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 2010

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
incorporation or organization) |  |  |  | (IRS Employer Identification No.)

213 Washington Street, Newark, New Jersey 07102-2992

(Address of principal executive offices) (Zip Code)

(973)
802-6000

(Registrants telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13
or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90
days.                YESX        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
Non-accelerated filer X (Do not check if a smaller reporting company) |  | Accelerated filer
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



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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, 2010 and December 31, 2009                            |  | 4   
|                                                                                               |  |                                                                                           
|                                                                                               |  | Statements of Operations  Three Months Ended March 31, 2010 and 2009                      |  | 4   
|                                                                                               |  |                                                                                           
|                                                                                               |  | Statements of Changes in Net Assets Three Months Ended March 31, 2010 and
2009            |  | 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, 2010 and December 31,
2009   |  | 11  
|                                                                                               |  |                                                                                           
|                                                                                               |  | Consolidated Statements of Operations Three Months Ended March 31, 2010 and
2009          |  | 12  
|                                                                                               |  |                                                                                           
|                                                                                               |  | Consolidated Statements of Changes in Net AssetsNine Months Ended March 31, 2010 and 2009 |  | 13  
|                                                                                               |  |                                                                                           
|                                                                                               |  | Consolidated Statements of Cash Flows  Three Months Ended March 31, 2010 and
2009         |  | 14  
|                                                                                               |  |                                                                                           
|                                                                                               |  | Consolidated Schedules of Investments  March 31, 2010 and December 31,
2008               |  | 15  
|                                                                                               |  |                                                                                           
|                                                                                               |  | Notes to Consolidated Financial Statements of the Partnership                              |  | 17  
|                                                                                               | 
|Item 
2. Managements Discussion and Analysis of Financial Condition and Results of Operations |  | 26                                                                                        
|                                                                                               | 
|Item 3. Quantitative and Qualitative Disclosures About Market Risk                             |  | 34                                                                                        
|                                                                                               | 
|Item 4. Controls and Procedures                                                                |  | 34                                                                                        
|                                                                                               | 
|Part II - Other Information                                                                    |  |                                                                                           
|                                                                                               | 
|Item 1A. Risk Factors                                                                          |  | 35                                                                                        
|                                                                                               | 
|Item 6.    Exhibits                                                                            |  | 35                                                                                        
|                                                                                               | 
|Signatures                                                                                     |  | 36                                                                                        



2



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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; (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
and valuation of business acquired; (6) changes in our claims-paying or credit ratings; (7) investment losses and defaults; (8) competition in our product lines and for personnel; (9) changes in tax law; (10) regulatory or
legislative changes, including government actions in response to the stress experienced by the financial markets; (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 foregoing risks are even more pronounced in severe adverse market and economic conditions such as
those that began in the second half of 2007 and continued into 2009. The Company and the Real Property Account do not intend, and are under no obligation, to update any particular forward-looking statement included in this document. See Risk
Factors included in the Annual Report on Form 10-K for the year ended December 31, 2009 for discussion of certain risks relating to the operation of the Partnership and investment in our securities.



3



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FINANCIAL STATEMENTS OF

PRUCO LIFE OF NEW JERSEY VARIABLE CONTRACT REAL PROPERTY ACCOUNT

STATEMENT OF NET ASSETS

March 31,
2010 and December 31, 2009



|                                                                                               |  |                                    |           |                               |   |            
|---------------------------------------------------------------------------------------------- |  | ---------------------------------- | --------- | ----------------------------- | - | -----------
|                                                                                               |  | March 31, 2010      
  (unaudited) |           | December 31, 2009            
|ASSETS                                                                                         |  |                                    |           |                               |   |            
|Investment in The Prudential Variable Contract Real Property Partnership                       |  | $                                  | 7,270,949 |                               | $ | 7,317,018  
|                                                                                               |  |                                    |           |                               |   |            
|Net Assets                                                                                     |  | $                                  | 7,270,949 |                               | $ | 7,317,018  
|                                                                                               |  |                                    |           |                               |   |            
|                                                                                               |  |                                   
|NET ASSETS,representing:                                                                       |  |                                    |           |                               |   |            
|Equity of contract owners                                                                      |  | $                                  | 5,036,902 |                               | $ | 5,103,774  
|Equity of Pruco Life Insurance Company of New Jersey                                           |  |                                    | 2,234,047 |                               |   | 2,213,244  
|                                                                                               |  |                                    |           |                               |   |            
|                                                                                               |  | $                                  | 7,270,949 |                               | $ | 7,317,018  
|                                                                                               |  |                                    |           |                               |   |            
|                                                                                               |  |                                   
|Units outstanding                                                                              |  |                                    | 3,242,405 |                               |   | 3,237,668  
|                                                                                               |  |                                    |           |                               |   |            
|                                                                                               |  |                                   
|Portfolio shares held                                                                          |  |                                    | 282,778   |                               |   | 282,778    
|Portfolio net asset value per share                                                            |  | $                                  | 25.71     |                               | $ | 25.88      
|                                                                                               |  |                                   
|STATEMENT OF OPERATIONS
For the three months ended March 31, 2010 and 2009                     |  | 1/1/2010-3/31/2010(unaudited)      |           | 1/1/2009-3/31/2009(unaudited)
|INVESTMENT INCOME                                                                              |  |                                    |           |                               |   |            
|Net investment income from Partnership operations                                              |  | $                                  | 80,317    |                               | $ | 90,891     
|                                                                                               |  |                                    |           |                               |   |            
|                                                                                               |  |                                   
|EXPENSES                                                                                       |  |                                    |           |                               |   |            
|Charges to contract owners for assuming mortality risk and expense risk and for administration |  |                                    | 7,228     |                               |   | 8,882      
|                                                                                               |  |                                    |           |                               |   |            
|NET INVESTMENT INCOME                                                                          |  |                                    | 73,089    |                               |   | 82,009     
|                                                                                               |  |                                    |           |                               |   |            
|                                                                                               |  |                                   
|NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS                                         |  |                                    |           |                               |   |            
|Net change in unrealized gain (loss) on investments in Partnership                             |  |                                    | (126,386) |                               |   | (1,101,307)
|                                                                                               |  |                                    |           |                               |   |            
|NET GAIN (LOSS) ON INVESTMENTS                                                                 |  |                                    | (126,386) |                               |   | (1,101,307)
|                                                                                               |  |                                    |           |                               |   |            
|                                                                                               |  |                                   
|NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS                                |  | $                                  | (53,297)  |                               | $ | (1,019,298)
|                                                                                               |  |                                    |           |                               |   |            
|                                                                                               |  |                                   
|STATEMENT OF CHANGES IN NET ASSETS
For the three months ended March 31, 2010 and 2009          |  | 1/1/2010-3/31/2010(unaudited)      |           | 1/1/2009-3/31/2009(unaudited)
|OPERATIONS                                                                                     |  |                                    |           |                               |   |            
|Net investment income                                                                          |  | $                                  | 73,089    |                               | $ | 82,009     
|Net change in unrealized gain (loss) on investments in Partnership                             |  |                                    | (126,386) |                               |   | (1,101,307)
|                                                                                               |  |                                    |           |                               |   |            
|                                                                                               |  |                                   
|NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS                                |  |                                    | (53,297)  |                               |   | (1,019,298)
|                                                                                               |  |                                    |           |                               |   |            
|                                                                                               |  |                                   
|CAPITAL TRANSACTIONS                                                                           |  |                                    |           |                               |   |            
|Net withdrawals by contract owners                                                             |  |                                    | (27,887)  |                               |   | (38,141)   
|Net contributions (withdrawals) by Pruco Life Insurance Company of New Jersey                  |  |                                    | 35,115    |                               |   | 47,023     
|                                                                                               |  |                                    |           |                               |   |            
|                                                                                               |  |                                   
|NET INCREASE (DECREASE) IN NET ASSETS                                                          |  |                                    |           |                               |   |            
|RESULTING FROM CAPITAL TRANSACTIONS                                                            |  |                                    | 7,228     |                               |   | 8,882      
|                                                                                               |  |                                    |           |                               |   |            
|                                                                                               |  |                                   
|TOTAL INCREASE (DECREASE) IN NET ASSETS                                                        |  |                                    | (46,069)  |                               |   | (1,010,416)
|                                                                                               |  |                                   
|NET ASSETS                                                                                     |  |                                    |           |                               |   |            
|Beginning of period                                                                            |  |                                    | 7,317,018 |                               |   | 9,322,498  
|                                                                                               |  |                                    |           |                               |   |            
|End of period                                                                                  |  | $                                  | 7,270,949 |                               | $ | 8,312,082  
|                                                                                               |  |                                    |           |                               |   |            

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



4



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NOTES TO THE FINANCIAL STATEMENTS OF

PRUCO LIFE OF NEW JERSEY VARIABLE CONTRACT REAL PROPERTY ACCOUNT

March 31, 2010

(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 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, 2010 and for the three months ended March 31, 2010 and 2009
is unaudited; however, in the opinion of management, the interim data includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results for the interim periods.

In December 2007, the Financial Accounting Standards Board (FASB) revised authoritative guidance for business combinations,
which expands the definition of a business and redefines the acquisition date in a merger and acquisition transaction. It significantly modifies the existing guidance for business combinations, including changes to acquisition related contingent
consideration, preacquisition contingencies, non controlling interest, restructuring costs, in-process R&D, goodwill and partial acquisition. This guidance is effective for acquisitions closing after the first annual reporting period beginning
after December 15, 2008. The Account adopted this guidance effective January 1, 2009. The Accounts adoption has no effect on the Accounts financial position and results of operations, but may have an effect on the accounting
for future business combinations.

In December 2007, FASB revised the accounting, presentation and disclosure for
noncontrolling interests in consolidated financial statements. This revised guidance will change the accounting for minority interests, which will be recharacterized as noncontrolling interests and classified by the parent company as a component of
equity. This guidance is effective for fiscal years



5



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beginning on or after December 15, 2008, with early adoption prohibited. Upon adoption, the guidance requires retroactive adoption of the presentation and disclosure requirements for
existing minority interests and prospective adoption for all other requirements. The adoption of this guidance has no effect on the Accounts financial position and results of operations.

