<HTML>
<HEAD>
<TITLE> </TITLE>
</HEAD>
<BODY bgcolor="#ffffff" style='font-family:"Times New Roman"'>




<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;line-height:95.83333%;'><B><font FACE="ARIAL" SIZE=2>UNITED STATES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;line-height:95.83333%;'><B><font FACE="ARIAL" SIZE=2>SECURITIES AND EXCHANGE COMMISSION</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;line-height:95.83333%;'><b><font face="Arial" size=2>Washington, D.C. 20549</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;line-height:95.83333%;'><B><font FACE="ARIAL" SIZE=3>FORM S-1</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;line-height:95.83333%;'><B><font FACE="ARIAL" SIZE=2>REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><B><font FACE="ARIAL" SIZE=2>THE PRUDENTIAL INSURANCE COMPANY OF AMERICA</font></B><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><B><font FACE="ARIAL" SIZE=2>IN RESPECT OF:</font></B><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;line-height:95.83333%;'><u><font face="Arial" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><B><font FACE="ARIAL" SIZE=2>THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY ACCOUNT    </font></B></u><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;line-height:95.83333%;'>(Exact name of registrant as specified in its charter)</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;line-height:95.83333%;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;line-height:95.83333%;'><b><font face="Arial" size=2>                      </font></b><b><font face="Arial" size=2><u>____________________________New Jersey_____________________________</u></font></b><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;</font><u><b><font face="Arial" size=2>       </font></b></u></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;line-height:95.83333%;'>(State or other jurisdiction of incorporation or organization)</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;line-height:95.83333%;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;line-height:95.83333%;'><b><font face="Arial" size=2>   </font></b><u><b><font face="Arial" size=2>______________________________6311_______________________________</font></b></u><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;line-height:95.83333%;'>(Primary Standard Industrial Classification Code Number)</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;line-height:95.83333%;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;line-height:95.83333%;'><b><font face="Arial" size=2>   </font></b><u><b><font face="Arial" size=2>_______________________22-1211670_______________________________</font></b></u><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><b><font face="Arial" size=2>                    </font></b></u><b><font face="Arial" size=2>          </font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;line-height:95.83333%;'>(I.R.S. Employer Identification Number)</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;line-height:95.83333%;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;line-height:95.83333%;'><b>c/o The Prudential Insurance Company of America</b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;line-height:95.83333%;'><b>  </b><u><b>    751 Broad Street, Newark, New Jersey  07102-3777, (800) 778-2255  </b></u><b>  </b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;line-height:95.83333%;'>(Address, including zip code, and telephone number,</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;line-height:95.83333%;'>including area code, or registrant's principal executive offices)</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;line-height:95.83333%;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;line-height:95.83333%;'><b>Thomas C. Castano, Vice President and Corporate Counsel </b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;line-height:95.83333%;'><b>The Prudential Insurance Company of America</b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;line-height:95.83333%;'><b>   </b><u><b>     751 Broad Street, Newark, New Jersey  07102-3777, (800) 778-2255  </b></u><b>  </b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;line-height:95.83333%;'>               (Name, address, including zip code, and telephone number,</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;line-height:95.83333%;'>including area code, of agent for service</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;line-height:95.83333%;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;line-height:95.83333%;'><font face="Arial" size=2>Copies to:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;line-height:95.83333%;'><font face="Arial" size=2>Christopher E. Palmer</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;line-height:95.83333%;'><font face="Arial" size=2>Goodwin Procter LLP</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;line-height:95.83333%;'><font face="Arial" size=2>901 New York Avenue, N.W.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;line-height:95.83333%;'><font face="Arial" size=2>Washington, DC 20001</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;line-height:95.83333%;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;line-height:95.83333%;'><b><font face="Arial" size=2>               </font></b><u><b><font face="Arial" size=2> _________________________________March 26, 2009________________________ </font></b></u><b><font face="Arial" size=2>        </font></b><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;line-height:95.83333%;'>(Approximate date of commencement of proposed sale to the public)</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;line-height:95.83333%;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'>If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box: [ X ]</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'>If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [   ]</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'>If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [   ]</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'>If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [   ]</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'>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 the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. </p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'>&nbsp;</p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="570" style=' border-collapse:collapse'>
    <tr>
        <td width="32" nowrap valign=top style='padding:0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="147" nowrap valign=top style='padding:0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>Large accelerated filer [  </p> </td>
        <td width="253" nowrap valign=top style='padding:0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>]</p> </td>
        <td width="115" nowrap valign=top style='padding:0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>Accelerated filer [  </p> </td>
        <td width="24" nowrap valign=top style='padding:0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>]</p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>

<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="570" style=' border-collapse:collapse'>
    <tr>
        <td width="32" nowrap valign=top style='padding:0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="147" nowrap valign=top style='padding:0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><font face="Arial" size=2>Non-accelerated filer [ X ]</font></p> </td>
        <td width="300" nowrap valign=top style='padding:0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><font face="Arial" size=2>(Do not check if a smaller reporting company)</font></p> </td>
        <td width="200" nowrap valign=top style='padding:0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><font face="Arial" size=2>Smaller reporting company [     ]</font></p> </td>
        <td width="24" nowrap valign=top style='padding:0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><font face="Arial" size=2></font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;line-height:95.83333%;'>&nbsp;</p>

<div TITLE="EE+ Page Break" STYLE="PAGE-BREAK-AFTER: always">

<HR noshade align="center" width="100%" size="2">
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;line-height:95.83333%;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;line-height:95.83333%;'><b>Calculation of Registration Fee</b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;line-height:95.83333%;'>&nbsp;</p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="571" style=' border-collapse:collapse'>
    <tr>
        <td width="288" nowrap valign=top style='padding:0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>Title of Each Class</p> </td>
        <td width="144" nowrap valign=top style='padding:0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>Proposed Maximum</p> </td>
        <td width="139" nowrap valign=top style='padding:0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>Proposed Maximum</p> </td> </tr></table>
</div>



<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="648" style=' border-collapse:collapse'>
    <tr>
        <td width="144" nowrap valign=top style='padding:0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>of Securities to</p> </td>
        <td width="144" nowrap valign=top style='padding:0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>Amount to be</p> </td>
        <td width="144" nowrap valign=top style='padding:0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>Offering</p> </td>
        <td width="136" nowrap valign=top style='padding:0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>Aggregate</p> </td>
        <td width="80" nowrap valign=top style='padding:0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>Amount of</p> </td> </tr></table>
</div>



<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="684" style=' border-collapse:collapse; '>
    <tr>
        <td width="144" nowrap valign=top style='border-bottom: solid black 1.5pt;padding:0pt 0pt 0pt 0pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>be Registered</p> </td>
        <td width="144" nowrap valign=top style='border-bottom: solid black 1.5pt;padding:0pt 0pt 0pt 0pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>Registered*</p> </td>
        <td width="144" nowrap valign=top style='border-bottom: solid black 1.5pt;padding:0pt 0pt 0pt 0pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>Price Per Unit*</p> </td>
        <td width="136" nowrap valign=top style='border-bottom: solid black 1.5pt;padding:0pt 0pt 0pt 0pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>Offering Price**</p> </td>
        <td width="116" nowrap valign=top style='border-bottom: solid black 1.5pt;padding:0pt 0pt 0pt 0pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>Registration Fee</p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>Interests in real </font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="635" style=' border-collapse:collapse'>
    <tr>
        <td width="432" nowrap valign=top style='padding:0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>property</font></p> </td>
        <td width="136" nowrap valign=top style='padding:0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>$7,000,000</font></p> </td>
        <td width="67" nowrap valign=top style='padding:0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>$390.60</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>separate account </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>underlying variable </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font face="Arial" size=2>life insurance and </font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="120" style=' border-collapse:collapse; '>
    <tr>
        <td width="120" nowrap valign=top style='border-bottom: solid black 1.5pt;padding:0pt 0pt 0pt 0pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>annuity contracts__________________________________________________________________________________________</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;line-height:95.83333%;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;line-height:95.83333%;'>*  These securities are not issued in predetermined amounts or units and the maximum aggregate offering price is estimated solely for purposes of determining the registration fee. </p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;line-height:95.83333%;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;line-height:95.83333%;'>** In this filing the registrant is registering $7,000,000 of securities and is paying a fee of $390.60 therefor.  The proposed maximum offering price is estimated solely for the purpose of calculating the registration fee based on Rule 457 (o).</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;line-height:95.83333%;border-bottom:solid 1.5pt;padding-bottom:1;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;line-height:95.83333%;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;line-height:95.83333%;'>Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to Section 8(a), may determine.   </p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;line-height:95.83333%;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;line-height:95.83333%;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;line-height:95.83333%;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>

<div TITLE="EE+ Page Break" STYLE="PAGE-BREAK-AFTER: always">

<HR noshade align="center" width="100%" size="2">
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;line-height:95.83333%;'><B>PART I</B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;line-height:95.83333%;'><B>INFORMATION REQUIRED IN PROSPECTUS</B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<div TITLE="EE+ Page Break" STYLE="PAGE-BREAK-AFTER: always">

<HR noshade align="center" width="100%" size="2">
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'>
<font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'>&nbsp;</p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><B><font FACE="ARIAL" SIZE=2>PROSPECTUS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><b><font face="Arial" size=2>May 1, 2009</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;line-height:95.83333%;'><I><B><font FACE="ARIAL" SIZE=5>THE PRUDENTIAL</font></B></I></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;line-height:95.83333%;'><I><B><font FACE="ARIAL" SIZE=5>VARIABLE CONTRACT </font></B></I></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;line-height:95.83333%;'><I><B><font FACE="ARIAL" SIZE=5>REAL PROPERTY ACCOUNT</font></B></I></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>This prospectus is attached to two other types of prospectuses.  The first describes either a variable annuity contract or a variable life insurance contract (collectively, the "Contract") issued by The Prudential Insurance Company of America ("Prudential," "us," "we," or "our").  The second prospectus describes several investment options available under that variable contract through The Prudential Series Fund (the "Series Fund").  The Series Fund is registered under the Investment Company Act of 1940 as an open-end, diversified management investment company. The Series Fund consists of separate investment portfolios that are mutual funds, each with a different investment policy and objective.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>This prospectus describes The Prudential Variable Contract Real Property Account (the "Real Property Account"), an additional available investment option.  Although it is not a mutual fund, in many ways it is like a mutual fund.  Instead of holding a diversified portfolio of securities, such as stocks or bonds, it consists mainly of a portfolio of commercial and residential real properties. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>Prudential determines the price of a "share" or, as we call it, a "participating interest" in this portfolio of properties, just as it does for the other investment options.  It is based upon our best estimate of the fair market value of the properties and other assets held in this portfolio.  The portion of your "Contract Fund" (the total amount invested under the Contract) that you allocate to this investment option will change daily in value, up or down, as our estimate of the fair market value of these real properties and other assets change.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>The risks of investing in real property are different from the risks of investing in mutual funds.  See </font><B><font FACE="ARIAL" SIZE=2>RISK FACTORS</font></B><font face="Arial" size=2>.  Also, your ability to withdraw or transfer your investment in this option is not as freely available as it is for the other investment options.  See </font><B><font FACE="ARIAL" SIZE=2>RESTRICTIONS ON WITHDRAWALS</font></B><font face="Arial" size=2>. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><b><font face="Arial" size=2>Please read this prospectus and keep it for future reference.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font face="Arial" size=2>The Securities and Exchange Commission ("SEC") maintains a Web site (http://www.sec.gov) that contains material incorporated by reference and other information regarding registrants that file electronically with the SEC.  </font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><b><font face="Arial" size=2>Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is accurate or complete.  Any representation to the contrary is a criminal offense.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;line-height:95.83333%;'><b><font face="Arial" size=2>The Prudential Insurance Company of America</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;line-height:95.83333%;'><font face="Arial" size=2>751 Broad Street</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;line-height:95.83333%;'><font face="Arial" size=2>Newark, New Jersey 07102-3777</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;line-height:95.83333%;'><font face="Arial" size=2>Telephone: (800) 778-2255</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>PRPA-3 Ed 5-2009</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>

<div TITLE="EE+ Page Break" STYLE="PAGE-BREAK-AFTER: always">

<HR noshade align="center" width="100%" size="2">
</DIV>


<PRE>
                                                           TABLE OF CONTENTS

                                                                                                                            Page

PER SHARE INVESTMENT INCOME, CAPITAL CHANGES AND SELECTED RATIOS...............................................................1

SUMMARY........................................................................................................................2
   Investment of The Real Property Account Assets..............................................................................2
   Investment Objectives.......................................................................................................2
   Risk Factors................................................................................................................2
   Summary of Charges..........................................................................................................3
   Availability to Prudential Contracts........................................................................................3

GENERAL INFORMATION ABOUT THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY ACCOUNT,
THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP, AND THE INVESTMENT MANAGER.........................................3
   The Prudential Insurance Company of America.................................................................................3
   The Prudential Variable Contract Real Property Account......................................................................3
   The Prudential Variable Contract Real Property Partnership..................................................................4
   The Investment Manager......................................................................................................4

INVESTMENT POLICIES............................................................................................................5
   Overview....................................................................................................................5
   Investment in Direct Ownership Interests in Real Estate.....................................................................5
   Investments in Mortgage Loans...............................................................................................6
   Investments in Sale-Leasebacks..............................................................................................7
   General Investment and Operating Policies...................................................................................8

CURRENT REAL ESTATE-RELATED INVESTMENTS........................................................................................9
   Properties..................................................................................................................9

RISK FACTORS...................................................................................................................9
   Liquidity of Investments....................................................................................................9
   General Risks of Real Property Investments.................................................................................10
   Reliance on The Partners and The Investment Manager........................................................................11

INVESTMENT RESTRICTIONS.......................................................................................................11

DIVERSIFICATION REQUIREMENTS..................................................................................................12

CONFLICTS OF INTEREST.........................................................................................................12

THE REAL PROPERTY ACCOUNT'S UNAVAILABILITY TO CERTAIN CONTRACTS...............................................................14

VALUATION OF CONTRACT OWNERS' PARTICIPATING INTERESTS.........................................................................14

BORROWING BY THE PARTNERSHIP..................................................................................................15

CHARGES.......................................................................................................................16

RESTRICTIONS ON WITHDRAWALS...................................................................................................16

RESTRICTIONS ON CONTRACT OWNERS' INVESTMENT IN THE REAL PROPERTY ACCOUNT......................................................17

FEDERAL INCOME TAX CONSIDERATIONS.............................................................................................17

DISTRIBUTION OF THE CONTRACTS.................................................................................................17

STATE REGULATION..............................................................................................................17

ADDITIONAL INFORMATION........................................................................................................18

EXPERTS.......................................................................................................................18

LITIGATION....................................................................................................................18

REPORTS TO CONTRACT OWNERS....................................................................................................18

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.....................................................................................................18

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK....................................................................25

FINANCIAL STATEMENTS..........................................................................................................25

FINANCIAL STATEMENTS OF THE PRUDENTIAL VARIABLE CONTRACT REAL
PROPERTY ACCOUNT..............................................................................................................A1

FINANCIAL STATEMENTS OF THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY
PARTNERSHIP...................................................................................................................B1

</PRE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<div TITLE="EE+ Page Break" STYLE="PAGE-BREAK-AFTER: always">

<HR noshade align="center" width="100%" size="2">
</DIV>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font FACE="ARIAL" SIZE=3>PER SHARE INVESTMENT INCOME, CAPITAL CHANGES AND</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font face="Arial" size=3><a name="toc2"></a>SELECTED RATIOS</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font face="Arial" size=2>(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=1>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font face="Arial" size=2>The following information on per share investment income, capital changes and selected ratios has been provided for your information.  This page should be read in conjunction with the financial statements and notes thereto of The Prudential Variable Contract Real Property Partnership included in this prospectus.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=1>&nbsp;</font></p>


<div align=center>

<table border="0" cellspacing=0 cellpadding=0 width="692" style=' border-collapse:collapse'>
    <tr>
        <td width="301" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font face="Arial" size=1>01/01/2008</font></b></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font face="Arial" size=1>01/01/2007</font></b></p> </td>
        <td width="78" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font face="Arial" size=1>01/01/2006</font></b></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font face="Arial" size=1>01/01/2005</font></b></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font face="Arial" size=1>01/01/2004</font></b></p> </td> </tr>
    <tr>
        <td width="301" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b>To</b></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b>To</b></p> </td>
        <td width="78" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b>To</b></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b>To</b></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b>To</b></p> </td> </tr>
    <tr>
        <td width="301" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><u><b>12/31/2008</b></u><u></u></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><u><b>12/31/2007</b></u><u></u></p> </td>
        <td width="78" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><u><b>12/31/2006</b></u><u></u></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><u><b>12/31/2005</b></u><u></u></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><u><b>12/31/2004</b></u><u></u></p> </td> </tr>
    <tr>
        <td width="301" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="301" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>Revenue from real estate and improvements</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>$4.55</p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>$4.25</p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>$3.69</p> </td>
        <td width="78" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>$3.80 </p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>$3.78</font></p> </td> </tr>
    <tr>
        <td width="301" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>Equity in income of real estate partnership</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>$0.15</p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>$0.17</p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>$0.14</p> </td>
        <td width="78" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>$0.04 </p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>$0.09</font></p> </td> </tr>
    <tr>
        <td width="301" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>Dividend income from real estate investment trusts</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>$0.00</p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>$0.00</p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>$0.00</p> </td>
        <td width="78" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>$0.00 </p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>$0.00</font></p> </td> </tr>
    <tr>
        <td width="301" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>Interest and equity income on mortgage and other loans receivable</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>$0.00</p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>$0.00</p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>$0.02</p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>$0.04 </p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>$0.02</font></p> </td> </tr>
    <tr>
        <td width="301" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>Income from other real estate investments</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>$0.00</p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>$0.06</p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>$0.03</p> </td>
        <td width="78" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>$0.00 </p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>$0.03</font></p> </td> </tr>
    <tr>
        <td width="301" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>Interest on short-term investments</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><u>$0.06</u><u></u></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><u>$0.22</u><u></u></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><u>$0.27</u><u></u></p> </td>
        <td width="78" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><u>$0.14 </u><u></u></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><u><font face="Arial" size=1>$0.03</font></u><u></u></p> </td> </tr>
    <tr>
        <td width="301" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="301" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><B><font FACE="ARIAL" SIZE=1>TOTAL INVESTMENT INCOME</font></B></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><u>$4.76</u><u></u></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><u>$4.70</u><u></u></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><u>$4.15</u><u></u></p> </td>
        <td width="78" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><u>$4.02 </u><u></u></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><u><font face="Arial" size=1>$3.95</font></u><u></u></p> </td> </tr>
    <tr>
        <td width="301" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="301" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>Investment Management fee</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>$0.51</p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>$0.50</p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>$0.45</p> </td>
        <td width="78" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>$0.40 </p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>$0.36</font></p> </td> </tr>
    <tr>
        <td width="301" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>Real Estate Taxes</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>$0.45</p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>$0.36</p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>$0.30</p> </td>
        <td width="78" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>$0.33 </p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>$0.36</font></p> </td> </tr>
    <tr>
        <td width="301" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>Administrative expense</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>$0.88</p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>$0.60</p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>$0.57</p> </td>
        <td width="78" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>$0.62 </p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>$0.71</font></p> </td> </tr>
    <tr>
        <td width="301" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>Operation expense</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>$1.07</p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>$1.03</p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>$0.92</p> </td>
        <td width="78" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>$1.04 </p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>$1.02</font></p> </td> </tr>
    <tr>
        <td width="301" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>Interest expense</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>$0.29</p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>$0.30</p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>$0.26</p> </td>
        <td width="78" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>$0.30 </p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>$0.40</font></p> </td> </tr>
    <tr>
        <td width="301" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>Minority interest in consolidated partnership</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><u>($0.08)</u><u></u></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><u>$0.02</u><u></u></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><u>$0.03</u><u></u></p> </td>
        <td width="78" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><u>$0.02 </u><u></u></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><u><font face="Arial" size=1>$0.03</font></u><u></u></p> </td> </tr>
    <tr>
        <td width="301" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="301" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><B><font FACE="ARIAL" SIZE=1>TOTAL INVESTMENT EXPENSES</font></B></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><u>$3.12</u><u></u></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><u>$2.81</u><u></u></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><u>$2.53</u><u></u></p> </td>
        <td width="78" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><u>$2.71 </u><u></u></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><u><font face="Arial" size=1>$2.89</font></u><u></u></p> </td> </tr>
    <tr>
        <td width="301" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="301" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><B><font FACE="ARIAL" SIZE=1>NET INVESTMENT INCOME</font></B></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><u>$1.64</u><u></u></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><u>$1.89</u><u></u></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><u>$1.62</u><u></u></p> </td>
        <td width="78" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><u>$1.29 </u><u></u></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><u><font face="Arial" size=1>$1.06</font></u><u></u></p> </td> </tr>
    <tr>
        <td width="301" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="301" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>Net realized gain (loss) on real estate investments sold</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="301" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:11.25pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>or converted</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><u>$0.00</u><u></u></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><u>$0.10</u><u></u></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><u>$0.01</u><u></u></p> </td>
        <td width="78" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><u>$0.87 </u><u></u></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><u><font face="Arial" size=1>$0.23</font></u><u></u></p> </td> </tr>
    <tr>
        <td width="301" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="301" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>Change in unrealized gain (loss) on real estate investments</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>($6.75)</p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>$0.83</p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>$2.94</p> </td>
        <td width="78" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>$1.47 </p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>$0.33</font></p> </td> </tr>
    <tr>
        <td width="301" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>Minority interest in unrealized gain (loss) on investments</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><u>($0.21)</u><u></u></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><u>$0.12</u><u></u></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><u>$0.29</u><u></u></p> </td>
        <td width="78" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><u>$0.17 </u><u></u></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><u><font face="Arial" size=1>$0.12</font></u><u></u></p> </td> </tr>
    <tr>
        <td width="301" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="301" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>Net unrealized gain (loss) on real estate investments</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><u>($6.54)</u><u></u></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><u>$0.71</u><u></u></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><u>$2.65</u><u></u></p> </td>
        <td width="78" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><u>$1.30 </u><u></u></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><u><font face="Arial" size=1>$0.21</font></u><u></u></p> </td> </tr>
    <tr>
        <td width="301" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="301" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><B><font FACE="ARIAL" SIZE=1>NET REALIZED AND UNREALIZED</font></B></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="301" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:15.75pt;text-align:justify;margin-top:1.5pt;margin-bottom:0pt'><B><font FACE="ARIAL" SIZE=1>GAIN (LOSS) ON INVESTMENTS</font></B></p> </td>
        <td width="78" valign=top style='border-bottom:double black 2.25pt; padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>($6.54)</p> </td>
        <td width="78" valign=top style='border-bottom:double black 2.25pt; padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>$0.81</p> </td>
        <td width="78" valign=top style='border-bottom:double black 2.25pt; padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>$2.66</p> </td>
        <td width="78" valign=bottom style='border-bottom: double black 2.25pt;padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>$2.17 </p> </td>
        <td width="78" valign=top style='border-bottom:double black 2.25pt; padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>$0.45</font></p> </td> </tr>
    <tr>
        <td width="301" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="301" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>Net change in share value</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>($4.90)</p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>$2.68</p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>$4.28</p> </td>
        <td width="78" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>$3.44 </p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>$1.49</font></p> </td> </tr>
    <tr>
        <td width="301" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="301" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>Share value at beginning of period</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><u>$36.55</u><u></u></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><u>$33.87</u><u></u></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><u>$29.59</u><u></u></p> </td>
        <td width="78" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><u>$26.15 </u><u></u></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><u><font face="Arial" size=1>$24.66</font></u><u></u></p> </td> </tr>
    <tr>
        <td width="301" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:1.5pt;margin-bottom:0pt'><font face="Arial" size=1>Share value at end of period</font></p> </td>
        <td width="78" valign=top style='border-bottom:double black 2.25pt; padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>$31.65</p> </td>
        <td width="78" valign=top style='border-bottom:double black 2.25pt; padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>$36.55</p> </td>
        <td width="78" valign=top style='border-bottom:double black 2.25pt; padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>$33.87</p> </td>
        <td width="78" valign=bottom style='border-bottom: double black 2.25pt;padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>$29.59 </p> </td>
        <td width="78" valign=top style='border-bottom:double black 2.25pt; padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>$26.15</font></p> </td> </tr>
    <tr>
        <td width="301" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="301" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>Ratio of expenses to average net assets (1)</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>8.57%</p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>7.94%</p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>7.98%</p> </td>
        <td width="78" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>9.78%</p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>11.34%</font></p> </td> </tr>
    <tr>
        <td width="301" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="301" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>Ratio of net investment income to average net assets (1)</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>4.55%</p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>5.28%</p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>5.10%</p> </td>
        <td width="78" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>4.64%</p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>4.16%</font></p> </td> </tr>
    <tr>
        <td width="301" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="301" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>Number of weighted shares outstanding at</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="301" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>end of period (000&#146;s)</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>6,759</p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>6,759</p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>6,893</p> </td>
        <td width="78" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>7,133</p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>7,364</font></p> </td> </tr>
    <tr>
        <td width="301" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font face="Arial" size=1>All per share calculations are based on weighted average shares outstanding.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=1>(1)  Average net assets are calculated based on an average of ending monthly net assets.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=1>*Per Share amount less than $0.01 (rounded)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<div TITLE="EE+ Page Footer">
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font FACE="ARIAL" SIZE=2></FONT></p>

<p style=' margin-bottom:0pt; margin-top:1pt;text-align:center;'><A NAME="PAGENUM"><font face="Arial" size=2></font>
</A></p>



<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="471" style=' border-collapse:collapse'>
    <tr>
        <td width="236" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:1.0pt;margin-bottom:0pt;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="236" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:129.6%'><font face="Arial" size=2>1 - Real Property</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'> </p>
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<div TITLE="EE+ Page Break" STYLE="PAGE-BREAK-AFTER: always">

<HR noshade align="center" width="100%" size="2">
</DIV>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font face="Arial" size=3><a name="toc3"></a>SUMMARY</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>This Summary provides a brief overview of the more significant aspects of the Real Property Account.  We provide further detail in the subsequent sections of this prospectus.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The Real Property Account is a separate account of Prudential created pursuant to New Jersey insurance law.  Under that law, the assets of the Real Property Account are not chargeable with liabilities arising out of any other business of Prudential.  Owners of certain variable life insurance and variable annuity contracts issued by Prudential may allocate a portion of their net premiums or purchase payments, or transfer a portion of their Contract Fund, to the Real Property Account.  Values and benefits under the Contracts will thereafter reflect the investment experience of the Real Property Account.  Contract owners, not Prudential, bear the risks and rewards of the investment performance of the Real Property Account to the extent of the Contract owner's Contract Fund invested in the Real Property Account. This prospectus is attached to and should be read in conjunction with the prospectus
for the Contract you selected.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font face="Arial" size=2><a name="toc4"></a>Investment of The Real Property Account Assets</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The Real Property Account assets are invested primarily in income-producing real estate through The Prudential Variable Contract Real Property Partnership (the "Partnership"), which is a general partnership that was established by Prudential and two of its wholly-owned subsidiaries, Pruco Life Insurance Company ("Pruco Life") and Pruco Life Insurance Company of New Jersey (&#147;Pruco Life of New Jersey&#148;). See </font><b><font face="Arial" size=2>The Prudential Variable Contract Real Property Partnership</font></b><font face="Arial" size=2>.  Currently Prudential serves as the investment manager of the Partnership. Prudential acts through Prudential Investment Management, Inc.  See </font><b><font face="Arial" size=2>The Investment Manager</font></b><font face="Arial" size=2>.  The Partnership invests at least 65% of its assets in direct ownership interests in:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>



<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse;'>
    <tr>
        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>1.</font></p> </td>
        <td  valign=top style='padding:0pt 0pt 0pt 0pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>income-producing real estate; </font></p> </td> </tr></table>
</div>





<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse;'>
    <tr>
        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>2.</font></p> </td>
        <td  valign=top style='padding:0pt 0pt 0pt 0pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>participating mortgage loans (mortgages providing for participation in the revenues generated by, or the appreciation of, the underlying property, or both) originated for the Partnership; and</font></p> </td> </tr></table>
</div>





<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse;'>
    <tr>
        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>3.</font></p> </td>
        <td  valign=top style='padding:0pt 0pt 0pt 0pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>real property sale-leasebacks negotiated  on behalf of the Partnership.</font></p> </td> </tr></table>
</div>



<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The large majority of these real estate investments will be in direct ownership interests in income producing real estate, such as office buildings, shopping centers, apartments, industrial properties or hotels.  The Partnership may also invest up to 5% of its assets in direct ownership interests in agricultural land.  Approximately 10% of the Partnership's assets will be held in cash or invested in liquid instruments and securities.  The remainder of the Partnership's assets may be invested in other types of real estate related investments, including non-participating mortgage loans and real estate investment trusts.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font face="Arial" size=2><a name="toc5"></a>Investment Objectives</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The investment objectives of the Partnership are to:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>



<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse;'>
    <tr>
        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>1.</font></p> </td>
        <td  valign=top style='padding:0pt 0pt 0pt 0pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>preserve and protect the Partnership's capital; </font></p> </td> </tr></table>
</div>





<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse;'>
    <tr>
        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>2.</font></p> </td>
        <td  valign=top style='padding:0pt 0pt 0pt 0pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>compound income by reinvesting  investment cash flow; and </font></p> </td> </tr></table>
</div>





<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse;'>
    <tr>
        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>3.</font></p> </td>
        <td  valign=top style='padding:0pt 0pt 0pt 0pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>over time, increase the income amount through appreciation in the value of permitted investments and, to a lesser extent, through mortgage loans and sale-leaseback transactions.  </font></p> </td> </tr></table>
</div>



<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>There is no assurance that the Partnership's objectives will be attained.  See </font><B><font FACE="ARIAL" SIZE=2>INVESTMENT POLICIES</FONT></B><font face="Arial" size=2>.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font face="Arial" size=2><a name="toc6"></a>Risk Factors</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>Investment in the Real Property Account, and thereby, participation in the investment experience of the Partnership, involves significant risks.  See</font><b><font face="Arial" size=2> RISK FACTORS</font></b><font face="Arial" size=2>.  These include the risk of fluctuating real estate values and the risk that the appraised or estimated values of the Partnership's real property investments will not be realized upon their disposition.  Many of the Partnership's real estate investments will not be quickly convertible into cash. Therefore, the Real Property Account should be viewed as a long-term investment.  See </font><B><font FACE="ARIAL" SIZE=2>RESTRICTIONS ON WITHDRAWALS</FONT></B><font face="Arial" size=2>.  Prudential and the investment manager have taken steps that are designed to ensure that the Real Property Account and Partnership will be sufficiently liquid to satisfy all withdrawal
or loan requests promptly (within seven days), see </font><b><font face="Arial" size=2>Liquidity of Investments</font></b><font face="Arial" size=2>. </font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>Prudential&#146;s management of the Partnership is subject to certain conflicts of interest, including the possible acquisition of properties from Prudential Financial affiliates.  See </font><B><font FACE="ARIAL" SIZE=2>CONFLICTS OF INTEREST</FONT></B><font face="Arial" size=2>.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<div TITLE="EE+ Page Footer">
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font FACE="ARIAL" SIZE=2></FONT></p>

<p style=' margin-bottom:0pt; margin-top:1pt;text-align:center;'><A NAME="PAGENUM"><font face="Arial" size=2></font>
</A></p>



<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="471" style=' border-collapse:collapse'>
    <tr>
        <td width="236" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:1.0pt;margin-bottom:0pt;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="236" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:129.6%'><font face="Arial" size=2>2 - Real Property</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'> </p>
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<div TITLE="EE+ Page Break" STYLE="PAGE-BREAK-AFTER: always">

<HR noshade align="center" width="100%" size="2">
</DIV>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font face="Arial" size=2><a name="toc7"></a>Summary of Charges</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The Partnership pays a daily investment management fee, which amounts to 1.25% per year of the average daily gross assets of the Partnership.  The Partnership also compensates the investment manager for providing certain accounting and administrative services.  See </font><B><font FACE="ARIAL" SIZE=2>CHARGES</FONT></B><font face="Arial" size=2>.  The portion of your Contract Fund allocated to the Real Property Account is subject to the same Contract charges as the portion of your Contract Fund allocated to The Prudential Series Fund, Inc. (the "Series Fund").  The Series Fund is the underlying funding vehicle for the other variable investment options available to Contract owners.  You should read the Contract prospectus for a description of those charges.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font face="Arial" size=2><a name="toc8"></a>Availability to Prudential Contracts</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The Real Property Account is currently available to purchasers of Prudential's </font><b><font face="Arial" size=2>Variable Investment Plan</font><font size=2><sup> &#174;</sup></font></b><font face="Arial" size=2> Contracts, Prudential's </font><b><font face="Arial" size=2>Discovery</font><font size=2><sup> &#174;</sup></font><font face="Arial" size=2> Plus</font></b><font face="Arial" size=2> Contracts, Prudential's </font><b><font face="Arial" size=2>Variable Appreciable Life</font><font size=2><sup> &#174;</sup></font></b><font face="Arial" size=2> Insurance Contracts, and Prudential's </font><b><font face="Arial" size=2>Custom</font></b><font face="Arial" size=2> </font><B><font FACE="ARIAL" SIZE=2>VAL</FONT></B><font face="Arial" size=2><SUP>SM</SUP> Life Insurance Contracts.  It is not available on Contracts that are purchased in connection with IRAs, Section 403(b) annuities, and other
tax-qualified plans, that are subject to the Employee Retirement Income Security Act of 1974 ("ERISA") or to the prohibited transaction excise tax provisions of the Internal Revenue Code. See</font><b><font face="Arial" size=2> THE REAL PROPERTY ACCOUNT'S UNAVAILABILITY TO CERTAIN CONTRACTS</font></b><font face="Arial" size=2>.  For example, a </font><b><font face="Arial" size=2>Variable Appreciable Life</font></b><font face="Arial" size=2> Contract owner who elects to invest part of his or her net premiums in The Prudential Variable Appreciable Account, a separate account of Prudential registered as a unit investment trust under the Investment Company Act of 1940, and part in the Real Property Account, will be subject to the same:  (1) monthly sales charges; (2) risk charges; (3) administrative charges; (4) insurance charges; and (5) contingent deferred sales charges without regard to what portion is invested in The Prudential Variable Appreciable Account and what portion is invested
in the Real Property Account.  The Real Property Account has established different subaccounts, relating to the different types of variable Contracts that may participate in the Real Property Account. These subaccounts provide the mechanism and maintain the records whereby these different Contract charges are made.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font face="Arial" size=2>This prospectus may only be offered in jurisdictions in which the offering is lawful.  No person is authorized to make any representations in connection with this offering other than those contained in this prospectus.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font face="Arial" size=3><a name="toc9"></a>GENERAL INFORMATION ABOUT THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY ACCOUNT, THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP, AND THE INVESTMENT MANAGER</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font face="Arial" size=2><a name="toc10"></a>The Prudential Insurance Company of America</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>Prudential, a stock life insurance company, has been doing business since October 13, 1875.  Prudential is licensed to sell life insurance and annuities in the District of Columbia, Guam, U.S. Virgin Islands, and in all states.  These Contracts are not offered in any state in which the necessary approvals have not yet been obtained.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>Prudential is an indirect, wholly-owned subsidiary of Prudential Financial, Inc. (&#147;Prudential Financial&#148;), a New Jersey insurance holding company.  Prudential Financial exercises significant influence over the operations and capital structure of Prudential.  However, neither Prudential Financial nor any other related company has any legal responsibility to pay amounts that Prudential may owe under the Contract.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font face="Arial" size=2><a name="toc11"></a>The Prudential Variable Contract Real Property Account</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The Real Property Account was established on November 20, 1986 under New Jersey law as a separate investment account.  The Real Property Account meets the definition of a "separate account" under the federal securities laws.  The Real Property Account holds assets that are separated from all of Prudential&#146;s other assets.  The Real Property Account is used only to support the variable benefits payable under the Contracts that are funded by the real estate investment option.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The Contract obligations to Contract owners and beneficiaries are general corporate obligations of Prudential. Prudential is also the legal owner of the Real Property Account assets.  Prudential will maintain assets in the Real Property Account with a total market value at least equal to the amounts credited under the real estate option to all the Contracts participating in the Real Property Account.  These assets may not be charged with liabilities, which arise from any other business that Prudential conducts.  In addition to these assets, the Real Property Account's assets may include funds contributed by Prudential, and reflect any accumulations of the charges Prudential makes against the Real Property Account.  See </font><b><font face="Arial" size=2>VALUATION OF CONTRACT OWNER'S PARTICIPATING INTERESTS</font></b><font face="Arial" size=2>.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<div TITLE="EE+ Page Footer">
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font FACE="ARIAL" SIZE=2></FONT></p>

<p style=' margin-bottom:0pt; margin-top:1pt;text-align:center;'><A NAME="PAGENUM"><font face="Arial" size=2></font>
</A></p>



<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="471" style=' border-collapse:collapse'>
    <tr>
        <td width="236" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:1.0pt;margin-bottom:0pt;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="236" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:129.6%'><font face="Arial" size=2>3 - Real Property</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'> </p>
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<div TITLE="EE+ Page Break" STYLE="PAGE-BREAK-AFTER: always">

