | 94%  | 
|Ocean City, MD              |  |                                  | 289,314   |  |                                  |   | 243,174   |                             |  |   | 624,870                   |   |  |               | 110,955     |  |               |  | 98%  |  |  |  | 96%  | 
|Westminster, MD             |  |                                  | 305,802   |  |                                  |   | 281,771   |                             |  |   | 500,000                   |   |  |               | (100,634)   |  |               |  | 100% |  |  |  | 100% | 
|Dunn, NC                    |  |                                  | 131,073   |  |                                  |   | 71,119    |                             |  |   | (41,598                   | ) |  |               | (8,784)     |  |               |  | 35%  |  |  |  | 36%  | 
|CARS Preferred Equity(2)    |  |                                  | 451,303   |  |                                  |   | 247,109   |                             |  |   | 963,801                   |   |  |               | 285,719     |  |               |  | N/A  |  |  |  | N/A  | 
|                            |  |                                  |           |  |                                  |   |           |                             |  |   |                           |  
|                            |  | $                                | 1,496,120 |  |                                  | $ | 1,075,752 |                             |  | $ | 2,747,073                 |   |  | $             | (1,623,544) |  |               |  |      |  |  |  |      | 
|                            |  |                                  |           |  |                                  |   |           |                             |  |   |                           |  



|(1) | The Rosw ell, Georgia retail property was sold on May 1, 2009. The Income
(loss) in 2011 is a result of post-closing adjustments.
|--- | ---------------------------------------------------------------------------------------------------------------------------------

|(2) | A portion of the CARS Preferred Equity position was redeemed on March 11,
2011.
|--- | -------------------------------------------------------------------------------

Net Investment Income

Net investment income attributable to the general partners controlling interest for the Partnerships retail properties was approximately $1.5 million for the three months ended March 31,
2011, an increase of approximately $0.4 million from the prior year period. The increase in net investment income attributable to the general partners controlling interest for the three month period ended March 31, 2011 was largely due to
(a) the reconciliation of the interest rate at the CARS preferred equity investment resulting in a $0.2 million true up; and (b) post-closing income from the sale of the property in Roswell, Georgia related to a tax reconciliation.

Unrealized Gain/(Loss)

The retail properties owned by the Partnership recorded a net unrealized gain attributable to the general partners controlling interest of approximately $2.7 million for the three months ended
March 31, 2011, compared with a net unrealized loss attributable to the general partners controlling interest of approximately $1.6 million for the prior year period. The unrealized gain attributable to the general partners
controlling interest for the three month period ended March 31, 2011 was primarily due to (a) an increased valuation of the CARS preferred equity investment based on a reduction in the expected remaining term of the investment, resulting
in an increased present value of principal repayment, as well as decreased risk and applied market investment rate; and (b) increased valuations of the properties in Hampton, Virginia; Ocean City, Maryland; and Westminster, Maryland, generally
due to improved market leasing conditions and decreased investment rates.



27



---

HOTEL PROPERTY



|                            |  |                                 |        |  |                                 |   |        |                           |  |   |                           |  |  |               |        |   |               |  |    |   |  |  |    |  
|--------------------------- |  | ------------------------------- | ------ |  | ------------------------------- | - | ------ | ------------------------- |  | - | ------------------------- |  |  | ------------- | ------ | - | ------------- |  | -- | - |  |  | -- | -
|Three Months EndedMarch 31, |  | Net InvestmentIncome/(Loss)2011 |        |  | Net InvestmentIncome/(Loss)2010 |   |        | UnrealizedGain/(Loss)2011 |  |   | UnrealizedGain/(Loss)2010 |  |  | Occupancy2011 |        |   | Occupancy2010 | 
|                            | 
|Property                    |  |                                 |        |  |                                 |   |        |                           |  |   |                           |  |  |               |        |   |               |  |    |   |  |  |    |  
|Lake Oswego, OR             |  | $                               | 36,947 |  |                                 | $ | 29,730 |                           |  | $ | 424,097                   |  |  | $             | (2,515 | ) |               |  | 52 | % |  |  | 48 | %

Net Investment Income

Net investment income attributable to the general partners controlling interest for the Partnerships hotel
property was under $0.1 million for the three months ended March 31, 2011, which is relatively unchanged from the prior year period.

Unrealized Gain/(Loss)

The Partnerships hotel property recorded a
net unrealized gain attributable to the general partners controlling interest of approximately $0.4 million for the three months ended March 31, 2011, compared with a slight loss the prior year period. The unrealized gain attributable to
the general partners controlling interest for the three month period ended March 31, 2011 was primarily due to a valuation gain caused by an increase in projected occupancy, revenue per available room, and average daily rate at the
property reflecting improvements in the overall hotel market.

Other

Other net investment loss attributable to the general partners controlling interest was approximately $0.7 million for the three
month period ended March 31, 2011, which remained relatively unchanged from the prior year period. Other net investment includes interest income from short-term investments and expenses including investment management fees and portfolio level
expenses.



28



---

(c) Inflation

A majority of the Partnerships leases with 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.

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.

Accounting Pronouncements Adopted

See Note 1B to our Consolidated Financial Statements for a discussion of recently adopted accounting pronouncements.

Valuation of Investments

Real Estate Investments - Real estate investments are carried at fair value. 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.