In April 2009, the FASB revised authoritative guidance on issued recognition and presentation of other-than-temporary impairments. This
revision amends the other-than-temporary impairment guidance for debt securities and expands the presentation and disclosure requirements of other-than-temporary impairments on debt and equity securities in the financial statements. This revision
also requires that the required annual disclosures for debt and equity securities be made for interim reporting periods. This revision does not amend existing recognition and measurement guidance related to other-than-temporary impairments of equity
securities. This revision is effective for interim and annual reporting periods ending after June 15, 2009, and shall be applied prospectively. Early adoption is permitted for periods ending after March 15, 2009. The Accounts early
adoption of this guidance effective January 1, 2009 did not have a material effect on the Accounts financial position or results of operations.

In April 2009, the FASB issued authoritative guidance on determining fair value when the volume and level of activity for the asset or
liability have significantly decreased and identifying transactions that are not orderly. This guidance also amends the disclosure requirements in interim and annual periods. This guidance is effective for interim and annual reporting periods ending
after June 15, 2009, and shall be applied prospectively. Early adoption is permitted for periods ending after March 15, 2009. The Accounts early adoption of this guidance effective January 1, 2009 did not have a material effect
on the Accounts financial position or results of operations.

In April 2009, the FASB issued additional guidance for
accounting for assets acquired and liabilities assumed in a business combination that arise from contingencies. This guidance requires an asset acquired or liability assumed in a business combination that arises from a contingency to be recognized
at fair value at the acquisition date, if the acquisition date fair value of that asset or liability can be determined during the measurement period. If the acquisition date fair value of an asset acquired or liability assumed in a business
combination that arises from a contingency cannot be determined during the measurement period, the asset or liability shall be recognized at the acquisition date using the guidance in accounting for contingencies. This guidance also amends
disclosure requirements. This guidance is effective for assets or liabilities arising from contingencies in business combinations for which the acquisition date is on or after January 1, 2009. The Accounts adoption of this guidance
effective January 1, 2009 did not have a material effect on the Accounts financial position or results of operations.

In April 2009, the FASB issued additional guidance for interim disclosures about fair value of financial instruments for interim
reporting periods of publicly traded companies as well as in annual financial statements. This guidance is effective for interim reporting periods ending after June 15, 2009, with early adoption permitted. The Account adopted this guidance
within the interim period ending June 30, 2009. The Accounts adoption of this guidance did not have a material effect on the Accounts financial position or results of operations.

In July 2009, the FASB launched its Accounting Standards Codification (the Codification), as the sole source of authoritative U.S.
GAAP to be applied by nongovernmental entities. The Codification generally does not change the existing rules of U.S. GAAP but rather makes it easier to find and research U.S. GAAP applicable to a particular transaction or specific accounting issue.
The Codification is a new structure which takes accounting pronouncements and organizes them by approximately ninety accounting topics and aggregates them in four common accounting areas. Topics within each category are further broken down into
subtopics, sections and paragraphs. Accounting standards that are included in the Codification will be considered authoritative whereas those that are not included will be deemed non-authoritative. As a result, there are two levels of U.S. GAAP,
authoritative and non-authoritative. The Codification is effective for financial statements that cover the interim and annual periods ending after September 15, 2009 and has impacted the way the Account references U.S. GAAP accounting standards
in the financial statements.

In August 2009, the FASB issued updated guidance for the fair value measurement of liabilities.
This guidance includes techniques for measuring fair value when a quoted price in an active market for the identical liability is not available and clarifies that restrictions preventing the transfer of a liability should not be considered as a
separate input or adjustment in the measurement of its fair value. This guidance is effective for the first reporting period (including interim periods) beginning after issuance. The Accounts adoption of this guidance effective
December 31, 2009 did not have a material effect on the Accounts consolidated financial position, results of operations or financial statement disclosures.

In September 2009, the FASB issued updated guidance for the fair value measurement of investments in certain entities that calculate net
asset value per share including certain alternative investments such as hedge funds, private equity funds, and venture capital funds. This guidance allows companies to determine the fair value of such investments using net asset value
(NAV) as a practical expedient if the fair value of the investment is not readily determinable and the investee entity issues financial statements in accordance with measurement principles for investment companies. Use of this practical
expedient is prohibited if it is probable the investment will be sold at something other than NAV. This guidance also requires new disclosures for each major category of alternative investments. It is effective for the first annual or interim
reporting period ending after December 15, 2009, with early application permitted. The Accounts adoption of this guidance effective December 31, 2009 did not have a material effect on the Accounts financial position or results
of operations.

In January 2010, the FASB issued updated guidance that clarifies existing guidance on accounting and reporting
by an entity that experiences a decrease in ownership of a subsidiary that is a business. The updated guidance states that a decrease in ownership



6



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applies to a subsidiary or group of assets that is a business, but does not apply to a sale of in-substance real estate even if it involves a business, such as an ownership interest in a
partnership whose only asset is operating real estate. This guidance also affects accounting and reporting by an entity that exchanges a group of assets that constitutes a business for an equity interest in another entity. The updated guidance also
expands disclosures about fair value measurements relating to retained investments in a deconsolidated subsidiary or a preexisting interest held by an acquirer in a business combination. The updated guidance is effective in the first interim or
annual reporting period ending on or after December 15, 2009, and is applied on a retrospective basis to the first period that the Account adopted the existing guidance, which was as of January 1, 2009. The Accounts adoption of this
updated guidance effective December 31, 2009 did not have a material effect on the Accounts financial position, results of operations, or financial statement disclosures.

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, 2010 and December 31, 2009 the Accounts interest in the Partnership was 4.4% or 282,778 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.

C.    Income Recognition

Net investment income and 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.

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.



7



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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 Contributions (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, 2010 and 2009, were as follows:



| |  |                              |  |  |  |     
| |  | ---------------------------- |  |  |  | ----
| |  | Three Months Ended March 31,
| |  | (Unaudited)                 
| |  |                              | 
| |  | 2010                         |  |  |  | 2009

|      |  |           |  |  |  |          
|----- |  | --------- |  |  |  | ---------
|      |  |           | 
|VAL   |  | $(19,207) |  |  |  | $(7,187) 
|VLI   |  | (8,560)   |  |  |  | (30,666) 
|SPVA  |  | (0)       |  |  |  | 0        
|SPVL  |  | (120)     |  |  |  | (288)    
|TOTAL |  | $(27,887) |  |  |  | $(38,141)
|      |  |           |  |  |  |          

Note 6: Partnership Distributions

As of March 31, 2010, the Partnership made no distribution. For the year ended December 31, 2009, the Partnership made a
distribution of $8 million. The Pruco Life of New Jersey Accounts share of this distribution was $0.3 million.

Note 7: Unit
Information

Outstanding units and unit values at March 31, 2010 and December 31, 2009 were as follows:



|                   |  |                    |  |  |  |                   
|------------------ |  | ------------------ |  |  |  | ------------------
|                   |  | March 31, 2010     |  |  |  | December 31, 2009 
|                   |  | (Unaudited)        |  |  |  |                   
|                   |  |                    | 
|Units Outstanding: |  | 3,242,405          |  |  |  | 3,237,668         
|                   |  |                    | 
|Unit Value:        |  | 1.92201 to 2.36984 |  |  |  | 1.94013 to 2.38693

Note 8: Financial
Highlights

The range of total return for the three months ended March 31, 2010 and 2009 were as follows:



|             |  |                       |  |             |  |                    
|------------ |  | --------------------- |  | ----------- |  | -------------------
|             |  | Three Months Ended   
|             |  | March 31, 2010 & 2009
|             |  | 2010                  |  | (Unaudited) |  | 2009               
|Total Return |  | -.93% to - .72%       |  |             |  | -11.11% to - 10.92%



8



---

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 based on estimated fair value
from property appraisal reports prepared by independent real estate appraisers as discussed in the notes to the Partnerships audited 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 independent appraiser uses one or a combination of
them, to determine the approximated value for the type of real estate in the market.

In general, the input values used in the
appraisal process are unobservable, therefore unless indicated otherwise; underlying investments in the Partnership are classified as Level 3 under the fair value hierarchy. The inputs or methodology used for valuing securities 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, 2010
|                                      |  |                                           |       |                                                              
|Assets:                               |  | Amounts  Measured at
Fair Value03/31/10   |       | Quoted Prices inActive Markets
for Identical
Assets (Level 1) |   | SignificantOtherObservable
Inputs (Level 2) |  | Significant  Unobservable Inputs
(Level 3)
|                                      |  |                                           |       |                                                              
|Investment in The Prudential Variable |  | $                                         | 7,271 |                                                               | $ |                                            |  | $                                          |  |  | $ | 7,271
|Contract Real Property Partnership    |  |                                           |       |                                                               |   |                                             |  |                                            |   |  |   |      
|                                      |  |                                           |      
|Total Assets                          |  | $                                         | 7,271 |                                                               | $ |                                            |  | $                                          |  |  | $ | 7,271
|                                      |  |                                           |      





|                                      |  |                                              |       |                                                             |   |                                            |  |                                             |   |  |   |      
|------------------------------------- |  | -------------------------------------------- | ----- | ----------------------------------------------------------- | - | ------------------------------------------ |  | ------------------------------------------- | - |  | - | -----
|                                      |  | ($ in 000s)                                
|                                      |  | Fair Value Measurements at December 31, 2009
|                                      |  |                                              |       |                                                            
|Assets:                               |  | Amounts  Measured at  Fair Value12/31/2009   |       | Quoted Prices inActive Marketsfor IdenticalAssets (Level 1) |   | SignificantOtherObservableInputs (Level 2) |  | Significant  Unobservable Inputs  (Level 3)
|                                      |  |                                              |       |                                                            
|Investment in The Prudential Variable |  | $                                            | 7,317 |                                                             | $ |                                           |  | $                                           |  |  | $ | 7,317
|Contract Real Property Partnership    |  |                                              |       |                                                             |   |                                            |  |                                             |   |  |   |      
|                                      |  |                                              |      
|Total Assets                          |  | $                                            | 7,317 |                                                             | $ |                                           |  | $                                           |  |  | $ | 7,317
|                                      |  |                                              |      



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 period ended March 31, 2010 and March 31, 2009.