<HR noshade align="center" width="100%" size="2">
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>Prudential will bear the risks and rewards of the Real Property Account's investment experience to the extent of its investment in the Real Property Account.  Prudential may withdraw or redeem its investment in the Real Property Account at any time.  We will not make any such redemption if it will have a materially adverse impact on the Real Property Account.  Accumulations of charges will be withdrawn on a regular basis.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>Unlike the other separate accounts funding the Contracts, the Real Property Account is not registered with the Securities and Exchange Commission ("SEC") under the Investment Company Act of 1940 as an investment company. For state law purposes, the Real Property Account is treated as a part or division of Prudential.  Contract owners have no voting rights with respect to the Real Property Account.  The Real Property Account is under the control and management of Prudential.  The Board of Directors and officers of Prudential are responsible for the management of the Real Property Account.  No salaries of Prudential personnel are paid by the Real Property Account.  Information regarding the directors and officers of Prudential is contained in the attached prospectus for the Contract.  The financial statements of the Real Property Account begin on page A1.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font face="Arial" size=2><a name="toc12"></a>The Prudential Variable Contract Real Property Partnership</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The assets of the Real Property Account are invested in the Partnership.  The Partnership, a general partnership organized under New Jersey law on April 29, 1988, was formed through an agreement among Prudential, Pruco Life, and Pruco Life of New Jersey, to provide a means for assets allocated to the real estate investment option under certain variable life insurance and variable annuity contracts issued by the respective companies to be invested in a commingled pool.  This was done to provide greater diversification of investments and lower transaction costs than would be possible if the assets were separately invested by each company.  All amounts allocated to the Real Property Account are contributed by Prudential to the Partnership.  Prudential's general partnership interest in the Partnership is held in the Real Property Account.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The initial contributions to the Partnership were made on April 29, 1988.  Prudential contributed  $100,000 in cash to the Partnership; Pruco Life of New Jersey contributed $100,000 in cash to the Partnership; and Pruco Life contributed the real estate and other assets held in its real estate separate account, which had been actively investing in real estate for more than a year.  Those assets had an estimated market value of $91,538,737 on that date.  Each Partner is entitled to its respective proportionate share of all income, gains, and losses of the Partnership.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The Partnership assets are valued on each business day.  The value of each Partner's interest will fluctuate with the investment performance of the Partnership.  In addition, the Partners&#146; interests are proportionately readjusted, at the current value, on each day when a Partner makes a contribution to, or withdrawal from, the Partnership.  When you choose to allocate a portion of your net premiums or purchase payments, or transfer a portion of your Contract Fund, to the Real Property Account, Prudential will contribute that amount to the Partnership as a capital contribution.  It will correspondingly increase the Real Property Account's interest in the Partnership.  Values and benefits under the Contract will thereafter vary with the performance of the Partnership's investments.  For more information on how the value of your interest in the Real Property Account and the value of the
Partnership's investments are calculated, see </font><B><font FACE="ARIAL" SIZE=2>VALUATION OF CONTRACT OWNERS' PARTICIPATING INTERESTS</FONT></B><font face="Arial" size=2>.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>Contract owners have no voting rights with respect to the Partnership operations.  The financial statements of the Partnership begin on page B1.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font face="Arial" size=2><a name="toc13"></a>The Investment Manager</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>Currently, Prudential Investment Management, Inc. (&#147;PIM&#148;) acts as investment manager of the Partnership.  PIM invests in and manages real estate equities and mortgages for the general account and separate accounts of Prudential Financial affiliates, and other third party accounts.  </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>PIM, on behalf of the general account, and separate accounts of Prudential Financial affiliates, and other third party accounts, is one of the largest real estate investors in North America. PIM and Prudential Financial affiliates participate in real estate ventures through public and private partnerships.  As of December 31, 2008, PIM managed $59.1 billion of net domestic real estate mortgages and equities of which $29.8 billion is in Prudential&#146;s general account and $29.3 billion is in separate accounts and other third party accounts.  Statement value for general account assets is recorded at depreciated cost and for assets in separate accounts and other third party accounts at market value.  For a discussion of how the Partnership's real estate-related investments are valued, see </font><B><font FACE="ARIAL" SIZE=2>VALUATION OF CONTRACT OWNERS' PARTICIPATING INTERESTS</FONT></B><font
face="Arial" size=2>.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>PIM has organized its real estate activities into separate business units within Prudential's Global Asset Management Group.  Prudential Real Estate Investors (&#147;PREI&#148;&#153;) is the unit responsible for the investments of the Real Property </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<div TITLE="EE+ Page Footer">
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font FACE="ARIAL" SIZE=2></FONT></p>

<p style=' margin-bottom:0pt; margin-top:1pt;text-align:center;'><A NAME="PAGENUM"><font face="Arial" size=2></font>
</A></p>



<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="471" style=' border-collapse:collapse'>
    <tr>
        <td width="236" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:1.0pt;margin-bottom:0pt;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="236" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:129.6%'><font face="Arial" size=2>4 - Real Property</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'> </p>
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<div TITLE="EE+ Page Break" STYLE="PAGE-BREAK-AFTER: always">

<HR noshade align="center" width="100%" size="2">
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>Partnership.  PREI's investment staff is responsible for both general account and third party account real estate investment management activities.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>PREI provides global investment management services to institutional investors worldwide.  PREI is headquartered in Parsippany, New Jersey and has 5 field offices across the United States.  As of December 31, 2008, PREI had under management, within the US, approximately 30.1 million net rentable square feet of office real estate, 37.1 million net rentable square feet of industrial real estate, 13.5 million net rentable square feet of retail real estate, 109,586 hotel rooms, 16,081,751 multifamily residential units, and 15.3 million units of self-storage real estate.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>PIM has entered into an administrative services agreement with Prudential, Pruco Life, and Pruco Life of New Jersey under which it pays the companies a fee for performing certain of PIM&#146;s record keeping and other obligations under its investment management agreement with the Partnership.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font face="Arial" size=3><a name="toc14"></a>INVESTMENT POLICIES</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font face="Arial" size=2><a name="toc15"></a>Overview</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The Partnership has an investment policy of investing at least 65% of its assets in direct ownership interests in income-producing real estate and participating mortgage loans.  The largest portion of these real estate investments are direct ownership interests in income-producing real estate, such as office buildings, shopping centers, hotels, apartments, or industrial properties.  Approximately 10% of the Partnership&#146;s assets are generally held in cash or invested in liquid instruments and securities although the Partners reserve discretion to increase this amount to meet partnership liquidity requirements.  The remainder of the Partnership&#146;s assets are invested in other types of real estate-related investments, including real estate investment trusts.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font face="Arial" size=2><a name="toc16"></a>Investment in Direct Ownership Interests in Real Estate</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><i><b><font face="Arial" size=2>Acquisition.</font></b></i><b><font face="Arial" size=2> </font></b><font face="Arial" size=2> The Partnership's principal investment policy involves acquiring direct ownership interests in existing (including newly constructed) income-producing real estate, including office buildings, shopping centers, apartment buildings, industrial properties, and hotels.  The Partnership may also invest up to 5% of its assets in direct ownership interests in agricultural land.  Property acquisitions will generally be carried out by the real estate acquisition offices in PREI's network of field offices located in Parsippany, New Jersey, Atlanta, Georgia, Chicago, Illinois and San Francisco, California.  A field office or an affiliate of Prudential Financial supervises the management of properties in all of</font><b><font face="Arial" size=2> </font></b><font face="Arial"
size=2>PIM&#146;s</font><b><font face="Arial" size=2> </font></b><font face="Arial" size=2>accounts</font><b><font face="Arial" size=2>. </font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>Proposals to acquire properties for the Partnership are usually originated by a field office.  They are reviewed and approved by the Investment Management Committee of PREI.  Depending upon the size of the acquisition and other factors, a proposed real estate investment may also be submitted for review to the Investment Committee of the Board of Directors of Prudential.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>Although percentage limitations on the type and location of properties that may be acquired by the Partnership have not been established, the Partnership plans to diversify its investments through the type of property acquired and its geographic location.  The Partnership's investments will be maintained to meet the Internal Revenue Code diversification requirements.  See </font><b><font face="Arial" size=2>General Investment and Operating Policies</font></b><font face="Arial" size=2>.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>In order for the Partnership to meet its stated objectives, it will have to acquire properties that generate more cash than needed to pay its gross operating expenses.  To do this, a substantial portion of the Partnership's assets will be invested in properties with operating histories that include established rent and expense schedules.  However, the Partnership may also acquire recently constructed properties that may be subject to agreements with sellers providing for certain minimum levels of income.  Upon the expiration of or default under these agreements, there is no assurance that the Partnership will maintain the level of operating income necessary to produce the return it was previously experiencing.  The Partnership may purchase real property from Prudential Financial or its affiliates under certain conditions.  See </font><B><font FACE="ARIAL" SIZE=2>CONFLICTS OF
INTEREST</FONT></B><font face="Arial" size=2>.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The property acquired by the Partnership is usually real estate, which is ready for use.  Accordingly, the Partnership is not usually subject to the development or construction risks inherent in the purchase of unimproved real estate.  From time to time, however, the Partnership may invest in a developmental real estate project that is consistent with the Partnership's objectives.  The Partnership will then be subject to those risks.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The Partnership will often own the entire fee interest in an acquired property, but it may also hold other direct ownership interests.  These include, but are not limited to, partnership interests, limited liability company interests, leaseholds, and tenancies in common.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<div TITLE="EE+ Page Footer">
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font FACE="ARIAL" SIZE=2></FONT></p>

<p style=' margin-bottom:0pt; margin-top:1pt;text-align:center;'><A NAME="PAGENUM"><font face="Arial" size=2></font>
</A></p>



<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="471" style=' border-collapse:collapse'>
    <tr>
        <td width="236" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:1.0pt;margin-bottom:0pt;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="236" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:129.6%'><font face="Arial" size=2>5 - Real Property</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'> </p>
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<div TITLE="EE+ Page Break" STYLE="PAGE-BREAK-AFTER: always">

<HR noshade align="center" width="100%" size="2">
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><i><b><font face="Arial" size=2>Property Management and Leasing Services</font></b><font face="Arial" size=2>.</font></i><font face="Arial" size=2>  The Partnership usually retains a management company operating in the area of a property to perform local property management services.  A field office or other affiliate of Prudential Financial will usually:  (1) supervise and monitor the performance of the local management company; (2) determine and establish the required accounting information to be supplied; (3) periodically inspect the property; (4) review and approve property operating budgets; and (5) review actual operations to ensure compliance with budgets.  In addition to day-to-day management of the property, the local management company will have responsibility for:  (1) supervision of any on-site personnel; (2) negotiation of maintenance and service contracts; (3) major repair advice; (4) replacements and
capital improvements; (5) the review of market conditions to recommend rent schedule changes; and (6) creation of marketing and advertising programs to obtain and maintain good occupancy rates by responsible tenants.  The local management company fees will reduce the cash flow from the property to the Partnership. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The Partnership usually retains a leasing company to perform leasing services on any property with actual or projected vacancies.  The leasing company will coordinate with the property management company to provide marketing and leasing services for the property.  When the property management company is qualified to handle leasing, it may also be hired to provide leasing services.  Leasing commissions and expenses will reduce the cash flow from the property to the Partnership.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>PREI may, on behalf of the Partnership, hire a Prudential Financial affiliate to perform property management or leasing services. The affiliate's services must be provided on terms competitive with unaffiliated entities performing similar services in the same geographic area.  See </font><B><font FACE="ARIAL" SIZE=2>CONFLICTS OF INTEREST</FONT></B><font face="Arial" size=2>.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>Annually, the field office which oversees the management of each property owned by the Partnership will, together with the local property management firm, develop a business plan and budget for each property.  It will consider, among other things, the projected rollover of individual leases, necessary capital expenditures and any expansion or modification of the use of the property.  The approval of an officer of PREI is required.  The field office will also periodically report the operating performance of the property to PREI.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font face="Arial" size=2><a name="toc17"></a>Investments in Mortgage Loans</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><i><b><font face="Arial" size=2>Types of Mortgage Loans</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The Partnership is authorized to invest in mortgage loans, including conventional mortgage loans that may pay fixed or variable rates of interest and mortgage loans that have a Participation (as defined below).  The Partnership will not make mortgage loans to Prudential Financial affiliates.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The Partnership intends to give mortgage loans on:  (1) commercial properties (such as office buildings, shopping centers, hotels, industrial properties, and office showrooms); (2) agricultural properties; and (3) residential properties (such as garden apartment complexes and high-rise apartment buildings).  These loans are usually secured by properties with income-producing potential based on historical or projected data.  Usually, they are not personal obligations of the borrower and are not insured or guaranteed.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><i><b><font face="Arial" size=2>1.</font></b><font face="Arial" size=2> </font><b><font face="Arial" size=2>First Mortgage Loans.</font></b></i><b><font face="Arial" size=2>  </font></b><font face="Arial" size=2>The Partnership will primarily make first mortgage loans secured by mortgages on existing income-producing property.  These loans may provide for interest-only payments and a balloon payment at maturity.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><i><b><font face="Arial" size=2>2.</font></b><font face="Arial" size=2> </font><b><font face="Arial" size=2>Wraparound Mortgage Loans</font></b><font face="Arial" size=2>.</font></i><b><font face="Arial" size=2>  </font></b><font face="Arial" size=2>The Partnership also may make wraparound mortgage loans on income-producing properties which are already mortgaged to unaffiliated entities.  A wraparound mortgage loan is a mortgage with a principal amount equal to the outstanding balance of the prior existing mortgage plus the amount to be advanced by the lender under the wraparound mortgage loan, thereby providing the property owner with additional funds without disturbing the existing loan.  The terms of wraparound mortgage loans made by the Partnership require the borrower to make all principal and interest payments on the underlying loan to the Partnership, which will then pay the holder of the prior loan.  Because the
existing first mortgage loan is preserved, the lien of the wraparound mortgage loan is junior to it.  The Partnership will make wraparound mortgage loans only in states where local applicable foreclosure laws permit a lender, in the event of the borrower's default, to obtain possession of the property, which secures the loan.  </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><i><b><font face="Arial" size=2>3. Junior Mortgage Loans</font></b><font face="Arial" size=2>.</font></i><font face="Arial" size=2>  The Partnership may also invest in other junior mortgage loans.  Junior mortgage loans will be secured by mortgages, which are subordinate to one or more prior liens on the real property.  They will generally, but not in all cases, provide for repayment in full prior to the end of the amortization period of the senior mortgages.  Recourse on such loans will include the real property encumbered by the Partnership's mortgage and may also include other collateral or personal guarantees by the borrower.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The Partnership will generally make junior or wraparound mortgage loans only if the senior mortgage, when combined with the amount of the Partnership's mortgage loan, would not exceed the maximum amount which the Partnership </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<div TITLE="EE+ Page Footer">
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font FACE="ARIAL" SIZE=2></FONT></p>

<p style=' margin-bottom:0pt; margin-top:1pt;text-align:center;'><A NAME="PAGENUM"><font face="Arial" size=2></font>
</A></p>



<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="471" style=' border-collapse:collapse'>
    <tr>
        <td width="236" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:1.0pt;margin-bottom:0pt;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="236" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:129.6%'><font face="Arial" size=2>6 - Real Property</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'> </p>
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<div TITLE="EE+ Page Break" STYLE="PAGE-BREAK-AFTER: always">

<HR noshade align="center" width="100%" size="2">
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>would be willing to commit to a first mortgage loan and only under such circumstances and on such property as to which the Partnership would otherwise make a first mortgage loan.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><i><b><font face="Arial" size=2>4. Participations.</font></b></i><b><font face="Arial" size=2>  </font></b><font face="Arial" size=2>The Partnership may make mortgage loans, which, in addition to charging a base rate of interest, will include provisions permitting the Partnership to participate (a "Participation") in the economic benefits of the underlying property.  The Partnership would receive a percentage of:  (1) the gross or net revenues from the property operations; and/or (2) the increase in the property value realized by the borrower, such as through sale or refinancing of the property.  These arrangements may also grant the Partnership an option to acquire the property or an undivided interest in the property securing the loan.  When the Partnership negotiates the right to receive additional interest in the form of a percentage of the gross revenues or otherwise, the fixed cash return to the Partnership from
that investment will generally be less than would otherwise be the case.  It is expected that the Partnership will be entitled to percentage Participations when the gross or net revenues from the property operations exceed a certain base amount.  This base amount may be adjusted if real estate taxes or similar charges are increased.  The form and extent of the additional interest that the Partnership receives will vary with each transaction depending on:  (1) the equity investment of the owner or developer of the property; (2) other financing or credit obtained by the owner or developer; (3) the fixed base interest rate on the mortgage loan by the Partnership; (4) any other security arrangement; (5) the cash flow and pro forma cash flow from the property; and (6) market conditions.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The Partnership intends to use this additional interest as a hedge against inflation.  It assumes that as prices increase in the economy, the rental prices on properties, such as shopping centers or office buildings, will increase and  there should be a corresponding increase in the property value.  There is no assurance that additional interest or increased property values will be received.  In that event, the Partnership will be entitled to receive only the fixed portion of its return.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><i><b><font face="Arial" size=2>Standards for Mortgage Loan Investments</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>In making mortgage loans, the investment manager will consider relevant real property and financial factors, including: (1) the location, condition, and use of the underlying property; (2) its operating history; (3) its future income-producing capacity; and (4) the quality, experience, and creditworthiness of the unaffiliated borrower.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>Before the Partnership makes a mortgage loan, the investment manager analyzes the fair market value of the underlying real estate.  In general, the amount of each mortgage loan made by the Partnership will not exceed, when added to the amount of any existing indebtedness, 80% of the estimated or appraised value of the property mortgaged.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><i><b><font face="Arial" size=2>Dealing With Outstanding Loans</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The Partnership may sell its mortgage loans prior to maturity if it is deemed advisable by the investment manager and consistent with the Partnership's investment objectives.  The investment manager may also:  (1) extend the maturity of any mortgage loan made by the Partnership; (2) consent to a sale of the property subject to a mortgage loan or finance the purchase of a property by making a new mortgage loan in connection with the sale of a property (either with or without requiring the repayment of the mortgage loan); (3) renegotiate the terms of a mortgage loan; and (4) otherwise deal with the mortgage loans of the Partnership.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font face="Arial" size=2><a name="toc18"></a>Investments in Sale-Leasebacks</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>A portion of the Partnership's investments may consist of real property sale-leaseback transactions ("Leasebacks").  In this type of transaction, the Partnership will purchase land and income-producing improvements on the land and simultaneously lease the land and improvements, generally to the seller, under a long-term lease.  Leasebacks may be for very long periods and may provide for increasing payments from the lessee.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>Under the terms of the Leaseback, the tenant will operate, or provide for the operation of, the property and generally be responsible for the payment of all costs, including: (1) taxes; (2) mortgage debt service; (3) maintenance and repair of the improvements; and (4) insurance.  In some cases, the Partnership may also grant the lessee an option to acquire the land and improvements from the Partnership after a period of years.  The option exercise price would  be based on the fair market value of the property, as encumbered by the lease, the increase in the gross revenues from the property or other objective criteria reflecting the increased value of the property.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>In some Leaseback transactions, the Partnership may only purchase the land under an income-producing building and lease the land to the building owner.  In such cases, the Partnership may seek, in addition to base rents in its Leasebacks, Participations in the gross revenues from the building in a form such as a percentage of the gross revenues of the lessee above a base amount (which may be adjusted if real property taxes increase or for other events).  The Partnership may invest in Leasebacks which are subordinate to other interests in the land, buildings, and </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<div TITLE="EE+ Page Footer">
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font FACE="ARIAL" SIZE=2></FONT></p>

<p style=' margin-bottom:0pt; margin-top:1pt;text-align:center;'><A NAME="PAGENUM"><font face="Arial" size=2></font>
</A></p>



<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="471" style=' border-collapse:collapse'>
    <tr>
        <td width="236" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:1.0pt;margin-bottom:0pt;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="236" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:129.6%'><font face="Arial" size=2>7 - Real Property</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'> </p>
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<div TITLE="EE+ Page Break" STYLE="PAGE-BREAK-AFTER: always">

<HR noshade align="center" width="100%" size="2">
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>improvements, such as a first mortgage, other mortgage, or lien.  In those situations, the Partnership's Leaseback interest will be subject to greater risks.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The Partnership will only acquire a property for a Leaseback transaction if the purchase price is equal to not more than 100% of the estimated or appraised property value.  The Partnership may dispose of its Leasebacks when deemed advisable by the investment manager and consistent with the Partnership's investment objectives.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font face="Arial" size=2><a name="toc19"></a>General Investment and Operating Policies</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The Partnership does not intend to invest in any direct ownership interests in properties, mortgage loans or Leasebacks in order to make short-term profits from their sale, although in exceptional cases, the investment manager may decide to do so in the best interests of the Partnership.  The Partnership may dispose of its investments whenever necessary to meet its cash requirements or when it is deemed to be desirable by the investment manager because of market conditions or otherwise.  The Partnership will reinvest any proceeds from the disposition of assets (and any cash flow from operations) which are not necessary for the Partnership's operations and which are not withdrawn by the Partners in order to make distributions to investors pursuant to the variable contracts issued by the Partners, or to Prudential to return its equity interests pursuant to this prospectus.  The proceeds will be
reinvested in investments consistent with the Partnership's investment objectives and policies.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>In making investments in properties, mortgage loans, Leasebacks or other real estate investments, the Partnership will rely on the investment manager's analysis of the investment and will not receive an independent appraisal prior to acquisition.  The Partnership expects, however, that all the properties it owns, and most mortgage loans it holds, will be appraised or valued annually by an independent appraiser who is a member of a nationally recognized society of appraisers.  Each appraisal will be maintained in the Partnership records for at least five years.  It should be noted that appraised values are opinions and, as such, may not represent the true worth or realizable value of the property being appraised.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The Partnership usually purchases properties on an unleveraged basis.  The properties acquired will typically be free and clear of mortgage debt immediately after their acquisition.  The Partnership may, however, acquire properties subject to existing mortgage loans.  In addition, the Partnership may mortgage or acquire properties partly with the proceeds of purchase money mortgage loans, up to 80% of the property value.  Although this is not usually done, the Partnership may do so if the investment manager decides that it is consistent with its investment objectives.  When the Partnership mortgages its properties, it bears the expense of mortgage payments.  See </font><B><font FACE="ARIAL" SIZE=2>BORROWING BY THE PARTNERSHIP</FONT></B><font face="Arial" size=2>.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The Partnership may also invest a portion of its assets in non-participating mortgage loans, real estate limited partnerships, limited liability companies, real estate investment trusts, and other vehicles whose underlying investment is in real estate.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The Partnership's investments will be maintained in order to meet the diversification requirements set forth in regulations under the Internal Revenue Code (the "Code") relating to the investments of variable life insurance and variable annuity separate accounts.  In order to meet the diversification requirements under the regulations, the Partnership will meet the following test: (1) no more than 55% of the assets will be invested in any one investment; (2) no more than 70% of the assets will be invested in any two investments; (3) no more than 80% of the assets will be invested in any three investments; and (4) no more than 90% of the assets will be invested in any four investments.  All interests in the same real property project are treated as a single investment.  The Partnership must meet the above test within 30 days of the end of each calendar quarter.  To comply with the
diversification requirements of the State of Arizona, the Partnership will limit additional investments in any one parcel or related parcels to an amount not exceeding 10% of Partnership's gross assets, as of the prior fiscal year end. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>In managing the assets of the Partnership, the investment manager will use its discretion in determining whether to foreclose on defaulting borrowers or to evict defaulting tenants.  The investment manager will decide which course of action is in the best interests of the Partnership in maintaining the value of the investment.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>Property management services are usually required for the Partnership's investments in properties which are owned and operated by the Partnership, but usually will not be needed for mortgage loans owned by the Partnership, except for mortgage servicing.  It is possible, however, that these services will be necessary or desirable in exercising default remedies under a foreclosure on a mortgage loan.  The investment manager may engage, on behalf of the Partnership, Prudential Financial affiliated or unaffiliated entities to provide these additional services to the Partnership. The investment manager may engage Prudential Financial affiliates to provide property management, property development services, loan servicing or other services if and only if the fees paid to an affiliate do not exceed the amount that would be paid to an independent party for similar services rendered in the same
geographic area.  See </font><B><font FACE="ARIAL" SIZE=2>CONFLICTS OF INTEREST</FONT></B><font face="Arial" size=2>.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<div TITLE="EE+ Page Footer">
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font FACE="ARIAL" SIZE=2></FONT></p>

<p style=' margin-bottom:0pt; margin-top:1pt;text-align:center;'><A NAME="PAGENUM"><font face="Arial" size=2></font>
</A></p>



<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="471" style=' border-collapse:collapse'>
    <tr>
        <td width="236" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:1.0pt;margin-bottom:0pt;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="236" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:129.6%'><font face="Arial" size=2>8 - Real Property</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'> </p>
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<div TITLE="EE+ Page Break" STYLE="PAGE-BREAK-AFTER: always">

<HR noshade align="center" width="100%" size="2">
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The investment manager will manage the Partnership so that the Real Property Account will not be subject to registration under the Investment Company Act of 1940.  This requires monitoring the proportion of the Partnership's assets to be placed in various investments.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font face="Arial" size=3><a name="toc20"></a>CURRENT REAL ESTATE-RELATED INVESTMENTS</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The current principal real estate-related investments held by the Partnership are described below. Many of these investments were originated by, and previously held in, The Prudential Real Property Account of Pruco Life Insurance Company (the "Pruco Life Account"), a separate account established to fund the real estate investment option under variable contracts issued by Pruco Life.  Prior to the formation of the Partnership, the Pruco Life Account followed the same investment policies as those followed by the Partnership.  Pruco Life contributed the assets held in the Pruco Life Account to the Partnership as its initial capital contribution to the Partnership.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font face="Arial" size=2><a name="toc21"></a>Properties</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The Partnership owns the following properties as of December 31, 2008.</font><b><font face="Arial" size=2> </font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font face="Arial" size=2><a name="toc22"></a></font></b><font face="Arial" size=2>&nbsp;</font></p>



<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse;'>
    <tr>
        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><b><font face="Arial" size=2>1. </font></b></p> </td>
        <td  valign=top style='padding:0pt 0pt 0pt 0pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><b><font face="Arial" size=2>Office Properties</font></b></p> </td> </tr></table>
</div>



<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.25in;text-align:justify;'><font face="Arial" size=2>The Partnership owns office properties in Lisle, Illinois; Brentwood, Tennessee; and Beaverton, Oregon. Total square footage owned is approximately 370,550, of which 85%, or 315,116 square feet, are leased between 1 and 10&nbsp;years.  </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.25in;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>



<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse;'>
    <tr>
        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><b>2. </b></p> </td>
        <td  valign=top style='padding:0pt 0pt 0pt 0pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><b><font face="Arial" size=2>Apartment Complexes</font></b></p> </td> </tr></table>
</div>



<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.25in;text-align:justify;'><font face="Arial" size=2>The Partnership owns apartment properties in Atlanta, Georgia; Austin, Texas; Charlotte, North Carolina; and Raleigh, North Carolina, comprising a total of 855 apartment units, of which 92%, or 785 units, are leased. Leases range from month to month to one year.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.25in;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>



<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse;'>
    <tr>
        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><b>3. </b></p> </td>
        <td  valign=top style='padding:0pt 0pt 0pt 0pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><b><font face="Arial" size=2>Retail Property</font></b></p> </td> </tr></table>
</div>



<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.25in;text-align:justify;'><font face="Arial" size=2>The Partnership owns retail properties in Roswell, Georgia; Ocean City, Maryland; Hampton, Virginia; Dunn, North Carolina; and Westminster, Maryland. Total square footage owned is approximately 953,095 of which 79%, or 751,877 square feet, are leased between 1 and 30&nbsp;years.  </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.25in;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>



<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse;'>
    <tr>
        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><b>4. </b></p> </td>
        <td  valign=top style='padding:0pt 0pt 0pt 0pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><b><font face="Arial" size=2>Hotel Property </font></b></p> </td> </tr></table>
</div>



<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.25in;text-align:justify;'><font face="Arial" size=2>The Partnership owns a hotel property in Lake Oswego, Oregon. This joint venture investment has 161 rooms. Occupancy for the year ended 2008 averaged 71%.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.25in;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>



<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse;'>
    <tr>
        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><b><font face="Arial" size=2>5.</font></b></p> </td>
        <td  valign=top style='padding:0pt 0pt 0pt 0pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><b><font face="Arial" size=2>Investment in Real Estate Trust</font></b></p> </td> </tr></table>
</div>



<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.25in;text-align:justify;'><font face="Arial" size=2>The Partnership liquidated its entire investment in REIT shares in December&nbsp;2001. The Partnership does, however, maintain a preferred equity investment in an existing private real estate investment trust, or &#147;REIT.&#148;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font FACE="ARIAL" SIZE=3>RISK FACTORS</FONT></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>There are certain risk factors that you should consider before allocating a portion of your net premiums or purchase payments, or transferring a portion of your Contract Fund, to the Real Property Account.  These include valuation risks, (see </font><B><font FACE="ARIAL" SIZE=2>VALUATION OF CONTRACT OWNERS' PARTICIPATING INTERESTS</FONT></B><font face="Arial" size=2>), certain conflicts of interest, (see </font><B><font FACE="ARIAL" SIZE=2>CONFLICTS OF INTEREST</FONT></B><font face="Arial" size=2>), as well as the following risks:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font face="Arial" size=2><a name="toc23"></a>Liquidity of Investments</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>Because the Real Property Account will, through the Partnership, invest primarily in real estate, its assets will not be as liquid as the investments generally made by separate accounts of life insurance companies funding variable life insurance and variable annuity contracts.  The Partnership will, however, hold approximately 10% of its assets in cash and invested in liquid securities.  The primary purposes for such investments are to meet the expenses involved in the operation of the Partnership and to allow it to have sufficient liquid assets to meet any requests for withdrawals from the Real Property Account.  Such withdrawals would be made in order to meet requested or required payments under the Contracts.  The Partnership may also borrow funds to meet liquidity needs.  See </font><B><font FACE="ARIAL" SIZE=2>BORROWING BY THE PARTNERSHIP</FONT></B><font face="Arial" size=2>.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>We have taken steps to ensure that the Partnership will be liquid enough to meet all anticipated withdrawals by the Partners to meet the separate accounts' liquidity requirements. It is possible that the Partnership may need to dispose of a real property or mortgage loan investment promptly in order to meet such withdrawal requests.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<div TITLE="EE+ Page Footer">
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font FACE="ARIAL" SIZE=2></FONT></p>

<p style=' margin-bottom:0pt; margin-top:1pt;text-align:center;'><A NAME="PAGENUM"><font face="Arial" size=2></font>
</A></p>



<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="471" style=' border-collapse:collapse'>
    <tr>
        <td width="236" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:1.0pt;margin-bottom:0pt;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="236" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:129.6%'><font face="Arial" size=2>9 - Real Property</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'> </p>
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<div TITLE="EE+ Page Break" STYLE="PAGE-BREAK-AFTER: always">

<HR noshade align="center" width="100%" size="2">
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font face="Arial" size=2><a name="toc24"></a>General Risks of Real Property Investments</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>By participating in the Real Property Account and thereby in the investment performance of the</font><b><font face="Arial" size=2> </font></b><font face="Arial" size=2>Partnership, you will be subject to many of the risks of real property investments.  These include:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font face="Arial" size=2>1. </font></b><i><b><font face="Arial" size=2>Risks of Ownership of Real Properties</font></b></i><b><font face="Arial" size=2>.  </font></b><font face="Arial" size=2>The</font><b><font face="Arial" size=2> </font></b><font face="Arial" size=2>Partnership will be subject to the risks inherent in the ownership of real property such as fluctuations in occupancy rates and operating expenses and variations in rental schedules. It may be adversely affected by general and local economic conditions, the supply of and demand for properties of the type in which the Partnership invests, zoning laws, and real property tax rates.  Operation of property in which the Partnership invests will primarily involve rental of that property to tenants.  The financial failure of a tenant resulting in the termination of their lease might cause a reduction in the cash flow to the Partnership.  If a lease is
terminated, there is no assurance that the Partnership will be able to find a new tenant for the property on terms as favorable to the Partnership as those from the prior tenant.  Investments in hotels are subject to additional risk from the daily turnover and fluctuating occupancy rates of hotel rooms and the absence of long-term tenants.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The Partnership's properties will also be subject to the risk of loss due to certain types of property damage (such as from nuclear power plant accidents and wars) which are either uninsurable or not economically insurable.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font face="Arial" size=2>2. </font></b><i><b><font face="Arial" size=2>Risks of Mortgage Loan Investments</font></b></i><b><font face="Arial" size=2>.</font></b><font face="Arial" size=2>  The Partnership&#146;s mortgage loan investments will be subject to the risk of default by the borrowers.  In this event the Partnership would have the added responsibility of foreclosing on or pursuing other remedies on the underlying properties to protect the value of its mortgage loans.  A borrower&#146;s ability to meet its mortgage loan payments will be dependent upon the risks generally inherent to the ownership of real property. Mortgage loans made by the Partnership will generally not be personal obligations of the borrowers.  The Partnership will only rely on the value of the underlying property for its security.  Mechanics&#146;, material men's, government, and other liens may have or obtain priority over the
Partnership&#146;s security interest in the property.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>In addition, the Partnership's mortgage loan investments will be subject to prepayment risks.  If the terms of the mortgage loans permit, mortgagors may prepay the loans, thus possibly changing the Partnership's return.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>Junior mortgage loans (including wraparound mortgage loans) will be subject to greater risk than first mortgage loans, since they will be subordinate to liens of senior mortgagees. In the event a default occurs on a senior mortgage, the Partnership may be required to make payments or take other actions to cure the default (if it has the right to do so) in order to prevent foreclosure on the senior mortgage and possible loss of all or portions of the Partnership's investment. "Due on sale" clauses included in some senior mortgages, accelerating the amount due under the senior mortgage in the case of sale of the property, may be applied to the sale of the property upon foreclosure by the Partnership of its junior mortgage loan.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The risk of lending on real estate increases as the proportion, which the amount of the mortgage loan bears to the fair market value of the real estate increases.  The Partnership usually does not make mortgage loans of over 80% of the estimated or appraised value of the property that secures the loan.  There can be no assurance, that in the event of a default, the Partnership will realize an amount equal to the estimated or appraised value of the property on which a mortgage loan was made.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>Mortgage loans made by the Partnership may be subject to state usury laws.  These laws impose limits on interest charges and possible penalties for violation of those limits, including restitution of excess interest, unenforceability of debt, and treble damages.  The Partnership does not intend to make mortgage loans at usurious rates of interest. Uncertainties in determining the legality of interest rates and other borrowing charges under some statutes could result in inadvertent violations, in which case the Partnership could incur the penalties mentioned above.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font face="Arial" size=2>3. </font></b><i><b><font face="Arial" size=2>Risks with Participations</font></b><font face="Arial" size=2>.</font></i><font face="Arial" size=2>  The Partnership may seek to invest in mortgage loans and Leasebacks with Participations, which will provide the Partnership with both fixed interest and additional interest based upon gross revenues, sale proceeds, and/or other variable amounts.  If the interest income received by the Partnership is based, in part, on a percentage of the gross revenues or sale proceeds of the underlying property, the Partnership's income will depend on the success in the leasing of the underlying property, the management and operation of such property by the borrower or lessee and upon the market value of the property upon ultimate disposition.  If the Partnership negotiates a mortgage loan with a lower fixed interest rate and an additional percentage of the
gross revenues or eventual sale proceeds of the underlying property, and the underlying property fails to generate increased revenues or to appreciate, the Partnership will have foregone a potentially greater fixed return without receiving the benefit of appreciation.  State laws may limit Participations.  In the event of the borrower's bankruptcy, it is possible that as a result of the Partnership's interest in the gross revenues or sale proceeds, a court could treat the Partnership as a partner or joint venturer with the borrower, and the Partnership could lose the priority its security interest would have </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<div TITLE="EE+ Page Footer">
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font FACE="ARIAL" SIZE=2></FONT></p>

<p style=' margin-bottom:0pt; margin-top:1pt;text-align:center;'><A NAME="PAGENUM"><font face="Arial" size=2></font>
</A></p>



<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="471" style=' border-collapse:collapse'>
    <tr>
        <td width="236" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:1.0pt;margin-bottom:0pt;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="236" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:129.6%'><font face="Arial" size=2>10 - Real Property</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'> </p>
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<div TITLE="EE+ Page Break" STYLE="PAGE-BREAK-AFTER: always">

<HR noshade align="center" width="100%" size="2">
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>been given, or be liable for the borrower&#146;s debts.  The Partnership will structure its Participations to avoid being characterized as a partner or joint venturer with the borrower.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font face="Arial" size=2>4</font></b><i><b><font face="Arial" size=2>. Risks with Sale-Leaseback Transactions</font></b><font face="Arial" size=2>.</font></i><font face="Arial" size=2>  Leaseback transactions typically involve the acquisition of land and improvements thereon and the leaseback of such land and improvements to the seller or another party.  The value of the land and improvements will depend, in large part, on the performance and financial stability of the lessee and its tenants, if any.  The tenants&#146; leases may have shorter terms than the leaseback.  Therefore, the lessee's future ability to meet payment obligations to the Partnership will depend on its ability to obtain renewals of such leases or new leases upon satisfactory terms and the ability of the tenants to meet their rental payments to the lessee.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>PREI investigates the stability and creditworthiness of lessees in all commercial properties it may acquire, including leaseback transactions.  However, a lessee in a leaseback transaction may have few, if any, assets.  The Partnership will therefore rely for its security on the value of the land and improvements.  When the Partnership's leaseback interest is subordinate to other interests in the land or improvements, such as a first mortgage or other lien, the Partnership's leaseback will be subject to greater risk.  A default by a lessee or other premature termination of the leaseback may result in the Partnership being unable to recover its investment unless the property is sold or leased on favorable terms.  The ability of the lessee to meet its obligations under the leaseback, and the value of a property, may be affected by a number of factors inherent in the ownership of real property
which are described above. Furthermore, the long-term nature of a leaseback may, in the future, result in the Partnership receiving lower average annual rentals. However, this risk may be lessened if the Partnership obtains Participations in connection with its Leasebacks.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font face="Arial" size=2><a name="toc25"></a>Reliance on The Partners and The Investment Manager</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>You do not have a vote in determining the policies of the Partnership or the Real Property Account.  You also have no right or power to take part in the management of the Partnership or the Real Property Account.  The investment manager alone, subject to the supervision of the Partners, will make all decisions with respect to the management of the Partnership, including the determination as to what properties to acquire, subject to the investment policies and restrictions.  Although the Partners have the right to replace the investment manager, it should be noted that Prudential, Pruco Life, Pruco Life of New Jersey, and the investment manager are wholly-owned subsidiaries of Prudential Financial.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The Partnership will compete in the acquisition of its investments with many other individuals and entities engaged in real estate activities, including the investment manager and its affiliates. See </font><B><font FACE="ARIAL" SIZE=2>CONFLICTS OF INTEREST</FONT></B><font face="Arial" size=2>.  There may be intense competition in obtaining properties or mortgages in which the Partnership intends to invest.  Competition may result in increased costs of suitable investments.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>Since the Partnership will continuously look for new investments, you will not be able to evaluate the economic merit of many of the investments, which may be acquired by the Partnership.  You must depend upon the ability of the investment manager to select investments.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font face="Arial" size=3><a name="toc26"></a>INVESTMENT RESTRICTIONS</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The Partnership has adopted certain restrictions relating to its investment activities.  These restrictions may be changed, if the law permits, by the Partners.  Pursuant to these restrictions, the Partnership will not:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>



<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="610" style=' border-collapse:collapse;'>
    <tr>
        <td width="24" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font size=1>&nbsp;</font></p> </td>
        <td width="24" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>1.</font></p> </td>
        <td width="562" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>Make any investments not related to real estate, other than liquid instruments and securities.</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.25in;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="381" style=' border-collapse:collapse;'>
    <tr>
        <td width="24" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font size=1>&nbsp;</font></p> </td>
        <td width="24" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>2.</font></p> </td>
        <td width="333" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>Engage in underwriting of securities issued by others.</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.25in;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>