In general fair 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. (PIM), which is an indirectly owned subsidiary of Prudential Financial, Inc. (PFI), is responsible to assure that the valuation process provides
independent and reasonable property fair value estimates. An unaffiliated third party has been appointed by PIM to assist the Chief Real Estate Appraiser in maintaining and monitoring the independence and the accuracy of the appraisal process. The
fair value of real estate investments does not reflect the transaction sale costs, which may be incurred upon disposition of the real estate investments.

The purpose of an appraisal is to estimate the fair value of real estate as of a specific date. In accordance with FASB authoritative guidance on fair value measurements and disclosures, fair value is the
price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The estimate of fair value is based on the conventional approaches to value, all of which
require the exercise of subjective judgment. The three approaches are: (1) current cost of reproducing the real estate less deterioration and functional and economic obsolescence; (2) discounting a series of income streams and reversion at
a specific yield or by directly capitalizing a single year income estimate by an appropriate factor; and (3) value indicated by recent sales of comparable real estate in the market. Key inputs and assumptions include rental income and expense
amounts, related rental income and expense growth rates, discount rates and capitalization rates. In the reconciliation of these three approaches, the independent appraiser uses one or a combination of them, to come up with the approximated value
for the type of real estate in the market.

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.



29



---

|ITEM 3.  Quantitative | and Qualitative Disclosures about Market Risk
|--------------------- | ---------------------------------------------

Interest Rate Risk  The general partners controlling interest exposure to market rate risk for changes in interest rates relates to approximately 38.37% of its investment portfolio as
of March 31, 2011, which consists primarily of short-term commercial paper and fixed and variable interest rate debt. The Partnership does not use derivative financial instruments. As a matter of 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 March 31, 2011:



|                          |  |            |  |                                   |  |                       |  | 
|------------------------- |  | ---------- |  | --------------------------------- |  | --------------------- |  | 
|                          |  | Maturity   |  | Estimated Market Value (millions) |  | Average
Interest Rate |  | 
|                          |  |            | 
|Cash and Cash equivalents |  | 0-3 months |  | $35.9                             |  | 1.39%                 | 

The table below discloses the Partnerships debt as of
March 31, 2011. The fair value of the Partnerships long-term debt 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 debt.



|                                                                 |  |      |         |   |      |  |       |      |  |  |        |  |  |      |       |  |            |  |       |       |  |  |                     |  |  |  |         |   |  |  |         |  |  | 
|---------------------------------------------------------------- |  | ---- | ------- | - | ---- |  | ----- | ---- |  |  | ------ |  |  | ---- | ----- |  | ---------- |  | ----- | ----- |  |  | ------------------- |  |  |  | ------- | - |  |  | ------- |  |  | 
|Investment level debt (in $ thousands),including current portion |  | 2011 |         |   | 2012 |  |       | 2013 |  |  | 2014   |  |  | 2015 |       |  | Thereafter |  |       | Total |  |  | EstimatedFair Value |  |  | 
|Weighted Average Fixed Interest
Rate                             |  |      | 6.75%   |   |      |  | 6.75% |      |  |  | 6.75%  |  |  |      | 6.75% |  |            |  | 6.75% |       |  |  | 6.75%               |  |  |  | 6.75%   |   |  |  |         |  | 
|Fixed Rate                                                       |  |      | $ 457   |   |      |  | $646  |      |  |  | $691   |  |  |      | $740  |  |            |  | $791  |       |  |  | $2,719              |  |  |  | $6,044  |   |  |  | $6,206  |  | 
|Variable Rate                                                    |  |      | $15,349 |   |      |  | -     |      |  |  | $9,000 |  |  |      | -     |  |            |  | -     |       |  |  | -                   |  |  |  | $24,349 |   |  |  | $24,184 |  | 
|Premium/(Discount) on Investment Level Debt                      |  |      | ($4     | ) |      |  | -     |      |  |  | -      |  |  |      | -     |  |            |  | -     |       |  |  | -                   |  |  |  | ($4     | ) |  |  | -       |  | 
|                                                                 |  |      |         |   |     
|Total Investment Level Debt                                      |  |      | $15,802 |   |      |  | $646  |      |  |  | $9,691 |  |  |      | $740  |  |            |  | $791  |       |  |  | $2,719              |  |  |  | $30,389 |   |  |  | $30,390 |  | 
|                                                                 |  |      |         |   |     

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, tenant delinquencies could increase and result in losses to the Partnership, and the Accounts operating results and
liquidity could be adversely affected.



|ITEM 4.  Controls | and Procedures
|----------------- | --------------

In order
to ensure that the information we must disclose in our filings with the Securities and Exchange Commission, or 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 Rules 13a-15(e) and 15d-15(e), under the Securities Exchange Act of 1934, as amended, as of
March 31, 2011. Based on such evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of March 31, 2011, our disclosure controls and procedures were effective. No change in our internal control over
financial reporting, as defined in Exchange Act Rules 13a-15(f) and 15d-15(e), occurred during the quarter ended March 31, 2011, that has materially affected, or is reasonably likely to materially affect, our internal control over financial
reporting.



30



---

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, 2010. 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 business described elsewhere in this Quarterly Report on Form 10-Q.

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.



31



---

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 JERSEY

in respect of

Pruco Life of New Jersey Variable

Contract Real Property Account

(Registrant)





Date:
May 13, 2011



By:

/s/ Scott D. KaplanScott D. KaplanPresident and Director(Principal Executive Officer)




32