Table 2:



|                                                                                                                                                                                                                                                                               |  |                                                                                                                             |        
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | --------------------------------------------------------------------------------------------------------------------------- | -------
|                                                                                                                                                                                                                                                                               |  | ($ in 000s)                                                                                                               
|                                                                                                                                                                                                                                                                               | 
|                                                                                                                                                                                                                                                                               |  | Fair Value Measurements
Using SignificantUnobservable Inputs for thethree months ended
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 @ 03/31/10                                                                                                                                                                                                                                                      |  | $                                                                                                                           | 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
(realized\unrealized) gains or losses relating to assets still held at the reporting date relating to assets still held at the reporting date |  | $                                                                                                                           | (126)  
|                                                                                                                                                                                                                                                                               |  |                                                                                                                             |        
|                                                                                                                                                                                                                                                                               | 
|                                                                                                                                                                                                                                                                               |  | ($ in 000s)
Fair Value MeasurementsUsing SignificantUnobservable Inputs for the
three months ended
March 31,2009
(Level 3)
|                                                                                                                                                                                                                                                                               | 
|                                                                                                                                                                                                                                                                               |  |                                                                                                                             |        
|                                                                                                                                                                                                                                                                               | 
|Beginning balance @ 01/01/09                                                                                                                                                                                                                                                   |  | $                                                                                                                           | 9,322  
|                                                                                                                                                                                                                                                                               | 
|Total gains or losses (realized/unrealized) included in earnings (or changes in net assets) from Partnership
operations                                                                                                                                                        |  | $                                                                                                                           | (1,101)
|Net Investment Income from Partnership operations                                                                                                                                                                                                                              |  | $                                                                                                                           | 91     
|Acquisition/Additions                                                                                                                                                                                                                                                          |  |                                                                                                                             | -      
|Equity Income                                                                                                                                                                                                                                                                  |  |                                                                                                                             | -      
|Contributions                                                                                                                                                                                                                                                                  |  |                                                                                                                             | -      
|Disposition/Settlements                                                                                                                                                                                                                                                        |  |                                                                                                                             |        
|Equity losses                                                                                                                                                                                                                                                                  |  |                                                                                                                             | -      
|Distributions                                                                                                                                                                                                                                                                  |  |                                                                                                                             | -      
|                                                                                                                                                                                                                                                                               |  |                                                                                                                             |        
|Ending balance @ 03/31/09                                                                                                                                                                                                                                                      |  | $                                                                                                                           | 8,312  
|                                                                                                                                                                                                                                                                               |  |                                                                                                                             |        
|                                                                                                                                                                                                                                                                               | 
|The amount of total gains or losses for the period included in earnings (or changes in net assets) attributable to the change in
(realized\unrealized) gains or losses relating to assets still held at the reporting date relating to assets still held at the reporting date |  | $                                                                                                                           | (1,101)
|                                                                                                                                                                                                                                                                               |  |                                                                                                                             |        



10



---

THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES



|                                                                                                                    |  |                               |             |                   |   |            
|------------------------------------------------------------------------------------------------------------------- |  | ----------------------------- | ----------- | ----------------- | - | -----------
|                                                                                                                    |  | March 31, 2010    (Unaudited) |             | December 31, 2009
|ASSETS                                                                                                              |  |                               |             |                   |   |            
|                                                                                                                    |  |                              
|REAL ESTATE INVESTMENTS - At estimated fair value:                                                                  |  |                               |             |                   |   |            
|Real estate and improvements
(cost: 3/31/2010 - $212,421,062; 12/31/2009 - $211,091,543)                            |  | $                             | 165,400,000 |                   | $ | 167,100,000
|Real estate partnerships and preferred equity investments (cost:
3/31/2010 - $14,220,905; 12/31/2009 - $14,238,698) |  |                               | 10,312,436  |                   |   | 10,044,510 
|                                                                                                                    |  |                               |             |                   |   |            
|                                                                                                                    |  |                              
|Total real estate investments                                                                                       |  |                               | 175,712,436 |                   |   | 177,144,510
|                                                                                                                    |  |                              
|CASH AND CASH EQUIVALENTS                                                                                           |  |                               | 25,625,822  |                   |   | 24,522,159 
|                                                                                                                    |  |                              
|OTHER ASSETS, NET                                                                                                   |  |                               | 2,440,032   |                   |   | 2,629,989  
|                                                                                                                    |  |                               |             |                   |   |            
|                                                                                                                    |  |                              
|Total assets                                                                                                        |  | $                             | 203,778,290 |                   | $ | 204,296,658
|                                                                                                                    |  |                               |             |                   |   |            
|                                                                                                                    |  |                              
|LIABILITIES & PARTNERS EQUITY                                                                                      |  |                               |             |                   |   |            
|                                                                                                                    |  |                              
|INVESTMENT LEVEL DEBT (net of unamortized discount: 3/31/10 $2,760; 12/31/09 $1,830)                                |  | $                             | 30,686,286  |                   | $ | 30,824,899 
|                                                                                                                    |  |                              
|ACCOUNTS PAYABLE AND ACCRUED EXPENSES                                                                               |  |                               | 3,188,900   |                   |   | 2,541,198  
|                                                                                                                    |  |                              
|DUE TO AFFILIATES                                                                                                   |  |                               | 589,084     |                   |   | 603,101    
|                                                                                                                    |  |                              
|OTHER LIABILITIES                                                                                                   |  |                               | 959,662     |                   |   | 1,025,279  
|                                                                                                                    |  |                               |             |                   |   |            
|                                                                                                                    |  |                              
|Total liabilities                                                                                                   |  |                               | 35,423,932  |                   |   | 34,994,477 
|                                                                                                                    |  |                               |             |                   |   |            
|                                                                                                                    |  |                              
|COMMITMENTS AND CONTINGENCIES                                                                                       |  |                               |             |                   |   |            
|                                                                                                                    |  |                              
|NET ASSETS, REPRESENTING PARTNERS EQUITY:                                                                          |  |                               |             |                   |   |            
|                                                                                                                    |  |                              
|GENERAL PARTNERS CONTROLLING INTEREST                                                                              |  |                               | 166,151,535 |                   |   | 167,204,272
|                                                                                                                    |  |                              
|NONCONTROLLING INTEREST                                                                                             |  |                               | 2,202,823   |                   |   | 2,097,909  
|                                                                                                                    |  |                               |             |                   |   |            
|                                                                                                                    |  |                              
|                                                                                                                    |  |                               | 168,354,358 |                   |   | 169,302,181
|                                                                                                                    |  |                               |             |                   |   |            
|                                                                                                                    |  |                              
|Total liabilities and partners equity                                                                              |  | $                             | 203,778,290 |                   | $ | 204,296,658
|                                                                                                                    |  |                               |             |                   |   |            
|                                                                                                                    |  |                              
|NUMBER OF SHARES OUTSTANDING AT END OF PERIOD                                                                       |  |                               | 6,461,874   |                   |   | 6,461,874  
|                                                                                                                    |  |                               |             |                   |   |            
|                                                                                                                    |  |                              
|SHARE VALUE AT END OF PERIOD                                                                                        |  | $                             | 25.71       |                   | $ | 25.88      
|                                                                                                                    |  |                               |             |                   |   |            

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 Ended March 31,
|                                                                                                                       |  | 2010                                 |             | 2009
|INVESTMENT INCOME:                                                                                                     |  |                                      |             |      |   |             
|Revenue from real estate and improvements                                                                              |  | $                                    | 5,817,966   |      | $ | 6,852,896   
|Equity in income of real estate partnerships                                                                           |  |                                      | 249,109     |      |   | 271,443     
|Interest on short-term investments                                                                                     |  |                                      | 5,853       |      |   | 10,747      
|                                                                                                                       |  |                                      |             |      |   |             
|                                                                                                                       |  |                                     
|Total investment income                                                                                                |  |                                      | 6,072,928   |      |   | 7,135,086   
|                                                                                                                       |  |                                      |             |      |   |             
|                                                                                                                       |  |                                     
|INVESTMENT EXPENSES:                                                                                                   |  |                                      |             |      |   |             
|Operating                                                                                                              |  |                                      | 1,559,772   |      |   | 1,763,751   
|Investment management fee                                                                                              |  |                                      | 575,677     |      |   | 725,937     
|Real estate taxes                                                                                                      |  |                                      | 650,703     |      |   | 755,705     
|Administrative                                                                                                         |  |                                      | 1,164,870   |      |   | 1,230,684   
|Interest expense                                                                                                       |  |                                      | 253,675     |      |   | 460,734     
|                                                                                                                       |  |                                      |             |      |   |             
|                                                                                                                       |  |                                     
|Total investment expenses                                                                                              |  |                                      | 4,204,697   |      |   | 4,936,811   
|                                                                                                                       |  |                                      |             |      |   |             
|                                                                                                                       |  |                                     
|NET INVESTMENT INCOME                                                                                                  |  |                                      | 1,868,231   |      |   | 2,198,275   
|                                                                                                                       |  |                                      |             |      |   |             
|                                                                                                                       |  |                                     
|Unrealized gain (loss) on investments held:                                                                            |  |                                      |             |      |   |             
|Change in unrealized gain (loss) on real estate investments held                                                       |  |                                      | (2,743,798) |      |   | (26,328,074)
|                                                                                                                       |  |                                      |             |      |   |             
|                                                                                                                       |  |                                     
|Increase (decrease) in net assets resulting from operations                                                            |  | $                                    | (875,567)   |      | $ | (24,129,799)
|                                                                                                                       |  |                                      |             |      |   |             
|                                                                                                                       |  |                                     
|Amounts attributable to noncontrolling interest:                                                                       |  |                                      |             |      |   |             
|Net investment income (loss) attributable to noncontrolling interest                                                   |  |                                      | 32,867      |      |   | 112,453     
|Net unrealized gain (loss) attributable to noncontrolling interest                                                     |  |                                      | 144,303     |      |   | (1,054,616) 
|                                                                                                                       |  |                                      |             |      |   |             
|Net increase (decrease) in net assets resulting from operations attributable to the noncontrolling interest            |  | $                                    | 177,170     |      | $ | (942,163)   
|                                                                                                                       |  |                                      |             |      |   |             
|                                                                                                                       |  |                                     
|Amounts attributable to general partners controlling interest:                                                        |  |                                      |             |      |   |             
|Net investment income attributable to general partners controlling interest                                           |  |                                      | 1,835,364   |      |   | 2,085,822   
|Net unrealized gain (loss) attributable to general partners controlling interest                                      |  |                                      | (2,888,101) |      |   | (25,273,458)
|                                                                                                                       |  |                                      |             |      |   |             
|Net increase (decrease) in net assets resulting from operations attributable to general partners controlling interest |  | $                                    | (1,052,737) |      | $ | (23,187,636)
|                                                                                                                       |  |                                      |             |      |   |             