<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="390" style=' border-collapse:collapse;'>
    <tr>
        <td width="24" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font size=1>&nbsp;</font></p> </td>
        <td width="24" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>3.</font></p> </td>
        <td width="342" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>Invest in securities issued by any investment company.</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.25in;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>



<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="187" style=' border-collapse:collapse;'>
    <tr>
        <td width="24" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font size=1>&nbsp;</font></p> </td>
        <td width="24" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>4.</font></p> </td>
        <td width="139" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>Sell securities short.</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.25in;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>



<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="536" style=' border-collapse:collapse;'>
    <tr>
        <td width="24" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font size=1>&nbsp;</font></p> </td>
        <td width="24" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>5.</font></p> </td>
        <td width="488" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>Purchase or sell oil, gas, or other mineral exploration or development programs.</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.25in;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>



<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="679" style=' border-collapse:collapse;'>
    <tr>
        <td width="24" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font size=1>&nbsp;</font></p> </td>
        <td width="24" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>6.</font></p> </td>
        <td width="631" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>Make loans to the Partners, any of their affiliates, or any investment program sponsored by such parties.</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.25in;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>



<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse;'>
    <tr>
        <td width="24" valign=top style='padding:1.0pt 0pt 0pt 0pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top style='padding:1.0pt 0pt 0pt 0pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>7.</font></p> </td>
        <td  valign=top style='padding:1.0pt 0pt 0pt 0pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>Enter into leaseback transactions in which the lessee is Prudential, Pruco Life, Pruco Life of New Jersey, their affiliates, or any investment program sponsored by such parties.</font></p> </td> </tr></table>
</div>



<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.25in;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>



<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse;'>
    <tr>
        <td width="24" valign=top style='padding:1.0pt 0pt 0pt 0pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top style='padding:1.0pt 0pt 0pt 0pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>8.</font></p> </td>
        <td  valign=top style='padding:0pt 0pt 0pt 0pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>Borrow more than 33</font><font face="Arial" size=1>1/3</font><font face="Arial" size=2>% (pursuant to California state requirements) of the value of the assets of the Partnership (based upon periodic valuations and appraisals).  See </font><B><font FACE="ARIAL" SIZE=2>VALUATION OF CONTRACT OWNERS'
PARTICIPATING INTERESTS.</FONT></B></p> </td> </tr></table>
</div>



<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<div TITLE="EE+ Page Footer">
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font FACE="ARIAL" SIZE=2></FONT></p>

<p style=' margin-bottom:0pt; margin-top:1pt;text-align:center;'><A NAME="PAGENUM"><font face="Arial" size=2></font>
</A></p>



<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="471" style=' border-collapse:collapse'>
    <tr>
        <td width="236" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:1.0pt;margin-bottom:0pt;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="236" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:129.6%'><font face="Arial" size=2>11 - Real Property</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'> </p>
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<div TITLE="EE+ Page Break" STYLE="PAGE-BREAK-AFTER: always">

<HR noshade align="center" width="100%" size="2">
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font face="Arial" size=3><a name="toc27"></a>DIVERSIFICATION REQUIREMENTS</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The Partnership&#146;s investments are maintained so as to meet the diversification requirements set forth in Treasury Regulations issued pursuant to</font><font color="#0000FF"><font face="Arial" size=2> </font></font><font face="Arial" size=2>Section 817(h)</font><font color="#0000FF"><font face="Arial" size=2> </font></font><font face="Arial" size=2>of the Internal Revenue Code relating to the investments of variable life insurance and variable annuity separate accounts.  Section 817(h) requires, among other things, that the partnership will have no more than 55% of the assets invested in any one investment, no more than 70% of the assets will be invested in any two investments, no more than 80% of the assets will be invested in any three investments, and no more than 90% of the assets will be invested in any four investments.  To comply with requirements of the State of Arizona, the
Partnership will limit additional investments in any one parcel or related parcels to an amount not exceeding 10% of the Partnership&#146;s gross assets as of the prior fiscal year.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font face="Arial" size=3><a name="toc28"></a>CONFLICTS OF INTEREST</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The investment manager, will be subject to various conflicts of interest in managing the Partnership.  PIM invests in real estate equities and mortgages for the general account of Prudential Financial affiliates and for third parties, including through separate accounts established for the benefit of qualified pension and profit-sharing plans. PIM also manages, or advises in the management of, real estate equities and mortgages owned by other persons.  In addition, affiliates of Prudential Financial are general partners in publicly offered limited partnerships that invest in real estate equities and mortgage loans.  Prudential Financial and its affiliates may engage in business activities, which will be competitive with the Partnership.  Moreover, the Partnership may purchase properties from Prudential Financial or its affiliates.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The potential conflicts involved in managing the Partnership include:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font face="Arial" size=2>1.</font></b><i><b><font face="Arial" size=2> Lack of Independent Negotiations between the Partnership and The Investment Manager.</font></b></i><font face="Arial" size=2>  All agreements and arrangements relating to compensation between the Partnership and the investment manager, or any affiliate of Prudential Financial, may not be the result of arm's-length negotiations.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font face="Arial" size=2>2.</font></b><i><b><font face="Arial" size=2> Competition by the Partnership with Prudential Financial's Affiliates for Acquisition and Disposition of Investments</font></b><font face="Arial" size=2>.</font></i><font face="Arial" size=2>  Prudential Financial affiliates are involved in numerous real estate investment activities for their general account, their separate accounts, and other entities.  They may involve investment policies comparable to the Partnership&#146;s and may compete with the Partnership for the acquisition and disposition of investments.  Moreover, additional accounts or affiliated entities may be formed in the future with investment objectives similar to those of the Partnership.  In short, existing or future real estate investment accounts or entities managed or advised by Prudential Financial affiliates may have the same management as the Partnership and may be in
competition with the Partnership regarding real property investments, mortgage loan investments, Leasebacks, and the management and sale of such investments.  Prudential Financial affiliates are not obligated to present to the Partnership any particular investment opportunity, regardless of whether the opportunity would be suitable for investment by the Partnership.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>Prudential Financial affiliates have, however, adopted procedures to distinguish between equity investments available for the Partnership as opposed to the other programs and entities described above.  If investment accounts or entities managed by Prudential Financial affiliates have investment objectives and policies similar to the Partnership and are in the market to acquire properties or make investments at the same time as the Partnership, the following procedures will be followed to resolve any conflict of interest.  The Investment Allocation Procedure (&#147;IAP&#148;) has been established to provide a reasonable and fair procedure for allocating real estate investments among the several accounts managed by PREI.  The IAP is administered by an Allocation Committee composed of the Managing Directors, Portfolio Management.  Allocation decisions are made by vote of the Allocation Committee,
and are approved by the Chief Executive Officer of PREI (&#147;CEO&#148;).  Sufficient information on each investment opportunity is distributed to all portfolio managers, who each indicate to the Allocation Committee their account&#146;s interest in the opportunity.  Based on such expressions of interest, the Allocation Committee allocates the investment opportunity to an account (and may also determine a back-up account or accounts to receive the allocation in the event the account, which is first allocated the opportunity, fails to pursue the investment for any reason) after giving appropriate consideration to the following factors and with the goal of providing each account a fair allotment of investment opportunities: (1) the investment opportunity&#146;s conformity with an account&#146;s investment criteria and objectives (including property type, size and location, diversification, anticipated returns, investment structure, etc.); (2) the amount of funds available for
investment (in total and by property type) by an account; (3) the length of time such funds (in total and by property type) have been available for investment; (4) any limitations or restrictions upon the availability of funds for investment; (5) the absolute and relative (to amount of funds available) amount of funds invested and committed for the account; (6) whether funds available for investment are discretionary or non-discretionary, particularly in relation to the timing of the investment opportunity; (7) an account&#146;s prior dealings or investments with the seller, developer, lender or other counterparty; and </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<div TITLE="EE+ Page Footer">
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font FACE="ARIAL" SIZE=2></FONT></p>

<p style=' margin-bottom:0pt; margin-top:1pt;text-align:center;'><A NAME="PAGENUM"><font face="Arial" size=2></font>
</A></p>



<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="464" style=' border-collapse:collapse;'>
    <tr>
        <td width="356" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:129.6%;'><font size=1>&nbsp;</font></p> </td>
        <td width="108" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:129.6%;'><font face="Arial" size=2>12 - Real Property</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'> </p>
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'>&nbsp;</p>

<div TITLE="EE+ Page Break" STYLE="PAGE-BREAK-AFTER: always">

<HR noshade align="center" width="100%" size="2">
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>(8) other factors which the Allocation Committee feel should be considered in fairness to all accounts participating in the IAP.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>If an account which has been allocated an investment opportunity does not proceed with the acquisition, and either (i) no back-up account has been determined by the Allocation Committee, or (ii) all accounts which were deemed back-up accounts do not proceed with the acquisition, the opportunity may be reallocated to another account by the Allocation Committee.  If an investment opportunity is appropriate for more than one account, the Allocation Committee may (subject to the CEO&#146;s approval) permit the sharing of the investment among accounts, which permit such sharing. Such division of the investment opportunity may be accomplished by separating properties (in a multi-property investment), by co-investment, or otherwise. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font face="Arial" size=2>3</font></b><i><b><font face="Arial" size=2>. Competition with the Partnership from Affiliates for the Time and Services of Common Officers, Directors, and Management Personnel.</font></b></i><b><font face="Arial" size=2>  </font></b><font face="Arial" size=2>As noted above, PIM and Prudential Financial affiliates are involved in numerous real estate investment activities.  Accordingly, many of the personnel of PIM and Prudential Financial affiliates who will be involved in performing services for the Partnership have competing demands on their time.  Conflicts of interest may arise with respect to allocating time among such entities and the Partnership.  The directors and officers of Prudential Financial and affiliates will determine how much time will be devoted to the Partnership affairs.  Prudential Financial believes it has sufficient personnel to meet its responsibilities to all
entities to which it is affiliated.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font face="Arial" size=2>4.</font></b><i><b><font face="Arial" size=2> Competitive Properties</font></b><font face="Arial" size=2>.</font></i><font face="Arial" size=2>  Some properties of affiliates may be competitive with Partnership properties.  Among other things, the properties could be in competition with the Partnership's properties for prospective tenants.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font face="Arial" size=2>5</font></b><i><b><font face="Arial" size=2>. Lessee Position.</font></b></i><font face="Arial" size=2>  It is possible that Prudential Financial or its affiliates may be a lessee in one or more of the properties owned by the Partnership.  The terms of such a lease will be competitive with leases with non-affiliated third parties.  The Partnership limits the amount of space that an affiliate of Prudential may rent in a property owned by the Partnership.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font face="Arial" size=2>6</font></b><i><b><font face="Arial" size=2>. Use of Affiliates to Perform Additional Services for the Partnership</font></b><font face="Arial" size=2>.</font></i><font face="Arial" size=2>  The Partnership may engage Prudential Financial affiliates to provide additional services to the Partnership, such as real estate brokerage, mortgage servicing, property management, leasing, property development, and other real estate-related services.  The Partnership may utilize the services of such affiliates and pay their fees, as long as the fees paid to an affiliate do not exceed the amount that would be paid to an independent party for similar services rendered in the same geographic area.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font face="Arial" size=2>7</font></b><i><b><font face="Arial" size=2>. Joint Ventures with Affiliates.</font></b></i><font face="Arial" size=2>  The Partnership may enter into investments through joint ventures with Prudential Financial, its affiliates, or investment programs they sponsor.  The Partnership may enter into such a joint venture investment with an affiliate only if the following conditions are met: (1) the affiliate must have investment objectives substantially identical to those of the Partnership; (2) there must be no duplicative property management fee, mortgage servicing fee or other fees; (3) the compensation payable to the sponsor of the affiliate must be no greater than that payable to the Partnership's investment manager; (4) the Partnership must have a right of first refusal to buy if such affiliate wishes to sell the property held in the joint venture; and (5) the investment of the Partnership
and the affiliate in the joint venture must be made on the same terms and conditions (although not the same percentage).  In connection with such an investment, both affiliated parties would be required to approve any decision concerning the investment. Thus, an impasse may result in the event the affiliated joint venture partners disagree.  However, in the event of a disagreement regarding a proposed sale or other disposition of the investment, the party not desiring to sell would have a right of first refusal to purchase the affiliated joint venture partner's interest in the investment.  If this happens, it is possible that in the future the joint venture partners would no longer be affiliated.  In the event of a proposed sale initiated by the joint venture partner, the Partnership would also have a right of first refusal to purchase the joint venture partner's interest in the investment.  The exercise of a right of first refusal would be subject to the Partnership's having the
financial resources to effectuate such a purchase.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>If the Partnership invests in joint venture partnerships which own properties, instead of investing directly in the properties themselves, they may be subject to risks not otherwise present.  These risks include risks associated with the possible bankruptcy of the Partnership's co-venturer or such co-venturer at any time having economic or business interests or goals which are inconsistent with those of the Partnership.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font face="Arial" size=2>8. </font></b><i><b><font face="Arial" size=2>Purchase of Real Property From Prudential Financial or Affiliates</font></b><font face="Arial" size=2>.</font></i><font face="Arial" size=2>  The Partnership may acquire properties owned by Prudential Financial or its affiliates, subject to compliance with special conditions designed to minimize the conflicts of interests. The Partnership may purchase property satisfying the Partnership's investment objectives and policies from an affiliate only if: (1) the applicable insurance regulators approve the Partnership&#146;s acquisition of real property from Prudential Financial or affiliates to the extent such approval is required under applicable insurance regulations; (2) the Partnership acquires the property at a price not greater than the appraised value, with the appraisal being conducted by a qualified, unaffiliated appraiser; (3) a qualified
and independent real estate adviser (other than the appraiser) reviews the proposed acquisition and provides a letter of opinion that the transaction is fair to the </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<div TITLE="EE+ Page Footer">
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font FACE="ARIAL" SIZE=2></FONT></p>

<p style=' margin-bottom:0pt; margin-top:1pt;text-align:center;'><A NAME="PAGENUM"><font face="Arial" size=2></font>
</A></p>



<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="464" style=' border-collapse:collapse;'>
    <tr>
        <td width="356" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:129.6%;'><font size=1>&nbsp;</font></p> </td>
        <td width="108" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:129.6%;'><font face="Arial" size=2>13 - Real Property</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'> </p>
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<div TITLE="EE+ Page Break" STYLE="PAGE-BREAK-AFTER: always">

<HR noshade align="center" width="100%" size="2">
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>Partnership; and (4) the affiliate has owned the property at least two years, the cost paid by the affiliate is established, and any increase in the proposed purchase price over the cost to the affiliate is, in the opinion of the independent real estate adviser, explicable by material factors (including the passage of time) that have increased the value of the property.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font face="Arial" size=3><a name="toc29"></a>THE REAL PROPERTY ACCOUNT&#146;S UNAVAILABILITY TO CERTAIN CONTRACTS</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>Prudential has determined that it is in the best interest of Contract owners participating in the Real Property Account to provide the Real Property Account with the flexibility to engage in transactions that may be prohibited if the Real Property Account accepts funds under Contracts subject to ERISA or the prohibited transaction excise tax provisions of the Internal Revenue Code.  Accordingly, owners of Prudential Contracts that are purchased in connection with: (1) IRAs; (2) tax deferred annuities subject to Section 403(b) of the Code; (3) other employee benefit plans which are subject to ERISA; or (4) prohibited transaction excise tax provisions of the Code, may not select the Real Property Account as one of the investment options under their Contract.  By not offering the Real Property Account as an investment option under such contracts, Prudential is able to comply with state insurance
law requirements that policy loans be made available to Contract owners.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font face="Arial" size=3><a name="toc30"></a>VALUATION OF CONTRACT OWNERS&#146; PARTICIPATING INTERESTS</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>A Contract owner's interest in the Real Property Account will initially be the amount they allocated to the Real Property Account.  Thereafter, that value will change daily.  The value of a Contract owner's interest in the Real Property Account at the close of any day is equal to its amount at the close of the preceding day, multiplied by the "net investment factor" for that day arising from the Real Property Account's participation in the Partnership, plus any additional amounts allocated to the Real Property Account by the Contract owner, and reduced by any withdrawals by the Contract owner from the Real Property Account and by the applicable Contract charges recorded in that Contract's subaccount.  Some of the charges will be made:  (1) daily; (2) on the Contract's monthly anniversary date; (3) at the end of each Contract year; and (4) upon withdrawal or annuitization.  Periodically
Prudential will withdraw from the Real Property Account an amount equal to the aggregate charges recorded in the subaccounts.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The "net investment factor" is calculated on each business day by dividing the value of the net assets of the Partnership at the end of that day (ignoring, for this purpose, changes resulting from new contributions to or withdrawals from the Partnership) by the value of the net assets of the Partnership at the end of the preceding business day.  The value of the net assets of the Partnership at the end of any business day is equal to the sum of all cash held by the Partnership plus the aggregate value of the Partnership's liquid securities and instruments, the individual real properties and the other real estate-related investments owned by the Partnership, determined in the manner described below, and an estimate of the accrued net operating income earned by the Partnership from properties and other real estate-related investments, reduced by the liabilities of the Partnership, including the
daily investment management fee and certain other expenses attributable to the operation of the Partnership.  See </font><B><font FACE="ARIAL" SIZE=2>CHARGES</FONT></B><font face="Arial" size=2>.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The Partnership may invest in various liquid securities and instruments.  These investments will generally be carried at their market value as determine by a valuation method, which the Partners deem appropriate for the particular type of liquid security or instrument.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The value of the individual real properties and other real estate-related investments, including mortgages, acquired by the Partnership will be determined as follows.  Each property or other real estate-related investment acquired by the Partnership will initially be valued at its purchase price.  In acquiring a property or other real estate-related investment, PIM will not obtain an independent appraisal but will instead rely on its own analysis of the investment's fair market value.  Thereafter, all properties and most real estate-related investments will ordinarily be appraised by an independent appraiser at least annually.  At least every three months, PIM will review each property or other real estate-related investments and adjust its valuation if it concludes there has been a change in the value of the property or other real estate-related investment since the last valuation.  The
revised value will remain in effect and will be used in each day's calculation of the value of the Partnership's assets until the next review or appraisal.  It should be noted that appraisals are only estimates and do not necessarily reflect the realizable value of an investment.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The estimated amount of the net operating income of the Partnership from properties and other real estate-related investments will be based on estimates of revenues and expenses for each property and other real estate-related investments.  Annually, PIM will prepare a month-by-month estimate of the revenues and expenses ("Estimated Net Operating Income") for each property and other real estate-related investments owned by the Partnership.  Each day PIM will add to the value of the assets, as determined above, a proportionate part of the Estimated Net Operating Income for the month.  In effect, PIM will establish a daily accrued receivable of the Estimated Net Operating Income </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<div TITLE="EE+ Page Footer">
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font FACE="ARIAL" SIZE=2></FONT></p>

<p style=' margin-bottom:0pt; margin-top:1pt;text-align:center;'><A NAME="PAGENUM"><font face="Arial" size=2></font>
</A></p>



<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="464" style=' border-collapse:collapse;'>
    <tr>
        <td width="356" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:129.6%;'><font size=1>&nbsp;</font></p> </td>
        <td width="108" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:129.6%;'><font face="Arial" size=2>14 - Real Property</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'> </p>
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<div TITLE="EE+ Page Break" STYLE="PAGE-BREAK-AFTER: always">

<HR noshade align="center" width="100%" size="2">
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>from each property and other real estate-related investments owned by the Partnership (the "Daily Accrued Receivable").  On a monthly basis, the Partnership will receive a report of actual operating results for each property and other real estate-related investments ("Actual Net Operating Income").  Such Actual Net Operating Income will be recognized on the books of the Partnership and the amount of the then-outstanding daily accrued receivable will be correspondingly adjusted.  In addition, as cash from a property or other real estate-related investment is actually received by the Partnership, receivables and other accounts will be appropriately adjusted.</font><b><font face="Arial" size=2> </font></b><font face="Arial" size=2> Periodically, but at least every three months, PIM will review its prospective estimates of net operating income in light of actual experience and make an adjustment to
such estimates if circumstances indicate that such an adjustment is warranted.  PIM follows this practice of accruing Estimated Net Operating Income from properties and other real estate-related investments because net operating income from such investments is generally received on an intermittent rather than daily basis, and the Partners believe it is more equitable to participating Contract owners if such net operating income is estimated and a proportionate amount is recognized daily.  Because the daily accrual of Estimated Net Operating Income is based on estimates that may not turn out to reflect actual revenue and expenses, Contract owners will bear the risk that this practice will result in the undervaluing or overvaluing of the Partnership's assets.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>PIM may adjust the value of any asset held by the Partnership based on events that have increased or decreased the realizable value of a property or other real estate-related investment.  For example, adjustments may be made for events indicating an impairment of a borrower's or a lessee's ability to pay any amounts due or events which affect the property values of the surrounding area.  There can be no assurance that the factors for which an adjustment may be made will immediately come to the attention of PIM.  Additionally, because the evaluation of such factors may be subjective, there can be no assurance that such adjustments will be timely made in all cases where the value of the Partnership's investments may be affected.  All adjustments made to the valuation of the Partnership's investments, including adjustments to Estimated Net Operating Income, the daily accrued receivable, and
adjustments to the valuation of properties and other real estate-related investments, will be on a prospective basis only.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The above method of valuation of the Partnership's assets may be changed, without the consent of Contract owners, should the Partners determine that another method would more accurately reflect the value of the Partnership&#146;s investments.  Changes in the method of valuation could result in a change in the Contract Fund values which may have either an adverse or beneficial effect on Contract owners.  Information concerning any material change in the valuation method will be given to all Contract owners in the annual report of the operations of the Real Property Account.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>Although the above-described valuation methods have been adopted because the Partners believe they will provide a reasonable way to estimate the fair market value of the Partnership's investments, there may well be variations between the amount realizable upon disposition and the Partnership's valuation of such assets.  Contract owners may be either favorably or adversely affected if the valuation method results in either overvaluing or undervaluing the Partnership's investments.  If a Contract owner invests in the Real Property Account at a time in which the Partnership's investments are overvalued, the Contract owner will be credited with less of an interest than if the value had been correctly stated.  A Contract owner withdrawing from the Real Property Account during such time will receive more than he or she would if the value had been correctly stated, to the detriment of other Contract
owners. The converse situation will exist if the Partnership's assets are undervalued.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font face="Arial" size=3><a name="toc31"></a>BORROWING BY THE PARTNERSHIP</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The Partnership may borrow for Partnership purposes, including to meet its liquidity requirements and the leveraging of currently-owned property to buy new property, subject to a maximum debt to value ratio of 33</font><font face="Arial" size=1>1/3</font><font face="Arial" size=2>% (pursuant to California state requirements) based on the aggregate value of all Partnership assets.  The Partnership will bear the cost of all such borrowings.  The Real Property Account, and Contract owners participating in it, will bear a portion of any borrowing costs equal to their percentage interest in the Partnership.  Moreover, although the Partnership will generally make unleveraged investments, it reserves the right to borrow up to 80% of the value of a property (with the value of a property determined as explained under </font><B><font FACE="ARIAL" SIZE=2>VALUATION OF CONTRACT OWNERS' PARTICIPATING
INTERESTS</FONT></B><font face="Arial" size=2>).  Increasing the Partnership's assets through leveraged investments would increase the compensation paid to PIM since its investment management fee is a percentage of the Partnership's gross assets. Any borrowing by the Partnership would increase the Partnership's risk of loss.  It could also inhibit the Partnership from achieving its investment objectives because the Partnership's payments on any loans would have to be made regardless of the profitability of its investments. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font face="Arial" size=3><a name="toc32"></a>CHARGES</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>Pursuant to the investment management agreement, the Partnership pays a daily investment management fee, which is equal to an effective annual rate of 1.25% of the average daily gross assets of the Partnership.  Certain other expenses and charges attributable to the operation of the Partnership are also charged against the Partnership.  In acquiring an investment, the Partnership may incur various types of expenses paid to third parties, including but not </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<div TITLE="EE+ Page Footer">
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font FACE="ARIAL" SIZE=2></FONT></p>

<p style=' margin-bottom:0pt; margin-top:1pt;text-align:center;'><A NAME="PAGENUM"><font face="Arial" size=2></font>
</A></p>



<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="464" style=' border-collapse:collapse;'>
    <tr>
        <td width="356" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:129.6%;'><font size=1>&nbsp;</font></p> </td>
        <td width="108" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:129.6%;'><font face="Arial" size=2>15 - Real Property</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'> </p>
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<div TITLE="EE+ Page Break" STYLE="PAGE-BREAK-AFTER: always">

<HR noshade align="center" width="100%" size="2">
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>limited to, brokerage fees, attorneys' fees, architects' fees, engineers' fees, and accounting fees.  After acquisition of an investment, the Partnership will incur recurring expenses for the preparation of annual reports, periodic appraisal costs, mortgage servicing fees, annual audit charges, accounting and legal fees, and various administrative expenses. These expenses will be charged against the Partnership's assets.  Some of these operating expenses represent reimbursement of the investment manager for the cost of providing certain services necessary to the operation of the Partnership, such as daily accounting services, preparation of annual reports, and various administrative services. The investment manager charges the Partnership mortgage loan servicing fees pursuant to the standards outlined in item 6 under</font><b><font face="Arial" size=2> CONFLICTS OF INTEREST</font></b><font
face="Arial" size=2>.  In addition to the various expenses charged against the Partnership's assets, other expenses such as insurance costs, taxes, and property management fees will ordinarily be deducted from rental income, thereby reducing the gross income of the Partnership.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>As explained earlier, charges to the Contracts will be recorded in the corresponding subaccounts of the Real Property Account.  From time to time, Prudential will withdraw from the Real Property Account an amount equal to the aggregate amount of these charges.  Aside from the charges to the Contracts, Prudential does not charge the Real Property Account for the expenses involved in the Real Property Account&#146;s operation.  The Real Property Account will, however, bear its proportionate share of the charges made to the Partnership as described above.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The Partnership is not a taxable entity under the provisions of the Internal Revenue Code.  The income, gains, and losses of the Partnership are attributed, for federal income tax purposes, to the Partners in the Partnership.  The earnings of the Real Property Account are, in turn, taxed as part of the operations of Prudential.  Prudential is currently not charging the Real Property Account for company federal income taxes.   Prudential may make such a charge in the future.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>Under current laws Prudential may incur state and local taxes (in addition to premium taxes) in several states.  At present, Prudential does not charge these taxes against the Contracts or the Real Property Account, but Prudential may decide to charge the Real Property Account for such taxes in the future.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font face="Arial" size=3><a name="toc33"></a>RESTRICTIONS ON WITHDRAWALS</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>Before allocating any portion of your net premium or purchase payments, or transferring any portion of your Contract Fund, to the Real Property Account, you should be aware that withdrawals from the Real Property Account may have greater restrictions than the other variable investment options available under the Contracts.  Prudential reserves the right to restrict transfers into or out of the Real Property Account.  Apart from the limitations on transfers out of the Real Property Account described below, Prudential will only restrict transfers out of the Real Property Account if there is insufficient cash available to meet Contract owners' requests and prompt disposition of the Partnership's investments to meet such requests could not be made on commercially reasonable terms.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>Generally, we will pay any death benefit, cash surrender value, loan proceeds, or partial withdrawal within seven days after all the documents required for such a payment are received at the Payment Office.  Other than the death benefit, which is determined as of the date of death, the amount will be determined as of the end of the valuation period in which the necessary documents are received at a Service Office.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The funds necessary to pay any death benefit, cash surrender value, withdrawal or loan proceeds funded by the Real Property Account will normally be obtained, first, from any cash flows into the Real Property Account on the day the funds are required.  If, on the day the funds are required, cash flows into the Real Property Account are less than the amount of funds required, Prudential will seek to obtain such funds by withdrawing a portion of its interest in the Partnership.  The Partnership will normally obtain funds to meet such a withdrawal request from its net operating income and from the liquid securities and instruments it holds.  If the Partners determine that these sources are insufficient to meet anticipated withdrawals from the Partnership, the Partnership may use a line of credit or otherwise borrow up to 33</font><font face="Arial" size=1>1/3</font><font face="Arial" size=2>%
(pursuant to California state requirements) of the value of the Partnership's assets.  See </font><B><font FACE="ARIAL" SIZE=2>BORROWING BY THE PARTNERSHIP</FONT></B><font face="Arial" size=2>.  If the Partners determine that such a borrowing by the Partnership would not serve the best interests of Contract owners, Prudential may, in the event of a Contract loan or withdrawal, rather than take the amount of any loan or withdrawal request proportionately from all investment options under the Contract (including the Real Property Account), take any such loan or withdrawal first from the other investment options under the Contract.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>Transfers from the Real Property Account to the other investment options available under the Contract are currently permitted only during the 30-day period beginning on the Contract anniversary.  The maximum amount that may be transferred out of the Real Property Account each year is the greater of: (a) 50% of the amount invested in the Real Property Account or (b) $10,000.  Such transfer requests received prior to the Contract anniversary will be effected on the Contract anniversary.  Transfer requests received within the 30-day period beginning on the Contract anniversary will be effected as of the end of the valuation period in which a proper written request or authorized telephone request is received.  The "valuation period" means the period of time from one determination of the value of the amount </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<div TITLE="EE+ Page Footer">
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font FACE="ARIAL" SIZE=2></FONT></p>

<p style=' margin-bottom:0pt; margin-top:1pt;text-align:center;'><A NAME="PAGENUM"><font face="Arial" size=2></font>
</A></p>



<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="464" style=' border-collapse:collapse;'>
    <tr>
        <td width="356" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:129.6%;'><font size=1>&nbsp;</font></p> </td>
        <td width="108" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:129.6%;'><font face="Arial" size=2>16 - Real Property</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'> </p>
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<div TITLE="EE+ Page Break" STYLE="PAGE-BREAK-AFTER: always">

<HR noshade align="center" width="100%" size="2">
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>invested in the Real Property Account to the next.  Such determinations are made when the value of the assets and liabilities of the Partnership is calculated, which is generally at 4:00 p.m. Eastern time on each day during which the New York Stock Exchange is open.  Transfers into or out of the Real Property Account are also subject to the general limits under the Contracts.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font face="Arial" size=3><a name="toc34"></a>RESTRICTIONS ON CONTRACT OWNERS' INVESTMENT IN THE REAL PROPERTY ACCOUNT</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>As explained earlier, identification and acquisition of real estate investments meeting the Partnership's investment objectives is a time-consuming process.  Because the Real Property Account and the Partnership are managed so they will not become investment companies subject to the Investment Company Act of 1940, the portion of the Partnership's assets that may be invested in securities, as opposed to non-securities real estate investments, is strictly limited.  For these reasons, Prudential reserves the right to restrict or limit Contract owners' allocation of funds to the Real Property Account.  Any such restrictions are likely to take the form of restricting the timing, amount and/or frequency of transfers into the Real Property Account and/or precluding Contract owners who have not previously selected the Real Property Account from allocating a portion of their net premiums or purchase
payments to the Real Property Account.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font face="Arial" size=3><a name="toc35"></a>FEDERAL INCOME TAX CONSIDERATIONS</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The federal income tax treatment of Contract benefits is described briefly in the attached prospectus for the particular Contract you selected.  Prudential believes that the same principles will apply with respect to Contracts funded in whole or part by the Real Property Account.  The Partnership's conformity with the diversification standards for the investments of variable life insurance and variable annuity separate accounts is essential to ensure that treatment. See </font><b><font face="Arial" size=2>General Investment and Operating Policies</font></b><font face="Arial" size=2>.  Prudential urges you to consult a qualified tax adviser.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>Under the Internal Revenue Code, the Partnership is not a taxable entity and any income, gains or losses of the Partnership are passed through to the Partners, including Prudential, with respect to the Real Property Account.  The Real Property Account is not a separate taxpayer for purposes of the Internal Revenue Code.  The earnings of the Real Property Account are taxed as part of the operations of Prudential.  No charge is currently being made to the Real Property Account for company federal income taxes.  We may make such a charge in the future, see </font><B><font FACE="ARIAL" SIZE=2>CHARGES</FONT></B><font face="Arial" size=2>.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font face="Arial" size=3><a name="toc36"></a>DISTRIBUTION OF THE CONTRACTS</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>As explained in the attached prospectus for the Contracts, Pruco Securities, LLC, a wholly-owned subsidiary of Prudential Financial, acts as the principal underwriter of the Contracts.  Consult that prospectus for information about commission scales and other facts relating to sale of the Contracts.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font face="Arial" size=3><a name="toc37"></a>STATE REGULATION</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>Prudential is subject to regulation and supervision by the Department of Insurance of the State of New Jersey, which periodically examines its operations and financial condition.  It is also subject to the insurance laws and regulations of all jurisdictions in which it is authorized to do business.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>Prudential is required to submit annual statements of its operations, including financial statements, to the insurance departments of the various jurisdictions in which it does business to determine solvency and compliance with local insurance laws and regulations.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>In addition to the annual statements referred to above, Prudential is required to file with New Jersey and other jurisdictions a separate statement with respect to the operations of all its variable contract accounts, in a form promulgated by the National Association of Insurance Commissioners.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font face="Arial" size=3><a name="toc38"></a>ADDITIONAL INFORMATION</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>Prudential has filed a registration statement with the Securities and Exchange Commission ("SEC") under the Securities Act of 1933, relating to the offering described in this prospectus.  This prospectus does not include all of the information set forth in the registration statement.  Certain portions have been omitted pursuant to the rules and regulations of the SEC.  All reports and information filed by Prudential can be inspected and copied at the Public Reference Section of the Commission at 100 F Street, N.E., Washington, D.C. 20549, and at certain of its regional </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<div TITLE="EE+ Page Footer">
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font FACE="ARIAL" SIZE=2></FONT></p>

<p style=' margin-bottom:0pt; margin-top:1pt;text-align:center;'><A NAME="PAGENUM"><font face="Arial" size=2></font>
</A></p>



<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="464" style=' border-collapse:collapse;'>
    <tr>
        <td width="356" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:129.6%;'><font size=1>&nbsp;</font></p> </td>
        <td width="108" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:129.6%;'><font face="Arial" size=2>17 - Real Property</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'> </p>
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<div TITLE="EE+ Page Break" STYLE="PAGE-BREAK-AFTER: always">

<HR noshade align="center" width="100%" size="2">
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>offices: Midwestern Regional Office, 175 West Jackson Boulevard, Suite 900, Chicago, IL 60604; Northeastern Regional Office SEC, 233 Broadway, New York, NY 10279, or by telephoning (202) 551-5850.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The SEC maintains a Web site (http://www.sec.gov) that contains material incorporated by reference and other information regarding registrants that file electronically with the SEC.  </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>Further information may also be obtained from Prudential.  The address and telephone number are on the cover of this prospectus.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font face="Arial" size=3><a name="toc39"></a>EXPERTS</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The financial statements of the Partnership as of December 31, 2008 and 2007 and for each of the three years in the period ended December 31, 2008, the financial statement schedules of the Partnership as of December 31, 2008 and the financial statements of the Real Property Account as of December 31, 2008 and 2007 and for each of the three years in the period ended December 31, 2008 included in this prospectus have been so included in reliance on the reports of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.  PricewaterhouseCoopers LLP's principal business address is 300 Madison Avenue, New York, New York 10017. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font face="Arial" size=3><a name="toc40"></a>LITIGATION</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>No litigation is pending, and no litigation is known to be contemplated by governmental authorities, that would have an adverse material effect upon the Real Property Account or the Partnership.  </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><b><font face="Arial" size=3><a name="toc41"></a>REPORTS TO CONTRACT OWNERS</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>If you allocate a portion of your Contract Fund to the Real Property Account, Prudential will mail you an annual report containing audited financial statements for the Partnership and an annual statement showing the status of your Contract Fund and any other information that may be required by applicable regulation or law.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font face="Arial" size=3><a name="toc43"></a>MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>All of the assets of the Real Property Account, or the &#147;Account&#148; 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&#146;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 &#147;Partners&#148;.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>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 audited Consolidated Financial Statements of the Account and the Partnership and the related Notes included in this filing. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font face="Arial" size=2>(a) Liquidity and Capital Resources</font></b></p>

<p style=' margin-bottom:0pt; margin-top:8pt;text-align:justify;'><font face="Arial" size=2>As of December 31, 2008, the Partnership&#146;s liquid assets, consisting of cash and cash equivalents, were approximately $27.7 million, an increase of approximately $9.5 million from $18.2 million at December 31, 2007.  The increase was primarily due to cash flows received from the Partnership&#146;s operating activities and the repayment of the Partnership&#146;s preferred equity investment, as discussed below.  Partially offsetting this increase was a contribution to an existing retail property in Dunn, North Carolina as well as capital expenditures to existing properties, as detailed below.  Sources of liquidity included net cash flow from property operations, financings, 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 December 31, 2008, approximately 10.5% of the
Partnership&#146;s total assets consisted of cash and cash equivalents.</font></p>

<p style=' margin-bottom:0pt; margin-top:8pt;text-align:justify;'><font face="Arial" size=2>During 2008, the Partnership made an additional $2.6 million preferred equity investment in an existing retail property located in Ocean City, Maryland to fund costs associated with the redevelopment of the center.  This investment was repaid with interest on April 1, 2008 with proceeds to the Partnership totaling $4.0 million in conjunction with the refinancing of the existing loan as discussed below.    </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<div TITLE="EE+ Page Footer">
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font FACE="ARIAL" SIZE=2></FONT></p>

<p style=' margin-bottom:0pt; margin-top:1pt;text-align:center;'><A NAME="PAGENUM"><font face="Arial" size=2></font>
</A></p>



<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="464" style=' border-collapse:collapse;'>
    <tr>
        <td width="356" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:129.6%;'><font size=1>&nbsp;</font></p> </td>
        <td width="108" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:129.6%;'><font face="Arial" size=2>18 - Real Property</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'> </p>
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<div TITLE="EE+ Page Break" STYLE="PAGE-BREAK-AFTER: always">

<HR noshade align="center" width="100%" size="2">
</DIV>

<p style=' margin-bottom:0pt; margin-top:8pt;text-align:justify;'><font face="Arial" size=2>The Partnership did not have any dispositions or acquisitions for the year ended December 31, 2008.  The Partnership refinanced two existing loans during the year ended December 31, 2008.   The retail property in Ocean City, Maryland was refinanced for loan proceeds of $16.6 million, of which $9.8 million represents additional indebtedness.  $1.6 million of the loan remains to be funded for future costs associated with the redevelopment of the property. The apartment property in Raleigh, North Carolina was refinanced for the amount of $9.0 million. </font></p>

<p style=' margin-bottom:0pt; margin-top:8pt;text-align:justify;'><font face="Arial" size=2>During the year ended December 31, 2008, the Partnership spent approximately $3.7 million on capital improvements to various existing properties. Approximately $1.2 million was associated with the renovation of the hotel property in Lake Oswego, Oregon; approximately $0.7 million funded renovation and tenant improvements costs at the office property in Lisle, Illinois; approximately $0.7 million contributed to interior renovations at one of the office properties in Brentwood, Tennessee; and approximately $0.4 million financed tenant improvements at the retail property in Dunn, North Carolina. The remaining $0.7 million was associated with minor capital improvements and transaction costs associated with leasing expenses related to other properties in the Partnership.  Additionally, $6.3 million of capital improvements was funded at the retail property in Ocean City, Maryland through the
aforementioned third party loan. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font face="Arial" size=2>(b) Results of Operations</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The following is a comparison of the Partnership&#146;s results of operations for the periods ended December&nbsp;31, 2008 and 2007.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b>Net Investment Income Overview</b></p>

<p style=' margin-bottom:0pt; margin-top:8pt;text-align:justify;'><font face="Arial" size=2>The Partnership&#146;s net investment income for the year ended December 31, 2008 was approximately $11.1 million, a decrease of approximately $1.5 million from the prior year.  The decrease in net investment income was primarily attributable to a $1.4 million increase in other net investment loss from the prior year. Additionally, the retail, office, and hotel sectors&#146; net investment income declined approximately $0.9 million, $0.1 million, and $0.1 million, respectively during the year ended December 31, 2008 from the prior year.  Partially offsetting these decreases was an increase in the apartment sector&#146;s net investment income of approximately $1.0 million from the prior year.  The industrial sector&#146;s net investment income remained relatively unchanged.  The components of this net investment income are discussed below by investment type.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b>Valuation Overview</b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The Partnership did not have any realized gains for the year ended December 31, 2008, compared with a net realized gain of approximately $0.7 million for the prior year.  The Partnership recorded a net unrealized loss of approximately $44.2 million for the year ended December 31, 2008, compared with a net unrealized gain of approximately $4.8 million for the prior year. The Partnership recorded a net realized and unrealized loss of approximately $44.2 million for the year ended December 31, 2008, compared with a net realized and unrealized gain of approximately $5.5 million for the prior year. The net unrealized loss of approximately $44.2 million for the year ended December 31, 2008 was attributable to valuation declines in every sector primarily due to increased investment rates suggesting an industry-wide repricing. Investment rates include direct and terminal capitalization rates, and
discount rates, which reflect investors&#146; yield requirements on investments. The increase in investment rates was caused by the national economic downturn, frozen credit markets, weakening market fundamentals, and deteriorated demand for commercial real estate. The components of these valuation losses are discussed below by investment type.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<div TITLE="EE+ Page Footer">
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font FACE="ARIAL" SIZE=2></FONT></p>

<p style=' margin-bottom:0pt; margin-top:1pt;text-align:center;'><A NAME="PAGENUM"><font face="Arial" size=2></font>
</A></p>



<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="464" style=' border-collapse:collapse;'>
    <tr>
        <td width="356" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:129.6%;'><font size=1>&nbsp;</font></p> </td>
        <td width="108" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:129.6%;'><font face="Arial" size=2>19 - Real Property</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'> </p>
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<div TITLE="EE+ Page Break" STYLE="PAGE-BREAK-AFTER: always">

<HR noshade align="center" width="100%" size="2">
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'>
<font face="Arial" size=2>The following table presents a comparison of the Partnership&#146;s sources of net investment income, and realized and unrealized gains or losses by investment type for the years ended December 31, 2008 and 2007.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>


<div align=center>

</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<PRE>
                                                                            Twelve Months Ended December 31,
                                                                            2008                       2007
                                                                    ---------------------      ----------------------
Net Investment Income:

Office properties                                                         $3,893,422                 $3,945,096
Apartment properties                                                       3,129,457                  2,119,681
Retail properties                                                          6,062,399                  6,998,954
Industrial property                                                             -                        49,279
Hotel property                                                             1,213,328                  1,343,200
Other (including interest income, investment mgt fee, etc.)               (3,160,422)                (1,792,630)
                                                                    ---------------------      ----------------------
Total Net Investment Income                                             $11,138,184                $12,663,580
                                                                    ---------------------      ----------------------

Net Realized Gain (Loss) on Real Estate Investments:

Retail properties                                                               -                       323,649
Industrial property                                                             -                       345,832
                                                                    ---------------------      ----------------------
Net Realized Gain (Loss) on Real Estate Investments
                                                                                -                       669,481
                                                                    ---------------------      ----------------------

Net Unrealized Gain (Loss) on Real Estate Investments:

Office properties                                                         (6,677,199)                1,967,086
Apartment properties                                                     (12,344,133)                3,123,154
Retail properties                                                        (23,864,965)               (2,716,050)
Hotel property                                                            (1,347,338)                2,409,924
                                                                    ---------------------      ----------------------
Net Unrealized Gain (Loss) on Real Estate Investments
                                                                        (44,233,635)                 4,784,114
                                                                    ---------------------      ----------------------

Net Realized and Unrealized Gain (Loss) on Real Estate Investments
                                                                         (44,233,635)               $5,453,595
                                                                    ---------------------      ----------------------
</PRE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><B><font FACE="ARIAL" SIZE=2>OFFICE PROPERTIES</FONT></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="710" style=' margin-left:5.4pt;border-collapse:collapse;'>
    <tr style='height:44.4pt;'>
        <td width="157" valign=bottom style='border-bottom: solid black 1.5pt;padding:0pt 5.4pt 0pt 5.4pt;height:44.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt;'><b><font face="Arial" size=1>Year Ended </font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt;'><b><font face="Arial" size=1>December 31, 2008</font></b></p> </td>
        <td width="98" valign=top style='border-bottom:solid black 1.5pt; padding:0pt 5.4pt 0pt 5.4pt;height:44.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><b><font face="Arial" size=1>Net Investment Income/(Loss)
2008</font></b></p> </td>
        <td width="98" valign=bottom style='border-bottom: solid black 1.5pt;padding:0pt 5.4pt 0pt 5.4pt;height:44.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><b><font face="Arial" size=1>Net Investment Income/(Loss) 2007</font></b></p> </td>
        <td width="89" valign=bottom style='border-bottom: solid black 1.5pt;padding:0pt 5.4pt 0pt 5.4pt;height:44.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><b><font face="Arial" size=1>Unrealized Gain/(Loss) 2008</font></b></p> </td>
        <td width="87" valign=bottom style='border-bottom: solid black 1.5pt;padding:0pt 5.4pt 0pt 5.4pt;height:44.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><b><font face="Arial" size=1>Unrealized Gain/(Loss) 2007</font></b></p> </td>
        <td width="91" valign=bottom style='border-bottom: solid black 1.5pt;padding:0pt 5.4pt 0pt 5.4pt;height:44.4pt;'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><b><font face="Arial" size=1>Occupancy 2008</font></b></p> </td>
        <td width="91" valign=bottom style='border-bottom: solid black 1.5pt;padding:0pt 5.4pt 0pt 5.4pt;height:44.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><b><font face="Arial" size=1>Occupancy 2007</font></b></p> </td> </tr>
    <tr style='height:11.3pt;'>
        <td width="157" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;height:11.3pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><u><b><font face="Arial" size=2>Property</font></b></u></p>  </td>
        <td width="98" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;height:11.3pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font size=1>&nbsp;</font></p> </td>
        <td width="98" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;height:11.3pt;'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font size=1>&nbsp;</font></p> </td>
        <td width="89" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;height:11.3pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;height:11.3pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font size=1>&nbsp;</font></p> </td>
        <td width="91" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;height:11.3pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font size=1>&nbsp;</font></p> </td>
        <td width="91" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;height:11.3pt;'>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:11.3pt;'>
        <td width="157" valign=top style='padding:0pt 5.4pt 0pt 5.4pt; height:11.3pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt;line-height:118.8%;'><font face="Arial" size=2>Lisle, IL</font></p> </td>
        <td width="98" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt; height:11.3pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>$767,766</font></p> </td>
        <td width="98" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt; height:11.3pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>$650,916</font></p> </td>
        <td width="89" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt; height:11.3pt;'>
            <p
style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>(2,664,209)</font></p> </td>
        <td width="87" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt; height:11.3pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>$804,870</font></p> </td>
        <td width="91" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt; height:11.3pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>70%</font></p> </td>
        <td width="91" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt; height:11.3pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>67%</font></p> </td> </tr>
    <tr style='height:11.3pt;'>
        <td width="157" valign=top style='padding:0pt 5.4pt 0pt 5.4pt; height:11.3pt;'>
            <p
style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>Brentwood, TN</font></p> </td>
        <td width="98" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt; height:11.3pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>972,063</font></p> </td>
        <td width="98" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt; height:11.3pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>1,153,443</font></p> </td>
        <td width="89" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt; height:11.3pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>(83,142)</font></p> </td>
        <td width="87" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt; height:11.3pt;'>
            <p
style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>9,918</font></p> </td>
        <td width="91" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt; height:11.3pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>83%</font></p> </td>
        <td width="91" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt; height:11.3pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>100%</font></p> </td> </tr>
    <tr style='height:11.3pt;'>
        <td width="157" valign=top style='padding:0pt 5.4pt 0pt 5.4pt; height:11.3pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>Beaverton, OR</font></p> </td>
        <td width="98" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt; height:11.3pt;'>
            <p
style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>1,090,039</font></p> </td>
        <td width="98" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt; height:11.3pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>1,093,305</font></p> </td>
        <td width="89" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt; height:11.3pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>(2,911,733)</font></p> </td>
        <td width="87" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt; height:11.3pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>990,238</font></p> </td>
        <td width="91" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt; height:11.3pt;'>
            <p
style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>88%</font></p> </td>
        <td width="91" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt; height:11.3pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>88%</font></p> </td> </tr>
    <tr style='height:11.3pt;'>
        <td width="157" valign=top style='padding:0pt 5.4pt 0pt 5.4pt; height:11.3pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt;line-height:118.8%;'><font face="Arial" size=2>Brentwood, TN</font></p> </td>
        <td width="98" valign=bottom style='border-bottom: solid black .5pt;padding:0pt 5.4pt 0pt 5.4pt;height:11.3pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>1,063,554</font></p> </td>
        <td width="98" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt; height:11.3pt;'>
            <p
style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>1,047,432</font></p> </td>
        <td width="89" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt; height:11.3pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>(1,018,115)</font></p> </td>
        <td width="87" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt; height:11.3pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>162,060</font></p> </td>
        <td width="91" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt; height:11.3pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt;'><font face="Arial" size=2>100%</font></p> </td>
        <td width="91" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt; height:11.3pt;'>
            <p
style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt;'><font face="Arial" size=2>100%</font></p> </td> </tr>
    <tr style='height:11.3pt;'>
        <td width="157" valign=top style='padding:0pt 5.4pt 0pt 5.4pt; height:11.3pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:1.0pt;margin-bottom:0pt;'><font size=1>&nbsp;</font></p> </td>
        <td width="98" style='border-bottom:solid black .5pt; padding:0pt 5.4pt 0pt 5.4pt; height:11.3pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>$3,893,422</font>&nbsp;</p> </td>
        <td width="98" style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; padding:0pt 5.4pt 0pt 5.4pt;height:11.3pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>$3,945,096</font>&nbsp;</p> </td>
        <td
            width="89" style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; padding:0pt 5.4pt 0pt 5.4pt;height:11.3pt;'>
<p style='margin-left:0pt;text-indent:3.0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>(6,677,199</font>&nbsp;</p> </td>
        <td width="87" style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; padding:0pt 5.4pt 0pt 5.4pt;height:11.3pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>$1,967,086</font>&nbsp;</p> </td>
        <td width="91" valign=top style='padding:0pt 5.4pt 0pt 5.4pt; height:11.3pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt;'><font size=1>&nbsp;</font></p> </td>
        <td width="91" valign=top style='padding:0pt 5.4pt 0pt 5.4pt; height:11.3pt;'>
            <p
style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt;'><font size=1>&nbsp;</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font face="Arial" size=2>Net Investment Income</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>Net investment income for the Partnership&#146;s office properties was approximately $3.9 million for the year ended December 31, 2008, relatively unchanged from the prior year. The net investment income at the property in Lisle, Illinois increased $0.1 million due to an increase in occupancy. This increase was offset by a net investment loss of $0.1 million at a property in Brentwood, Tennessee due to reduced occupancy.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font face="Arial" size=2>Unrealized Gain/(Loss)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The office properties owned by the Partnership recorded a net unrealized loss of approximately $6.7 million during the year ended December 31, 2008, compared with a net unrealized gain of approximately $2.0 million for the prior year.  </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<div TITLE="EE+ Page Footer">
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font FACE="ARIAL" SIZE=2></FONT></p>

<p style=' margin-bottom:0pt; margin-top:1pt;text-align:center;'><A NAME="PAGENUM"><font face="Arial" size=2></font>
</A></p>



<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="464" style=' border-collapse:collapse;'>
    <tr>
        <td width="232" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:129.6%;'><font size=1>&nbsp;</font></p> </td>
        <td width="232" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:129.6%;'><font face="Arial" size=2>20 - Real Property</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'> </p>
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<div TITLE="EE+ Page Break" STYLE="PAGE-BREAK-AFTER: always">

<HR noshade align="center" width="100%" size="2">
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The net unrealized loss of approximately $6.7 million for the year ended December 31, 2008 was primarily due to increased investment rates across the office sector that caused each property to decline in value.  Additionally, at the office property in Lisle, Illinois notification from the property&#146;s largest tenant to vacate upon lease expiration in January 2009 resulted in decreased projected cash flows, which contributed to its net unrealized loss of $2.7 million.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><B>APARTMENT PROPERTIES</B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="710" style=' border-collapse:collapse;'>
    <tr>
        <td width="155" valign=bottom style='border-bottom: solid black 1.5pt;padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt;'><b><font face="Arial" size=1>Year Ended </font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt;'><b><font face="Arial" size=1>December 31, 2008</font></b></p> </td>
        <td width="92" valign=bottom style='border-bottom: solid black 1.5pt;padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><b><font face="Arial" size=1>Net Investment Income/(Loss) 2008</font></b></p> </td>
        <td width="92" valign=bottom style='border-bottom: solid black 1.5pt;padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><b><font
face="Arial" size=1>Net Investment Income/(Loss) 2007</font></b></p> </td>
        <td width="92" valign=bottom style='border-bottom: solid black 1.5pt;padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><b><font face="Arial" size=1>Unrealized Gain/(Loss) 2008</font></b></p> </td>
        <td width="92" valign=bottom style='border-bottom: solid black 1.5pt;padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><b><font face="Arial" size=1>Realized/</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><b><font face="Arial" size=1>Unrealized Gain/(Loss) 2007</font></b></p> </td>
        <td width="92" valign=bottom style='border-bottom: solid black 1.5pt;padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><b><font face="Arial"
size=1>Occupancy 2008</font></b></p> </td>
        <td width="92" valign=bottom style='border-bottom: solid black 1.5pt;padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><b><font face="Arial" size=1>Occupancy 2007</font></b></p> </td> </tr>
    <tr>
        <td width="155" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><u><b><font face="Arial" size=2>Property</font></b></u><u></u></p> </td>
        <td width="92" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font size=1>&nbsp;</font></p> </td>
        <td width="92" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font size=1>&nbsp;</font></p> </td>
        <td
            width="92" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;'>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font size=1>&nbsp;</font></p> </td>
        <td width="92" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font size=1>&nbsp;</font></p> </td>
        <td width="92" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font size=1>&nbsp;</font></p> </td>
        <td width="92" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="155" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p
style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>Atlanta, GA</font></p> </td>
        <td width="92" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>$480,064</font></p> </td>
        <td width="92" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>$447,290</font></p> </td>
        <td width="92" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>$(4,362,625)</font></p> </td>
        <td width="92" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>$(530,277)</font></p>
</td>
        <td width="92" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>91%</font></p> </td>
        <td width="92" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>92%</font></p> </td> </tr>
    <tr>
        <td width="155" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>Raleigh, NC</font></p> </td>
        <td width="92" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>608,481</font></p> </td>
        <td width="92" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p
style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>613,122</font></p> </td>
        <td width="92" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>(3,258,506)</font></p> </td>
        <td width="92" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>(687,270)</font></p> </td>
        <td width="92" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>87%</font></p> </td>
        <td width="92" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>94%</font></p> </td> </tr>
    <tr>
        <td width="155" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>Jacksonville, FL<sup>(1)</sup></font></p> </td>
        <td width="92" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:50.25pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>-</font></p> </td>
        <td width="92" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>17,342</font></p> </td>
        <td width="92" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:45.0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>- </font></p> </td>
        <td width="92" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p
style='margin-left:0pt;text-indent:45.0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>- </font></p> </td>
        <td width="92" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font FACE="ARIAL" SIZE=2>N/A</FONT></p> </td>
        <td width="92" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font FACE="ARIAL" SIZE=2>N/A</FONT></p> </td> </tr>
    <tr>
        <td width="155" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>Austin, TX<sup>(2)</sup></font></p> </td>
        <td width="92" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;'><font face="Arial"
size=2>1,440,973</font></p> </td>
        <td width="92" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>860,746</font></p> </td>
        <td width="92" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:9.0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>2,108,514</font></p> </td>
        <td width="92" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:9.0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>4,376,151</font></p> </td>
        <td width="92" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>92%</font></p> </td>
        <td width="92" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p
style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>92%</font></p> </td> </tr>
    <tr>
        <td width="155" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:1.0pt;margin-bottom:0pt;'><font face="Arial" size=2>Charlotte, NC<sup>(3)</sup></font></p> </td>
        <td width="92" valign=bottom style='border-bottom: solid black 1.0pt;padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>599,939</font></p> </td>
        <td width="92" valign=bottom style='border-bottom: solid black 1.0pt;padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>181,181</font></p> </td>
        <td width="92" valign=bottom style='border-bottom: solid black 1.0pt;padding:0pt 5.4pt 0pt 5.4pt;'>
            <p
style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>(2,614,488)</font></p> </td>
        <td width="92" valign=bottom style='border-bottom: solid black 1.0pt;padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>(35,450)</font></p> </td>
        <td width="92" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt;'><font face="Arial" size=2>90%</font></p> </td>
        <td width="92" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt;'><font face="Arial" size=2>87%</font></p> </td> </tr>
    <tr>
        <td width="155" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:1.0pt;margin-bottom:0pt;'><font size=1>&nbsp;</font></p> </td>
        <td width="92" style='border-bottom:solid black 1.0pt; padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>$3,129,457</font>&nbsp;</p> </td>
        <td width="92" style='border-bottom:solid black 1.0pt; padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>$2,119,681</font>&nbsp;</p> </td>
        <td width="92" style='border-bottom:solid black 1.0pt; padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>$12,344,133</font></p> </td>
        <td width="92" style='border-bottom:solid black 1.0pt; padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:3.0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font face="Arial"
size=2>$3,123,154</font>&nbsp;</p> </td>
        <td width="92" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt;'><font size=1>&nbsp;</font></p> </td>
        <td width="92" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt;'><font size=1>&nbsp;</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>



<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse;'>
    <tr>
        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>(1)</font></p> </td>
        <td  valign=top style='padding:0pt 0pt 0pt 0pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>The Jacksonville, Florida apartment property was sold on November 30, 2005, but certain post-closing adjustments were recognized in the years ended December 31, 2007.</font></p> </td> </tr></table>
</div>





<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse;'>
    <tr>
        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>(2)</font></p> </td>
        <td  valign=top style='padding:0pt 0pt 0pt 0pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>Net investment income for the year ended December&nbsp;31, 2007 reflects partial period results for the Austin, Texas apartment property acquired on May&nbsp;8, 2007.</font></p> </td> </tr></table>
</div>





<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse;'>
    <tr>
        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>(3)</font></p> </td>
        <td  valign=top style='padding:0pt 0pt 0pt 0pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>Net investment income for the year ended December&nbsp;31, 2007 reflects partial period results for the Charlotte, North Carolina apartment property acquired on September&nbsp;6, 2007.</font></p> </td> </tr></table>
</div>



<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b>Net Investment Income</b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>Net investment income for the Partnership&#146;s apartment properties was $3.1 million for the year ended December 31, 2008, an increase of approximately $1.0 million from the prior year. The increase in net investment income for the year ended December 31, 2008 was primarily due to the additional rental income generated from the acquisition of the apartment properties in Austin, Texas and Charlotte, North Carolina on May 8, 2007 and September 6, 2007, respectively. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font face="Arial" size=2>Total Realized and Unrealized Gain/(Loss)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The apartment properties owned by the Partnership recorded a net unrealized loss of approximately $12.3 million for the year ended December 31, 2008, compared with a net unrealized gain of approximately $3.1 million for the prior year.  The net unrealized loss for the year ended December 31, 2008 was primarily due to increased investment rates and decreased market rents across the apartment sector that caused each property to decline in value. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><B>RETAIL PROPERTIES</B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="710" style=' margin-left:0pt;border-collapse:collapse;'>
    <tr>
        <td width="168" valign=bottom style='border-bottom: solid black 1.5pt;padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt;'><b><font face="Arial" size=1>Year Ended </font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt;'><b><font face="Arial" size=1>December 31, 2008</font></b></p> </td>
        <td width="90" valign=bottom style='border-bottom: solid black 1.5pt;padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><b><font face="Arial" size=1>Net Investment Income/(Loss) 2008</font></b></p> </td>
        <td width="90" valign=bottom style='border-bottom: solid black 1.5pt;padding:0pt 5.4pt 0pt 5.4pt;'>
            <p
style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><b><font face="Arial" size=1>Net Investment Income/(Loss) 2007</font></b></p> </td>
        <td width="104" valign=bottom style='border-bottom: solid black 1.5pt;padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><b><font face="Arial" size=1>Realized/</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><b><font face="Arial" size=1>Unrealized Gain/(Loss) 2008</font></b></p> </td>
        <td width="96" valign=bottom style='border-bottom: solid black 1.5pt;padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><b><font face="Arial" size=1>Unrealized Gain/(Loss) 2007</font></b></p> </td>
        <td width="76" valign=bottom style='border-bottom: solid black 1.5pt;padding:0pt 5.4pt 0pt 5.4pt;'>
            <p
style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><b><font face="Arial" size=1>Occupancy 2008</font></b></p> </td>
        <td width="84" valign=bottom style='border-bottom: solid black 1.5pt;padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><b><font face="Arial" size=1>Occupancy 2007</font></b></p> </td> </tr>
    <tr>
        <td width="168" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><u><b><font face="Arial" size=2>Property</font></b></u><u></u></p> </td>
        <td width="90" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p
style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font size=1>&nbsp;</font></p> </td>
        <td width="104" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font size=1>&nbsp;</font></p> </td>
        <td width="96" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="168" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>Roswell, GA</font></p> </td>
        <td width="90" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;line-height:118.8%;'><font face="Arial" size=2>$1,674,996</font></p> </td>
        <td width="90" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;line-height:118.8%;'><font face="Arial" size=2>$2,072,194</font></p> </td>
        <td width="104" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>$(10,610,373)</font></p> </td>
        <td width="96" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt;'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>$(3,807,895)</font></p> </td>
        <td width="76" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>38%</font></p> </td>
        <td width="84" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>82%</font></p> </td> </tr>
    <tr>
        <td width="168" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>Kansas City, KS<sup>(1)</sup></font></p> </td>
        <td width="90" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p
style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>(15,941)</font></p> </td>
        <td width="90" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>158,664</font></p> </td>
        <td width="104" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:53.25pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>-</font></p> </td>
        <td width="96" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:20.25pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>323,649</font></p> </td>
        <td width="76" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font FACE="ARIAL" SIZE=2>N/A</FONT></p> </td>
        <td
            width="84" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt;'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font FACE="ARIAL" SIZE=2>N/A</FONT></p> </td> </tr>
    <tr>
        <td width="168" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>Hampton, VA</font></p> </td>
        <td width="90" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>1,318,984</font></p> </td>
        <td width="90" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>1,299,715</font></p> </td>
        <td width="104" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p
style='margin-left:0pt;text-indent:14.25pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>(3,160,726)</font></p> </td>
        <td width="96" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:20.25pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>492,521</font></p> </td>
        <td width="76" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>98%</font></p> </td>
        <td width="84" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>100%</font></p> </td> </tr>
    <tr>
        <td width="168" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>Ocean City,
MD</font></p> </td>
        <td width="90" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>820,593</font></p> </td>
        <td width="90" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>702,556</font></p> </td>
        <td width="104" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>(686,899)</font></p> </td>
        <td width="96" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>(122,583)</font></p> </td>
        <td width="76" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p
style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>95%</font></p> </td>
        <td width="84" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>67%</font></p> </td> </tr>
    <tr>
        <td width="168" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>Westminster, MD</font></p> </td>
        <td width="90" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>1,181,465</font></p> </td>
        <td width="90" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>1,576,148</font></p>
</td>
        <td width="104" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>(3,394,988)</font></p> </td>
        <td width="96" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:25.5pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>69,981</font></p> </td>
        <td width="76" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>100%</font></p> </td>
        <td width="84" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>100%</font></p> </td> </tr>
    <tr>
        <td width="168" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p
style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>Dunn, NC<sup>(2)</sup></font></p> </td>
        <td width="90" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>81,363</font></p> </td>
        <td width="90" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>215,118</font></p> </td>
        <td width="104" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:12.0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>(3,484,491)</font></p> </td>
        <td width="96" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:20.25pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font face="Arial"
size=2>651,926</font></p> </td>
        <td width="76" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>34%</font></p> </td>
        <td width="84" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>90%</font></p> </td> </tr>
    <tr>
        <td width="168" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:1.0pt;margin-bottom:0pt;'><font face="Arial" size=2>CARS Preferred Equity<sup> </sup></font></p> </td>
        <td width="90" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>1,000,939</font></p> </td>
        <td width="90" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p
style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>974,559</font></p> </td>
        <td width="104" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>(2,527,488)</font></p> </td>
        <td width="96" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:53.25pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>-</font></p> </td>
        <td width="76" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt;'><font FACE="ARIAL" SIZE=2>N/A</FONT></p> </td>
        <td width="84" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt;'><font FACE="ARIAL" SIZE=2>N/A</FONT></p> </td>
</tr>
    <tr>
        <td width="168" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:1.0pt;margin-bottom:0pt;'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='border-top:solid black .5pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>$6,062,399</font></p> </td>
        <td width="90" valign=top style='border-top:solid black .5pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>$6,998,954</font></p> </td>
        <td width="104" style='border-top:solid black .5pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; padding:0pt 5.4pt 0pt 5.4pt;'>
<p style='margin-left:0pt;text-indent:3.0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>$(23,864,965)</font></p> </td>
        <td width="96" style='border-top:solid black .5pt;border-left: none;border-bottom:solid black 1.0pt;border-right:none;padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:3.0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>$(2,392,401)</font></p> </td>
        <td width="76" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt;'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt;'><font size=1>&nbsp;</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>



<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse;'>
    <tr>
        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>(1)</font></p> </td>
        <td  valign=top style='padding:0pt 0pt 0pt 0pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>The Kansas City, Kansas retail property was sold on June 29, 2007 but certain post-closing adjustments were recognized during the year ended December 31, 2008.  Net investment income for the year ended 2007 reflects partial period results to the June 29, 2007 sale. </font></p> </td> </tr></table>
</div>





<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse;'>
    <tr>
        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>(2)</font></p> </td>
        <td  valign=top style='padding:0pt 0pt 0pt 0pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>Net investment income for the year ended December&nbsp;31, 2007 reflects partial period results for the Dunn, North Carolina retail property acquired on August&nbsp;17, 2007.</font></p> </td> </tr></table>
</div>



<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<div TITLE="EE+ Page Footer">
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font FACE="ARIAL" SIZE=2></FONT></p>

<p style=' margin-bottom:0pt; margin-top:1pt;text-align:center;'><A NAME="PAGENUM"><font face="Arial" size=2></font>
</A></p>



<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="464" style=' border-collapse:collapse;'>
    <tr>
        <td width="232" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:129.6%;'><font size=1>&nbsp;</font></p> </td>
        <td width="232" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:129.6%;'><font face="Arial" size=2>21 - Real Property</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'> </p>
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<div TITLE="EE+ Page Break" STYLE="PAGE-BREAK-AFTER: always">

<HR noshade align="center" width="100%" size="2">
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font face="Arial" size=2>Net Investment Income</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>Net investment income for the Partnership&#146;s retail properties was approximately $6.1 million for the year ended December 31, 2008, a decrease of approximately $0.9 million from the prior year.  The decrease was primarily due to (a) the allowance for accrued income that was deemed uncollectible at the retail property in Westminster, MD; (b) increased vacancy at the Roswell, Georgia retail property; (c) lost rent related to the Kansas City, Kansas retail property sold on June 29, 2007; and (d) a one-time occurrence related to bad debt expense at the retail property in Dunn, North Carolina.  Partially offsetting these losses was an increase in net investment income at the property in Ocean City, Maryland due to completion of renovation and increased occupancy.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font face="Arial" size=2>Total Realized and Unrealized Gain/Loss</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The retail properties owned by the Partnership recorded a net unrealized loss of approximately $23.9 million for the year ended December 31, 2008, compared with a net realized and unrealized loss of approximately $2.4 million for the prior year.  The net unrealized loss for the year ended December 31, 2008 was primarily due to increased investment rates across the retail sector based on declining national consumption, which caused each property to decline in value. The aggregate net unrealized loss was also partially attributable to the $10.6 million loss recorded at the retail property in Roswell, Georgia, which is consistent with the most recent offers received in connection with the continued sale efforts of the property. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><B>INDUSTRIAL PROPERTY</B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="710" style=' margin-left:5.4pt;border-collapse:collapse;'>
    <tr>
        <td width="153" valign=bottom style='border-bottom: solid black 1.5pt;padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt;'><b><font face="Arial" size=1>Year Ended </font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt;'><b><font face="Arial" size=1>December 31, 2008</font></b></p> </td>
        <td width="96" valign=bottom style='border-bottom: solid black 1.5pt;padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><b><font face="Arial" size=1>Net Investment Income/(Loss) 2008</font></b></p> </td>
        <td width="100" valign=bottom style='border-bottom: solid black 1.5pt;padding:0pt 5.4pt 0pt 5.4pt;'>
            <p
style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><b><font face="Arial" size=1>Net Investment Income/(Loss) 2007</font></b></p> </td>
        <td width="93" valign=bottom style='border-bottom: solid black 1.5pt;padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><b><font face="Arial" size=1>Realized Gain/(Loss) 2008</font></b></p> </td>
        <td width="87" valign=bottom style='border-bottom: solid black 1.5pt;padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><b><font face="Arial" size=1>Unrealized Gain/(Loss) 2007</font></b></p> </td>
        <td width="93" valign=bottom style='border-bottom: solid black 1.5pt;padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><b><font face="Arial" size=1>Occupancy 2008</font></b></p> </td>
        <td width="87"
            valign=bottom style='border-bottom: solid black 1.5pt;padding:0pt 5.4pt 0pt 5.4pt;'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><b><font face="Arial" size=1>Occupancy 2007</font></b></p> </td> </tr>
    <tr>
        <td width="153" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><u><b><font face="Arial" size=2>Property</font></b></u><u></u></p> </td>
        <td width="96" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font size=1>&nbsp;</font></p> </td>
        <td width="100" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font size=1>&nbsp;</font></p> </td>
        <td width="93" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;'>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:1.0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font size=1>&nbsp;</font></p> </td>
        <td width="93" valign=top style='padding:1.0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:1.0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="153" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p
style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>Aurora, CO<sup>(1)</sup></font></p> </td>
        <td width="96" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>$              -</font></p> </td>
        <td width="100" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>$49,279</font></p> </td>
        <td width="93" valign=bottom style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>$              -</font></p> </td>
        <td width="87" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font face="Arial"
size=2>$345,832</font></p> </td>
        <td width="93" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font FACE="ARIAL" SIZE=2>N/A</FONT></p> </td>
        <td width="87" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font FACE="ARIAL" SIZE=2>N/A</FONT></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.25in; text-indent:-0.25in;text-align:justify;'><font face="Arial" size=2>(1) The Partnership sold the property on February&nbsp;7, 2007.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font face="Arial" size=2>Net Investment Income</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The Partnership sold its industrial property on February 7, 2007. Therefore no net investment income was received for the year ended December, 2008, reflecting a minimal decrease from the prior year.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font face="Arial" size=2>Total Realized and Unrealized Gain/Loss</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The Partnership&#146;s industrial property was sold on February 7, 2007. Therefore no realized gains and/or losses were recorded for the year ended December 31, 2008, compared with realized gains of $0.3 million during the prior year.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><B>HOTEL PROPERTY</B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="710" style=' margin-left:5.4pt;border-collapse:collapse;'>
    <tr style='height:43.15pt;'>
        <td width="155" valign=bottom style='border-bottom: solid black 1.5pt;padding:0pt 5.4pt 0pt 5.4pt;height:43.15pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt;'><b><font face="Arial" size=1>Year Ended </font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt;'><b><font face="Arial" size=1>December 31, 2008</font></b></p> </td>
        <td width="99" valign=bottom style='border-bottom: solid black 1.5pt;padding:0pt 5.4pt 0pt 5.4pt;height:43.15pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><b><font face="Arial" size=1>Net Investment Income/(Loss) 2008</font></b></p> </td>
        <td width="99" valign=bottom style='border-bottom: solid black 1.5pt;padding:0pt 5.4pt 0pt 5.4pt;height:43.15pt;'>
            <p
style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><b><font face="Arial" size=1>Net Investment Income/(Loss) 2007</font></b></p> </td>
        <td width="99" valign=bottom style='border-bottom: solid black 1.5pt;padding:0pt 5.4pt 0pt 5.4pt;height:43.15pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><b><font face="Arial" size=1>Unrealized Gain/(Loss) 2008</font></b></p> </td>
        <td width="93" valign=bottom style='border-bottom: solid black 1.5pt;padding:0pt 5.4pt 0pt 5.4pt;height:43.15pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><b><font face="Arial" size=1>Unrealized Gain/(Loss) 2007</font></b></p> </td>
        <td width="81" valign=bottom style='border-bottom: solid black 1.5pt;padding:0pt 5.4pt 0pt 5.4pt;height:43.15pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><b><font face="Arial"
size=1>Occupancy 2008</font></b></p> </td>
        <td width="82" valign=bottom style='border-bottom: solid black 1.5pt;padding:0pt 5.4pt 0pt 5.4pt;height:43.15pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><b><font face="Arial" size=1>Occupancy 2007</font></b></p> </td> </tr>
    <tr style='height:10.8pt;'>
        <td width="155" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;height:10.8pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><u><b><font face="Arial" size=2>Property</font></b></u><u></u></p> </td>
        <td width="99" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;height:10.8pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font size=1>&nbsp;</font></p> </td>
        <td width="99" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;height:10.8pt;'>
            <p
style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font size=1>&nbsp;</font></p> </td>
        <td width="99" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;height:10.8pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font size=1>&nbsp;</font></p> </td>
        <td width="93" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;height:10.8pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font size=1>&nbsp;</font></p> </td>
        <td width="81" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;height:10.8pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font size=1>&nbsp;</font></p> </td>
        <td width="82" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;height:10.8pt;'>
            <p
style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:10.8pt;'>
        <td width="155" valign=top style='padding:0pt 5.4pt 0pt 5.4pt; height:10.8pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>Lake Oswego, OR</font></p> </td>
        <td width="99" valign=top style='padding:0pt 5.4pt 0pt 5.4pt; height:10.8pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>$1,213,328</font></p> </td>
        <td width="99" valign=top style='padding:0pt 5.4pt 0pt 5.4pt; height:10.8pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>$1,343,200</font></p> </td>
        <td width="99" valign=top style='padding:0pt 5.4pt 0pt 5.4pt; height:10.8pt;'>
            <p
style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>$(1,347,338)</font></p> </td>
        <td width="93" valign=top style='padding:0pt 5.4pt 0pt 5.4pt; height:10.8pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>$2,409,924</font></p> </td>
        <td width="81" valign=top style='padding:0pt 5.4pt 0pt 5.4pt; height:10.8pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>71%</font></p> </td>
        <td width="82" valign=top style='padding:0pt 5.4pt 0pt 5.4pt; height:10.8pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>76%</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font face="Arial" size=2>Net Investment Income</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>Net investment income for the Partnership&#146;s hotel property was approximately $1.2 million for the year ended December 31, 2008, reflecting a decrease of $0.1 million from the prior year due to lost occupancy. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font face="Arial" size=2>Unrealized Gain/Loss</font></b><font face="Arial" size=2> </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The hotel property owned by the Partnership recorded an unrealized loss of approximately $1.3 million for the year ended December 31, 2008, compared with an unrealized gain of approximately $2.4 million for the prior year.  The unrealized loss for the year ended December 31, 2008 reflects increased investment rates and decreased average daily rate growth projections.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<div TITLE="EE+ Page Footer">
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font FACE="ARIAL" SIZE=2></FONT></p>

<p style=' margin-bottom:0pt; margin-top:1pt;text-align:center;'><A NAME="PAGENUM"><font face="Arial" size=2></font>
</A></p>



<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="464" style=' border-collapse:collapse;'>
    <tr>
        <td width="356" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:129.6%;'><font size=1>&nbsp;</font></p> </td>
        <td width="108" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:129.6%;'><font face="Arial" size=2>22 - Real Property</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'> </p>
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<div TITLE="EE+ Page Break" STYLE="PAGE-BREAK-AFTER: always">