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 Ended March 31, 
|                                                                       |  | 2010                                  |             | 2009                      
|                                                                       |  | General PartnersControlling Interest |             | Noncontrolling    Interest |   | Total     |  | General PartnersControlling Interest |             | Noncontrolling    Interest |   | Total       
|INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS:           |  |                                       |             |                            |   |           |  |                                       |             |                            |   |              |  |   |             |  |   |             
|Net investment income                                                  |  | $                                     | 1,835,364   |                            | $ | 32,867    |  | $                                     | 1,868,231   |                            | $ | 2,085,822    |  | $ | 112,453     |  | $ | 2,198,275   
|Net unrealized gain (loss) from real estate investments                |  |                                       | (2,888,101) |                            |   | 144,303   |  |                                       | (2,743,798) |                            |   | (25,273,458) |  |   | (1,054,616) |  |   | (26,328,074)
|                                                                       |  |                                       |             |                            |   |           |  |                                       |             |                            |   |              |  |   |             |  |   |             
|                                                                       |  |                                       |             |                            |   |          
|Increase (decrease) in net assets resulting from operations            |  |                                       | (1,052,737) |                            |   | 177,170   |  |                                       | (875,567)   |                            |   | (23,187,636) |  |   | (942,163)   |  |   | (24,129,799)
|                                                                       |  |                                       |             |                            |   |           |  |                                       |             |                            |   |              |  |   |             |  |   |             
|                                                                       |  |                                       |             |                            |   |          
|INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL TRANSACTIONS: |  |                                       |             |                            |   |           |  |                                       |             |                            |   |              |  |   |             |  |   |             
|Distributions to noncontrolling interest                               |  |                                       | -           |                            |   | (72,256)  |  |                                       | (72,256)    |                            |   | -            |  |   | (103,702)   |  |   | (103,702)   
|                                                                       |  |                                       |             |                            |   |           |  |                                       |             |                            |   |              |  |   |             |  |   |             
|                                                                       |  |                                       |             |                            |   |          
|Increase (decrease) in net assets resulting from capital transactions  |  |                                       | -           |                            |   | (72,256)  |  |                                       | (72,256)    |                            |   | -            |  |   | (103,702)   |  |   | (103,702)   
|                                                                       |  |                                       |             |                            |   |           |  |                                       |             |                            |   |              |  |   |             |  |   |             
|                                                                       |  |                                       |             |                            |   |          
|INCREASE (DECREASE) IN NET ASSETS                                      |  |                                       | (1,052,737) |                            |   | 104,914   |  |                                       | (947,823)   |                            |   | (23,187,636) |  |   | (1,045,865) |  |   | (24,233,501)
|                                                                       |  |                                       |             |                            |   |          
|NET ASSETS - Beginning of period                                       |  |                                       | 167,204,272 |                            |   | 2,097,909 |  |                                       | 169,302,181 |                            |   | 213,938,308  |  |   | 4,924,263   |  |   | 218,862,571 
|                                                                       |  |                                       |             |                            |   |           |  |                                       |             |                            |   |              |  |   |             |  |   |             
|                                                                       |  |                                       |             |                            |   |          
|NET ASSETS - End of period                                             |  | $                                     | 166,151,535 |                            | $ | 2,202,823 |  | $                                     | 168,354,358 |                            | $ | 190,750,672  |  | $ | 3,878,398   |  | $ | 194,629,070 
|                                                                       |  |                                       |             |                            |   |          

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,
|                                                                                                                      |  | 2010                                 |             | 2009
|CASH FLOWS FROM OPERATING ACTIVITIES:                                                                                 |  |                                      |             |      |   |             
|Net increase (decrease) in net assets from operations                                                                 |  | $                                    | (875,567)   |      | $ | (24,129,799)
|Adjustments to reconcile net increase (decrease) in net assets to net cash provided by (used in) operating activities |  |                                      |             |      |   |             
|Net realized and unrealized loss (gain)                                                                               |  |                                      | 2,743,798   |      |   | 26,328,074  
|Amortization of discount on investment level debt                                                                     |  |                                      | (930)       |      |   | 1,472       
|Amortization of deferred financing costs                                                                              |  |                                      | 17,581      |      |   | 27,680      
|Distributions in excess of (less than) equity in income of real estate partnerships operations                       |  |                                      | 17,793      |      |   | (4,793)     
|Bad debt expense                                                                                                      |  |                                      | 1,531       |      |   | 18,585      
|(Increase) decrease in:                                                                                               |  |                                      |             |      |   |             
|Other assets                                                                                                          |  |                                      | 170,847     |      |   | 388,352     
|Increase (decrease) in:                                                                                               |  |                                      |             |      |   |             
|Accounts payable and accrued expenses                                                                                 |  |                                      | 647,702     |      |   | (138,975)   
|Due to affiliates                                                                                                     |  |                                      | (14,017)    |      |   | (112,250)   
|Other liabilities                                                                                                     |  |                                      | (65,617)    |      |   | (60,739)    
|                                                                                                                      |  |                                      |             |      |   |             
|                                                                                                                      |  |                                     
|Net cash flows provided by (used in) operating activities                                                             |  |                                      | 2,643,121   |      |   | 2,317,607   
|                                                                                                                      |  |                                      |             |      |   |             
|                                                                                                                      |  |                                     
|CASH FLOWS PROVIDED FOR INVESTING ACTIVITIES:                                                                         |  |                                      |             |      |   |             
|Additions to real estate and improvements                                                                             |  |                                      | (1,329,519) |      |   | (441,575)   
|                                                                                                                      |  |                                      |             |      |   |             
|                                                                                                                      |  |                                     
|Net cash flows provided by (used in) investing activities                                                             |  |                                      | (1,329,519) |      |   | (441,575)   
|                                                                                                                      |  |                                      |             |      |   |             
|                                                                                                                      |  |                                     
|CASH FLOWS FROM FINANCING ACTIVITIES:                                                                                 |  |                                      |             |      |   |             
|Principal payments on investment level debt                                                                           |  |                                      | (137,683)   |      |   | (102,161)   
|Distributions to noncontrolling interest                                                                              |  |                                      | (72,256)    |      |   | (103,702)   
|                                                                                                                      |  |                                      |             |      |   |             
|                                                                                                                      |  |                                     
|Net cash flows provided by (used in) financing activities                                                             |  |                                      | (209,939)   |      |   | (205,863)   
|                                                                                                                      |  |                                      |             |      |   |             
|                                                                                                                      |  |                                     
|NET CHANGE IN CASH AND CASH EQUIVALENTS                                                                               |  |                                      | 1,103,663   |      |   | 1,670,169   
|                                                                                                                      |  |                                     
|CASH AND CASH EQUIVALENTS - Beginning of period                                                                       |  |                                      | 24,522,159  |      |   | 27,736,520  
|                                                                                                                      |  |                                      |             |      |   |             
|                                                                                                                      |  |                                     
|CASH AND CASH EQUIVALENTS - End of period                                                                             |  | $                                    | 25,625,822  |      | $ | 29,406,689  
|                                                                                                                      |  |                                      |             |      |   |             