<HR noshade align="center" width="100%" size="2">
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font face="Arial" size=2>Other</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>Other net investment loss increased approximately $1.4 million during the year ended December 31, 2008 from the prior year. Other net</font><font size=2> </font><font face="Arial" size=2>investment loss includes interest income from short-term investments, investment management fees, and portfolio level expenses.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font face="Arial" size=2>(c) Inflation</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>A majority of the Partnership&#146;s leases with its commercial tenants provide for recoveries of expenses based upon the tenant&#146;s proportionate share of, and/or increases in, real estate taxes and certain operating costs, which may partially reduce the Partnership&#146;s exposure to increases in operating costs resulting from inflation.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><u><b><font face="Arial" size=2>Critical Accounting Policies</font></b></u></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America, or &#147;U.S. GAAP&#148;, 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 audited Consolidated Financial Statements of the Account and the Partnership may change significantly. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>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.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font face="Arial" size=2>Accounting Pronouncements Adopted </font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The Partnership adopted FASB Interpretation No. 48 (&#147;FIN 48&#148;), &#147;Accounting for Uncertainty in Income Taxes,&#148; an Interpretation of FASB Statement No. 109 as of January 1, 2007.  This interpretation prescribes a comprehensive model for how a Partnership should recognize, measure, present, and disclose in its financial statements uncertain tax positions that the Partnership has taken or expects to take on a tax return.  The adoption of FIN 48 had no effect to the financial position and result of operations of the Partnership.  </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>In September 2006, the FASB issued SFAS No. 157, &#147;Fair Value Measurements.&#148; This statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and requires additional disclosures about fair value measurements. This statement does not require any new fair value measurements, but the application of this statement could change current practices in determining fair value. This adoption did not change the methodology used to fair value our real estate investments.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>In February 2007, the FASB issued SFAS No. 159, &#147;The Fair Value Option for Financial Assets and Financial Liabilities,&#148; including an amendment of FASB Statement No. 115. This statement provides partnerships with an option to report selected financial assets and liabilities at fair value. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>SFAS No. 157 and SFAS No. 159 are effective for fiscal years beginning after November 15, 2007 with early adoption permitted.  The Partnership adopted SFAS No. 157 and SFAS No. 159 effective January 1, 2008, however, the Partnership did not make a fair value option election for its existing debt. The adoption does not have any effect on the Partnership&#146;s consolidated financial position and results of operations.  Please refer to Notes 2D and 5 for details.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font face="Arial" size=2>New Accounting Pronouncements</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>FASB Interpretation No. 46, &#147;Consolidation of Variable Interest Entities&#148; (&#147;FIN 46&#148;), was issued in January 2003.  In December 2003, FASB issued a revised interpretation of FIN 46 (&#147;FIN 46-R&#148;) that supersedes FIN 46.  FIN 46-R defers the effective date for applying the provisions of FIN 46 for those companies currently accounting for their investments in accordance with the AICPA Audit and Accounting Guide, &#147;Audits of Investment Companies&#148; (the &#147;Audit Guide&#148;).  The FASB is currently considering modifying FIN 46-R to provide an exception for companies that apply the Audit Guide.  The Partnership is awaiting further guidance from the FASB in order to evaluate the extent in which, if any, its investments may need to be consolidated as a result of this FIN 46-R.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>In June 2007, the Accounting Standards Executive Committee issued Statement of Position 07-1, &#147;Clarification of the Scope of the Audit and Accounting Guide Investment Companies and Accounting by Parent Companies and Equity Method Investors for Investments in Investment Companies&#148; (&#147;SOP 07-1&#148;). SOP 07-1 provides guidance for determining whether an entity is within the scope of the Audit Guide. SOP 07-1 was originally determined to be </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<div TITLE="EE+ Page Footer">
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font FACE="ARIAL" SIZE=2></FONT></p>

<p style=' margin-bottom:0pt; margin-top:1pt;text-align:center;'><A NAME="PAGENUM"><font face="Arial" size=2></font>
</A></p>



<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="464" style=' border-collapse:collapse;'>
    <tr>
        <td width="356" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:129.6%;'><font size=1>&nbsp;</font></p> </td>
        <td width="108" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:129.6%;'><font face="Arial" size=2>23 - Real Property</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'> </p>
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<div TITLE="EE+ Page Break" STYLE="PAGE-BREAK-AFTER: always">

<HR noshade align="center" width="100%" size="2">
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>effective for fiscal years beginning on or after December 15, 2007, however, on February 6, 2008, FASB issued a Staff Position indefinitely deferring the effective date. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>In December 2007, FASB issued SFAS No. 141 (revised 2007) (&#147;SFAS 141R&#148;), &#147;Business Combinations&#148;, and SFAS No. 160, &#147;Non-controlling interests in Consolidated Financial Statements, an Amendment to ARB No. 51&#148; (&#147;SFAS 160&#148;).  SFAS 141R expands the definition of a business and redefines the acquisition date in a merger and acquisition transaction. It significantly modifies the existing SFAS 141, including changes to acquisition related contingent consideration, pre-acquisition contingencies, non-controlling interest, restructuring costs, in-process R&amp;D, goodwill and partial acquisition.  SFAS 160 requires the non-controlling interest to be reported as a separate component of equity.  It also changes the allocation of losses and accounting in step acquisitions.  The provisions in SFAS 160 should be applied prospectively except for the presentation and
disclosure requirements, which are required retrospectively for all periods presented.  SFAS 141R and SFAS 160 are effective for the acquisitions closing after the first annual reporting period beginning after December 15, 2008.  The Partnership is currently reviewing the provisions in SFAS 141R and SFAS 160, and assessing whether the changes would be material to its financial statements upon adoption.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font face="Arial" size=2>Valuation of Investments</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><i><font face="Arial" size=2>Real Estate Investments</font></i><font face="Arial" size=2> - 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.  </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>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. (&#147;PIM&#148;), which is an indirectly owned subsidiary of Prudential Financial, Inc. (&#147;PFI&#148;), is responsible to assure that the valuation process provides independent and reasonable property fair value estimates.  An unaffiliated third party 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.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The purpose of an appraisal is to estimate the fair value of real estate as of a specific date.  In accordance with SFAS 157, 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.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>In general, the input values used in the appraisal process are unobservable, therefore unless indicated otherwise; real estate investments are classified as Level 3 under SFAS 157 fair value hierarchy.  </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>Unconsolidated real estate partnerships and preferred equity investments are carried at fair value and are generally valued at the Partnership&#146;s equity in net assets as reflected in the partnerships' financial statements with properties valued as described above.  Under the equity method, the investment is initially recorded at the original investment amount, plus or minus additional amounts invested or distributed, and is subsequently adjusted for the Partnership&#146;s share of undistributed earnings or losses, including unrealized appreciation and depreciation, from the partnership.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>As described above, the estimated fair value of real estate and real estate related assets is determined through an appraisal process.  There continues to be significant disruptions in the global capital, credit and real estate markets.  </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>These disruptions have led to, among other things, a significant decline in the volume of transaction activity, in the fair value of many real estate and real estate related investments, and a significant 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 and could be material to the financial statements. Although the </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<div TITLE="EE+ Page Footer">
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font FACE="ARIAL" SIZE=2></FONT></p>

<p style=' margin-bottom:0pt; margin-top:1pt;text-align:center;'><A NAME="PAGENUM"><font face="Arial" size=2></font>
</A></p>



<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="464" style=' border-collapse:collapse;'>
    <tr>
        <td width="356" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:129.6%;'><font size=1>&nbsp;</font></p> </td>
        <td width="108" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:129.6%;'><font face="Arial" size=2>24 - Real Property</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'> </p>
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<div TITLE="EE+ Page Break" STYLE="PAGE-BREAK-AFTER: always">

<HR noshade align="center" width="100%" size="2">
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>estimated fair values represent subjective estimates, management believes these estimated fair values are reasonable approximations of market prices and the aggregate estimated value of investments in real estate is fairly presented as of December 31, 2008 and December 31, 2007.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font face="Arial" size=2>Other Estimates</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>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 audited Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font face="Arial" size=3><a name="toc44"></a>QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><i><font face="Arial" size=2>Interest Rate Risk &#150;</font></i><font face="Arial" size=2> The Partnership&#146;s exposure to market rate risk for changes in interest rates relates to approximately 31.68% of its investment portfolio as of December 31, 2008, which consists primarily of short-term fixed rate commercial paper and fixed and variable interest rate debt. The Partnership does not use derivative financial instruments. In accordance with its 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.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The table below presents the amounts and related weighted interest rates of the Partnership&#146;s cash equivalents and short-term investments at December 31, 2008:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="710" style=' margin-left:36.9pt;border-collapse:collapse;'>
    <tr>
        <td width="209" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:75.75pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt;'><font size=1>&nbsp;</font></p> </td>
        <td width="129" valign=top style='border-bottom:solid black .75pt; padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>Maturity</font></p> </td>
        <td width="202" valign=top style='border-bottom:solid black .75pt; padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>Estimated Market Value</font></p>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>(in $ millions)</font></p> </td>
        <td width="170" valign=top style='border-bottom: solid black .75pt;padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt;'><font face="Arial" size=2>Average</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>Interest Rate</font></p> </td> </tr>
    <tr>
        <td width="209" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:72.75pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>Cash and Cash equivalents</font></p> </td>
        <td width="129" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>0-3 months</font></p> </td>
        <td width="202" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font face="Arial" size=2>$27.7</font></p> </td>
        <td width="170" valign=top style='padding:0pt 5.4pt 0pt 5.4pt;'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;'><font
face="Arial" size=2>1.96%</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The table below discloses the Partnership&#146;s debt as of December 31, 2008. All of the Partnership&#146;s long-term debt bears interest at fixed rates and therefore the fair value of these instruments is affected by changes in market interest rates. The following table presents principal cash flows based upon maturity dates of the debt obligations and the related weighted-average interest rates by expected maturity dates for the fixed rate debt. &nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="710" style=' border-collapse:collapse'>
    <tr>
        <td width="247" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><b><font face="Arial" size=1>Investment level debt (in $ thousands), </font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><u><b><font face="Arial" size=1>including current portion</font></b></u></p> </td>
        <td width="48" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:9.0pt;margin-bottom:0pt'><u><font face="Arial" size=1>2009</font></u></p> </td>
        <td width="56" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:9.0pt;margin-bottom:0pt'><u><font face="Arial" size=1>2010</font></u><u></u></p> </td>
        <td width="48" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:9.0pt;margin-bottom:0pt'><u><font face="Arial" size=1>2011</font></u><u></u></p> </td>
        <td width="50" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:9.0pt;margin-bottom:0pt'><u><font face="Arial" size=1>2012</font></u><u></u></p> </td>
        <td width="58" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:9.0pt;margin-bottom:0pt'><u><font face="Arial" size=1>2013</font></u><u></u></p> </td>
        <td width="70" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:9.0pt;margin-bottom:0pt'><u><font face="Arial" size=1>Thereafter</font></u></p> </td>
        <td width="62" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:9.0pt;margin-bottom:0pt'><u><font face="Arial" size=1>Total</font></u></p> </td>
        <td width="70" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>Estimated</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>Fair </font><br> <u><font face="Arial" size=1>Value</font></u></p> </td> </tr>
    <tr>
        <td width="247" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><b><font face="Arial" size=1>Average Fixed Interest Rate</font></b></p> </td>
        <td width="48" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>6.75%</font></p> </td>
        <td width="56" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>6.75%</font></p> </td>
        <td width="48" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>6.75%</font></p> </td>
        <td width="50" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>6.75%</font></p> </td>
        <td width="58" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>6.75%</font></p> </td>
        <td width="70" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>6.75%</font></p> </td>
        <td width="62" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>6.75%</font></p> </td>
        <td width="70" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="247" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><b><font face="Arial" size=1>Fixed Rate</font></b></p> </td>
        <td width="48" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>$9,277</font></p> </td>
        <td width="56" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>$566</font></p> </td>
        <td width="48" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>$604</font></p> </td>
        <td width="50" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>$646</font></p> </td>
        <td width="58" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>$463</font></p> </td>
        <td width="70" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>$4,475</font></p> </td>
        <td width="62" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>$16,031</font></p> </td>
        <td width="70" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>$16,332</font></p> </td> </tr>
    <tr>
        <td width="247" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><b><font face="Arial" size=1>Variable Rate</font></b></p> </td>
        <td width="48" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>-</font></p> </td>
        <td width="56" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>$15,043</font></p> </td>
        <td width="48" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>-</font></p> </td>
        <td width="50" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>-</font></p> </td>
        <td width="58" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>$9,000</font></p> </td>
        <td width="70" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>$0</font></p> </td>
        <td width="62" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>$24,043</font></p> </td>
        <td width="70" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>$24,053</font></p> </td> </tr>
    <tr>
        <td width="247" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font face="Arial" size=1>Premium/(Discount) on Mortgage Loans Payable</font></p> </td>
        <td width="48" valign=top style='border-bottom:solid black .75pt; padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>-</font></p> </td>
        <td width="56" valign=top style='border-bottom:solid black .75pt; padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>-</font></p> </td>
        <td width="48" valign=top style='border-bottom:solid black .75pt; padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>-</font></p> </td>
        <td width="50" valign=top style='border-bottom:solid black .75pt; padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>-</font></p> </td>
        <td width="58" valign=top style='border-bottom:solid black .75pt; padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>-</font></p> </td>
        <td width="70" valign=top style='border-bottom:solid black .75pt; padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>($26)</font></p> </td>
        <td width="62" valign=top style='border-bottom:solid black .75pt; padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>($26)</font></p> </td>
        <td width="70" valign=top style='border-bottom:solid black .75pt; padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>-</font></p> </td> </tr>
    <tr>
        <td width="247" valign=top style='padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font face="Arial" size=1>Total Mortgage Loans Payable</font></p> </td>
        <td width="48" valign=top style='border-bottom:solid black .5pt; padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>$9,277</font></p> </td>
        <td width="56" valign=top style='border-bottom:solid black .5pt; padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>$15,609</font></p> </td>
        <td width="48" valign=top style='border-bottom:solid black .5pt; padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>$604</font></p> </td>
        <td width="50" valign=top style='border-bottom:solid black .5pt; padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>$646</font></p> </td>
        <td width="58" valign=top style='border-bottom:solid black .5pt; padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>$9,463</font></p> </td>
        <td width="70" valign=top style='border-bottom:solid black .5pt; padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>$4,449</font></p> </td>
        <td width="62" valign=top style='border-bottom:solid black .5pt; padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>$40,048</font></p> </td>
        <td width="70" valign=top style='border-bottom:solid black .5pt; padding:0pt 5.4pt 0pt 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=1>$40,384</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>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.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font face="Arial" size=3><a name="toc45"></a>FINANCIAL STATEMENTS</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>Following are the financial statements and Independent Registered Public Accounting Firm auditor&#146;s reports of the Real Property Account, as well as the financial statements and Independent Registered Public Accounting Firm auditor&#146;s reports of the Partnership.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<div TITLE="EE+ Page Footer">
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font FACE="ARIAL" SIZE=2></FONT></p>

<p style=' margin-bottom:0pt; margin-top:1pt;text-align:center;'><A NAME="PAGENUM"><font face="Arial" size=2></font>
</A></p>
</div>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="464" style=' border-collapse:collapse;'>
    <tr>
        <td width="356" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:129.6%;'><font size=1>&nbsp;</font></p> </td>
        <td width="108" nowrap valign=top style='padding:1.0pt 0pt 0pt 0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:129.6%;'><font face="Arial" size=2>25 - Real Property</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'>&nbsp;</p>


<DIV style="FONT-FAMILY: 'Times New Roman',Times,serif">
<DIV style="MARGIN-TOP: 18pt; FONT-SIZE: 10pt" align=center><B>FINANCIAL
STATEMENTS OF<BR>THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY ACCOUNT</B>
</DIV>
<DIV align=left><A name=345></A></DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left><B>STATEMENTS OF NET
ASSETS</B><BR>December&nbsp;31, 2008 and 2007 </DIV>
<DIV align=center>
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0 cellPadding=0 width="100%"
border=0><!-- Begin Table Head -->

  <TR vAlign=bottom>
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=2><B>2008</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=2><B>2007</B></TD>
    <TD>&nbsp;</TD></TR><!-- End Table Head --><!-- Begin Table Body -->
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px"><B>ASSETS</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Investment in The
      Prudential Variable Contract Real Property Partnership</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>86,786,975</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>100,212,593</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Net Assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>86,786,975</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>100,212,593</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px"><B>NET ASSETS,
      </B>representing:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Equity of contract
      owners</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>59,902,956</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>72,012,128</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Equity of The
      Prudential Insurance Company of America</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>26,884,019</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>28,200,465</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>86,786,975</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>100,212,593</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Units
    outstanding</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>36,703,680</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>36,396,005</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Portfolio shares
      held</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>2,741,864</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>2,741,864</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Portfolio net asset
      value per share</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>31.65</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>36.55</TD>
    <TD>&nbsp;</TD></TR><!-- End Table Body --></TABLE></DIV>
<DIV align=left><A name=346></A></DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left><B>STATEMENTS OF
OPERATIONS</B><BR>For the years ended December&nbsp;31, 2008, 2007 and 2006
</DIV>
<DIV align=center>
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0 cellPadding=0 width="100%"
border=0><!-- Begin Table Head -->

  <TR vAlign=bottom>
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=2><B>2008</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=2><B>2007</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=2><B>2006</B></TD>
    <TD>&nbsp;</TD></TR><!-- End Table Head --><!-- Begin Table Body -->
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px"><B>INVESTMENT
      INCOME</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Net investment income
      from Partnership operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>4,518,355</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>5,137,153</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>4,526,160</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV
style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px"><B>EXPENSES</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Charges to contract
      owners for assuming mortality risk and expense risk and for
      administration</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>556,142</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>563,608</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>509,687</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px"><B>NET INVESTMENT
      INCOME</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>3,962,213</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>4,573,545</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>4,016,473</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px"><B>NET REALIZED AND
      UNREALIZED GAIN (LOSS)&nbsp;ON INVESTMENTS</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Net change in
      unrealized gain (loss)&nbsp;on investments in Partnership</DIV></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(17,943,973</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,940,739</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>7,413,826</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Net realized gain on
      sale of investments in Partnership</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>271,584</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>27,482</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px"><B>NET GAIN
      (LOSS)&nbsp;ON INVESTMENTS</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(17,943,973</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>2,212,323</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>7,441,308</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px"><B>NET INCREASE
      (DECREASE)&nbsp;IN NET ASSETS RESULTING FROM OPERATIONS</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>$</TD>
    <TD align=right>(13,981,760</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>6,785,868</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>11,457,781</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR><!-- End Table Body --></TABLE></DIV>
<DIV align=left><A name=347></A></DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left><B>STATEMENTS OF
CHANGES IN NET ASSETS</B><BR>For the years ended December&nbsp;31, 2008, 2007
and 2006 </DIV>
<DIV align=center>
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0 cellPadding=0 width="100%"
border=0><!-- Begin Table Head -->
    <TR vAlign=bottom>
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=2><B>2008</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=2><B>2007</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=2><B>2006</B></TD>
    <TD>&nbsp;</TD></TR><!-- End Table Head --><!-- Begin Table Body -->
  <TR vAlign=bottom>
    <TD>
      <DIV
    style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px"><B>OPERATIONS</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Net investment
      income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>3,962,213</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>4,573,545</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>4,016,473</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Net change in
      unrealized gain (loss)&nbsp;on investments in Partnership</DIV></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(17,943,973</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,940,739</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>7,413,826</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Net realized gain on
      sale of investments in Partnership</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>271,584</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>27,482</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px"><B>NET INCREASE
      (DECREASE)&nbsp;IN NET ASSETS RESULTING FROM OPERATIONS</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(13,981,760</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>6,785,868</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>11,457,781</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px"><B>CAPITAL
      TRANSACTIONS</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Net withdrawals by
      contract owners</DIV></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(2,238,147</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(904,047</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(865,224</TD>
    <TD noWrap>)</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Net contributions by
      The Prudential Insurance Company of America</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>2,794,289</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,467,655</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(1,006,825</TD>
    <TD noWrap>)</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px"><B>NET INCREASE
      (DECREASE)&nbsp;IN NET ASSETS RESULTING FROM CAPITAL
    TRANSACTIONS</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>556,142</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>563,608</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(1,872,049</TD>
    <TD noWrap>)</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px"><B>TOTAL INCREASE
      (DECREASE)&nbsp;IN NET ASSETS</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(13,425,618</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>7,349,476</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>9,585,732</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px"><B>NET
    ASSETS</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Beginning of
      period</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>100,212,593</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>92,863,117</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>83,277,385</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">End of period</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>86,786,975</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>100,212,593</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>92,863,117</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR><!-- End Table Body --></TABLE></DIV>
<DIV style="MARGIN-TOP: 18pt; FONT-SIZE: 10pt" align=center>The accompanying
notes are an integral part of these financial statements. </DIV>
<P style="FONT-SIZE: 10pt" align=center><!-- Folio -->A-1 Real Property<!-- /Folio --> </P></DIV><!-- PAGEBREAK -->
<DIV style="FONT-FAMILY: 'Times New Roman',Times,serif">
<DIV align=left><A name=348></A></DIV>
<DIV style="MARGIN-TOP: 18pt; FONT-SIZE: 10pt" align=center><B>NOTES TO THE
FINANCIAL STATEMENTS OF<BR>THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY
ACCOUNT<BR>December&nbsp;31, 2008</B> </DIV>
<DIV style="MARGIN-TOP: 12pt; FONT-SIZE: 10pt" align=left><B>Note 1: General</B>
</DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left>The Prudential Variable
Contract Real Property Account (the "Account") was established on November 20,
1986 by resolution of the Board of Directors of The Prudential Insurance Company
of America ("Prudential" or the "Company"), which is 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 Prudential's
other assets. The Account is used to fund benefits under certain variable life
insurance and variable annuity contracts issued by Prudential. These products
are Variable Appreciable Life ("PVAL and PVAL $100,000+ Face Value"), Discovery
Plus ("PDISCO+"), and Variable Investment Plan ("VIP"). </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left>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 variable annuity contracts. The Account, along with the Pruco
Life Variable Contract Real Property Account and the Pruco Life of New Jersey
Variable Contract Real Property Account, are the sole investors in the
Partnership. These financial statements should be read in conjunction with the
financial statements of the Partnership. </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left>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. </DIV>
<DIV style="MARGIN-TOP: 12pt; FONT-SIZE: 10pt" align=left><B>Note 2: Summary of
Significant Accounting Policies and Pronouncements</B> </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left><B>A. Basis of
Accounting</B> </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left>The accompanying
financial statements are prepared in conformity with 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. </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left>In September&nbsp;2006,
the FASB issued SFAS No.&nbsp;157, "Fair Value Measurements." This Statement
defines fair value, establishes a framework for measuring fair value in
generally accepted accounting principles, and requires additional disclosures
about fair value measurements. This Statement does not require any new fair
value measurements, but the application of this Statement could change current
practices in determining fair value. The Account adopted this guidance effective
January&nbsp;1, 2008. The adoption of SFAS No.&nbsp;157 has no effect on the
Account's financial position and results of operations. See Note 9 for more
information on SFAS No.&nbsp;157. </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left>In February&nbsp;2007,
the FASB issued SFAS No.&nbsp;159, "The Fair Value Option for Financial Assets
and Financial Liabilities," including an amendment of FASB Statement
No.&nbsp;115. This statement provides companies with an option to report
selected financial assets and liabilities at fair value. This statement is
effective for fiscal years beginning after November&nbsp;15, 2007 with early
adoption permitted. The Account adopted this guidance effective January&nbsp;1,
2008. The Account did not make a fair value option election for its existing
debt. The adoption of SFAS No.&nbsp;159 has no effect on the Account's financial
position and results of operations. </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left>In December&nbsp;2007,
the FASB issued SFAS No.&nbsp;141R, "Business Combinations." This statement,
which addresses the accounting for business acquisitions, is effective for
fiscal years beginning on or after December&nbsp;15, 2008, with early adoption
prohibited, and generally applies to business acquisitions completed after
December&nbsp;31, 2008. Among other things, the new standard requires that all
acquisition-related costs be expensed as incurred, and that all restructuring
costs related to acquired operations be expensed as incurred. This new standard
also addresses the current and subsequent accounting for assets and liabilities
arising from contingencies acquired or assumed and, for acquisitions both prior
and subsequent to December&nbsp;31, 2008, requires the acquirer to recognize
changes in the amount of its deferred tax benefits that are recognizable because
of a business combination either in income from continuing operations in the
period of the combination or directly in contributed capital, depending on the
circumstances. The Account is currently assessing the impact of SFAS
No.&nbsp;141R on its financial position and results of operations. </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left>In December&nbsp;2007,
the FASB issued SFAS No.&nbsp;160, "Noncontrolling Interests in Consolidated
Financial Statements." SFAS No.&nbsp;160 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 statement is
effective for fiscal years beginning on or after December&nbsp;15, 2008, with
early adoption prohibited. Upon adoption, SFAS No.&nbsp;160 requires retroactive
adoption of the presentation and disclosure requirements for existing minority
interests and prospective adoption for all other requirements. The Account is
currently assessing the impact of SFAS No.&nbsp;160 on its financial position
and results of operations. </DIV>
<P style="FONT-SIZE: 10pt" align=center><!-- Folio -->A-2 Real Property<!-- /Folio --> </P></DIV><!-- PAGEBREAK -->
<DIV style="FONT-FAMILY: 'Times New Roman',Times,serif">
<DIV style="MARGIN-TOP: 18pt; FONT-SIZE: 10pt" align=center><B>NOTES TO THE
FINANCIAL STATEMENTS OF<BR>THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY
ACCOUNT<BR>December&nbsp;31, 2008</B> </DIV>
<DIV style="MARGIN-TOP: 12pt; FONT-SIZE: 10pt" align=left><B>B. Investment in
Partnership Interest</B> </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left>The investment in the
Partnership is based on the Account's proportionate interest of the
Partnership's market value. At December&nbsp;31, 2008 and 2007 the Account's
interest in the Partnership was 40.6% or 2,741,864 shares. </DIV>
<DIV style="MARGIN-TOP: 12pt; FONT-SIZE: 10pt" align=left><B>C. Income
Recognition</B> </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left>Net investment income
and realized and unrealized gains and losses are recognized daily. Amounts are
based upon the Account's proportionate interest in the Partnership. </DIV>
<DIV style="MARGIN-TOP: 12pt; FONT-SIZE: 10pt" align=left><B>D. Equity of The
Prudential Insurance Company of America</B> </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left>Prudential 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.
</DIV>
<DIV style="MARGIN-TOP: 12pt; FONT-SIZE: 10pt" align=left><B>Note 3: Taxes</B>
</DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left>Prudential 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. </DIV>
<P style="FONT-SIZE: 10pt" align=center><!-- Folio -->A-3 Real Property<!-- /Folio --> </P></DIV><!-- PAGEBREAK -->
<DIV style="FONT-FAMILY: 'Times New Roman',Times,serif">
<DIV style="MARGIN-TOP: 18pt; FONT-SIZE: 10pt" align=center><B>NOTES TO THE
FINANCIAL STATEMENTS OF<BR>THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY
ACCOUNT<BR>December&nbsp;31, 2008</B> </DIV>
<DIV style="MARGIN-TOP: 12pt; FONT-SIZE: 10pt" align=left><B>Note 4: Net
Withdrawals by Contract Owners</B> </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left>Net contract owner
withdrawals for the real estate investment option in Prudential's variable
insurance and variable annuity products for the years ended December&nbsp;31,
2008, 2007 and 2006 were as follows: </DIV>
<DIV style="MARGIN-TOP: 12pt; FONT-SIZE: 10pt" align=left><U><B>2008:</B></U>
</DIV>
<DIV align=center>
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0 cellPadding=0 width="100%"
border=0><!-- Begin Table Head -->
    <TR vAlign=bottom>
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=2><B>PVAL &amp; PVAL</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=2><B>VIP &amp;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=2><B>$100,000+ face</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=2><B>PDISCO+</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=2><B>value</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=2><B>TOTAL</B></TD>
    <TD>&nbsp;</TD></TR><!-- End Table Head --><!-- Begin Table Body -->
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Contract Owner Net
      Payments:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>6,963</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>4,528,338</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>4,535,301</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Policy Loans:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(1,868,168</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(1,868,168</TD>
    <TD noWrap>)</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Policy Loan Repayments
      and Interest:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,370,568</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,370,568</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Surrenders,
      Withdrawals, and Death Benefits:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(492,456</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(3,690,570</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(4,183,026</TD>
    <TD noWrap>)</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Net Transfers From/To
      Other Subaccounts or Fixed Rate Option:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>34,626</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>665,582</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>700,208</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Administrative and
      Other Charges:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(1,282</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(2,791,748</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(2,793,030</TD>
    <TD noWrap>)</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px"><B>Net Withdrawals by
      Contract Owners</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>$</TD>
    <TD align=right>(452,149</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>$</TD>
    <TD align=right>(1,785,998</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>$</TD>
    <TD align=right>(2,238,147</TD>
    <TD noWrap>)</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR><!-- End Table Body --></TABLE></DIV>
<DIV style="MARGIN-TOP: 12pt; FONT-SIZE: 10pt" align=left><U><B>2007:</B></U>
</DIV>
<DIV align=center>
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0 cellPadding=0 width="100%"
border=0><!-- Begin Table Head -->

  <TR vAlign=bottom>
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=2><B>PVAL &amp; PVAL</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=2><B>VIP &amp;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=2><B>$100,000+ face</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=2><B>PDISCO+</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=2><B>value</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=2><B>TOTAL</B></TD>
    <TD>&nbsp;</TD></TR><!-- End Table Head --><!-- Begin Table Body -->
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Contract Owner Net
      Payments:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>8,130</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>3,775,341</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>3,783,471</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Policy Loans:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(1,455,672</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(1,455,672</TD>
    <TD noWrap>)</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Policy Loan Repayments
      and Interest:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,242,605</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,242,605</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Surrenders,
      Withdrawals, and Death Benefits:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(357,459</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(2,555,663</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(2,913,122</TD>
    <TD noWrap>)</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Net Transfers From/To
      Other Subaccounts or Fixed Rate Option:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>65,033</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,060,820</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,125,853</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Administrative and
      Other Charges:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(1,274</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(2,685,908</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(2,687,182</TD>
    <TD noWrap>)</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px"><B>Net Withdrawals by
      Contract Owners</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>$</TD>
    <TD align=right>(285,570</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>$</TD>
    <TD align=right>(618,477</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>$</TD>
    <TD align=right>(904,047</TD>
    <TD noWrap>)</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR><!-- End Table Body --></TABLE></DIV>
<DIV style="MARGIN-TOP: 12pt; FONT-SIZE: 10pt" align=left><U><B>2006:</B></U>
</DIV>
<DIV align=center>
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0 cellPadding=0 width="100%"
border=0><!-- Begin Table Head -->

  <TR vAlign=bottom>
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=2><B>PVAL &amp; PVAL</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=2><B>VIP &amp;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=2><B>$100,000+ face</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=2><B>PDISCO+</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=2><B>value</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=2><B>TOTAL</B></TD>
    <TD>&nbsp;</TD></TR><!-- End Table Head --><!-- Begin Table Body -->
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Contract Owner Net
      Payments:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>7,765</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>3,832,194</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>3,839,959</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Policy Loans:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(1,337,252</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(1,337,252</TD>
    <TD noWrap>)</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Policy Loan Repayments
      and Interest:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,216,739</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,216,739</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Surrenders,
      Withdrawals, and Death Benefits:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(611,189</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(2,485,769</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(3,096,958</TD>
    <TD noWrap>)</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Net Transfers From/To
      Other Subaccounts or Fixed Rate Option:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>134,505</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,152,025</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,286,530</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Administrative and
      Other Charges:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(1,390</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(2,772,852</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(2,774,242</TD>
    <TD noWrap>)</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px"><B>Net Withdrawals by
      Contract Owners</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>$</TD>
    <TD align=right>(470,309</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>$</TD>
    <TD align=right>(394,915</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>$</TD>
    <TD align=right>(865,224</TD>
    <TD noWrap>)</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR><!-- End Table Body --></TABLE></DIV>
<P style="FONT-SIZE: 10pt" align=center><!-- Folio -->A-4 Real Property<!-- /Folio --> </P></DIV><!-- PAGEBREAK -->
<DIV style="FONT-FAMILY: 'Times New Roman',Times,serif">
<DIV style="MARGIN-TOP: 18pt; FONT-SIZE: 10pt" align=center><B>NOTES TO THE
FINANCIAL STATEMENTS OF<BR>THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY
ACCOUNT<BR>December&nbsp;31, 2008</B> </DIV>
<DIV style="MARGIN-TOP: 12pt; FONT-SIZE: 10pt" align=left><B>Note 5: Unit
Activity</B> </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left>Transactions in units
for the years ended December&nbsp;31, 2008, 2007 and 2006 were as follows:
</DIV>
<DIV style="MARGIN-TOP: 12pt; FONT-SIZE: 10pt" align=left><U><B>2008:</B></U>
</DIV>
<DIV align=center>
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0 cellPadding=0 width="100%"
border=0><!-- Begin Table Head -->

  <TR vAlign=bottom>
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3><B>PVAL</B></TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3><B>$100,000+</B></TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=3><B>PDISCO+</B></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=3><B>VIP</B></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=3><B>PVAL</B></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=3><B>face value</B></TD></TR><!-- End Table Head --><!-- Begin Table Body -->
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px"><B>Company
      Contributions:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,542,396</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3><B>Contract Owner Contributions:</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>16,953</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>40,638</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,259,052</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,220,472</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px"><B>Company
      Redemptions:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=right>&nbsp;</TD>
    <TD align=right>(395,329</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3><B>Contract Owner Redemptions:</B></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=right>&nbsp;</TD>
    <TD align=right>(134,494</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=right>&nbsp;</TD>
    <TD align=right>(99,015</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=right>&nbsp;</TD>
    <TD align=right>(1,694,232</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=right>&nbsp;</TD>
    <TD align=right>(1,448,853</TD>
    <TD noWrap>)</TD></TR><!-- End Table Body --></TABLE></DIV>
<DIV style="MARGIN-TOP: 12pt; FONT-SIZE: 10pt" align=left><U><B>2007:</B></U>
</DIV>
<DIV align=center>
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0 cellPadding=0 width="100%"
border=0><!-- Begin Table Head -->

  <TR vAlign=bottom>
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3><B>$100,000+</B></TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=3><B>PDISCO+</B></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=3><B>VIP</B></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=3><B>PVAL</B></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=3><B>face value</B></TD></TR><!-- End Table Head --><!-- Begin Table Body -->
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px"><B>Company
      Contributions:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,339,992</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3><B>Contract Owner Contributions:</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>34,347</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>40,647</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,174,449</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,549,695</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px"><B>Company
      Redemptions:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=right>&nbsp;</TD>
    <TD align=right>(695,138</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3><B>Contract Owner Redemptions:</B></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=right>&nbsp;</TD>
    <TD align=right>(81,964</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=right>&nbsp;</TD>
    <TD align=right>(104,016</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=right>&nbsp;</TD>
    <TD align=right>(1,536,359</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=right>&nbsp;</TD>
    <TD align=right>(1,414,704</TD>
    <TD noWrap>)</TD></TR><!-- End Table Body --></TABLE></DIV>
<DIV style="MARGIN-TOP: 12pt; FONT-SIZE: 10pt" align=left><U><B>2006:</B></U>
</DIV>
<DIV align=center>
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0 cellPadding=0 width="100%"
border=0><!-- Begin Table Head -->

  <TR vAlign=bottom>
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3><B>PVAL</B></TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3><B>$100,000+</B></TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=3><B>PDISCO+</B></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=3><B>VIP</B></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=3><B>PVAL</B></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=3><B>face value</B></TD></TR><!-- End Table Head --><!-- Begin Table Body -->
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px"><B>Company
      Contributions:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,289,694</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3><B>Contract Owner Contributions:</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>61,105</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>42,871</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,371,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,814,985</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px"><B>Company
      Redemptions:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=right>&nbsp;</TD>
    <TD align=right>(1,567,945</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3><B>Contract Owner Redemptions:</B></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=right>&nbsp;</TD>
    <TD align=right>(208,442</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=right>&nbsp;</TD>
    <TD align=right>(97,978</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=right>&nbsp;</TD>
    <TD align=right>(1,589,371</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=right>&nbsp;</TD>
    <TD align=right>(1,776,915</TD>
    <TD noWrap>)</TD></TR><!-- End Table Body --></TABLE></DIV>
<DIV style="MARGIN-TOP: 12pt; FONT-SIZE: 10pt" align=left><B>Note 6: Purchases
and Sales of Investments</B> </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left>The aggregate costs of
purchases and proceeds from sales of investments in the Partnership for the
years ended December&nbsp;31, 2008, 2007 and 2006 were as follows: </DIV>
<DIV align=center>
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0 cellPadding=0 width="100%"
border=0><!-- Begin Table Head -->

  <TR vAlign=bottom>
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=3><B>December 31, 2008</B></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=3><B>December 31, 2007</B></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=3><B>December 31, 2006</B></TD></TR><!-- End Table Head --><!-- Begin Table Body -->
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Purchases:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>$0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>$0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>$</TD>
    <TD align=right>0</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Sales:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>$0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>$0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=right>$</TD>
    <TD align=right>(2,381,736</TD>
    <TD noWrap>)</TD></TR><!-- End Table Body --></TABLE></DIV>
<P style="FONT-SIZE: 10pt" align=center><!-- Folio -->A-5 Real Property<!-- /Folio --> </P></DIV><!-- PAGEBREAK -->
<DIV style="FONT-FAMILY: 'Times New Roman',Times,serif">
<DIV style="MARGIN-TOP: 18pt; FONT-SIZE: 10pt" align=center><B>NOTES TO THE
FINANCIAL STATEMENTS OF<BR>THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY
ACCOUNT<BR>December&nbsp;31, 2008</B> </DIV>
<DIV style="MARGIN-TOP: 12pt; FONT-SIZE: 10pt" align=left><B>Note 7: Financial
Highlights</B> </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left>Prudential sells a
number of variable annuity and variable life insurance products. These products
have unique combinations of features and fees that are charged against the
contract owner's account balance. Differences in the fee structures result in a
variety of unit values, expense ratios and total returns. </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left>The following table was
developed by determining which products offered by Prudential have the lowest
and highest total expense ratio. The summary may not reflect the minimum and
maximum contract charges offered by the Company as contract owners may not have
selected all available and applicable contract options as discussed in Note 1.
The table reflects contract owner units only. </DIV>
<DIV align=center>
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0 cellPadding=0 width="100%"
border=0><!-- Begin Table Head -->