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



14



---

THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

CONSOLIDATED SCHEDULE OF INVESTMENTS



|                                                                                                      |  |                         |  |                            |             |                                                                      |   |                          |            |                     |             |            |   |             |            |  |   |           
|----------------------------------------------------------------------------------------------------- |  | ----------------------- |  | -------------------------- | ----------- | -------------------------------------------------------------------- | - | ------------------------ | ---------- | ------------------- | ----------- | ---------- | - | ----------- | ---------- |  | - | ----------
|Property Name                                                                                         |  | March 31, 2010Ownership |  | City, State                |             | 2010 Total RentableSquare Feet
Unless Otherwise
Indicated(Unaudited) |   | March 31,2010(unaudited) |            | December 31, 2009  
|                                                                                                      |  |                         |  | Cost                       |             | Estimated FairValue                                                  |   | Cost                     |            | Estimated FairValue
|                                                                                                      |  |                         |  |                            |             |                                                                      |   |                          |            |                     |             |           
|                                                                                                      |  |                         |  |                            |             |                                                                      |  
|OFFICES                                                                                               |  |                         |  |                            |             |                                                                      |   |                          |            |                     |             |            |   |             |            |  |   |           
|750 Warrenville                                                                                       |  | WO                      |  | Lisle, IL                  |             | 103,193                                                              |   | $                        | 26,236,856 |                     | $           | 7,100,000  |   | $           | 26,186,415 |  | $ | 6,700,000 
|Summit @ Cornell Oaks                                                                                 |  | WO                      |  | Beaverton , OR             |             | 72,109                                                               |   |                          | 12,612,726 |                     |             | 7,500,000  |   |             | 12,625,626 |  |   | 8,500,000 
|Westpark                                                                                              |  | WO                      |  | Nashville, TN              |             | 97,199                                                               |   |                          | 14,108,757 |                     |             | 9,300,000  |   |             | 13,019,181 |  |   | 8,700,000 
|Financial Plaza                                                                                       |  | WO                      |  | Brentwood, TN              |             | 98,049                                                               |   |                          | 12,567,735 |                     |             | 9,700,000  |   |             | 12,564,614 |  |   | 9,700,000 
|                                                                                                     
|                                                                                                      |  |                         |  | Offices % as of 3/31/10    |             | 20%                                                                  |   |                          | 65,526,074 |                     |             | 33,600,000 |   |             | 64,395,836 |  |   | 33,600,000
|                                                                                                      |  |                         |  |                            |             |                                                                      |  
|APARTMENTS                                                                                            |  |                         |  |                            |             |                                                                      |   |                          |            |                     |             |            |   |             |            |  |   |           
|Brookwood Apartments                                                                                  |  | WO                      |  | Atlanta, GA                |             | 240 Units                                                            |   |                          | 20,298,568 |                     |             | 14,700,000 |   |             | 20,210,830 |  |   | 14,500,000
|Dunhill Trace Apartments                                                                              |  | WO                      |  | Raleigh, NC                |             | 250 Units                                                            |   |                          | 16,527,358 |                     |             | 14,800,000 |   |             | 16,512,970 |  |   | 15,000,000
|Broadstone Crossing                                                                                   |  | WO                      |  | Austin, TX                 |             | 225 Units                                                            |   |                          | 22,816,631 |                     |             | 21,000,000 |   |             | 22,815,992 |  |   | 21,000,000
|The Reserve At Waterford Lakes                                                                        |  | WO                      |  | Charlotte, NC              |             | 140 Units                                                            |   |                          | 13,775,980 |                     |             | 9,200,000  |   |             | 13,746,940 |  |   | 9,200,000 
|                                                                                                     
|                                                                                                      |  |                         |  | Apartments % as of 3/31/10 |             | 36%                                                                  |   |                          | 73,418,537 |                     |             | 59,700,000 |   |             | 73,286,732 |  |   | 59,700,000
|                                                                                                      |  |                         |  |                            |             |                                                                      |  
|RETAIL                                                                                                |  |                         |  |                            |             |                                                                      |   |                          |            |                     |             |            |   |             |            |  |   |           
|Hampton Towne Center                                                                                  |  | WO                      |  | Hampton, VA                |             | 174,540                                                              |   |                          | 18,147,199 |                     |             | 16,700,000 |   |             | 18,136,399 |  |   | 18,600,000
|White Marlin Mall                                                                                     |  | CJV                     |  | Ocean City, MD             |             | 197,098                                                              |   |                          | 23,363,254 |                     |             | 24,900,000 |   |             | 23,311,878 |  |   | 24,600,000
|Westminster Crossing East, LLC                                                                        |  | CJV                     |  | Westminster, MD            |             | 89,890                                                               |   |                          | 15,045,511 |                     |             | 13,800,000 |   |             | 15,044,877 |  |   | 13,900,000
|CARS Preferred Equity                                                                                 |  | PE                      |  | Various                    |             | N/A                                                                  |   |                          | 14,220,905 |                     |             | 10,312,436 |   |             | 14,238,698 |  |   | 10,044,510
|Harnett Crossing                                                                                      |  | CJV                     |  | Dunn, NC                   |             | 194,327                                                              |   |                          | 6,239,452  |                     |             | 3,200,000  |   |             | 6,237,926  |  |   | 3,200,000 
|                                                                                                     
|                                                                                                      |  |                         |  | Retail % as of 3/31/10     |             | 41%                                                                  |   |                          | 77,016,321 |                     |             | 68,912,436 |   |             | 76,969,778 |  |   | 70,344,510
|                                                                                                      |  |                         |  |                            |             |                                                                      |  
|HOTEL                                                                                                 |  |                         |  |                            |             |                                                                      |   |                          |            |                     |             |            |   |             |            |  |   |           
|Portland Crown Plaza                                                                                  |  | CJV                     |  | Portland, OR               |             | 161 Rooms                                                            |   |                          | 10,681,035 |                     |             | 13,500,000 |   |             | 10,677,895 |  |   | 13,500,000
|                                                                                                     
|                                                                                                      |  |                         |  | Hotel % as of 3/31/10      |             | 8%                                                                   |   |                          | 10,681,035 |                     |             | 13,500,000 |   |             | 10,677,895 |  |   | 13,500,000
|                                                                                                      |  |                         |  |                            |            
|Total Real Estate Investments as a Percentage of General Partners Controlling Interest as of
3/31/10 |  | 105%                    |  | $                          | 226,641,967 |                                                                      | $ | 175,712,436              |            | $                   | 225,330,241 |            | $ | 177,144,510
|                                                                                                      |  |                         |  |                            |             |                                                                      |   |                          |            |                     |             |            |   |             |            |  |   |           

WO - Wholly Owned Investment

CJV - Consolidated Joint Venture

EJV - Joint Venture Investment accounted for under the equity method

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



|                                                                                 |  |             |            |                           |   |                   |  |                         |            |  |   |            |  |   |           
|-------------------------------------------------------------------------------- |  | ----------- | ---------- | ------------------------- | - | ----------------- |  | ----------------------- | ---------- |  | - | ---------- |  | - | ----------
|                                                                                 |  | Face Amount |            | March 31, 2010(unaudited) |   | December 31, 2009
|                                                                                 |  | Cost        |            | Estimated    Fair Value   |   | Cost              |  | Estimated    Fair Value
|CASH AND CASH EQUIVALENTS - Percentage of General Partners Controlling Interest |  |             |            |                           |   |                   |  |                         | 15.4%      |  |   |            |  |   | 14.7%     
|                                                                                 |  |             |            |                           |  
|Federal Home Loan Bank, 0 coupon bond, April 1, 2010                             |  | $           | 5,967,000  |                           | $ | 5,967,000         |  | $                       | 5,967,000  |  | $ | 2,999,184  |  | $ | 2,999,184 
|Federal Home Loan Bank, 0 coupon bond, April 16, 2010                            |  |             | 12,999,225 |                           |   | 12,999,225        |  |                         | 12,999,225 |  |   | 9,997,769  |  |   | 9,997,769 
|Federal Home Loan Bank, 0 coupon bond, April 23, 2010                            |  |             | 4,999,603  |                           |   | 4,999,603         |  |                         | 4,999,603  |  |   | 2,999,267  |  |   | 2,999,267 
|Federal Home Loan Bank, 0 coupon bond, March, 2010                               |  |             |            |                           |   | -                 |  |                         | -          |  |   | 1,999,660  |  |   | 1,999,660 
|                                                                                 |  |             |            |                           |   |                   |  |                         |            |  |   |            |  |   |           
|                                                                                 |  |             |            |                           |  
|Total Cash Equivalents                                                           |  |             |            |                           |   | 23,965,828        |  |                         | 23,965,828 |  |   | 17,995,880 |  |   | 17,995,880
|                                                                                 |  |             |            |                           |  
|Cash                                                                             |  |             |            |                           |   | 1,659,994         |  |                         | 1,659,994  |  |   | 6,526,279  |  |   | 6,526,279 
|                                                                                 |  |             |            |                           |   |                   |  |                         |            |  |   |            |  |   |           
|                                                                                 |  |             |            |                           |  
|Total Cash and Cash Equivalents                                                  |  |             |            |                           | $ | 25,625,822        |  | $                       | 25,625,822 |  | $ | 24,522,159 |  | $ | 24,522,159
|                                                                                 |  |             |            |                           |   |                   |  |                         |            |  |   |            |  |   |           

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, 2010 and December 31, 2009

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, 2010 are not necessarily indicative of
the results that may be expected for the year ended December 31, 2010. For further information, refer to the audited consolidated financial statements and notes thereto included in each partners Annual Report on Form 10-K for the Year
Ended December 31, 2009. The Partnership has evaluated subsequent events through May 10, 2010, the date these financial statements were available to be issued.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | B. | Accounting Pronouncements Adopted-In December 2007, FASB revised authoritative guidance for business combinations, which expands the
definition of a business and redefines the acquisition date in a merger and acquisition transaction. It significantly modifies the existing guidance for business combinations, including changes to acquisition related contingent consideration,
preacquisition contingencies, noncontrolling interest, restructuring costs, in-process R&D, goodwill and partial acquisition. This guidance is effective for acquisitions closing after the first annual reporting period beginning after
December 15, 2008. The Partnerships adoption of this guidance effective January 1, 2009 did not have a material effect on the Partnerships consolidated financial position or results of operations, but may have an effect on the
accounting for future business combinations.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | In December 2007, FASB revised the accounting, presentation and disclosure for noncontrolling interests in consolidated financial statements. This
revised guidance requires noncontrolling interests to be reported as a separate component of equity. It also changes the allocation of losses and accounting in step acquisitions. The provisions in this revision should be applied prospectively except
for the presentation and disclosure requirements, which are required retrospectively for all periods presented. After the initial adoption, any retained noncontrolling equity investment as a result of a deconsolidation must be measured at fair value
at the date of the deconsolidation. This guidance is effective for the annual periods beginning after December 15, 2008. Pursuant to the Partnerships adoption on January 1, 2009 of the revised guidance, the Partnership is presenting
its noncontrolling interests as equity for all periods presented in the financial statements. Noncontrolling interests, previously reported as a liability, are now required to be reported as a separate component of equity on the balance sheet. In
addition, net income (loss) attributable to the noncontrolling interest, which was previously reported as an expense and reflected within Net Investment Income is now reported as a separate amount below Increase (decrease) in Net Assets
Resulting from Operations.
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | In April 2009, the FASB revised authoritative guidance on issued recognition and presentation of other-than-temporary impairments. This revision
amends the other-than-temporary impairment guidance for debt securities and expands the presentation and disclosure requirements of other-than-temporary impairments on debt and equity securities in the financial statements. This revision also
requires that the required annual disclosures for debt and equity securities be made for interim reporting periods. This revision does not amend existing recognition and measurement guidance related to other-than-temporary impairments of equity
securities. This revision is effective for interim and annual reporting periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009. The Partnerships early adoption of this guidance
effective January 1, 2009 did not have a material effect on the Partnerships consolidated financial position or results of operations.
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | In April 2009, the FASB issued authoritative guidance on determining fair value when the volume and level of activity for the asset or liability
have significantly decreased and identifying transactions that are not orderly. This guidance also amends the disclosure requirements in interim and annual periods. This guidance is effective for interim and annual reporting periods ending after
June 15, 2009, and shall be applied prospectively. Early adoption is permitted for periods ending after March 15, 2009. The Partnerships early adoption of this guidance effective January 1, 2009 did not have a material effect on
the Partnerships consolidated financial position or results of operations.
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