  <TR vAlign=bottom>
    <TD width="25%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=11><B>At year ended</B></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=11><B>For year ended</B></TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3><B>Investment</B></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3><B>Unit Value</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3><B>Income</B></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3><B>Expense Ratio **</B></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3><B>Total Return ***</B></TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle colSpan=3><B>Units (000's)</B></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle colSpan=3><B>Lowest- Highest</B></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle colSpan=3><B>Net Assets (000's)</B></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle colSpan=3><B>Ratio*</B></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle colSpan=3><B>Lowest-Highest</B></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle colSpan=3><B>Lowest-Highest</B></TD></TR><!-- End Table Head --><!-- Begin Table Body -->
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">December&nbsp;31, 2008</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>25,104</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>$</TD>
    <TD noWrap align=right>2.22351 to 2.47629</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>$</TD>
    <TD align=right>59,903</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=right>&nbsp;</TD>
    <TD align=right>4.55</TD>
    <TD noWrap>%</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3>0.60% to 1.20%</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3>-14.43% to -13.92%</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">December&nbsp;31,
      2007</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>25,943</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>$</TD>
    <TD noWrap align=right>2.59836 to 2.87660</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>$</TD>
    <TD align=right>72,012</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=right>&nbsp;</TD>
    <TD align=right>5.28</TD>
    <TD noWrap>%</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3>0.60% to 1.20%</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.63% to
      7.27%</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">December&nbsp;31,
      2006</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>26,281</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>$</TD>
    <TD noWrap align=right>2.43678 to 2.68168</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>$</TD>
    <TD align=right>68,091</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=right>&nbsp;</TD>
    <TD align=right>5.10</TD>
    <TD noWrap>%</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3>0.60% to 1.20%</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3>&nbsp;13.11% to 13.78%</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">December&nbsp;31,
      2005</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>26,664</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>$</TD>
    <TD noWrap align=right>2.15433 to 2.35694</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>$</TD>
    <TD align=right>60,797</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=right>&nbsp;</TD>
    <TD align=right>4.64</TD>
    <TD noWrap>%</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3>0.60% to 1.20%</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3>&nbsp;11.82% to 12.48%</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">December&nbsp;31,
      2004</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>27,073</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>$</TD>
    <TD noWrap align=right>1.92668 to 2.09540</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>$</TD>
    <TD align=right>54,956</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=right>&nbsp;</TD>
    <TD align=right>4.15</TD>
    <TD noWrap>%</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3>0.60% to 1.20%</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.81% to
      5.43%</TD></TR><!-- End Table Body --></TABLE></DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left>The table above
reflects information for units held by contract owners. Prudential also
maintains a position in the Real Property Account, to provide for property
acquisitions and capital expenditure funding needs. Prudential held 11,599,873,
10,452,719, 9,807,865, 10,086,116 and 10,421,720 units representing $26,884,019,
$28,200,465, $24,772,123, $22,480,400 and $20,733,052 of net assets as of
December&nbsp;31, 2008, 2007, 2006, 2005 and 2004, respectively. Charges for
mortality risk, expense risk and administrative expenses are used by Prudential
to purchase additional units in its account resulting in no impact to its net
assets. </DIV>
<DIV align=left>
<DIV
style="BORDER-TOP: #000000 1px solid; MARGIN-TOP: 16pt; FONT-SIZE: 3pt; WIDTH: 18%"></DIV></DIV>
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0 cellPadding=0 width="100%"
border=0>

  <TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width=96></TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left>*</TD>
    <TD>&nbsp;</TD>
    <TD>This amount represents the proportionate share of the net investment
      income from the underlying Partnership divided by the total average assets
      of the Account. This ratio excludes those expenses, such as mortality
      risk, expense risk and administrative charges that result in direct
      reductions in the unit values.</TD></TR>
  <TR style="FONT-SIZE: 3pt">
    <TD>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left>**</TD>
    <TD>&nbsp;</TD>
    <TD>These ratios represent the annualized contract expenses of the
      separate account, consisting primarily of mortality and expense charges,
      for each period indicated. The ratios include only those expenses that
      result in a direct reduction to unit values. Charges made directly to
      contract owner accounts through the redemption of units and expenses of
      the underlying Partnership are excluded.</TD></TR>
  <TR style="FONT-SIZE: 3pt">
    <TD>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left>***</TD>
    <TD>&nbsp;</TD>
    <TD>These amounts represent the total return for the periods indicated,
      including changes in the value of the underlying Partnership, and reflect
      deductions for all items included in the expense ratio. The total return
      does not include any expense assessed through the redemption of units;
      inclusion of these expenses in the calculation would result in a reduction
      in the total return presented.</TD></TR></TABLE>
<DIV style="MARGIN-TOP: 12pt; FONT-SIZE: 10pt" align=left><B>Charges and
Expenses</B> </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left><B>A. Mortality Risk
and Expense Risk Charges</B> </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left>Mortality risk and
expense risk charges are determined daily using an effective annual rate of
1.2%, 0.9%, 0.6% and 1.2% for PDISCO+, PVAL, PVAL $100,000 + face value and VIP,
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 Prudential. The mortality risk and expense risk
charges are assessed through reduction in unit values. </DIV>
<P style="FONT-SIZE: 10pt" align=center><!-- Folio -->A-6 Real Property<!-- /Folio --> </P></DIV><!-- PAGEBREAK -->
<DIV style="FONT-FAMILY: 'Times New Roman',Times,serif">
<DIV style="MARGIN-TOP: 18pt; FONT-SIZE: 10pt" align=center><B>NOTES TO THE
FINANCIAL STATEMENTS OF<BR>THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY
ACCOUNT<BR>December&nbsp;31, 2008</B> </DIV>
<DIV style="MARGIN-TOP: 12pt; FONT-SIZE: 10pt" align=left><B>B. Cost of
Insurance and Other Related Charges</B> </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left>Contract owner
contributions are subject to certain deductions prior to being invested in the
Account. The deductions for PVAL and PVAL $100,000 + face value are
(1)&nbsp;state premium taxes; (2) sales charges, up to 0.50%, which are deducted
in order to compensate Prudential for the cost of selling the contract and
(3)&nbsp;transaction costs 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 Prudential 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. </DIV>
<DIV style="MARGIN-TOP: 12pt; FONT-SIZE: 10pt" align=left><B>C. Deferred Sales
Charge</B> </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left>A deferred sales
charge, applicable to PVAL and PVAL $100,000 + face value and not to exceed 50%
of the first year's primary annual premium for PVAL contracts, is imposed upon
surrenders of certain variable life insurance contracts to compensate Prudential
for sales and other marketing expenses. The amount of any sales charge will
depend on the number of years that have elapsed since the contract was issued.
No sales charge will be imposed after the tenth year of the contract. No sales
charge will be imposed on death benefits. </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left>Also a deferred sales
charge is imposed upon the withdrawals of certain purchase payments to
compensate Prudential for sales and other marketing expenses for PDISCO+ and
VIP. The amount of any sales charge will depend on the amount withdrawn and the
number of contract years that have elapsed since the contract owner or annuitant
made the purchase payments deemed to be withdrawn. No sales charge is made
against the withdrawal of investment income. A reduced sales charge is imposed
in connection with the withdrawal of a purchase payment to affect an annuity if
three or more contract years have elapsed since the contract date, unless the
annuity affected is an annuity certain. No sales charge is imposed upon death
benefit payments or upon transfers made between subaccounts. This deferred sales
charge is assessed through the redemption of units. </DIV>
<DIV style="MARGIN-TOP: 12pt; FONT-SIZE: 10pt" align=left><B>D. Partial
Withdrawal Charge</B> </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left>A charge is imposed by
Prudential on partial withdrawals of the cash surrender value for PVAL and PVAL
$100,000 + face value. 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. </DIV>
<DIV style="MARGIN-TOP: 12pt; FONT-SIZE: 10pt" align=left><B>E. Annual
Maintenance Charge</B> </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left>An annual maintenance
charge, applicable to PDISCO+ and VIP, of $30 will be deducted if and only if
the contract fund is less than $10,000 on a contract anniversary or at the time
a full withdrawal is effected, including a withdrawal to effect an annuity. The
charge is made by reducing accumulation units credited to a contract owner's
account. </DIV>
<DIV style="MARGIN-TOP: 12pt; FONT-SIZE: 10pt" align=left><B>Note 8: Related Party</B> </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left>Prudential and its
affiliates perform various services on behalf of the Partnership in which the
Account invests and may receive fees for the services performed. These services
include, among other things, shareholder communications, preparation, postage,
fund transfer agency and various other record keeping and customer service
functions. </DIV>
<P style="FONT-SIZE: 10pt" align=center><!-- Folio -->A-7 Real Property<!-- /Folio --> </P></DIV>
<DIV style="FONT-FAMILY: 'Times New Roman',Times,serif">
<DIV align=left><A name=344></A></DIV>
<DIV style="MARGIN-TOP: 12pt; FONT-SIZE: 10pt" align=left><B>Report of
Independent Registered Public Accounting Firm</B> </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left>To the Contract Owners
of<BR>The Prudential Variable Contract Real Property Account<BR>and the Board of
Directors of<BR>The Prudential Insurance Company of America </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left>In our opinion, the
accompanying statements of net assets and the related statements of operations
and of changes in net assets present fairly, in all material respects, the
financial position of The Prudential Variable Contract Real Property Account at
December&nbsp;31, 2008 and 2007, and the results of its operations and the
changes in its net assets for each of the three years in the period ended
December&nbsp;31, 2008, in conformity with accounting principles generally
accepted in the United States of America. These financial statements are the
responsibility of the management of The Prudential Insurance Company of America.
Our responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these financial statements in
accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion. </DIV>
<DIV style="MARGIN-TOP: 12pt; FONT-SIZE: 10pt" align=left>PricewaterhouseCoopers
LLP<BR>New York, New York<BR>March&nbsp;20, 2009 </DIV>
<P style="FONT-SIZE: 10pt" align=center><!-- Folio -->A-8 Real Property<!-- /Folio --> </P></DIV>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font FACE="ARIAL" SIZE=2>THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP FINANCIAL STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="609" style=' border-collapse:collapse'>
    <tr>
        <td width="576" nowrap valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'><font face="Arial" size=2>Consolidated Statements of Assets and Liabilities &#150; December 31, 2008 and 2007</font></p> </td>
        <td width="33" nowrap valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p align=right style='margin:0pt;margin-bottom:.0001pt;text-align:right'><font FACE="ARIAL" SIZE=2>B1</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="609" style=' border-collapse:collapse'>
    <tr>
        <td width="576" nowrap valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'><font face="Arial" size=2>Consolidated Statements of Operations &#150; Years Ended December 31, 2008, 2007, and 2006</font></p> </td>
        <td width="33" nowrap valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p align=right style='margin:0pt;margin-bottom:.0001pt;text-align:right'><font FACE="ARIAL" SIZE=2>B2</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="609" style=' border-collapse:collapse'>
    <tr>
        <td width="576" nowrap valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'><font face="Arial" size=2>Consolidated Statements of Changes in Net Assets &#150; Years Ended December 31, 2008, 2007, and 2006</font></p> </td>
        <td width="33" nowrap valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p align=right style='margin:0pt;margin-bottom:.0001pt;text-align:right'><font FACE="ARIAL" SIZE=2>B3</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="609" style=' border-collapse:collapse'>
    <tr>
        <td width="576" nowrap valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'><font face="Arial" size=2>Consolidated Statements of Cash Flows &#150; Years Ended December 31, 2008, 2007, and 2006</font></p> </td>
        <td width="33" nowrap valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p align=right style='margin:0pt;margin-bottom:.0001pt;text-align:right'><font FACE="ARIAL" SIZE=2>B4</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="609" style=' border-collapse:collapse'>
    <tr>
        <td width="576" nowrap valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'><font face="Arial" size=2>Consolidated Schedules of Investments &#150; December 31, 2008 and 2007</font></p> </td>
        <td width="33" nowrap valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p align=right style='margin:0pt;margin-bottom:.0001pt;text-align:right'><font FACE="ARIAL" SIZE=2>B5</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="609" style=' border-collapse:collapse'>
    <tr>
        <td width="576" nowrap valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'><font face="Arial" size=2>Notes to Consolidated Financial Statements</font></p> </td>
        <td width="33" nowrap valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p align=right style='margin:0pt;margin-bottom:.0001pt;text-align:right'><font FACE="ARIAL" SIZE=2>B7</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="615" style=' border-collapse:collapse'>
    <tr>
        <td width="576" nowrap valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'><font face="Arial" size=2>Report of Independent Registered Public Accounting Firm</font></p> </td>
        <td width="39" nowrap valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p align=right style='margin:0pt;margin-bottom:.0001pt;text-align:right'><font FACE="ARIAL" SIZE=2>B20</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b>INDEX - Real Property</b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>



<DIV style="FONT-FAMILY: 'Times New Roman',Times,serif">
<DIV align=left><A name=312></A></DIV>
<DIV style="MARGIN-TOP: 18pt; FONT-SIZE: 10pt" align=center><B>THE PRUDENTIAL
VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP</B> </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=center><B>CONSOLIDATED
STATEMENTS OF ASSETS AND LIABILITIES</B> </DIV>
<DIV align=center>
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0 cellPadding=0 width="100%"
border=0><!-- Begin Table Head -->

  <TR vAlign=bottom>
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=2><B>December 31, 2008</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=2><B>December 31, 2007</B></TD>
    <TD>&nbsp;</TD></TR><!-- End Table Head --><!-- Begin Table Body -->
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px"><B>ASSETS</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">REAL ESTATE INVESTMENTS
      - At estimated fair value:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 30px; TEXT-INDENT: -15px">Real estate and
      improvements (cost: 12/31/2008 - $245,808,214; 12/31/2007 -
      $236,466,116)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>221,196,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>254,394,053</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 30px; TEXT-INDENT: -15px">Real estate
      partnerships and preferred equity investments (cost: 12/31/2008 -
      $14,324,204; 12/31/2007 - $14,523,934)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>11,796,716</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>14,523,934</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 45px; TEXT-INDENT: -15px">Total real estate
      investments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>232,992,716</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>268,917,987</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">CASH AND CASH
      EQUIVALENTS</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>27,736,520</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>18,215,871</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">OTHER ASSETS,
    NET</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>2,936,037</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>3,033,040</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 45px; TEXT-INDENT: -15px">Total assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>263,665,273</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>290,166,898</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px"><B>LIABILITIES &amp;
      PARTNERS' EQUITY</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">INVESTMENT LEVEL DEBT
      (net of unamortized discount: 12/31/08 $26,480; 12/31/07 $-)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>40,047,827</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>32,121,712</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">ACCOUNTS PAYABLE AND
      ACCRUED EXPENSES</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>2,924,938</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>2,184,812</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">DUE TO
    AFFILIATES</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>851,595</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>901,371</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">OTHER
    LIABILITIES</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>978,342</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>920,454</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">MINORITY
    INTEREST</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>4,924,263</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>7,004,790</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 45px; TEXT-INDENT: -15px">Total
    liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>49,726,965</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>43,133,139</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">COMMITMENTS AND
      CONTINGENCIES</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">PARTNERS'
    EQUITY</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>213,938,308</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>247,033,759</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 45px; TEXT-INDENT: -15px">Total liabilities and
      partners' equity</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>263,665,273</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>290,166,898</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">NUMBER OF SHARES
      OUTSTANDING AT END OF PERIOD</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>6,758,960</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>6,758,960</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">PER SHARE NET ASSET
      VALUE AT END OF PERIOD</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>31.65</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>36.55</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR><!-- End Table Body --></TABLE></DIV>
<DIV style="MARGIN-TOP: 18pt; FONT-SIZE: 10pt" align=center><B>The accompanying
notes are an integral part of these consolidated financial statements.</B>
</DIV>
<P style="FONT-SIZE: 10pt" align=center><!-- Folio -->B-1 Real Property<!-- /Folio --> </P></DIV><!-- PAGEBREAK -->
<DIV style="FONT-FAMILY: 'Times New Roman',Times,serif">
<DIV style="MARGIN-TOP: 18pt; FONT-SIZE: 10pt" align=center><B>THE PRUDENTIAL
VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP</B> </DIV>
<DIV align=left><A name=313></A></DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=center><B>CONSOLIDATED
STATEMENTS OF OPERATIONS</B> </DIV>
<DIV align=center>
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0 cellPadding=0 width="100%"
border=0><!-- Begin Table Head -->

  <TR vAlign=bottom>
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=10><B>Year Ended December 31,</B></TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=2><B>2008</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=2><B>2007</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=2><B>2006</B></TD>
    <TD>&nbsp;</TD></TR><!-- End Table Head --><!-- Begin Table Body -->
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">INVESTMENT
    INCOME:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 30px; TEXT-INDENT: -15px">Revenue from real
      estate and improvements</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>30,723,626</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>29,094,968</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>25,460,860</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 30px; TEXT-INDENT: -15px">Equity in income of
      real estate partnerships</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>994,333</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,136,936</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,181,772</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 30px; TEXT-INDENT: -15px">Interest and equity
      income on mortgage and other loans receivable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>125,510</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 30px; TEXT-INDENT: -15px">Interest on short-term
      investments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>406,431</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,468,159</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,855,345</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 45px; TEXT-INDENT: -15px">Total investment
      income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>32,124,390</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>31,700,063</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>28,623,487</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">INVESTMENT
      EXPENSES:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 30px; TEXT-INDENT: -15px">Operating</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>7,193,577</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>6,954,999</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>6,355,543</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 30px; TEXT-INDENT: -15px">Investment management
      fee</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>3,447,030</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>3,380,090</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>3,075,176</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 30px; TEXT-INDENT: -15px">Real estate
    taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>2,957,947</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>2,466,704</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>2,069,169</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 30px; TEXT-INDENT: -15px">Administrative</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>5,927,773</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>4,056,557</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>3,923,413</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 30px; TEXT-INDENT: -15px">Interest
    expense</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,970,462</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>2,019,937</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,814,686</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 30px; TEXT-INDENT: -15px">Minority
    interest</DIV></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(510,583</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>158,196</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>223,772</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 45px; TEXT-INDENT: -15px">Total investment
      expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>20,986,206</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>19,036,483</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>17,461,759</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">NET INVESTMENT
      INCOME</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>11,138,184</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>12,663,580</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>11,161,728</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">REALIZED AND UNREALIZED
      GAIN (LOSS)&nbsp;ON INVESTMENTS:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 30px; TEXT-INDENT: -15px">Net proceeds from real
      estate investments sold</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>18,353,122</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>67,770</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 30px; TEXT-INDENT: -15px">Less: Cost of real
      estate investments sold</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>19,063,985</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 30px; TEXT-INDENT: -15px">Gain
      (loss)&nbsp;realized from real estate investments sold</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(710,863</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>67,770</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 30px; TEXT-INDENT: -15px">Less: Reversal of prior
      periods' unrealized gain (loss)&nbsp;on real estate investments
    sold</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(1,380,344</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Net gain
      (loss)&nbsp;recognized on real estate investments sold</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>669,481</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>67,770</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Unrealized gain
      (loss)&nbsp;on investments:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 30px; TEXT-INDENT: -15px">Change in unrealized
      gain (loss)&nbsp;on real estate investments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(45,661,694</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>5,620,864</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>20,294,808</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 30px; TEXT-INDENT: -15px">Less: Minority interest
      in unrealized gain (loss)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(1,428,059</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>836,750</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>2,010,573</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 30px; TEXT-INDENT: -15px">Net unrealized gain
      (loss)&nbsp;on real estate investments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(44,233,635</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>4,784,114</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>18,284,235</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">NET REALIZED AND
      UNREALIZED GAIN (LOSS) ON REAL ESTATE INVESTMENTS</DIV></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(44,233,635</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>5,453,595</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>18,352,005</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">INCREASE
      (DECREASE)&nbsp;IN NET ASSETS RESULTING FROM OPERATIONS</DIV></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>($33,095,451</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>18,117,175</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>29,513,733</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR><!-- End Table Body --></TABLE></DIV>
<DIV style="MARGIN-TOP: 18pt; FONT-SIZE: 10pt" align=center><B>The accompanying
notes are an integral part of these consolidated financial statements.</B>
</DIV>
<P style="FONT-SIZE: 10pt" align=center><!-- Folio -->B-2 Real Property<!-- /Folio --> </P></DIV><!-- PAGEBREAK -->
<DIV style="FONT-FAMILY: 'Times New Roman',Times,serif">
<DIV style="MARGIN-TOP: 18pt; FONT-SIZE: 10pt" align=center><B>THE PRUDENTIAL
VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP</B> </DIV>
<DIV align=left><A name=314></A></DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=center><B>CONSOLIDATED
STATEMENTS OF CHANGES IN NET ASSETS</B> </DIV>
<DIV align=center>
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0 cellPadding=0 width="100%"
border=0><!-- Begin Table Head -->

  <TR vAlign=bottom>
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=10><B>Year Ended December 31,</B></TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=2><B>2008</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=2><B>2007</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=2><B>2006</B></TD>
    <TD>&nbsp;</TD></TR><!-- End Table Head --><!-- Begin Table Body -->
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">INCREASE
      (DECREASE)&nbsp;IN NET ASSETS RESULTING FROM OPERATIONS:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 30px; TEXT-INDENT: -15px">Net investment
      income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>11,138,184</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>12,663,580</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>11,161,728</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 30px; TEXT-INDENT: -15px">Net gain
      (loss)&nbsp;realized and unrealized from real estate investments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(44,233,635</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>5,453,595</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>18,352,005</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 45px; TEXT-INDENT: -15px">Increase
      (decrease)&nbsp;in net assets resulting from operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(33,095,451</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>18,117,175</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>29,513,733</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">INCREASE
      (DECREASE)&nbsp;IN NET ASSETS RESULTING FROM CAPITAL
TRANSACTIONS:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Withdrawals</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 30px; TEXT-INDENT: -15px">(2008- 0; 2007 -0; and
      2006 -182,671 shares, respectively)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(6,000,000</TD>
    <TD noWrap>)</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 45px; TEXT-INDENT: -15px">Increase
      (decrease)&nbsp;in net assets resulting from capital transactions</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(6,000,000</TD>
    <TD noWrap>)</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">INCREASE
      (DECREASE)&nbsp;IN NET ASSETS</DIV></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(33,095,451</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>18,117,175</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>23,513,733</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">NET ASSETS - Beginning
      of period</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>247,033,759</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>228,916,584</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>205,402,851</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">NET ASSETS - End of
      period</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>213,938,308</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>247,033,759</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>228,916,584</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR><!-- End Table Body --></TABLE></DIV>
<DIV style="MARGIN-TOP: 18pt; FONT-SIZE: 10pt" align=center><B>The accompanying
notes are an integral part of these consolidated financial statements.</B>
</DIV>
<P style="FONT-SIZE: 10pt" align=center><!-- Folio -->B-3 Real Property<!-- /Folio --> </P></DIV><!-- PAGEBREAK -->
<DIV style="FONT-FAMILY: 'Times New Roman',Times,serif">
<DIV style="MARGIN-TOP: 18pt; FONT-SIZE: 10pt" align=center><B>THE PRUDENTIAL
VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP</B> </DIV>
<DIV align=left><A name=315></A></DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=center><B>CONSOLIDATED
STATEMENTS OF CASH FLOWS</B> </DIV>
<DIV align=center>
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0 cellPadding=0 width="100%"
border=0><!-- Begin Table Head -->

  <TR vAlign=bottom>
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=10><B>Year Ended December 31,</B></TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=2><B>2008</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=2><B>2007</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=2><B>2006</B></TD>
    <TD>&nbsp;</TD></TR><!-- End Table Head --><!-- Begin Table Body -->
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">CASH FLOWS FROM
      OPERATING ACTIVITIES:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Net increase
      (decrease)&nbsp;in net assets from operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>($33,095,451</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>18,117,175</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>29,513,733</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Adjustments to
      reconcile net increase (decrease)&nbsp;in net assets to net cash from
      operating activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 45px; TEXT-INDENT: -15px">Net realized and
      unrealized loss (gain)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>44,233,635</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(5,453,595</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(18,352,005</TD>
    <TD noWrap>)</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 45px; TEXT-INDENT: -15px">Amortization of
      deferred financing costs</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>94,554</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>193,594</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 45px; TEXT-INDENT: -15px">Distributions in excess
      of (less than) equity in income of real estate partnerships
      operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>199,730</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>35,287</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(87,396</TD>
    <TD noWrap>)</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 45px; TEXT-INDENT: -15px">Minority interest in
      consolidated partnerships</DIV></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(510,583</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>158,196</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>223,772</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 45px; TEXT-INDENT: -15px">Bad debt
    expense</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,139,238</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>101,185</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(239,380</TD>
    <TD noWrap>)</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 45px; TEXT-INDENT: -15px">(Increase) decrease
      in:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 60px; TEXT-INDENT: -15px">Other assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(1,136,791</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>166,010</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>37,951</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 45px; TEXT-INDENT: -15px">Increase
      (decrease)&nbsp;in:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 60px; TEXT-INDENT: -15px">Accounts payable and
      accrued expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>740,126</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(907,118</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>546,878</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 60px; TEXT-INDENT: -15px">Due to
    affiliates</DIV></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(49,776</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>111,482</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>28,963</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 60px; TEXT-INDENT: -15px">Other
    liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>57,888</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>43,967</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>404,151</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 30px; TEXT-INDENT: -15px">Net cash flows from
      (used in) operating activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>11,672,570</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>12,566,183</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>12,076,667</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">CASH FLOWS FROM
      INVESTING ACTIVITIES:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 30px; TEXT-INDENT: -15px">Net proceeds from real
      estate investments sold</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>18,353,122</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>67,770</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 30px; TEXT-INDENT: -15px">Acquisition of real
      estate and improvements</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(42,218,143</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(14,797,730</TD>
    <TD noWrap>)</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 30px; TEXT-INDENT: -15px">Additions to real
      estate and improvements</DIV></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(9,936,151</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(3,554,451</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(3,417,034</TD>
    <TD noWrap>)</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 30px; TEXT-INDENT: -15px">Contributions to real
      estate partnerships</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(7,289,487</TD>
    <TD noWrap>)</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 30px; TEXT-INDENT: -15px">Return of investment in
      real estate partnerships</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>3,620,455</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 30px; TEXT-INDENT: -15px">Collection of mortgage
      loan receivable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>4,277,769</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 30px; TEXT-INDENT: -15px">Net cash flows from
      (used in) investing activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(9,936,151</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(27,419,472</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(17,538,257</TD>
    <TD noWrap>)</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">CASH FLOWS FROM
      FINANCING ACTIVITIES:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 30px; TEXT-INDENT: -15px">Withdrawals</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(6,000,000</TD>
    <TD noWrap>)</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 30px; TEXT-INDENT: -15px">Proceeds from
      investment level debt</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>24,016,161</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 30px; TEXT-INDENT: -15px">Principal payments on
      investment level debt</DIV></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(16,090,046</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(588,776</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(485,119</TD>
    <TD noWrap>)</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 30px; TEXT-INDENT: -15px">Contributions to
      minority interest partners</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>80,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>294,143</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 30px; TEXT-INDENT: -15px">Distributions to
      minority interest partners</DIV></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(221,885</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(35,739</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(121,244</TD>
    <TD noWrap>)</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 30px; TEXT-INDENT: -15px">Net cash flows from
      (used in) financing activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>7,784,230</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(330,372</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(6,606,363</TD>
    <TD noWrap>)</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">NET CHANGE IN CASH AND
      CASH EQUIVALENTS</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>9,520,649</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(15,183,661</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(12,067,953</TD>
    <TD noWrap>)</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">CASH AND CASH
      EQUIVALENTS - Beginning of period</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>18,215,871</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>33,399,532</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>45,467,485</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">CASH AND CASH
      EQUIVALENTS - End of period</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>27,736,520</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>18,215,871</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>33,399,532</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR><!-- End Table Body --></TABLE></DIV>
<DIV style="MARGIN-TOP: 18pt; FONT-SIZE: 10pt" align=center><B>The accompanying
notes are an integral part of these consolidated financial statements.</B>
</DIV>
<P style="FONT-SIZE: 10pt" align=center><!-- Folio -->B-4 Real Property<!-- /Folio --> </P></DIV><!-- PAGEBREAK -->
<DIV style="FONT-FAMILY: 'Times New Roman',Times,serif">
<DIV style="MARGIN-TOP: 18pt; FONT-SIZE: 10pt" align=center><B>THE PRUDENTIAL
VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP</B> </DIV>
<DIV align=left><A name=316></A></DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=center><B>CONSOLIDATED
SCHEDULE OF INVESTMENTS</B> </DIV>
<DIV align=center>
<TABLE style="FONT-SIZE: 9pt" cellSpacing=0 cellPadding=0 width="100%" border=0><!-- Begin Table Head -->

  <TR vAlign=bottom>
    <TD width="20%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle><B>2008 Total Rentable</B></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=6>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 0px solid" noWrap align=middle><B>Square
      Feet</B></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=7><B>December 31,</B></TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 0px solid" noWrap align=middle><B>Unless
      Otherwise</B></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=3><B>2008</B></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=3><B>2007</B></TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle><B>December 31, 2008</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle><B>Indicated</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle><B>Estimated Fair</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle><B>Estimated Fair</B></TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD noWrap align=left><B>Property Name</B></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle><B>Ownership</B></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle><B>City, State</B></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle><B>(Unaudited)</B></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle><B>Cost</B></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle><B>Value</B></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle><B>Cost</B></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle><B>Value</B></TD></TR><!-- End Table Head --><!-- Begin Table Body -->
  <TR style="FONT-SIZE: 1px">
    <TD style="BORDER-TOP: #000000 1px solid" align=left
  colSpan=15>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px"><B>OFFICES</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">750
Warrenville</DIV></TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>WO</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>Lisle, IL</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>103,193</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>$&nbsp;&nbsp;&nbsp;25,218,777</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9,542,046</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>$&nbsp;&nbsp;&nbsp;24,512,521</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>$&nbsp;&nbsp;&nbsp;11,500,000</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Summit @ Cornell
      Oaks</DIV></TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>WO</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>Beaverton , OR</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>72,109</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>12,512,985</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>11,000,000</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>12,401,252</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>13,800,000</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Westpark</DIV></TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>WO</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>Nashville, TN</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>97,199</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>12,060,981</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>13,753,954</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>11,323,885</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>13,100,000</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Financial
Plaza</DIV></TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>WO</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>Brentwood, TN</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>98,049</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>12,389,207</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>12,700,000</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>12,371,092</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>13,700,000</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD style="BORDER-TOP: #000000 1px solid" align=left
  colSpan=15>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>Offices % as of 12/31/08</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>22%</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>62,181,950</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>46,996,000</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>60,608,750</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>52,100,000</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV
    style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px"><B>APARTMENTS</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Brookwood
      Apartments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>WO</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>Atlanta, GA</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>240 Units</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>19,810,918</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>16,100,000</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>19,548,293</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>20,200,000</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Dunhill Trace
      Apartments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>WO</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>Raleigh, NC</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>250 Units</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>16,433,544</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>16,600,000</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>16,375,037</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>19,800,000</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Broadstone
      Crossing</DIV></TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>WO</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>Austin, TX</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>225 Units</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>22,732,363</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>25,000,000</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>22,723,849</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>27,100,000</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">The Reserve At
      Waterford Lakes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>WO</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>Charlotte, NC</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>140 Units</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>13,649,938</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>11,000,000</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>13,535,450</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>13,500,000</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD style="BORDER-TOP: #000000 1px solid" align=left
  colSpan=15>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top noWrap align=middle>Apartments % as of 12/31/08</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>32%</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>72,626,763</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>68,700,000</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>72,182,629</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>80,600,000</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px"><B>RETAIL</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">King's Market</DIV></TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>WO</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>Rosewell, GA</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>314,358</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>37,893,595</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>14,100,000</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>37,883,222</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>24,700,000</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Hampton Towne
      Center</DIV></TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>WO</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>Hampton, VA</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>174,540</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>18,110,816</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>23,400,000</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>18,050,090</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>26,500,000</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">White Marlin
    Mall</DIV></TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>CJV</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>Ocean City, MD</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>186,016</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>23,271,014</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>28,600,000</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>17,016,325</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>23,900,000</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Westminster Crossing
      East, LLC</DIV></TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>CJV</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>Westminster, MD</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>89,890</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>15,044,721</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>17,700,000</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>15,637,841</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>21,094,053</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Kansas City
      Portfolio</DIV></TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>EJV</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>Kansas City, KS;MO</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>487,660</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>13,595</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>13,595</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>140,911</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>140,911</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">CARS Preferred
      Equity</DIV></TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>PE</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>Various</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>N/A</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>14,310,609</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>11,783,121</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>14,383,023</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>14,383,023</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Harnett
    Crossing</DIV></TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>CJV</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>Dunn, NC</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>193,235</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>6,366,767</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>3,900,000</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>5,958,844</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>7,200,000</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD style="BORDER-TOP: #000000 1px solid" align=left
  colSpan=15>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>Retail % as of 12/31/08</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>47%</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>115,011,117</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>99,496,716</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>109,070,256</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>117,917,987</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px"><B>HOTEL</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Portland Crown
      Plaza</DIV></TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>CJV</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>Portland, OR</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>161 Rooms</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>10,312,588</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>17,800,000</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>9,128,415</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>18,300,000</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD style="BORDER-TOP: #000000 1px solid" align=left
  colSpan=15>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>Hotel % as of 12/31/08</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>8%</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>10,312,588</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>17,800,000</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>9,128,415</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right>18,300,000</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left colSpan=5>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px"><B>Total Real Estate
      Investments as a Percentage of Net Assets as of 12/31/08</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle><B>109%</B></TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right><B>$260,132,418</B></TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right><B>$232,992,716</B></TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right><B>$250,990,050</B></TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=right><B>$268,917,987</B></TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD vAlign=top align=middle>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" vAlign=top noWrap
    align=middle>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" vAlign=top align=left
    colSpan=7>&nbsp;</TD></TR><!-- End Table Body --></TABLE></DIV>
<DIV align=center>
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0 cellPadding=0 width="100%"
border=0><!-- Begin Table Head -->

  <TR vAlign=bottom>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="95%">&nbsp;</TD></TR><!-- End Table Head --><!-- Begin Table Body -->
  <TR vAlign=bottom>
    <TD vAlign=top>
      <DIV style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px">WO </DIV></TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=left>- </TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=left>Wholly Owned Investment</TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top>
      <DIV style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px">CJV </DIV></TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=left>- </TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=left>Consolidated Joint Venture</TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top>
      <DIV style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px">EJV </DIV></TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=left>- </TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=left>Joint Venture Investment accounted for under the
      equity method</TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top>
      <DIV style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px">PE </DIV></TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=left>- </TD>
    <TD>&nbsp;</TD>
    <TD vAlign=top align=left>Preferred equity investments accounted for under
      the equity method</TD></TR><!-- End Table Body --></TABLE></DIV>
<DIV style="MARGIN-TOP: 18pt; FONT-SIZE: 10pt" align=center><B>The accompanying
notes are an integral part of these consolidated financial statements.</B>
</DIV>
<P style="FONT-SIZE: 10pt" align=center><!-- Folio -->B-5 Real Property<!-- /Folio --> </P></DIV><!-- PAGEBREAK -->
<DIV style="FONT-FAMILY: 'Times New Roman',Times,serif">
<DIV style="MARGIN-TOP: 18pt; FONT-SIZE: 10pt" align=center><B>THE PRUDENTIAL
VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP</B> </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=center><B>CONSOLIDATED
SCHEDULE OF INVESTMENTS</B> </DIV>
<DIV align=center>
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0 cellPadding=0 width="100%"
border=0><!-- Begin Table Head -->

  <TR vAlign=bottom>
    <TD width="20%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=6><B>December 31, 2008</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=6><B>December 31, 2007</B></TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=2><B>Estimated</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=2><B>Estimated</B></TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=2><B>Face Amount</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=2><B>Cost</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=2><B>Fair Value</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=2><B>Cost</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=2><B>Fair Value</B></TD>
    <TD>&nbsp;</TD></TR><!-- End Table Head --><!-- Begin Table Body -->
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px"><B>CASH AND CASH
      EQUIVALENTS - Percentage of Net Assets</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>13.0</TD>
    <TD noWrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>7.4</TD>
    <TD noWrap>%</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Federal Home Loan Bank,
      0 coupon bond, January, 2009</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>1,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>1,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>1,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>2,065,813</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>2,065,813</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Federal Home Loan Bank,
      0 coupon bond, January, 2009</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>4,446,932</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>4,446,932</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>4,446,932</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>4,998,313</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>4,998,313</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Federal Home Loan Bank,
      0 coupon bond, January, 2009</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,999,985</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,999,985</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,999,985</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>9,997,633</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>9,997,633</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Federal Home Loan Bank,
      0 coupon bond, February, 2009</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>18,831,977</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>18,831,977</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>18,831,977</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px"><B>Total Cash
      Equivalents</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>26,278,894</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>26,278,894</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>17,061,759</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>17,061,759</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px"><B>Cash</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,457,626</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,457,626</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,154,112</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,154,112</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px"><B>Total Cash and Cash
      Equivalents</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>27,736,520</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>27,736,520</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>18,215,871</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>18,215,871</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR><!-- End Table Body --></TABLE></DIV>
<DIV style="MARGIN-TOP: 18pt; FONT-SIZE: 10pt" align=center><B>The accompanying
notes are an integral part of these consolidated financial statements.</B>
</DIV>
<P style="FONT-SIZE: 10pt" align=center><!-- Folio -->B-6 Real Property<!-- /Folio --> </P></DIV><!-- PAGEBREAK -->
<DIV style="FONT-FAMILY: 'Times New Roman',Times,serif">
<DIV align=left><A name=317></A></DIV>
<DIV style="MARGIN-TOP: 18pt; FONT-SIZE: 10pt" align=center><B>NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS OF<BR>THE PRUDENTIAL VARIABLE CONTRACT REAL
PROPERTY PARTNERSHIP<BR>For Years Ended December&nbsp;31, 2008, 2007, and
2006</B> </DIV>
<DIV style="MARGIN-TOP: 12pt; FONT-SIZE: 10pt" align=left><B>Note 1:
Organization</B> </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left>On April&nbsp;29, 1988,
The Prudential Variable Contract Real Property Partnership (the "Partnership"),
a general partnership organized under New Jersey law, was formed through an
agreement among The Prudential Insurance Company of America ("Prudential"),
Pruco Life Insurance Company ("Pruco Life"), and Pruco Life Insurance Company of
New Jersey ("Pruco Life of New Jersey"). The Partnership was established as a
means by which assets allocated to the real estate investment option under
certain variable life insurance and variable annuity contracts issued by the
respective companies could be invested in a commingled pool. The partners in the
Partnership are Prudential, Pruco Life and Pruco Life of New Jersey. The
Partners may make additional daily cash contributions to or withdrawals from the
Partnership in accordance with the provisions of the Partnership Agreement.
</DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left>The Partnership's
policy is to invest at least 65% of its assets in direct ownership interests in
income-producing real estate and participating mortgage loans. </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left>The per share net asset
value of the Partnership's shares is determined daily, consistent with the
Partnership Agreement. On each day during which the New York Stock Exchange is
open for business, the net asset value of the Partnership is estimated using the
estimated fair value of its assets, principally as described in Notes 2A, 2B and
2C below, reduced by any liabilities of the Partnership. The periodic
adjustments to property values described in Notes 2A, 2B and 2C below and other
adjustments to previous estimates are made on a prospective basis. There can be
no assurance that all such adjustments to estimates will be made timely. </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left>Shares of the
Partnership are held by The Prudential Variable Contract Real Property Account,
Pruco Life Variable Contract Real Property Account and Pruco Life of New Jersey
Variable Contract Real Property Account (the "Real Property Accounts") and may
be purchased and sold at the then current per share net asset value of the
Partnership's net assets. Per share net asset value is calculated by dividing
the net asset value of net assets of the Partnership as determined above by the
number of shares outstanding. A contract owner participates in the Partnership
through interests in the Real Property Accounts. </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left>PREI&reg; is the real
estate advisory unit of Prudential Investment Management, Inc. ("PIM"), which is
an indirectly owned subsidiary of Prudential Financial Inc. ("PFI"). PREI
provides investment advisory services to the Partnership's partners pursuant to
the terms of the Advisory Agreement as described in Note 12. </DIV>
<DIV style="MARGIN-TOP: 12pt; FONT-SIZE: 10pt" align=left><B>Note 2: Summary of
Significant Accounting Policies</B> </DIV>
<DIV style="MARGIN-TOP: 6pt">
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0 cellPadding=0 width="100%"
border=0>