17



---

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF

THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

March 31, 2010 and December 31, 2009



Note 1:  Summary of Significant Accounting Policies (continued)



| | B | Accounting Pronouncements Adopted (continued)
| | - | ---------------------------------------------



| |  | In April 2009, the FASB issued additional guidance for accounting for assets acquired and liabilities assumed in a business combination that arise
from contingencies. This guidance requires an asset acquired or liability assumed in a business combination that arises from a contingency to be recognized at fair value at the acquisition date, if the acquisition date fair value of that asset or
liability can be determined during the measurement period. If the acquisition date fair value of an asset acquired or liability assumed in a business combination that arises from a contingency cannot be determined during the measurement period, the
asset or liability shall be recognized at the acquisition date using the guidance in accounting for contingencies. This guidance also amends disclosure requirements. This guidance is effective for assets or liabilities arising from contingencies in
business combinations for which the acquisition date is on or after January 1, 2009. The Partnerships adoption of this guidance effective January 1, 2009 did not have a material effect on the Partnerships consolidated financial
position or results of operations.
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | In April 2009, the FASB issued additional guidance for interim disclosures about fair value of financial instruments for interim reporting periods
of publicly traded companies as well as in annual financial statements. This guidance is effective for interim reporting periods ending after June 15, 2009, with early adoption permitted. The Partnership adopted this guidance within the interim
period ending June 30, 2009. The Partnerships adoption of this guidance did not have a material effect on the Partnerships consolidated financial position or results of operations.
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | In May 2009, the FASB issued authoritative guidance for subsequent events. Subsequent events are events that occur after balance sheet date but
before financial statements are issued or are available to be issued. This guidance addresses the accounting for and disclosure of subsequent events not addressed in other applicable Generally Accepted Accounting Principles (U.S. GAAP),
including disclosure of the date through which subsequent events have been evaluated. This guidance is effective for interim or annual periods ending after June 15, 2009. The Partnerships adoption of this guidance effective with the
interim period ending June 30, 2009 did not have a material effect on the Partnerships consolidated financial position or results of operations. The required disclosure of the date through which subsequent events have been evaluated is
provided in Note 1A.
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | In July 2009, the FASB launched its Accounting Standards Codification (the Codification), as the sole source of authoritative U.S. GAAP
to be applied by nongovernmental entities. The Codification generally does not change the existing rules of U.S. GAAP but rather makes it easier to find and research U.S. GAAP applicable to a particular transaction or specific accounting issue. The
Codification is a new structure which takes accounting pronouncements and organizes them by approximately ninety accounting topics and aggregates them in four common accounting areas. Topics within each category are further broken down into
subtopics, sections and paragraphs. Accounting standards that are included in the Codification will be considered authoritative whereas those that are not included will be deemed non-authoritative. As a result, there are two levels of U.S. GAAP,
authoritative and non-authoritative. The Codification is effective for financial statements that cover the interim and annual periods ending after September 15, 2009 and has impacted the way the Partnership references U.S. GAAP accounting
standards in the financial statements.
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | In September 2009, the FASB issued updated guidance for the fair value measurement of investments in certain entities that calculate net asset value
per share including certain alternative investments such as hedge funds, private equity funds, and venture capital funds. This guidance allows companies to determine the fair value of such investments using net asset value (NAV) as a
practical expedient if the fair value of the investment is not readily determinable and the investee entity issues financial statements in accordance with measurement principles for investment companies. Use of this practical expedient is prohibited
if it is probable the investment will be sold at something other than NAV. This guidance also requires new disclosures for each major category of alternative investments. It is effective for the first annual or interim reporting period ending after
December 15, 2009, with early application permitted. The Partnerships adoption of this guidance effective December 31, 2009 did not have a material effect on the Partnerships consolidated financial position or results of
operations.
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



18



---

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF

THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

March 31, 2010 and December 31, 2009



Note 1:  Summary of Significant Accounting Policies (continued)



| | B | Accounting Pronouncements Adopted (continued)
| | - | ---------------------------------------------



| |  | In January 2010, the FASB issued updated guidance that clarifies existing guidance on accounting and reporting by an entity that experiences a
decrease in ownership of a subsidiary that is a business. The updated guidance states that a decrease in ownership applies to a subsidiary or group of assets that is a business, but does not apply to a sale of in-substance real estate even if it
involves a business, such as an ownership interest in a partnership whose only asset is operating real estate. This guidance also affects accounting and reporting by an entity that exchanges a group of assets that constitutes a business for an
equity interest in another entity. The updated guidance also expands disclosures about fair value measurements relating to retained investments in a deconsolidated subsidiary or a preexisting interest held by an acquirer in a business combination.
The updated guidance is effective in the first interim or annual reporting period ending on or after December 15, 2009, and is applied on a retrospective basis to the first period that the Partnership adopted the existing guidance, which was as
of January 1, 2009. The Partnerships adoption of this updated guidance effective December 31, 2009 did not have a material effect on the Partnerships consolidated financial position, results of operations, or financial
statement disclosures.
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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, 2010 and March 31, 2009, was
$236,094, and $433,054, respectively.



19



---

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF

THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

March 31, 2010 and December 31, 2009



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., 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 cost, 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. 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 level in the fair values 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 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.



20



---

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF

THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

March 31, 2010 and December 31, 2009



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, 2010 using   
|                                                          |  |                        |         |                                                    |  
|Assets:                                                   |  | Cost
at        3/31/10 |         | Amountsmeasured at
fair value
3/31/10              |   | Quoted pricesin activemarkets foridentical assets(level 1) |  | Significantotherobservableinputs (level 2) |   | Significantunobservableinputs (level 3)      
|                                                          |  |                        |        
|                                                          |  |                        |         |                                                    |  
|Real estate and improvements                              |  | $                      | 212,421 |                                                    | $ | 165,400                                                    |  | $                                          | - |                                               | $ | - |  | $ | 165,400
|Real estate partnerships and preferred equity investments |  |                        | 14,221  |                                                    |   | 10,312                                                     |  |                                            | - |                                               |   | - |  |   | 10,312 
|                                                          | 
|                                                          |  |                        |        
|Total                                                     |  | $                      | 226,642 |                                                    | $ | 175,712                                                    |  | $                                          | - |                                               | $ | - |  | $ | 175,712
|                                                          |  |                        |        
|                                                          |  |                       
|                                                          |  |                        |         | (in 000s)                                        
|                                                          |  |                        |         | Fair value measurements at December 31, 2009 using
|Assets:                                                   |  | Cost at12/31/09        |         | Amountsmeasured at
fair value12/31/2009            |   | Quoted pricesin activemarkets foridentical assets(level 1) |  | Significantotherobservableinputs (level 2) |   | Significantunobservable      inputs (level 3)
|                                                          |  |                        |        
|                                                          |  |                        |         |                                                    |  
|Real estate and improvements                              |  | $                      | 211,092 |                                                    | $ | 167,100                                                    |  | $                                          | - |                                               | $ | - |  | $ | 167,100
|Real estate partnerships and preferred equity investments |  |                        | 14,239  |                                                    |   | 10,045                                                     |  |                                            | - |                                               |   | - |  |   | 10,045 
|                                                          | 
|                                                          |  |                        |        
|Total                                                     |  | $                      | 225,331 |                                                    | $ | 177,145                                                    |  | $                                          | - |                                               | $ | - |  | $ | 177,145
|                                                          |  |                        |        



21



---

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF

THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

March 31, 2010 and December 31, 2009



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 period ended March 31, 2010 and March 31, 2009.

Table 2

|                                                                                                                              |  |                             |          |                                                            |   |         |  |   |         
|----------------------------------------------------------------------------------------------------------------------------- |  | --------------------------- | -------- | ---------------------------------------------------------- | - | ------- |  | - | --------
|(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     
|Purchases, issuances and settlements                                                                                          |  |                             | 1,329    |                                                            |   | (268)   |  |   | 1,061   
|                                                                                                                              |  |                             |         
|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) 
|                                                                                                                              |  |                             |         
|                                                                                                                             
|(in 000s)
Fair value measurements using significant unobservable inputs
for the three months ending March 31, 2009
(Level 3)
|                                                                                                                              |  | Real estate andimprovements |          | Real estate andpartnerships andpreferred equityinvestments |   | Total  
|                                                                                                                              |  |                             |         
|                                                                                                                              |  |                             |         
|Beginning balance @ 1/1/09                                                                                                    |  | $                           | 221,196  |                                                            | $ | 11,797  |  | $ | 232,993 
|                                                                                                                              |  |                             |         
|Net gains (losses) realized/unrealized included in earnings (or changes in net assets)                                        |  |                             | (25,138) |                                                            |   | (1,190) |  |   | (26,328)
|Equity income (losses)/interest income                                                                                        |  |                             | -        |                                                            |   | 271     |  |   | 271     
|Purchases, issuances and settlements                                                                                          |  |                             | 442      |                                                            |   | (267)   |  |   | 175     
|                                                                                                                              |  |                             |         
|Ending balance @ 3/31/09                                                                                                      |  | $                           | 196,500  |                                                            | $ | 10,611  |  | $ | 207,111 
|                                                                                                                              |  |                             |         
|                                                                                                                              |  |                             |         
|Unrealized gains (losses) for the period relating to level 3 assets still held at the reporting date                          |  | $                           | (25,138) |                                                            | $ | (1,190) |  | $ | (26,328)
|                                                                                                                              |  |                             |         



22



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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF

THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

March 31, 2010 and December 31, 2009



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, 2010 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 $31 million, and a carrying value of $31
million. Different assumptions or changes in future market conditions could significantly affect estimated fair value.

Note
5:  Risk

A.    Valuation Risk

Recent disruptions in the global capital, credit and real estate markets have led to, among other things, decline in the volume of
transaction activity, in the fair value of many real estate and real estate related investments, and a contraction in short-term and long-term debt and equity funding sources. The decline in liquidity and prices of real estate and real estate
related investments, as well as the availability of observable transaction data and inputs, may have made it more difficult to determine the fair value of such investments. As a result, 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, 2010 and December 31, 2009.

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, 2010 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.



23



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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF

THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

March 31, 2010 and December 31, 2009



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.

Note 7:  Related Party Transactions

Pursuant to an investment management agreement, Prudential Investment Management, Inc. (PIM), which is an indirectly owned
subsidiary of Prudential Financial Inc., charges the Partnership a daily investment management fee at an annual rate of 1.25% of the average daily gross asset valuation of the Partnership. For the period ended March 31, 2010 and March 31,
2009, management fees incurred by the Partnership were $575,677 and $725,937, respectively. The Partnership also reimburses PIM for certain administrative services rendered by PIM. The amounts incurred for the three months ended March 31, 2010
and March 31, 2009, were $13,407 and $13,407; respectively, and are classified as administrative expenses in the Consolidated Statements of Operations.



24



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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF

THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

March 31, 2010 and December 31, 2009



Note 8: Financial Highlights



|                                                                                                                       |  |                                      |        |      |   |         |  |      |        |      |   |        |  |   |       
|---------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------ | ------ | ---- | - | ------- |  | ---- | ------ | ---- | - | ------ |  | - | ------
|                                                                                                                       |  | For The Three Months Ended March 31,
|                                                                                                                       |  | 2010                                 |        | 2009 |   | 2008    |  | 2007 |        | 2006
|Per Share (Unit) Operating Performance:                                                                                |  |                                      |        |      |   |         |  |      |        |      |   |        |  |   |       
|Net Asset Value attributable to general partners controlling interest, beginning of period                            |  | $                                    | 25.88  |      | $ | 31.65   |  | $    | 36.55  |      | $ | 33.87  |  | $ | 29.59 
|Income From Investment Operations:                                                                                     |  |                                      |        |      |   |         |  |      |        |      |   |        |  |   |       
|Net investment income attributable to general partners controlling interest, before management fee                    |  |                                      | 0.37   |      |   | 0.42    |  |      | 0.61   |      |   | 0.52   |  |   | 0.50  
|Investment Management fee attributable to general partners controlling interest                                       |  |                                      | (0.09) |      |   | (0.11)  |  |      | (0.13) |      |   | (0.12) |  |   | (0.11)
|Net realized and unrealized gain (loss) on investments attributable to general partners controlling interest          |  |                                      | (0.45) |      |   | (3.74)  |  |      | (0.10) |      |   | 0.33   |  |   | 0.95  
|                                                                                                                       |  |                                      |        |      |   |         |  |      |        |      |   |        |  |   |       
|Net Increase/(Decrease) in Net Assets Resulting from Operations attributable to general partners controlling interest |  |                                      | (0.17) |      |   | (3.43)  |  |      | 0.38   |      |   | 0.73   |  |   | 1.34  
|                                                                                                                       |  |                                      |        |      |   |         |  |      |        |      |   |        |  |   |       
|                                                                                                                       |  |                                      |        |      |  
|Net Asset Value attributable to general partners controlling interest, end of period                                  |  | $                                    | 25.71  |      | $ | 28.22   |  | $    | 36.93  |      | $ | 34.60  |  | $ | 30.93 
|                                                                                                                       |  |                                      |        |      |   |         |  |      |        |      |   |        |  |   |       
|                                                                                                                       |  |                                      |        |      |  
|Total Return attributable to general partners controlling interest, before Management Fee:                            |  |                                      | -0.29% |      |   | -10.50% |  |      | 1.38%  |      |   | 2.53%  |  |   | 4.89% 
|Total Return attributable to general partners controlling interest, after Management Fee (a):                         |  |                                      | -0.63% |      |   | -10.83% |  |      | 1.03%  |      |   | 2.17%  |  |   | 4.53% 
|Ratios/Supplemental Data:                                                                                              |  |                                      |        |      |   |         |  |      |        |      |   |        |  |   |       
|Net Assets attributable to general partners controlling interest, end of period (in millions)                         |  | $                                    | 166    |      | $ | 191     |  | $    | 250    |      | $ | 234    |  | $ | 215   
|Ratios to average net assets for the period ended (b):                                                                 |  |                                      |        |      |   |         |  |      |        |      |   |        |  |   |       
|Total Portfolio Level Expenses                                                                                         |  |                                      | 0.39%  |      |   | 0.32%   |  |      | 0.35%  |      |   | 0.38%  |  |   | 0.36% 
|Net Investment Income, before Management Fee                                                                           |  |                                      | 1.38%  |      |   | 1.25%   |  |      | 1.66%  |      |   | 1.53%  |  |   | 1.68% 



|(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.
|--- | ----------------------------------------------------------------



25



---

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

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

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

(a) Liquidity and Capital Resources

As of March 31, 2010, the Partnerships liquid assets, consisting of cash and cash equivalents, were approximately $25.6
million, an increase of approximately $1.1 million from $24.5 million at December 31, 2009. The increase was primarily due to cash flows received from the Partnerships operating activities. Partially offsetting this increase were capital
expenditures to existing properties. Sources of liquidity included net cash flow from property operations, 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, 2010, approximately 12.6% of the Partnerships total assets consisted of cash and cash equivalents.

The Partnership did not have any dispositions or acquisitions for the quarter ended March 31, 2010.

During the quarter ended March 31, 2010, the Partnership spent approximately $1.3 million on capital improvements to various
existing properties. Approximately $1.1 million was associated with leasing expenses and capital upgrades at the office property in Brentwood, Tennessee. The remaining $0.2 million was associated with minor capital improvements and transaction costs
associated with leasing expenses of various other properties.



26



---

(b) Results of Operations

The following is a comparison of the Partnerships results of operations for the quarter ended March 31, 2010, and 2009.

Net Investment Income Overview

The Partnerships net investment income attributable to the general partners controlling interest for the quarter ended
March 31, 2010 was approximately $1.8 million, a decrease of approximately $0.3 million from the prior year period. The decrease in net investment income attributable to the general partners controlling interest resulted primarily from a
decline of approximately $0.3 million in net investment income for each of the retail and office sector investments from the prior year period. This decrease was slightly offset by increases in net investment income attributable to the general
partners controlling interest of $0.2 million and $0.1 million in the apartment sector and other income, respectively. 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 a net unrealized loss attributable to the general partners controlling interest of approximately $2.9
million for the quarter ended March 31, 2010, compared with a net unrealized loss attributable to the general partners controlling interest of approximately $25.3 million for the prior year period. The net unrealized loss attributable to
the general partners controlling interest for quarter ended March 31, 2010 was due to property valuation declines across all property sectors caused by weakened property fundamentals.



27



---

The following table presents a comparison of the Partnerships sources of net
investment income attributable to the general partners controlling interest, and realized and unrealized gains or losses attributable to the general partners controlling interest by investment type for the quarters ended March 31,
2010 and 2009.



|                                                            |  |                              |             |      |   |             
|----------------------------------------------------------- |  | ---------------------------- | ----------- | ---- | - | ------------
|                                                            |  | Three Months Ended March 31,
|                                                            |  | 2010                         |             | 2009
|Net Investment Income:                                      |  |                              |             |      |   |             
|                                                            |  |                             
|Office properties                                           |  | $                            | 566,456     |      | $ | 826,250     
|Apartment properties                                        |  |                              | 833,305     |      |   | 599,924     
|Retail properties                                           |  |                              | 1,075,752   |      |   | 1,346,827   
|Hotel property                                              |  |                              | 29,730      |      |   | 63,705      
|Other (including interest income, investment mgt fee, etc.) |  |                              | (669,878)   |      |   | (750,884)   
|                                                            |  |                              |             |      |   |             
|Total Net Investment Income                                 |  | $                            | 1,835,365   |      | $ | 2,085,822   
|                                                            |  |                              |             |      |   |             
|                                                            |  |                             
|Net Unrealized Gain (Loss) on Real Estate Investments:      |  |                              |             |      |   |             
|                                                            |  |                             
|Office properties                                           |  | $                            | (1,130,237) |      | $ | (6,195,849) 
|Apartment properties                                        |  |                              | (131,805)   |      |   | (8,422,433) 
|Retail properties                                           |  |                              | (1,623,544) |      |   | (9,159,625) 
|Hotel property                                              |  |                              | (2,515)     |      |   | (1,495,551) 
|                                                            |  |                             
|                                                            |  |                              |             |      |   |             
|Net Unrealized Gain (Loss) on Real Estate Investments       |  | $                            | (2,888,101) |      | $ | (25,273,458)
|                                                            |  |                              |             |      |   |             



28



---

OFFICE PROPERTIES



|                            |  |                                 |           |                                 |   |                           |  |                           |             |               |   |               |  |      |  |     
|--------------------------- |  | ------------------------------- | --------- | ------------------------------- | - | ------------------------- |  | ------------------------- | ----------- | ------------- | - | ------------- |  | ---- |  | ----
|Three Months EndedMarch 31, |  | Net InvestmentIncome/(Loss)2010 |           | Net InvestmentIncome/(Loss)2009 |   | UnrealizedGain/(Loss)2010 |  | UnrealizedGain/(Loss)2009 |             | Occupancy2010 |   | Occupancy2009
|                           
|Property                    |  |                                 |           |                                 |   |                           |  |                           |             |               |   |               |  |      |  |     
|Lisle, IL                   |  | $                               | 53,026    |                                 | $ | 69,384                    |  | $                         | 349,559     |               | $ | (1,053,615)   |  | 48%  |  | 32% 
|Brentwood, TN               |  |                                 | (117,634) |                                 |   | 177,435                   |  |                           | (489,575)   |               |   | (2,641,311)   |  | 70%  |  | 78% 
|Beaverton, OR               |  |                                 | 317,433   |                                 |   | 297,485                   |  |                           | (987,100)   |               |   | (1,400,000)   |  | 88%  |  | 88% 
|Brentwood, TN               |  |                                 | 313,631   |                                 |   | 281,946                   |  |                           | (3,121)     |               |   | (1,100,923)   |  | 100% |  | 100%
|                            |  |                                 |           |                                 |   |                           | 
|                            |  | $                               | 566,456   |                                 | $ | 826,250                   |  | $                         | (1,130,237) |               | $ | (6,195,849)   |  |      |  |     
|                            |  |                                 |           |                                 |   |                           | 

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 quarter ended March 31, 2010, a decrease of approximately $0.3 million from the prior year period. The decrease was primarily due to decreased rental income at the property in Brentwood, Tennessee due to free
rent given to the buildings largest tenant as part of a renewal of the tenants lease.

Unrealized Gain/(Loss)

The office properties owned by the Partnership recorded a net unrealized loss attributable to the general partners
controlling interest of approximately $1.1 million during the quarter ended March 31, 2010, compared with a net unrealized loss attributable to the general partners controlling interest of approximately $6.2 million for the prior year
period. The net unrealized loss attributable to the general partners controlling interest for the quarter ended March 31, 2010 was primarily due to valuation declines caused by (a) reduced market rents and a large amount of
short-term rollover risk at the property in Beaverton, Oregon; and (b) leasing costs related to the renewal of the largest tenant at the property in Brentwood, Tennessee.