  <TR
  style="FONT-SIZE: 10pt; BACKGROUND: none transparent scroll repeat 0% 0%; COLOR: #000000"
  vAlign=top>
    <TD style="BACKGROUND: none transparent scroll repeat 0% 0%"
    width="8%">&nbsp;</TD>
    <TD noWrap align=left width="3%">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Basis of Presentation </I>- The accompanying consolidated financial
      statements of the Partnership have been presented on the fair value basis
      of accounting in conformity with accounting principles generally accepted
      in the United States of America. The consolidated financial statements of
      Partnership include wholly owned entities, and those real estate
      partnerships in which the Partnership has a controlling interest. All
      significant inter-company balances and transactions have been eliminated
      in consolidation.</TD></TR>
  <TR>
    <TD style="FONT-SIZE: 6pt">&nbsp;</TD></TR>
  <TR
  style="FONT-SIZE: 10pt; BACKGROUND: none transparent scroll repeat 0% 0%; COLOR: #000000"
  vAlign=top>
    <TD style="BACKGROUND: none transparent scroll repeat 0% 0%"
    width="8%">&nbsp;</TD>
    <TD noWrap align=left width="3%">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Management's Use of Estimates in the Financial Statements - </I>The
      preparation of financial statements in conformity with accounting
      principles generally accepted in the United States of America requires
      management to make estimates and assumptions that affect the amounts
      reported in the consolidated financial statements and accompanying notes.
      Actual results could differ from those
estimates.</TD></TR></TABLE></DIV>
<P style="FONT-SIZE: 10pt" align=center><!-- Folio -->B-7 Real Property<!-- /Folio --> </P></DIV><!-- PAGEBREAK -->
<DIV style="FONT-FAMILY: 'Times New Roman',Times,serif">
<DIV style="MARGIN-TOP: 6pt">
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0 cellPadding=0 width="100%"
border=0>
  </TABLE></DIV>
<DIV style="MARGIN-TOP: 18pt; FONT-SIZE: 10pt" align=center><B>NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS OF<BR>THE PRUDENTIAL VARIABLE CONTRACT REAL
PROPERTY PARTNERSHIP<BR>For Years Ended December&nbsp;31, 2008, 2007, and
2006</B> </DIV>
<DIV style="MARGIN-TOP: 12pt; FONT-SIZE: 10pt" align=left><B>Note 2: Summary of
Significant Accounting Policies (continued)</B> </DIV>
<DIV style="MARGIN-TOP: 6pt">
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0 cellPadding=0 width="100%"
border=0>

  <TR
  style="FONT-SIZE: 10pt; BACKGROUND: none transparent scroll repeat 0% 0%; COLOR: #000000"
  vAlign=top>
    <TD style="BACKGROUND: none transparent scroll repeat 0% 0%"
    width="8%">&nbsp;</TD>
    <TD noWrap align=left width="3%"><I>C.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Accounting Pronouncements Adopted - </I>The Partnership adopted
      FASB Interpretation No.&nbsp;48 ("FIN 48"), "Accounting for Uncertainty in
      Income Taxes," an Interpretation of FASB Statement No.&nbsp;109 as of
      January&nbsp;1, 2007. This interpretation prescribes a comprehensive model
      for how a Partnership should recognize, measure, present, and disclose in
      its financial statements uncertain tax positions that the Partnership has
      taken or expects to take on a tax return. The adoption of FIN 48 had no
      effect to the financial position and result of operations of the
      Partnership.</TD></TR>
  <TR>
    <TD style="FONT-SIZE: 6pt">&nbsp;</TD></TR>
  <TR
  style="FONT-SIZE: 10pt; BACKGROUND: none transparent scroll repeat 0% 0%; COLOR: #000000"
  vAlign=top>
    <TD style="BACKGROUND: none transparent scroll repeat 0% 0%"
    width="8%">&nbsp;</TD>
    <TD noWrap align=left width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In September&nbsp;2006, the FASB issued SFAS No.&nbsp;157, "Fair Value
      Measurements." This statement defines fair value, establishes a framework
      for measuring fair value in generally accepted accounting principles, and
      requires additional disclosures about fair value measurements. This
      statement does not require any new fair value measurements, but the
      application of this statement could change current practices in
      determining fair value.</TD></TR>
  <TR>
    <TD style="FONT-SIZE: 6pt">&nbsp;</TD></TR>
  <TR
  style="FONT-SIZE: 10pt; BACKGROUND: none transparent scroll repeat 0% 0%; COLOR: #000000"
  vAlign=top>
    <TD style="BACKGROUND: none transparent scroll repeat 0% 0%"
    width="8%">&nbsp;</TD>
    <TD noWrap align=left width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In February&nbsp;2007, the FASB issued SFAS No.&nbsp;159, "The Fair
      Value Option for Financial Assets and Financial Liabilities," including an
      amendment of FASB Statement No.&nbsp;115. This statement provides
      partnerships with an option to report selected financial assets and
      liabilities at fair value.</TD></TR>
  <TR>
    <TD style="FONT-SIZE: 6pt">&nbsp;</TD></TR>
  <TR
  style="FONT-SIZE: 10pt; BACKGROUND: none transparent scroll repeat 0% 0%; COLOR: #000000"
  vAlign=top>
    <TD style="BACKGROUND: none transparent scroll repeat 0% 0%"
    width="8%">&nbsp;</TD>
    <TD noWrap align=left width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>SFAS No.&nbsp;157 and SFAS No.&nbsp;159 are effective for fiscal years
      beginning after November&nbsp;15, 2007 with early adoption permitted. The
      Partnership adopted SFAS No. 157 and SFAS No.&nbsp;159 effective
      January&nbsp;1, 2008, however, the Partnership did not make a fair value
      option election for its existing debt. The adoption of SFAS No. 157 and
      SFAS No.&nbsp;159 did not have any effect on the Partnership's
      consolidated financial position and results of operations. Please refer to
      Notes 2D and 5 for details.</TD></TR>
  <TR>
    <TD style="FONT-SIZE: 6pt">&nbsp;</TD></TR>
  <TR
  style="FONT-SIZE: 10pt; BACKGROUND: none transparent scroll repeat 0% 0%; COLOR: #000000"
  vAlign=top>
    <TD style="BACKGROUND: none transparent scroll repeat 0% 0%"
    width="8%">&nbsp;</TD>
    <TD noWrap align=left width="3%"><I>D.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Real Estate Investments - </I>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.</TD></TR>
  <TR>
    <TD style="FONT-SIZE: 6pt">&nbsp;</TD></TR>
  <TR
  style="FONT-SIZE: 10pt; BACKGROUND: none transparent scroll repeat 0% 0%; COLOR: #000000"
  vAlign=top>
    <TD style="BACKGROUND: none transparent scroll repeat 0% 0%"
    width="8%">&nbsp;</TD>
    <TD noWrap align=left width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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
      PIM, which is an indirectly owned subsidiary of PFI, is responsible to
      assure that the valuation process provides independent and reasonable
      property fair value estimates. An unaffiliated third party 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.</TD></TR></TABLE></DIV>
<P style="FONT-SIZE: 10pt" align=center><!-- Folio -->B-8 Real Property<!-- /Folio --> </P></DIV><!-- PAGEBREAK -->
<DIV style="FONT-FAMILY: 'Times New Roman',Times,serif">
<DIV style="MARGIN-TOP: 6pt">
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0 cellPadding=0 width="100%"
border=0>
  </TABLE></DIV>
<DIV style="MARGIN-TOP: 18pt; FONT-SIZE: 10pt" align=center><B>NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS OF<BR>THE PRUDENTIAL VARIABLE CONTRACT REAL
PROPERTY PARTNERSHIP<BR>For Years Ended December&nbsp;31, 2008, 2007, and
2006</B> </DIV>
<DIV style="MARGIN-TOP: 12pt; FONT-SIZE: 10pt" align=left><B>Note 2: Summary of
Significant Accounting Policies (continued)</B> </DIV>
<DIV style="MARGIN-TOP: 6pt">
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0 cellPadding=0 width="100%"
border=0>

  <TR
  style="FONT-SIZE: 10pt; BACKGROUND: none transparent scroll repeat 0% 0%; COLOR: #000000"
  vAlign=top>
    <TD style="BACKGROUND: none transparent scroll repeat 0% 0%"
    width="8%">&nbsp;</TD>
    <TD noWrap align=left width="3%"><I>D.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Real Estate Investments (continued)</I></TD></TR>
  <TR>
    <TD style="FONT-SIZE: 6pt">&nbsp;</TD></TR>
  <TR
  style="FONT-SIZE: 10pt; BACKGROUND: none transparent scroll repeat 0% 0%; COLOR: #000000"
  vAlign=top>
    <TD style="BACKGROUND: none transparent scroll repeat 0% 0%"
    width="8%">&nbsp;</TD>
    <TD noWrap align=left width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The purpose of an appraisal is to estimate the fair value of real
      estate as of a specific date. In accordance with SFAS 157, 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)&nbsp;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)&nbsp;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.</TD></TR>
  <TR>
    <TD style="FONT-SIZE: 6pt">&nbsp;</TD></TR>
  <TR
  style="FONT-SIZE: 10pt; BACKGROUND: none transparent scroll repeat 0% 0%; COLOR: #000000"
  vAlign=top>
    <TD style="BACKGROUND: none transparent scroll repeat 0% 0%"
    width="8%">&nbsp;</TD>
    <TD noWrap align=left width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In general, the input values used in the appraisal process are
      unobservable, therefore unless indicated otherwise; real estate
      investments are classified as Level 3 (see Note 5 for detail) under SFAS
      157 fair value hierarchy.</TD></TR>
  <TR>
    <TD style="FONT-SIZE: 6pt">&nbsp;</TD></TR>
  <TR
  style="FONT-SIZE: 10pt; BACKGROUND: none transparent scroll repeat 0% 0%; COLOR: #000000"
  vAlign=top>
    <TD style="BACKGROUND: none transparent scroll repeat 0% 0%"
    width="8%">&nbsp;</TD>
    <TD noWrap align=left width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Unconsolidated real estate partnerships and preferred equity
      investments are carried at fair value and are generally valued at the
      Partnership's equity in net assets as reflected in the partnerships'
      financial statements with properties valued as described above. Under the
      equity method, the investment is initially recorded at the original
      investment amount, plus or minus additional amounts invested or
      distributed, and is subsequently adjusted for the Partnership's share of
      undistributed earnings or losses, including unrealized appreciation and
      depreciation, from the partnership.</TD></TR>
  <TR>
    <TD style="FONT-SIZE: 6pt">&nbsp;</TD></TR>
  <TR
  style="FONT-SIZE: 10pt; BACKGROUND: none transparent scroll repeat 0% 0%; COLOR: #000000"
  vAlign=top>
    <TD style="BACKGROUND: none transparent scroll repeat 0% 0%"
    width="8%">&nbsp;</TD>
    <TD noWrap align=left width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As described above, the estimated fair value of real estate and real
      estate related assets is determined through an appraisal process. There
      continues to be significant disruptions in the global capital, credit and
      real estate markets. These disruptions have led to, among other things, a
      significant decline in the volume of transaction activity, in the fair
      value of many real estate and real estate related investments, and a
      significant 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 these estimated fair values are reasonable approximations of
      market prices and the aggregate estimated value of investments in real
      estate is fairly presented as of December&nbsp;31, 2008 and
      December&nbsp;31, 2007.</TD></TR></TABLE></DIV>
<P style="FONT-SIZE: 10pt" align=center><!-- Folio -->B-9 Real Property<!-- /Folio --> </P></DIV><!-- PAGEBREAK -->
<DIV style="FONT-FAMILY: 'Times New Roman',Times,serif">
<DIV style="MARGIN-TOP: 6pt">
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0 cellPadding=0 width="100%"
border=0>
  </TABLE></DIV>
<DIV style="MARGIN-TOP: 18pt; FONT-SIZE: 10pt" align=center><B>NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS OF<BR>THE PRUDENTIAL VARIABLE CONTRACT REAL
PROPERTY PARTNERSHIP<BR>For Years Ended December&nbsp;31, 2008, 2007, and
2006</B> </DIV>
<DIV style="MARGIN-TOP: 12pt; FONT-SIZE: 10pt" align=left><B>Note 2: Summary of
Significant Accounting Policies (continued)</B> </DIV>
<DIV style="MARGIN-TOP: 6pt">
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0 cellPadding=0 width="100%"
border=0>

  <TR
  style="FONT-SIZE: 10pt; BACKGROUND: none transparent scroll repeat 0% 0%; COLOR: #000000"
  vAlign=top>
    <TD style="BACKGROUND: none transparent scroll repeat 0% 0%"
    width="8%">&nbsp;</TD>
    <TD noWrap align=left width="3%"><I>E.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Cash and Cash Equivalents - </I>Cash and cash equivalent are
      comprised of all short-term investments and investments in money market
      funds with a maximum maturity of three months. Cash equivalents consist of
      investments in the Prudential Investment Liquidity Pool offered and
      managed by an affiliate of PFI and are accounted for at fair value.</TD></TR>
  <TR>
    <TD style="FONT-SIZE: 6pt">&nbsp;</TD></TR>
  <TR
  style="FONT-SIZE: 10pt; BACKGROUND: none transparent scroll repeat 0% 0%; COLOR: #000000"
  vAlign=top>
    <TD style="BACKGROUND: none transparent scroll repeat 0% 0%"
    width="8%">&nbsp;</TD>
    <TD noWrap align=left width="3%"><I>F.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Other Assets </I>- Restricted cash of $207,343 and $186,736 was
      maintained by the wholly owned and consolidated properties at
      December&nbsp;31, 2008 and 2007, respectively, for tenant security
      deposits and is included in Other Assets on the Consolidated Statements of
      Assets and Liabilities. Other assets also include tenant receivables and
      are net of allowance for uncollectible accounts of $1,028,539 and $39,764
      at December&nbsp;31, 2008 and 2007, respectively.</TD></TR>
  <TR>
    <TD style="FONT-SIZE: 6pt">&nbsp;</TD></TR>
  <TR
  style="FONT-SIZE: 10pt; BACKGROUND: none transparent scroll repeat 0% 0%; COLOR: #000000"
  vAlign=top>
    <TD style="BACKGROUND: none transparent scroll repeat 0% 0%"
    width="8%">&nbsp;</TD>
    <TD noWrap align=left width="3%"><I>G.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Investment Level Debt </I>- Investment level debt is generally
      stated at the principal amount of the obligations outstanding, except for
      debt assumed. 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. Deferred
      financing costs related to debt were capitalized and amortized over the
      terms of the related obligations.</TD></TR>
  <TR>
    <TD style="FONT-SIZE: 6pt">&nbsp;</TD></TR>
  <TR
  style="FONT-SIZE: 10pt; BACKGROUND: none transparent scroll repeat 0% 0%; COLOR: #000000"
  vAlign=top>
    <TD style="BACKGROUND: none transparent scroll repeat 0% 0%"
    width="8%">&nbsp;</TD>
    <TD noWrap align=left width="3%"><I>H.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Revenue and Expense Recognition - </I>Revenue from real estate is
      recognized when earned in accordance with the terms of the respective
      leases. Operating expenses are recognized as incurred. Revenue from
      certain real estate investments is net of all or a portion of related real
      estate expenses, as lease arrangements vary as to responsibility for
      payment of these expenses between tenants and the Partnership. Since real
      estate investments are stated at estimated fair value, net income is not
      reduced by depreciation or amortization expense. Interest expenses are
      accrued periodically based on the contractual interest rate and terms of
      the loans, which approximates the effective interest method. Interest
      expenses are included in Net Investment Income in the Statement of
      Operations.</TD></TR>
  <TR>
    <TD style="FONT-SIZE: 6pt">&nbsp;</TD></TR>
  <TR
  style="FONT-SIZE: 10pt; BACKGROUND: none transparent scroll repeat 0% 0%; COLOR: #000000"
  vAlign=top>
    <TD style="BACKGROUND: none transparent scroll repeat 0% 0%"
    width="8%">&nbsp;</TD>
    <TD noWrap align=left width="3%"><I>I.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Equity in Income of Real Estate Partnerships </I>- Equity in income
      of real estate partnerships represents the Partnership's share of the
      current year's partnership income as provided for under the terms of the
      partnership agreements. As is the case with real estate investments,
      partnerships' net income are not reduced by depreciation or amortization
      expense. Frequency of distribution of income is determined by formal
      agreements or by the executive committee of the partnership. Any cash in
      excess of the amount of income generated from the underlying joint venture
      is treated as a return of the Partnership's equity investment.</TD></TR>
  <TR>
    <TD style="FONT-SIZE: 6pt">&nbsp;</TD></TR>
  <TR
  style="FONT-SIZE: 10pt; BACKGROUND: none transparent scroll repeat 0% 0%; COLOR: #000000"
  vAlign=top>
    <TD style="BACKGROUND: none transparent scroll repeat 0% 0%"
    width="8%">&nbsp;</TD>
    <TD noWrap align=left width="3%"><I>J.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Federal Income Taxes - </I>The Partnership is not a taxable entity
      under the provisions of the Internal Revenue Code. The income and capital
      gains and losses of the Partnership are attributed, for federal income tax
      purposes, to the Partners in the Partnership. The Partnership may be
      subject to state and local taxes in jurisdictions in which it
      operates<I>.</I></TD></TR></TABLE></DIV>
<P style="FONT-SIZE: 10pt" align=center><!-- Folio -->B-10 Real Property<!-- /Folio --> </P></DIV><!-- PAGEBREAK -->
<DIV style="FONT-FAMILY: 'Times New Roman',Times,serif">
<DIV style="MARGIN-TOP: 6pt">
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0 cellPadding=0 width="100%"
border=0>
  </TABLE></DIV>
<DIV style="MARGIN-TOP: 18pt; FONT-SIZE: 10pt" align=center><B>NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS OF<BR>THE PRUDENTIAL VARIABLE CONTRACT REAL
PROPERTY PARTNERSHIP<BR>For Years Ended December&nbsp;31, 2008, 2007, and
2006</B> </DIV>
<DIV style="MARGIN-TOP: 12pt; FONT-SIZE: 10pt" align=left><B>Note 2: Summary of
Significant Accounting Policies (continued)</B> </DIV>
<DIV style="MARGIN-TOP: 6pt">
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR style="FONT-SIZE: 10pt; BACKGROUND: none transparent scroll repeat 0% 0%; COLOR: #000000" vAlign=top>
    <TD style="BACKGROUND: none transparent scroll repeat 0% 0%"
    width="8%">&nbsp;</TD>
    <TD noWrap align=left width="3%"><I>K.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>New Accounting Pronouncements </I>- FASB Interpretation
      No.&nbsp;46, "Consolidation of Variable Interest Entities" ("FIN 46"), was
      issued in January 2003. In December&nbsp;2003, FASB issued a revised
      interpretation of FIN 46 ("FIN 46-R") that supersedes FIN 46. FIN 46-R
      defers the effective date for applying the provisions of FIN 46 for those
      companies currently accounting for their investments in accordance with
      the AICPA Audit and Accounting Guide, "Audits of Investment Companies"
      (the "Audit Guide"). The FASB is currently considering modifying FIN 46-R
      to provide an exception for companies that apply the Audit Guide. The
      Partnership is awaiting further guidance from the FASB in order to
      evaluate the extent in which, if any, its investments may need to be
      consolidated as a result of this FIN 46-R.</TD></TR>
  <TR>
    <TD style="FONT-SIZE: 6pt">&nbsp;</TD></TR>
  <TR
  style="FONT-SIZE: 10pt; BACKGROUND: none transparent scroll repeat 0% 0%; COLOR: #000000"
  vAlign=top>
    <TD style="BACKGROUND: none transparent scroll repeat 0% 0%"
    width="8%">&nbsp;</TD>
    <TD noWrap align=left width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In June&nbsp;2007, the Accounting Standards Executive Committee issued
      Statement of Position 07-1, "Clarification of the Scope of the Audit and
      Accounting Guide Investment Companies and Accounting by Parent Companies
      and Equity Method Investors for Investments in Investment Companies" ("SOP
      07-1"). SOP 07-1 provides guidance for determining whether an entity is
      within the scope of the Audit Guide. SOP 07-1 was originally determined to
      be effective for fiscal years beginning on or after December&nbsp;15,
      2007, however, on February&nbsp;6, 2008, FASB issued a Staff Position
      indefinitely deferring the effective date.</TD></TR>
  <TR>
    <TD style="FONT-SIZE: 6pt">&nbsp;</TD></TR>
  <TR
  style="FONT-SIZE: 10pt; BACKGROUND: none transparent scroll repeat 0% 0%; COLOR: #000000"
  vAlign=top>
    <TD style="BACKGROUND: none transparent scroll repeat 0% 0%"
    width="8%">&nbsp;</TD>
    <TD noWrap align=left width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In December&nbsp;2007, FASB issued SFAS No.&nbsp;141 (revised 2007)
      ("SFAS 141R"), "Business Combinations", and SFAS No.&nbsp;160,
      "Non-controlling interests in Consolidated Financial Statements, an
      Amendment to ARB No.&nbsp;51" ("SFAS 160"). SFAS 141R expands the
      definition of a business and redefines the acquisition date in a merger
      and acquisition transaction. It significantly modifies the existing SFAS
      141, including changes to acquisition related contingent consideration,
      pre-acquisition contingencies, non-controlling interest, restructuring
      costs, in-process R&amp;D, goodwill and partial acquisition. SFAS 160
      requires the non-controlling interest to be reported as a separate
      component of equity. It also changes the allocation of losses and
      accounting in step acquisitions. The provisions in SFAS 160 should be
      applied prospectively except for the presentation and disclosure
      requirements, which are required retrospectively for all periods
      presented. SFAS 141R and SFAS 160 are effective for the acquisitions
      closing after the first annual reporting period beginning after
      December&nbsp;15, 2008. The Partnership is currently reviewing the
      provisions in SFAS 141R and SFAS 160, and no significant impact is
      expected from the adoption.</TD></TR></TABLE></DIV>
<DIV style="MARGIN-TOP: 12pt; FONT-SIZE: 10pt" align=left><B>Note 3:
Reclassification</B> </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left>Certain prior period
balances have been reclassified to conform with current period presentation.
Such reclassifications had no effect on previously reported net assets. </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left><B>Note 4: Disclosure
of Supplemental Cash Flow Information and Non-Cash Investing and Financing
Activity</B> </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left>Cash paid for interest
during the years ended December&nbsp;31, 2008, 2007 and 2006, was $1,878,870,
$1,746,115 and $1,806,320, respectively. </DIV>
<P style="FONT-SIZE: 10pt" align=center><!-- Folio -->B-11 Real Property<!-- /Folio --> </P></DIV><!-- PAGEBREAK -->
<DIV style="FONT-FAMILY: 'Times New Roman',Times,serif">
<DIV style="MARGIN-TOP: 18pt; FONT-SIZE: 10pt" align=center><B>NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS OF<BR>THE PRUDENTIAL VARIABLE CONTRACT REAL
PROPERTY PARTNERSHIP<BR>For Years Ended December&nbsp;31, 2008, 2007, and
2006</B> </DIV>
<DIV style="MARGIN-TOP: 12pt; FONT-SIZE: 10pt" align=left><B>Note 5: Fair Value
Measurements</B> </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left><B>Fair Value
Measurements:</B> </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left>SFAS 157 establishes a
fair value measurement framework, provides a single definition of fair value and
requires expanded disclosure summarizing fair value measurements. This statement
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; </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left>Level 1 - Fair values
is based on unadjusted quoted prices inactive markets that are accessible to the
company for identical assets or liabilities. These generally provide the most
reliable evidence and should be used tom measure fair value whenever available.
</DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left>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. </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left>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. </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left>For items classified as
Level 3, a reconciliation of the beginning and ending balances, as shown in
table 2 below, is also required. </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left>Please refer to Note 2D
for discussion of valuation methodology. </DIV>
<P style="FONT-SIZE: 10pt" align=center><!-- Folio -->B-12 Real Property<!-- /Folio --> </P></DIV><!-- PAGEBREAK -->
<DIV style="FONT-FAMILY: 'Times New Roman',Times,serif">
<DIV style="MARGIN-TOP: 18pt; FONT-SIZE: 10pt" align=center><B>NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS OF<BR>THE PRUDENTIAL VARIABLE CONTRACT REAL
PROPERTY PARTNERSHIP<BR>For Years Ended December&nbsp;31, 2008, 2007, and
2006</B> </DIV>
<DIV style="MARGIN-TOP: 12pt; FONT-SIZE: 10pt" align=left><B>Note 5: Fair Value
Measurements (continued)</B> </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left>Table 1 below
summarizes the assets measured at fair value on a recurring basis and their
respective position in the fair value hierarchy. </DIV>
<DIV style="MARGIN-TOP: 12pt; FONT-SIZE: 10pt" align=left><U><B>Table 1</B></U>
</DIV>
<DIV style="MARGIN-TOP: 18pt; FONT-SIZE: 10pt" align=center><U><B>(in
000's)<BR>Fair value measurements at December&nbsp;31, 2008 using</B></U> </DIV>
<DIV align=center>
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0 cellPadding=0 width="100%" border=0><!-- Begin Table Head -->

  <TR vAlign=bottom>
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3><B>Amounts</B></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3><B>Quoted prices in</B></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3><B>measured at</B></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3><B>active markets for</B></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3><B>Significant other</B></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3><B>Significant</B></TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3><B>fair value</B></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3><B>identical assets</B></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3><B>observable</B></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3><B>unobservable inputs</B></TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD style="BORDER-TOP: #000000 0px solid" noWrap
    align=left><B>Assets:</B></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3><B>12/31/2008</B></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3><B>(level 1)</B></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3><B>inputs (level 2)</B></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3><B>(level 3)</B></TD></TR><!-- End Table Head --><!-- Begin Table Body -->
  <TR style="FONT-SIZE: 1px">
    <TD style="BORDER-TOP: #000000 1px solid">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" align=left
  colSpan=15>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Real estate and
      improvements</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align=right>$</TD>
    <TD align=right>221,196</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>$</TD>
    <TD align=right>-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>$</TD>
    <TD align=right>-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>$</TD>
    <TD align=right>221,196</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Real estate
      partnerships and preferred equity investments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>11,797</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>11,797</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" align=left colSpan=15>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px"><B>Total</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align=right>$</TD>
    <TD align=right>232,993</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>$</TD>
    <TD align=right>-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>$</TD>
    <TD align=right>-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>$</TD>
    <TD align=right>232,993</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" align=left
  colSpan=15>&nbsp;</TD></TR><!-- End Table Body --></TABLE></DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left>As required under SFAS
157, table 2 below present 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 year ended December&nbsp;31, 2008. </DIV>
<DIV style="MARGIN-TOP: 12pt; FONT-SIZE: 10pt" align=left><U><B>Table 2</B></U>
</DIV>
<DIV style="MARGIN-TOP: 18pt; FONT-SIZE: 10pt" align=center><U><B>(in
000's)<BR>Fair value measurements using significant unobservable
inputs<BR>(Level 3)</B></U> </DIV>
<DIV align=center>
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0 cellPadding=0 width="100%" border=0><!-- Begin Table Head -->

  <TR vAlign=bottom>
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3><B>Real estate and</B></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3><B>partnerships and</B></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3><B>Real estate and</B></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3><B>preferred equity</B></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3><B>improvements</B></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3><B>investments</B></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3><B>Total</B></TD></TR><!-- End Table Head --><!-- Begin Table Body -->
  <TR style="FONT-SIZE: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" align=left
  colSpan=11>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Beginning balance @
      1/1/08</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align=right>$</TD>
    <TD align=right>254,394</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>$</TD>
    <TD align=right>14,524</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>$</TD>
    <TD align=right>268,918</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Net gains
      (losses)&nbsp;realized/unrealized included in earnings (or changes in net
      assets)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=right>&nbsp;</TD>
    <TD align=right>(43,134</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=right>&nbsp;</TD>
    <TD align=right>(2,527</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=right>&nbsp;</TD>
    <TD align=right>(45,661</TD>
    <TD noWrap>)</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Equity income
      (losses)/interest income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>994</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>994</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV
      style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Acquisitions/issuances/contributions</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>9,936</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>9,936</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV
      style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Dispositions/settlements/distributions</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=right>&nbsp;</TD>
    <TD align=right>(1,194</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=right>&nbsp;</TD>
    <TD align=right>(1,194</TD>
    <TD noWrap>)</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=left
    colSpan=11>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Ending balance @
      12/31/08</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align=right>$</TD>
    <TD align=right>221,196</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>$</TD>
    <TD align=right>11,797</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>$</TD>
    <TD align=right>232,993</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" align=left
  colSpan=11>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Unrealized gains
      (losses)&nbsp;for the period relating to level 3 assets still held at the
      reporting date</DIV></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=right>$</TD>
    <TD align=right>(43,134</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=right>$</TD>
    <TD align=right>(2,527</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=right>$</TD>
    <TD align=right>(45,661</TD>
    <TD noWrap>)</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" noWrap align=left
    colSpan=11>&nbsp;</TD></TR><!-- End Table Body --></TABLE></DIV>
<P style="FONT-SIZE: 10pt" align=center><!-- Folio -->B-13 Real Property<!-- /Folio --> </P></DIV><!-- PAGEBREAK -->
<DIV style="FONT-FAMILY: 'Times New Roman',Times,serif">
<DIV style="MARGIN-TOP: 18pt; FONT-SIZE: 10pt" align=center><B>NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS OF<BR>THE PRUDENTIAL VARIABLE CONTRACT REAL
PROPERTY PARTNERSHIP<BR>For Years Ended December&nbsp;31, 2008, 2007, and
2006</B> </DIV>
<DIV style="MARGIN-TOP: 12pt; FONT-SIZE: 10pt" align=left><B>Note 6: Investment
Level Debt</B> </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left>Investment level debt
includes mortgage loans payable as summarized below (in 000's): </DIV>
<DIV align=center>
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0 cellPadding=0 width="100%"
border=0><!-- Begin Table Head -->

  <TR vAlign=bottom>
    <TD width="28%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=6><B>As of 12/31/08</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=2><B>As of 12/31/07</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=11><B>As of 12/31/08</B></TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=2><B>(Unaudited)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=2><B>Partnership's</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=2><B>100% Principal</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=2><B>Share of</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=2><B>100% Principal</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=2><B>Balance</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=2><B>Principal Balance</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=2><B>Balance</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=2><B>Interest</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=2><B>Maturity</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=2><B>Outstanding</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=2><B>Outstanding</B><SUP
      style="FONT-SIZE: 85%; VERTICAL-ALIGN: text-top"><B>1</B></SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=2><B>Outstanding</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=2><B>Rate</B><SUP
      style="FONT-SIZE: 85%; VERTICAL-ALIGN: text-top"><B>2, 3</B></SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=2><B>Date</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=2><B>Terms</B><SUP
      style="FONT-SIZE: 85%; VERTICAL-ALIGN: text-top"><B>4</B></SUP></TD>
    <TD>&nbsp;</TD></TR><!-- End Table Head --><!-- Begin Table Body -->
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px"><B>Mortgages of Wholly
      Owned Properties &amp; Consolidated Partnerships</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Hampton, VA</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>7,284</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>7,284</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>7,778</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>6.75</TD>
    <TD noWrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>2018</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=middle colSpan=3>PP, P&amp;I</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Ocean City, MD</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>15,044</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>12,105</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>6,847</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=middle colSpan=3>Libor +225</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>2010</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=middle>I</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Raleigh, NC</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>9,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>9,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>8,750</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3>DMBS +142</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>2013</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=middle>I</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Atlanta, GA</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>8,746</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>8,746</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>8,747</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>4.90</TD>
    <TD noWrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3>PP, P&amp;I</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Unamortized Premium
      (Discount)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(26</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" align=left colSpan=7>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>40,048</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>37,135</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>32,122</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" align=left colSpan=7>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR><!-- End Table Body --></TABLE></DIV>
<DIV align=left>
<DIV
style="BORDER-TOP: #000000 1px solid; MARGIN-TOP: 16pt; FONT-SIZE: 3pt; WIDTH: 18%"></DIV></DIV>
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0 cellPadding=0 width="100%"
border=0>

  <TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width=96></TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left>1.</TD>
    <TD>&nbsp;</TD>
    <TD>Represents the Partnership's interest in the loan based upon the
      estimated percentage of net assets which would be distributed to the
      Partnership if the partnership were liquidated at December&nbsp;31, 2008.
      It does not represent the Partnership's legal obligation.</TD></TR>
  <TR style="FONT-SIZE: 3pt">
    <TD>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left>2.</TD>
    <TD>&nbsp;</TD>
    <TD>The Partnership's weighted average interest rate was 5.78% and 6.14%
      at December&nbsp;31, 2008 and 2007, respectively. The weighted average
      interest rates were calculated using the Partnership's annualized interest
      expense for each loan (derived using the same percentage as that in
      (1)&nbsp;above) divided by the Partnership's share of total debt.</TD></TR>
  <TR style="FONT-SIZE: 3pt">
    <TD>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left>3.</TD>
    <TD>&nbsp;</TD>
    <TD>At December&nbsp;31, 2008, the 30&nbsp;day LIBOR is .43625% and the
      DMBS is 3.28%.</TD></TR>
  <TR style="FONT-SIZE: 3pt">
    <TD>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left>4.</TD>
    <TD>&nbsp;</TD>
    <TD>Loan Terms PP=Prepayment penalties applicable to loan, I=Interest
      only, P&amp;I=Principal and Interest</TD></TR></TABLE>
<P style="FONT-SIZE: 10pt" align=center><!-- Folio -->B-14 Real Property<!-- /Folio --> </P></DIV><!-- PAGEBREAK -->
<DIV style="FONT-FAMILY: 'Times New Roman',Times,serif">
<DIV style="MARGIN-TOP: 18pt; FONT-SIZE: 10pt" align=center><B>NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS OF<BR>THE PRUDENTIAL VARIABLE CONTRACT REAL
PROPERTY PARTNERSHIP<BR>For Years Ended December&nbsp;31, 2008, 2007, and
2006</B> </DIV>
<DIV style="MARGIN-TOP: 12pt; FONT-SIZE: 10pt" align=left><B>Note 6: Investment
Level Debt (continued)</B> </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left>As of December&nbsp;31,
2008 principal amounts of mortgage loans payable on wholly owned properties and
consolidated partnerships are payable as follows: </DIV>
<DIV align=center>
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0 cellPadding=0 width="100%"
border=0><!-- Begin Table Head -->

  <TR vAlign=bottom>
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left>Year Ending
      December 31,</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=2>(in 000's)</TD>
    <TD>&nbsp;</TD></TR><!-- End Table Head --><!-- Begin Table Body -->
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">2009</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>9,277</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">2010</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>15,609</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">2011</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>604</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">2012</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>646</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">2013</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>9,463</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Thereafter</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>4,475</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Total Principal Balance
      Outstanding</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>40,074</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Premium
    (Discount)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(26</TD>
    <TD noWrap>)</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Principal Balance
      Outstanding, net of premium (discount)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>40,048</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR><!-- End Table Body --></TABLE></DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left>The mortgage loans
payable of wholly owned properties and consolidated partnerships are secured by
real estate investments with an estimated fair value of $84.7&nbsp;million.
</DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left>Based on borrowing
rates available to the Partnership at December&nbsp;31, 2008 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 $40&nbsp;million, and a carrying value of $40&nbsp;million.
Different assumptions or changes in future market conditions could significantly
affect estimated fair value. </DIV>
<DIV style="MARGIN-TOP: 12pt; FONT-SIZE: 10pt" align=left><B>Note 7: Financing,
Covenant, and Repayment Risks:</B> </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left>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 December&nbsp;31, 2008, the Partnership had no
outstanding matured loans. </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left>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. </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left>In the event the
Partnership's current 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. </DIV>
<P style="FONT-SIZE: 10pt" align=center><!-- Folio -->B-15 Real Property<!-- /Folio --> </P></DIV><!-- PAGEBREAK -->
<DIV style="FONT-FAMILY: 'Times New Roman',Times,serif">
<DIV style="MARGIN-TOP: 18pt; FONT-SIZE: 10pt" align=center><B>NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS OF<BR>THE PRUDENTIAL VARIABLE CONTRACT REAL
PROPERTY PARTNERSHIP<BR>For Years Ended December&nbsp;31, 2008, 2007, and
2006</B> </DIV>
<DIV style="MARGIN-TOP: 12pt; FONT-SIZE: 10pt" align=left><B>Note 8: Significant
Transactions</B> </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left>During 2008, the
Partnership did not have any significant transactions in excess of
$10&nbsp;million. </DIV>
<DIV style="MARGIN-TOP: 12pt; FONT-SIZE: 10pt" align=left><B>Note 9:
Concentration of Risk on Real Estate Investments</B> </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left>Concentration of risk
on real estate investments represents the risk associated with investments that
are concentrated in certain geographic regions and industries. The Partnership
mitigates this risk by diversifying its investments in various regions and
different types of real estate investments. Please refer to the Schedule of
Investments for the Partnership's diversification on the types of real estate
investments. </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left>At December&nbsp;31,
2008, the Partnership had real estate investments located throughout the United
States. The diversification of the Partnership's holdings based on the estimated
fair values and established NCREIF regions is as follows: </DIV>
<DIV align=center>
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0 cellPadding=0 width="100%"
border=0><!-- Begin Table Head -->