29



---

APARTMENT PROPERTIES



|                             |  |                                 |         |                                 |   |                           |  |                           |           |               |   |               |  |     |  |    
|---------------------------- |  | ------------------------------- | ------- | ------------------------------- | - | ------------------------- |  | ------------------------- | --------- | ------------- | - | ------------- |  | --- |  | ---
|Three Months Ended March 31, |  | Net InvestmentIncome/(Loss)2010 |         | Net InvestmentIncome/(Loss)2009 |   | UnrealizedGain/(Loss)2010 |  | UnrealizedGain/(Loss)2009 |           | Occupancy2010 |   | Occupancy2009
|                            
|Property                     |  |                                 |         |                                 |   |                           |  |                           |           |               |   |               |  |     |  |    
|Atlanta, GA                  |  | $                               | 202,511 |                                 | $ | 116,017                   |  | $                         | 112,262   |               | $ | (1,768,577)   |  | 95% |  | 92%
|Raleigh, NC                  |  |                                 | 190,010 |                                 |   | 989                       |  |                           | (214,388) |               |   | (1,621,098)   |  | 96% |  | 90%
|Austin, TX                   |  |                                 | 310,978 |                                 |   | 341,989                   |  |                           | (640)     |               |   | (4,203,628)   |  | 94% |  | 90%
|Charlotte, NC                |  |                                 | 129,806 |                                 |   | 140,929                   |  |                           | (29,039)  |               |   | (829,130)     |  | 91% |  | 91%
|                             |  |                                 |         |                                 |   |                           | 
|                             |  | $                               | 833,305 |                                 | $ | 599,924                   |  | $                         | (131,805) |               | $ | (8,422,433)   |  |     |  |    
|                             |  |                                 |         |                                 |   |                           | 

Net Investment Income

Net investment income attributable to the general partners controlling interest for the Partnerships apartment properties was
approximately $0.8 million for the quarter ended March 31, 2010, an increase of approximately $0.2 million from the prior year period. The increase in net investment income attributable to the general partners controlling interest for the
quarter ended March 31, 2010 was primarily due to the write-off of accrued receivables at the property in Raleigh, North Carolina in the prior year period and decreased concessions and vacancy at the property in Atlanta, Georgia caused by
increased demand.

Unrealized Gain/(Loss)

The apartment properties owned by the Partnership recorded a net unrealized loss attributable to the general partners controlling
interest of approximately $0.1 million for the quarter ended March 31, 2010, compared with a net unrealized loss attributable to the general partners controlling interest of approximately $8.4 million for the prior year period. The net
unrealized loss attributable to the general partners controlling interest for the quarter ended March 31, 2010 was primarily due to valuation declines at the property in Raleigh, North Carolina caused by increased projected operating
expenses. This loss was partially offset by a net unrealized gain attributable to the general partners controlling interest at the property in Atlanta, Georgia due to a valuation increase caused by decreased investment rates. Investment rates
include direct and terminal capitalization rates, and discount rates, which reflect investors yield requirements on investments.



30



---

RETAIL PROPERTIES



|                            |  |                                 |           |                                 |   |                           |  |                           |             |               |   |               |  |      |  |     
|--------------------------- |  | ------------------------------- | --------- | ------------------------------- | - | ------------------------- |  | ------------------------- | ----------- | ------------- | - | ------------- |  | ---- |  | ----
|Three Months EndedMarch 31, |  | Net InvestmentIncome/(Loss)2010 |           | Net InvestmentIncome/(Loss)2009 |   | UnrealizedGain/(Loss)2010 |  | UnrealizedGain/(Loss)2009 |             | Occupancy2010 |   | Occupancy2009
|                           
|Property                    |  |                                 |           |                                 |   |                           |  |                           |             |               |   |               |  |      |  |     
|Roswell, GA(1)              |  | $                               | -         |                                 | $ | 209,258                   |  | $                         | -           |               | $ | (4,107,732)   |  | N/A  |  | 38% 
|Kansas City, KS (2)         |  |                                 | -         |                                 |   | 22,334                    |  |                           | -           |               |   | -             |  | N/A  |  | N/A 
|Hampton, VA                 |  |                                 | 232,579   |                                 |   | 262,751                   |  |                           | (1,910,800) |               |   | (1,404,744)   |  | 94%  |  | 89% 
|Ocean City, MD              |  |                                 | 243,174   |                                 |   | 280,981                   |  |                           | 110,955     |               |   | (738,746)     |  | 96%  |  | 95% 
|Westminster, MD             |  |                                 | 281,771   |                                 |   | 293,815                   |  |                           | (100,634)   |               |   | (1,700,000)   |  | 100% |  | 100%
|Dunn, NC (3)                |  |                                 | 71,119    |                                 |   | 30,989                    |  |                           | (8,784)     |               |   | (17,903)      |  | 36%  |  | 35% 
|CARS Preferred Equity       |  |                                 | 247,109   |                                 |   | 246,699                   |  |                           | 285,719     |               |   | (1,190,500)   |  | N/A  |  | N/A 
|                            |  |                                 |           |                                 |   |                           | 
|                            |  | $                               | 1,075,752 |                                 | $ | 1,346,827                 |  | $                         | (1,623,544) |               | $ | (9,159,625)   |  |      |  |     
|                            |  |                                 |           |                                 |   |                           | 



|(1) | The Roswell, Georgia retail property was sold on May 1, 2009.
|--- | -------------------------------------------------------------

|(2) | The Kansas City, Kansas retail property was sold on June 29, 2007 but certain post-closing adjustments were recognized during the three months ended
March 31, 2009.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | A portion of the Dunn, North Carolina retail property was sold on November 12, 2009.
|--- | ------------------------------------------------------------------------------------

Net Investment Income

Net investment income attributable to the general partners controlling interest for the Partnerships retail properties was
approximately $1.1 million for the quarter ended March 31, 2010, a decrease of approximately $0.3 million from the prior year period. The decrease in net investment income attributable to the general partners controlling interest for the
quarter ended March 31, 2010 was largely due to (a) the loss of income related to the disposition of the Roswell, Georgia property; and (b) increased rent relief at the properties in Hampton, Virginia, Ocean City, Maryland, and
Westminster, Maryland.

Unrealized Gain/(Loss)

The retail properties owned by the Partnership recorded a net unrealized loss attributable to the general partners controlling
interest of approximately $1.6 million for the quarter ended March 31, 2010, compared with a net unrealized loss attributable to the general partners controlling interest of approximately $9.2 million for the prior year period. The
unrealized loss attributable to the general partners controlling interest for the quarter ended March 31, 2010 was primarily due to a valuation decline of $1.9 million at the property in Hampton, Virginia caused by a large amount of
short-term tenant rollover. This loss was partially offset by a net unrealized gain attributable to the general partners controlling interest of approximately $0.3 million in the Capital Automotive Real Estate Services, or CARS,
preferred equity investment due to a reduction in the expected remaining term of the investment, effectively increasing the probability of repayment.



31



---

HOTEL PROPERTY



|                             |  |                                 |        |                                 |   |                           |  |                           |         |               |   |               |  |     |  |    
|---------------------------- |  | ------------------------------- | ------ | ------------------------------- | - | ------------------------- |  | ------------------------- | ------- | ------------- | - | ------------- |  | --- |  | ---
|Three Months Ended March 31, |  | Net InvestmentIncome/(Loss)2010 |        | Net InvestmentIncome/(Loss)2009 |   | UnrealizedGain/(Loss)2010 |  | UnrealizedGain/(Loss)2009 |         | Occupancy2010 |   | Occupancy2009
|                            
|Property                     |  |                                 |        |                                 |   |                           |  |                           |         |               |   |               |  |     |  |    
|Lake Oswego, OR              |  | $                               | 29,730 |                                 | $ | 63,705                    |  | $                         | (2,515) |               | $ | (1,495,551)   |  | 55% |  | 54%

Net Investment Income

Net investment income attributable to the general partners controlling interest for the Partnerships hotel
property was relatively unchanged from the prior year period for the quarter ended March 31, 2010.

Unrealized
Gain/(Loss)

The Partnerships hotel property recorded no unrealized gain or loss attributable to the general
partners controlling interest for the quarter ended March 31, 2010, compared with an unrealized loss attributable to the general partners controlling interest of approximately $1.5 million for the prior year period.



32



---

Other

Other net investment loss attributable to the general partners controlling interest decreased approximately $0.1 million for the
quarter ended March 31, 2010 over the prior year period. Other net investment includes interest income from short-term investments, investment management fees, and portfolio level expenses.

(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., 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 the 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. 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.



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ITEM 3.  Quantitative and Qualitative Disclosures about Market
Risk

Interest Rate Risk  The Partnerships exposure to market rate risk for changes in interest rates
relates to approximately 33.89% of the general partners controlling interest net assets as of March 31, 2010, 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, 2010:



|                          |  |            |  |                                   |  |                      
|------------------------- |  | ---------- |  | --------------------------------- |  | ---------------------
|                          |  | Maturity   |  | Estimated Market Value
(millions) |  | Average
Interest Rate
|                          |  |           
|Cash and Cash equivalents |  | 0-3 months |  | $25.6                             |  | 1.52%                

The table below discloses the
Partnerships debt as of March 31, 2010. 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 |  | 2010  |  | 2011    |  | 2012  |  | 2013   |  | 2014  |  | Thereafter |  | Total   |  | Estimated    Fair Value
|                                                                  |  |       |  |         |  |       |  |       
|Weighted Average Fixed Interest Rate                              |  | 6.75% |  | 6.75%   |  | 6.75% |  | 6.75%  |  | 6.75% |  | 6.75%      |  | 6.75%   |  |                        
|Fixed Rate                                                        |  | $427  |  | $604    |  | $646  |  | $691   |  | $739  |  | $3,510     |  | $6,617  |  | $6,610                 
|Variable Rate                                                     |  | -     |  | $15,071 |  | -     |  | $9,000 |  | -     |  | -          |  | $24,071 |  | $24,014                
|Premium/(Discount) on Investment Level Debt                       |  | ($2)  |  | -       |  | -     |  | -      |  | -     |  | -          |  | ($2)    |  | -                      
|                                                                  |  |      
|Total Investment Level Debt                                       |  | $425  |  | $15,675 |  | $646  |  | $9,691 |  | $739  |  | $3,510     |  | $30,686 |  | $30,624                
|                                                                  |  |      

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

Item 4.  Controls and
Procedures

In order to ensure that the information we must disclose in our filings with the 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, 2010. Based on such evaluation, the Chief Executive Officer and Chief Financial Officer
have concluded that, as of March 31, 2010, 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, 2010, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.



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PART II  OTHER INFORMATION

Item 1A.  Risk Factors

You should carefully consider the risks described under Risk Factors in our Annual Report on Form 10-K for the year ended
December 31, 2009. 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 Partnership. These risks are not exclusive, and additional risks to which we are subject include, but are not limited to, the factors mentioned under Forward-Looking Statements above and the risks of our businesses
described elsewhere in 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.



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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY

in respect of

Pruco Life of New Jersey Variable

Contract Real Property Account

(Registrant)





Date:
May 14, 2010



By:

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




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