  <TR vAlign=bottom>
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=2>Estimated</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=2>Fair Value</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle>Region</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=2>(in 000's)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=2>Region %</TD>
    <TD>&nbsp;</TD></TR><!-- End Table Head --><!-- Begin Table Body -->
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">East North
    Central</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>11,485</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>4.93</TD>
    <TD noWrap>%</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Mideast</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>103,704</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>44.51</TD>
    <TD noWrap>%</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Mountain</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,408</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>0.60</TD>
    <TD noWrap>%</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Northeast</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>243</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>0.10</TD>
    <TD noWrap>%</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Pacific</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>29,774</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>12.78</TD>
    <TD noWrap>%</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Southeast</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>58,602</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>25.15</TD>
    <TD noWrap>%</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Southwest</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>27,731</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>11.90</TD>
    <TD noWrap>%</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">West North
    Central</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>46</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>0.02</TD>
    <TD noWrap>%</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 30px; TEXT-INDENT: -15px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>232,993</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>100.00</TD>
    <TD noWrap>%</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR><!-- End Table Body --></TABLE></DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left>The allocations above
are based on (1)&nbsp;100% of the estimated fair value of wholly-owned
properties and consolidated joint ventures, and (2)&nbsp;the estimated fair
value of the Partnership's net equity in non-consolidated ventures and preferred
equity investments. </DIV>
<P style="FONT-SIZE: 10pt" align=center><!-- Folio -->B-16 Real Property<!-- /Folio --> </P></DIV><!-- PAGEBREAK -->
<DIV style="FONT-FAMILY: 'Times New Roman',Times,serif">
<DIV style="MARGIN-TOP: 18pt; FONT-SIZE: 10pt" align=center><B>NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS OF<BR>THE PRUDENTIAL VARIABLE CONTRACT REAL
PROPERTY PARTNERSHIP<BR>For Years Ended December&nbsp;31, 2008, 2007, and
2006</B> </DIV>
<DIV style="MARGIN-TOP: 12pt; FONT-SIZE: 10pt" align=left><B>Note 10: Leasing
Activity</B> </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt"
align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Partnership leases space to tenants
under various operating lease agreements. These agreements, without giving
effect to renewal options, have expiration dates ranging from January&nbsp;1,
2009 to March&nbsp;31, 2025. At December&nbsp;31, 2008, the aggregate future
minimum base rental payments under non-cancelable operating leases for wholly
owned and consolidated joint venture properties by year are as follows: </DIV>
<DIV align=center>
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0 cellPadding=0 width="100%"
border=0><!-- Begin Table Head -->

  <TR vAlign=bottom>
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left>Year Ending
      December 31,</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=2>(in 000's)</TD>
    <TD>&nbsp;</TD></TR><!-- End Table Head --><!-- Begin Table Body -->
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">2009</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>12,990</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">2010</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>11,774</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">2011</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>9,239</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">2012</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>6,833</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">2013</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>5,387</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Thereafter</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>21,735</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>67,958</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR><!-- End Table Body --></TABLE></DIV>
<DIV style="MARGIN-TOP: 12pt; FONT-SIZE: 10pt" align=left><B>Note 11:
Commitments and Contingencies</B> </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left>In 1986, Prudential
committed to fund up to $100&nbsp;million to enable the Partnership to acquire
real estate investments. Contributions to the Partnership under this commitment
have been utilized for property acquisitions, and were to be returned to
Prudential on an ongoing basis from contract owners' net contributions and other
available cash. The amount of the commitment has been reduced by
$10&nbsp;million for every $100&nbsp;million in current value net assets of the
Partnership. As of December&nbsp;31, 2008, the cost basis of Prudential's equity
interest in the Partnership under this commitment (held through the Real
Property Accounts) was $44.2&nbsp;million. Prudential terminated this commitment
on December&nbsp;31, 2002. </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left>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. </DIV>
<DIV style="MARGIN-TOP: 12pt; FONT-SIZE: 10pt" align=left><B>Note 12: Related
Party Transactions</B> </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left>Pursuant to an
investment management agreement, PIM charges the Partnership a daily investment
management fee at an annual rate of 1.25% of the average daily gross asset
valuation of the Partnership. For the years ended December&nbsp;31, 2008, 2007
and 2006 management fees incurred by the Partnership were $3.4&nbsp;million,
$3.4&nbsp;million and $3.1&nbsp;million, for each of the years, respectively.
The Partnership also reimburses PIM for certain administrative services rendered
by PIM. The amounts incurred for the years ended December&nbsp;31, 2008, 2007,
and 2006 were $53,630, $53,630 and $146,930; respectively, and are classified as
administrative expenses in the Consolidated Statements of Operations. </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left>During the years ended
December&nbsp;31, 2008, 2007 and 2006, the Partnership made the following
distributions to the Partners: </DIV>
<DIV align=center>
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0 cellPadding=0 width="100%"
border=0><!-- Begin Table Head -->

  <TR vAlign=bottom>
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left><B>Year
      Ended December 31,</B></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=3>(000's)</TD></TR><!-- End Table Head --><!-- Begin Table Body -->
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">2008</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align=right>$</TD>
    <TD align=right>-</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">2007</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align=right>$</TD>
    <TD align=right>-</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">2006</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align=right>$</TD>
    <TD align=right>6,000</TD>
    <TD>&nbsp;</TD></TR><!-- End Table Body --></TABLE></DIV>
<P style="FONT-SIZE: 10pt" align=center><!-- Folio -->B-17 Real Property<!-- /Folio --> </P></DIV><!-- PAGEBREAK -->
<DIV style="FONT-FAMILY: 'Times New Roman',Times,serif">
<DIV style="MARGIN-TOP: 12pt; FONT-SIZE: 10pt" align=left><B>Note 13: Financial
Highlights</B> </DIV>
<DIV align=center>
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0 cellPadding=0 width="100%"
border=0><!-- Begin Table Head -->

  <TR vAlign=bottom>
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=18><B>For The Twelve Months Ended December 31,</B></TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 8pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=2><B>2008</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=2><B>2007</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=2><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=2><B>2005</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=2><B>2004</B></TD>
    <TD>&nbsp;</TD></TR><!-- End Table Head --><!-- Begin Table Body -->
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px"><I>Per Share(Unit)
      Operating Performance:</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Net Asset Value,
      beginning of period</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>36.55</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>33.87</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>29.59</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>26.15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>24.66</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px"><I>Income From
      Investment Operations:</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Net investment income,
      before management fee</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>2.15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>2.37</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>2.07</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1.67</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1.44</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Investment Management
      fee</DIV></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(0.51</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(0.50</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(0.45</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(0.40</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(0.36</TD>
    <TD noWrap>)</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Net realized and
      unrealized gain (loss)&nbsp;on investments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(6.54</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>0.81</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>2.66</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>2.17</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>0.41</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Net Increase in Net
      Assets Resulting from Operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(4.90</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>2.68</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>4.28</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>3.44</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1.49</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px"><I>Net Asset Value, end
      of period</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>31.65</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>36.55</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>33.87</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>29.59</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>26.15</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px"><I>Total Return, before
      Management Fee:</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD noWrap align=right>-12.14</TD>
    <TD noWrap>%</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>9.44</TD>
    <TD noWrap>%</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>16.03</TD>
    <TD noWrap>%</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>14.76</TD>
    <TD noWrap>%</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>7.61</TD>
    <TD noWrap>%</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px"><I>Total Return, after
      Management Fee (a):</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD noWrap align=right>-13.40</TD>
    <TD noWrap>%</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>7.91</TD>
    <TD noWrap>%</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>14.46</TD>
    <TD noWrap>%</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>13.15</TD>
    <TD noWrap>%</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>6.06</TD>
    <TD noWrap>%</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px"><I>Ratios/Supplemental
      Data:</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Net Assets, end of
      period (in millions)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>214</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>247</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>229</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>205</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>187</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Ratios to average net
      assets for the year ended (b):</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 30px; TEXT-INDENT: -15px">Total Portfolio Level
      Expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>1.44</TD>
    <TD noWrap>%</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>1.55</TD>
    <TD noWrap>%</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>1.51</TD>
    <TD noWrap>%</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>1.46</TD>
    <TD noWrap>%</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>1.43</TD>
    <TD noWrap>%</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 30px; TEXT-INDENT: -15px">Net Investment Income,
      before Management Fee</DIV></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>5.87</TD>
    <TD noWrap>%</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>6.76</TD>
    <TD noWrap>%</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>6.58</TD>
    <TD noWrap>%</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>4.89</TD>
    <TD noWrap>%</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>5.76</TD>
    <TD noWrap>%</TD></TR><!-- End Table Body --></TABLE></DIV>
<DIV align=left>
<DIV
style="BORDER-TOP: #000000 1px solid; MARGIN-TOP: 16pt; FONT-SIZE: 3pt; WIDTH: 18%"></DIV></DIV>
<DIV style="MARGIN-TOP: 6pt">
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0 cellPadding=0 width="100%"
border=0>

  <TR
  style="FONT-SIZE: 10pt; BACKGROUND: none transparent scroll repeat 0% 0%; COLOR: #000000"
  vAlign=top>
    <TD noWrap align=left width="1%">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Total Return, after management fee is calculated by geometrically
      linking quarterly returns which are calculated using the formula
  below:</TD></TR></TABLE></DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt"
align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Net
Investment Income + Net Realized and Unrealized Gains/(Losses)</U> </DIV>
<DIV style="MARGIN-TOP: 6pt">
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0 cellPadding=0 width="100%"
border=0>

  <TR
  style="FONT-SIZE: 10pt; BACKGROUND: none transparent scroll repeat 0% 0%; COLOR: #000000"
  vAlign=top>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Beg. Net Asset Value + Time Weighted Contributions - Time Weighted
      Distributions</TD></TR>
  <TR>
    <TD style="FONT-SIZE: 6pt">&nbsp;</TD></TR>
  <TR
  style="FONT-SIZE: 10pt; BACKGROUND: none transparent scroll repeat 0% 0%; COLOR: #000000"
  vAlign=top>
    <TD noWrap align=left width="1%">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Average net assets are based on beginning of quarter net
  assets.</TD></TR></TABLE></DIV>
<P style="FONT-SIZE: 10pt" align=center><!-- Folio -->B-18 Real Property<!-- /Folio --> </P></DIV><!-- PAGEBREAK -->
<DIV style="FONT-FAMILY: 'Times New Roman',Times,serif">
<DIV align=left><A name=320></A></DIV>
<DIV align=center>
<TABLE style="FONT-SIZE: 7pt" cellSpacing=0 cellPadding=0 width="100%" border=0><!-- Begin Table Head -->

  <TR vAlign=bottom>
    <TD width="20%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 6pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=27><B>THE PRUDENTIAL VARIABLE CONTRACT
      REAL PROPERTY PARTNERSHIP</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 6pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=27><B>SCHEDULE III - REAL ESTATE OWNED:
      PROPERTIES</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 6pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=27><B>DECEMBER 31, 2008</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 6pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=23><B>Gross Amount at Which</B></TD></TR>
  <TR style="FONT-SIZE: 6pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=7><B>Initial Costs to the Partnership</B></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3><B>Costs</B></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=23><B>Carried at Close of Year</B></TD></TR>
  <TR style="FONT-SIZE: 6pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3><B>Capitalized</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 6pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3><B>Encumbrances</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3><B>Building &amp;</B></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3><B>Subsequent to</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3><B>Building &amp;</B></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3><B>2008</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3><B>Year of</B></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3><B>Date</B></TD></TR>
  <TR style="FONT-SIZE: 6pt" vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap
      align=middle><B>Description</B></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=3><B>at 12/31/08</B></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=3><B>Land</B></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=3><B>Improvements</B></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=3><B>Acquisition</B></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=3><B>Land</B></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=3><B>Improvements</B></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=3><B>Sales</B></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=3><B>Total</B></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=3><B>Construction</B></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=3><B>Acquired</B></TD></TR><!-- End Table Head --><!-- Begin Table Body -->
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Properties:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Office
Building</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Lisle, IL</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align=right colSpan=2>None</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,780,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>15,743,881</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>7,694,896</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,949,206</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>23,269,571</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>25,218,777</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1985</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=middle colSpan=3>Apr., 1988</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Garden
    Apartments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Atlanta, GA</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>8,746,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>3,631,212</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>11,168,904</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=right>&nbsp;</TD>
    <TD align=right>5,010,802</TD>
    <TD noWrap>(b)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>4,937,369</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>14,873,549</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>19,810,918</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1987</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=middle colSpan=3>Apr., 1988</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Retail Shopping
      Center</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Roswell, GA</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align=right colSpan=2>None</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>9,454,622</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>21,513,677</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>6,925,296</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>11,135,593</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>26,758,002</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>37,893,595</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1988</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=middle colSpan=3>Jan., 1989</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Garden
    Apartments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Raleigh, NC</DIV></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=right>&nbsp;</TD>
    <TD align=right>8,973,520</TD>
    <TD noWrap>(c)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,623,146</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>14,135,553</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>674,845</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,785,544</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>14,648,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>16,433,544</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1995</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=middle colSpan=3>Jun., 1995</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Hotel</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Portland, OR</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,500,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>6,508,729</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>2,303,859</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,500,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>8,812,588</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>10,312,588</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1989</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=middle colSpan=3>Dec., 2003</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Office
Building</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Nashville, TN</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align=right colSpan=2>None</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,797,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>6,588,451</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>3,675,530</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,855,339</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>10,205,642</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>12,060,981</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1982</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=middle colSpan=3>Oct., 1995</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Office
Building</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Beaverton, OR</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align=right colSpan=2>None</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>816,415</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>9,897,307</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,799,263</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>845,887</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>11,667,098</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>12,512,985</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1995</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=middle colSpan=3>Dec., 1996</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Office Complex</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Brentwood, TN</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align=right colSpan=2>None</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>2,425,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>7,063,755</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>2,900,452</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>2,463,601</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>9,925,606</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>12,389,207</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1987</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=middle colSpan=3>Oct., 1997</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Retail Shopping
      Center</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Hampton, VA</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>7,284,195</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>2,339,100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>12,767,956</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>3,003,760</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>4,839,418</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>13,271,398</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>18,110,816</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1998</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=middle colSpan=3>May, 2001</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Retail Shopping
      Center</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Westminster,
MD</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>3,031,735</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>9,326,605</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>2,686,381</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>3,031,735</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>12,012,986</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>15,044,721</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=middle colSpan=3>June, 2006</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Retail Shopping
      Center</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Ocean City, MD</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>15,044,112</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,517,099</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>8,495,039</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>13,258,876</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,517,099</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>21,753,915</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>23,271,014</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1986</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=middle colSpan=3>Nov., 2002</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Garden
    Apartments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Austin, TX</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>2,577,097</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>20,125,169</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>30,097</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>2,577,097</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>20,155,266</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>22,732,363</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>2007</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3>May, 2007</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Retail Shopping
      Center</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Dunn, NC</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align=right colSpan=2>None</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>586,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>5,372,344</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>407,923</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>586,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>5,780,267</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>6,366,767</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1984</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3>Aug., 2007</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Garden
    Apartments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Charlotte, NC</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,350,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>12,184,750</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>115,188</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1,350,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>12,299,938</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>13,649,938</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>1998</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=middle colSpan=3>Sep., 2007</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" align=right>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" align=right>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" align=right>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" align=right>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" align=right>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" align=right>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" align=right>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" align=right>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>40,047,827</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>34,428,926</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>160,892,120</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>50,487,168</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>40,374,388</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>205,433,826</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>245,808,214</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" align=right>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" align=right>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" align=right>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" align=right>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" align=right>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" align=right>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" align=right>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" align=right>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR><!-- End Table Body --></TABLE></DIV>
<DIV align=center>
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0 cellPadding=0 width="100%"
border=0><!-- Begin Table Head -->

  <TR vAlign=bottom>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 6pt" vAlign=bottom>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=2><B>2008</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=2><B>2007</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=middle
      colSpan=2><B>2006</B></TD>
    <TD>&nbsp;</TD></TR><!-- End Table Head --><!-- Begin Table Body -->
  <TR vAlign=bottom><!-- Blank Space -->
    <TD vAlign=top align=left>&nbsp;</TD>
    <TD vAlign=top align=right>&nbsp;</TD>
    <TD vAlign=top>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD vAlign=top align=left>&nbsp;</TD>
    <TD vAlign=top align=right>&nbsp;</TD>
    <TD vAlign=top>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top noWrap align=left>&nbsp;</TD>
    <TD vAlign=top align=right>(a</TD>
    <TD vAlign=top noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Balance at beginning of
      year</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>236,466,116</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>199,124,056</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>183,767,148</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top align=left>&nbsp;</TD>
    <TD vAlign=top align=right>&nbsp;</TD>
    <TD vAlign=top>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Additions:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top align=left>&nbsp;</TD>
    <TD vAlign=top align=right>&nbsp;</TD>
    <TD vAlign=top>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>
      <DIV style="MARGIN-LEFT: 30px; TEXT-INDENT: -15px">Acquistions</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>42,218,143</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>12,358,340</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top align=left>&nbsp;</TD>
    <TD vAlign=top align=right>&nbsp;</TD>
    <TD vAlign=top>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>
      <DIV style="MARGIN-LEFT: 30px; TEXT-INDENT: -15px">Improvements,
    etc.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>9,936,151</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>3,179,960</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>2,998,568</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top align=left>&nbsp;</TD>
    <TD vAlign=top align=right>&nbsp;</TD>
    <TD vAlign=top>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>
      <DIV style="MARGIN-LEFT: 30px; TEXT-INDENT: -15px">Reclass of other real
      estate investments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>3,232,337</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top align=left>&nbsp;</TD>
    <TD vAlign=top align=right>&nbsp;</TD>
    <TD vAlign=top>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>
      <DIV style="MARGIN-LEFT: 30px; TEXT-INDENT: -15px">Deletions:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top align=left>&nbsp;</TD>
    <TD vAlign=top align=right>&nbsp;</TD>
    <TD vAlign=top>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>
      <DIV style="MARGIN-LEFT: 30px; TEXT-INDENT: -15px">Sale</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(11,288,380</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD vAlign=top align=left>&nbsp;</TD>
    <TD vAlign=top align=right>&nbsp;</TD>
    <TD vAlign=top>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top align=left>&nbsp;</TD>
    <TD vAlign=top align=right>&nbsp;</TD>
    <TD vAlign=top>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>
      <DIV style="MARGIN-LEFT: 30px; TEXT-INDENT: -15px">Write off of
      uncollectible interest receivable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD align=right>(594,053</TD>
    <TD noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>-</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD vAlign=top align=left>&nbsp;</TD>
    <TD vAlign=top align=right>&nbsp;</TD>
    <TD vAlign=top>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD vAlign=top align=left>&nbsp;</TD>
    <TD vAlign=top align=right>&nbsp;</TD>
    <TD vAlign=top>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top align=left>&nbsp;</TD>
    <TD vAlign=top align=right>&nbsp;</TD>
    <TD vAlign=top>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Balance at end of
      year</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>245,808,214</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right>236,466,116</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD noWrap align=right>199,124,056</TD>
    <TD>&nbsp;</TD></TR>
  <TR style="FONT-SIZE: 1px">
    <TD vAlign=top align=left>&nbsp;</TD>
    <TD vAlign=top align=right>&nbsp;</TD>
    <TD vAlign=top>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 3px double" noWrap align=right
    colSpan=2>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD vAlign=top align=left>&nbsp;</TD>
    <TD vAlign=top align=right>&nbsp;</TD>
    <TD vAlign=top>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top noWrap align=left>&nbsp;</TD>
    <TD vAlign=top align=right>(b</TD>
    <TD vAlign=top noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Net of $1,000,000
      settlement received from lawsuit.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom><!-- Blank Space -->
    <TD vAlign=top align=left>&nbsp;</TD>
    <TD vAlign=top align=right>&nbsp;</TD>
    <TD vAlign=top>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top noWrap align=left>&nbsp;</TD>
    <TD vAlign=top align=right>(c</TD>
    <TD vAlign=top noWrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>
      <DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Net of an unamortized
      discount of $26,480</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR><!-- End Table Body --></TABLE></DIV>
<P style="FONT-SIZE: 10pt" align=center><!-- Folio -->B-19 Real Property<!-- /Folio --> </P></DIV>
<DIV style="FONT-FAMILY: 'Times New Roman',Times,serif">
<DIV align=left><A name=351></A></DIV>
<DIV style="MARGIN-TOP: 18pt; FONT-SIZE: 10pt" align=center><B>Report of
Independent Registered Public Accounting Firm</B> </DIV>
<DIV style="MARGIN-TOP: 12pt; FONT-SIZE: 10pt" align=left>To the Partners
of<BR>The Prudential Variable Contract Real Property Partnership: </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=left>In our opinion, the
accompanying consolidated statements of assets and liabilities, including the
schedule of real estate investments, and the related consolidated statements of
operations, of changes in net assets and of cash flows present fairly, in all
material respects, the financial position of The Prudential Variable Contract
Real Property Partnership (the "Partnership") at December&nbsp;31, 2008 and
2007, and the results of its operations, the changes in its net assets and its
cash flows for each of the three years in the period ended December&nbsp;31,
2008 in conformity with accounting principles generally accepted in the United
States of America. These financial statements are the responsibility of the
management of The Prudential Insurance Company of America. Our responsibility is
to express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion. </DIV>
<DIV style="MARGIN-TOP: 12pt; FONT-SIZE: 10pt" align=left>PricewaterhouseCoopers
LLP<BR>New York, New York<BR>February&nbsp;23, 2009 </DIV>
<P style="FONT-SIZE: 10pt" align=center><!-- Folio -->B-20 Real Property<!-- /Folio --> </P></DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;line-height:95.83333%;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;line-height:95.83333%;'><B>PART II</B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;line-height:95.83333%;'><B>INFORMATION NOT REQUIRED IN PROSPECTUS</B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'>&nbsp;</p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>

<div TITLE="EE+ Page Break" STYLE="PAGE-BREAK-AFTER: always">

<HR noshade align="center" width="100%" size="2">
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><B>ITEM 13.  OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION</B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><b><font face="Arial" size=2>Registration Fees</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>In this registration statement the Prudential Variable Contract Real Property Account is registering $7 million of securities and paying a filing fee of $390.60 therefor. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><b><font face="Arial" size=2>Federal Taxes</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>The Prudential Variable Contract Real Property Account estimates the federal tax effect associated with the deferred acquisition costs attributable to $1 million of premium payments to a variable life insurance contract for which the account serves as an underlying investment over a two year period to be $12,500.  </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><b><font face="Arial" size=2>State Taxes</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>The Prudential Variable Contract Real Property Account estimates that approximately $20,000 in premium taxes per  $1 million of premium payments would be owed upon receipt of purchase payments under variable life insurance contracts for which the account serves as an underlying investment.  </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><b><font face="Arial" size=2>Printing Costs</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>The Prudential Variable Contract Real Property Account estimates that the annual cost of printing prospectuses for the variable insurance products associated with the securities registered herein would be $140,000.  </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><b><font face="Arial" size=2>Legal Costs</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>This registration statement was prepared by Prudential attorneys whose time is allocated to The Prudential Insurance Company of America.  </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><b><font face="Arial" size=2>Accounting Costs</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>PricewaterhouseCoopers LLP, the independent registered public accounting firm that audits The Prudential Insurance Company of America's financial statements, charges approximately $10,000.00 in connection with each filing of this registration statement with the Commission.  </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><B>ITEM 14.  INDEMNIFICATION OF DIRECTORS AND OFFICERS</B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>The Registrant, in connection with certain affiliates, maintains various insurance coverages under which the underwriter and certain affiliated persons may be insured against liability, which may be incurred in such capacity, subject to the terms, conditions, and exclusions of the insurance policies.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><font face="Arial" size=2>New Jersey, being the state of organization of Prudential Insurance Company of America ("Prudential"), permits entities organized under its jurisdiction to indemnify directors and officers with certain limitations.  The relevant provisions of New Jersey law permitting indemnification can be found in Section 14A:3-5 of the New Jersey Statutes Annotated.  The text of Prudential's By-law Article VII, Section 1, which relates to indemnification of officers and directors, is incorporated by reference to Exhibit (a)(3B) of this registration statement.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the "Act") may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><B>ITEM 15.  RECENT SALES OF UNREGISTERED SECURITIES</B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'>Not Applicable.</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'>&nbsp;</p>

<div TITLE="EE+ Page Footer">
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=2></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM">II-1
</A></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.38in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<div TITLE="EE+ Page Break" STYLE="PAGE-BREAK-AFTER: always">

<HR noshade align="center" width="100%" size="2">
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><B>ITEM 16.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES</B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'>(a)  <u>Exhibits</u></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'>&nbsp;</p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="696" style=' border-collapse:collapse'>
    <tr>
        <td width="341" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>(1A) Distribution Agreement between Pruco Securities, LLC and The Prudential Insurance Company of America with respect to The Prudential Individual Variable Contract Account.</p> </td>
        <td width="30" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="325" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>Incorporated by reference to Post-Effective Amendment No. 9 to Form S-1, Registration No. 33-20083-01, filed April 9, 1997 on behalf of The Prudential Variable Contract Real Property Account.</p> </td> </tr>
    <tr style='height:12.0pt'>
        <td width="341" valign=top style='padding:0pt 3.6pt 0pt 3.6pt; height:12.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:216%'><font size=1>&nbsp;</font></p> </td>
        <td width="30" valign=top style='padding:0pt 3.6pt 0pt 3.6pt; height:12.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:216%'><font size=1>&nbsp;</font></p> </td>
        <td width="325" valign=top style='padding:0pt 3.6pt 0pt 3.6pt; height:12.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:216%'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="341" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>(1B) Distribution Agreement between Pruco Securities LLC and The Prudential Insurance Company of America with respect to The Prudential Variable Appreciable Account.</p> </td>
        <td width="30" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="325" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>Incorporated by reference to Post-Effective Amendment No. 19 to Form S-6, Registration No. 33-20000, filed April 19, 1997, on behalf of The Prudential Variable Appreciable Account.</p> </td> </tr>
    <tr style='height:12.0pt'>
        <td width="341" valign=top style='padding:0pt 3.6pt 0pt 3.6pt; height:12.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:216%'><font size=1>&nbsp;</font></p> </td>
        <td width="30" valign=top style='padding:0pt 3.6pt 0pt 3.6pt; height:12.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:216%'><font size=1>&nbsp;</font></p> </td>
        <td width="325" valign=top style='padding:0pt 3.6pt 0pt 3.6pt; height:12.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:216%'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="341" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>(3A) Charter of The Prudential Insurance Company of America, as amended July 19, 2004.</p> </td>
        <td width="30" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="325" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>Filed herewith.</p> </td> </tr>
    <tr style='height:12.0pt'>
        <td width="341" valign=top style='padding:0pt 3.6pt 0pt 3.6pt; height:12.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:216%'><font size=1>&nbsp;</font></p> </td>
        <td width="30" valign=top style='padding:0pt 3.6pt 0pt 3.6pt; height:12.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:216%'><font size=1>&nbsp;</font></p> </td>
        <td width="325" valign=top style='padding:0pt 3.6pt 0pt 3.6pt; height:12.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:216%'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="341" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>(3B) By-Laws of The Prudential Insurance Company of America, as amended September 10, 2002.</p> </td>
        <td width="30" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="325" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>Filed herewith.</p> </td> </tr>
    <tr style='height:12.0pt'>
        <td width="341" valign=top style='padding:0pt 3.6pt 0pt 3.6pt; height:12.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:216%'><font size=1>&nbsp;</font></p> </td>
        <td width="30" valign=top style='padding:0pt 3.6pt 0pt 3.6pt; height:12.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:216%'><font size=1>&nbsp;</font></p> </td>
        <td width="325" valign=top style='padding:0pt 3.6pt 0pt 3.6pt; height:12.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:216%'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="341" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>(3C) Resolution of the Board of Directors establishing The Prudential Variable Contract Real Property Account.</p> </td>
        <td width="30" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="325" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>Incorporated by reference to Post-Effective Amendment No. 9 to Form S-1, Registration No. 33-20083-01, filed April 9, 1997 on behalf of The Prudential Variable Contract Real Property Account.</p> </td> </tr>
    <tr style='height:12.0pt'>
        <td width="341" valign=top style='padding:0pt 3.6pt 0pt 3.6pt; height:12.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:216%'><font size=1>&nbsp;</font></p> </td>
        <td width="30" valign=top style='padding:0pt 3.6pt 0pt 3.6pt; height:12.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:216%'><font size=1>&nbsp;</font></p> </td>
        <td width="325" valign=top style='padding:0pt 3.6pt 0pt 3.6pt; height:12.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:216%'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="341" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>(4A)(i) Revised Individual Variable Annuity Contract.</p> </td>
        <td width="30" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="325" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>Incorporated by reference to Post-Effective Amendment No. 9 to Form S-1, Registration No. 33-20083-01, filed April 9, 1997 on behalf of The Prudential Variable Contract Real Property Account.</p> </td> </tr>
    <tr style='height:12.0pt'>
        <td width="341" valign=top style='padding:0pt 3.6pt 0pt 3.6pt; height:12.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:216%'><font size=1>&nbsp;</font></p> </td>
        <td width="30" valign=top style='padding:0pt 3.6pt 0pt 3.6pt; height:12.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:216%'><font size=1>&nbsp;</font></p> </td>
        <td width="325" valign=top style='padding:0pt 3.6pt 0pt 3.6pt; height:12.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:216%'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="341" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>(4A)(ii) Discovery Plus Contract.</p> </td>
        <td width="30" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="325" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>Incorporated by reference to Post-Effective Amendment No. 9 to Form S-1, Registration No. 33-20083-01, filed April 9, 1997 on behalf of The Prudential Variable Contract Real Property Account.</p> </td> </tr>
    <tr style='height:12.0pt'>
        <td width="341" valign=top style='padding:0pt 3.6pt 0pt 3.6pt; height:12.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:216%'><font size=1>&nbsp;</font></p> </td>
        <td width="30" valign=top style='padding:0pt 3.6pt 0pt 3.6pt; height:12.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:216%'><font size=1>&nbsp;</font></p> </td>
        <td width="325" valign=top style='padding:0pt 3.6pt 0pt 3.6pt; height:12.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:216%'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="341" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>(4B)(i) Variable Appreciable Life Insurance Contract with fixed death benefit.</p> </td>
        <td width="30" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="325" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>Incorporated by reference to Post-Effective Amendment No. 19 to Form S-6, Registration No. 33-20000, filed April 28, 1997, on behalf of The Prudential Variable Appreciable Account.</p> </td> </tr>
    <tr style='height:12.0pt'>
        <td width="341" valign=top style='padding:0pt 3.6pt 0pt 3.6pt; height:12.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:216%'><font size=1>&nbsp;</font></p> </td>
        <td width="30" valign=top style='padding:0pt 3.6pt 0pt 3.6pt; height:12.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:216%'><font size=1>&nbsp;</font></p> </td>
        <td width="325" valign=top style='padding:0pt 3.6pt 0pt 3.6pt; height:12.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:216%'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="341" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>(4B)(ii) Variable Appreciable Life Insurance Contract with variable death benefit.</p> </td>
        <td width="30" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="325" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>Incorporated by reference to Post-Effective Amendment No. 19 to Form S-6, Registration No. 33-20000, filed April 28, 1997, on behalf of The Prudential Variable Appreciable Account.</p> </td> </tr>
    <tr style='height:12.0pt'>
        <td width="341" valign=top style='padding:0pt 3.6pt 0pt 3.6pt; height:12.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:216%'><font size=1>&nbsp;</font></p> </td>
        <td width="30" valign=top style='padding:0pt 3.6pt 0pt 3.6pt; height:12.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:216%'><font size=1>&nbsp;</font></p> </td>
        <td width="325" valign=top style='padding:0pt 3.6pt 0pt 3.6pt; height:12.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:216%'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="341" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>(4C)(i) Custom VAL Life Insurance Contract with fixed death benefit.</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="30" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="325" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>Incorporated by reference to Post-Effective Amendment No. 19 to Form S-6, Registration No. 33-20000, filed April 28, 1997, on behalf of The Prudential Variable Appreciable Account.</p> </td> </tr>
    <tr style='height:12.0pt'>
        <td width="341" valign=top style='padding:0pt 3.6pt 0pt 3.6pt; height:12.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:216%'><font size=1>&nbsp;</font></p> </td>
        <td width="30" valign=top style='padding:0pt 3.6pt 0pt 3.6pt; height:12.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:216%'><font size=1>&nbsp;</font></p> </td>
        <td width="325" valign=top style='padding:0pt 3.6pt 0pt 3.6pt; height:12.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:216%'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="341" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>(4C)(ii) Custom VAL Life Insurance Contract with variable death benefit.</p> </td>
        <td width="30" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="325" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>Incorporated by reference to Post-Effective Amendment No. 19 to Form S-6, Registration No. 33-20000, filed April 28, 1997, on behalf of The Prudential Variable Appreciable Account.</p> </td> </tr>
    <tr style='height:12.0pt'>
        <td width="341" valign=top style='padding:0pt 3.6pt 0pt 3.6pt; height:12.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:216%'><font size=1>&nbsp;</font></p> </td>
        <td width="30" valign=top style='padding:0pt 3.6pt 0pt 3.6pt; height:12.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:216%'><font size=1>&nbsp;</font></p> </td>
        <td width="325" valign=top style='padding:0pt 3.6pt 0pt 3.6pt; height:12.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:216%'><font size=1>&nbsp;</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM">II-2
</A></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<div TITLE="EE+ Page Break" STYLE="PAGE-BREAK-AFTER: always">

<HR noshade align="center" width="100%" size="2">
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="696" style=' border-collapse:collapse'>
    <tr>
        <td width="341" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>(5) Opinion and Consent of Thomas C. Castano, Esq., as to the legality of the securities being registered.</p> </td>
        <td width="30" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="325" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>Filed herewith.</p> </td> </tr>
    <tr style='height:12.0pt'>
        <td width="341" valign=top style='padding:0pt 3.6pt 0pt 3.6pt; height:12.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="30" valign=top style='padding:0pt 3.6pt 0pt 3.6pt; height:12.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="325" valign=top style='padding:0pt 3.6pt 0pt 3.6pt; height:12.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="341" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>(10A) Investment Management Agreement between Prudential Investment Management, Inc. and The Prudential Variable Contract Real Property Partnership.</p> </td>
        <td width="30" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="325" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>Incorporated by reference to Post-Effective Amendment No. 16 to Form S-1, Registration No. 33-20083-01, filed April 10, 2003.</p> </td> </tr>
    <tr style='height:12.0pt'>
        <td width="341" valign=top style='padding:0pt 3.6pt 0pt 3.6pt; height:12.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="30" valign=top style='padding:0pt 3.6pt 0pt 3.6pt; height:12.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="325" valign=top style='padding:0pt 3.6pt 0pt 3.6pt; height:12.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="341" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>(10B) Administrative Service Agreement among PIM,  Prudential Insurance Company of America, Pruco Life Insurance Company, and Pruco Life Insurance Company of New Jersey.</p> </td>
        <td width="30" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="325" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>Incorporated by reference to Post-Effective Amendment No. 17 to Form S-1, Registration No. 33-20083-01, filed April 14, 2004.</p> </td> </tr>
    <tr style='height:12.0pt'>
        <td width="341" valign=top style='padding:0pt 3.6pt 0pt 3.6pt; height:12.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="30" valign=top style='padding:0pt 3.6pt 0pt 3.6pt; height:12.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="325" valign=top style='padding:0pt 3.6pt 0pt 3.6pt; height:12.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="341" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>(10C) Partnership Agreement of The Prudential Variable Contract Real Property Partnership.</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="30" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="325" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>Incorporated by reference to Post-Effective Amendment No. 9 to Form S-1, Registration No. 33-20083-01, filed April 9, 1997 on behalf of The Prudential Variable Contract Real Property Account.</p> </td> </tr>
    <tr style='height:12.0pt'>
        <td width="341" valign=top style='padding:0pt 3.6pt 0pt 3.6pt; height:12.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="30" valign=top style='padding:0pt 3.6pt 0pt 3.6pt; height:12.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="325" valign=top style='padding:0pt 3.6pt 0pt 3.6pt; height:12.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="341" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>(23A) Written consent of PricewaterhouseCoopers LLP, independent registered public accounting firm.</p> </td>
        <td width="30" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="325" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>Filed herewith.</p> </td> </tr>
    <tr>
        <td width="341" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="30" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="325" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="341" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>(23B) Written consent of Thomas C. Castano, Esq.</p> </td>
        <td width="30" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="325" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>Incorporated by reference to Exhibit (5) hereto.</p> </td> </tr>
    <tr>
        <td width="341" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="30" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="325" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="341" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>(24) Powers of Attorneys:</p>
<p style='margin-left:0pt;text-indent:3.0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>&nbsp;</p>
<p style='margin-left:18.0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>T. Baltimore Jr., F. Becker, G. Bethune, W. Caperton III, R. Carbone, G. Casellas, J. Cullen, W. Gray III, M. Grier, J. Hanson, C. Horner, K. Krapek, C. Poon, P. Sayre, J. Strangfeld Jr., and  J. Unruh</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="30" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="325" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>&nbsp;</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>Filed herewith.</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.0pt'>
        <td width="341" valign=top style='padding:0pt 3.6pt 0pt 3.6pt; height:12.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="30" valign=top style='padding:0pt 3.6pt 0pt 3.6pt; height:12.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="325" valign=top style='padding:0pt 3.6pt 0pt 3.6pt; height:12.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="341" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>(b)  <u>Financial Statement Schedules</u></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>&nbsp;</p>
<p style='margin-left:18.9pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>Schedule III-Real Estate Owned by The Prudential Variable Contract Real Property Partnership and Report of Independent Registered Public Accounting Firm thereon.</p> </td>
        <td width="30" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="325" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>&nbsp;</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>Filed herewith.</p> </td> </tr>
    <tr>
        <td width="341" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="30" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="325" valign=top style='padding:0pt 3.6pt 0pt 3.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>

<div TITLE="EE+ Page Footer">
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=2></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM">II-3
</A></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.38in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<div TITLE="EE+ Page Break" STYLE="PAGE-BREAK-AFTER: always">

<HR noshade align="center" width="100%" size="2">
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'><B>ITEM 17.  UNDERTAKINGS</B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>The undersigned registrant hereby undertakes:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>(i)</font></p> </td>
        <td  valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>To include any prospectus required by Section 10 (a)(3) of the Securities Act of 1933;</font></p> </td> </tr></table>
</div>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.75in;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>(ii)</font></p> </td>
        <td  valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information in the registration statement; and</font></p> </td> </tr></table>
</div>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.75in;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>(iii)</font></p> </td>
        <td  valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font face="Arial" size=2>To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.</font></p> </td> </tr></table>
</div>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.75in;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at the time shall be deemed to be the initial bona fide offering thereof.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><FONT FACE="Arial" SIZE="2">(4) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser: each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness; provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of th



















e registration statement or made in any such document immediately prior to such date of first use.</FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><FONT FACE="Arial" SIZE="2">(5) That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities: The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser: (i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; (ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the
 undersigned registrant; (iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and (iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. </FONT> </p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>(6) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font face="Arial" size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>

<div TITLE="EE+ Page Footer">
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=2></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM">II-4
</A></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.38in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<div TITLE="EE+ Page Break" STYLE="PAGE-BREAK-AFTER: always">

<HR noshade align="center" width="100%" size="2">
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;line-height:95.83333%;'><B>SIGNATURES</B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'>Pursuant to the requirements of the Securities Act of 1933, this registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Newark, State of New Jersey, on the 26th day of March, 2009.</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'>&nbsp;</p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="695" style=' border-collapse:collapse'>
    <tr style='height:104.05pt'>
        <td width="336" valign=top style='padding:0pt 0pt 0pt 0pt; height:104.05pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt; height:104.05pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="336" valign=top style='padding:0pt 0pt 0pt 0pt; height:104.05pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:6.0pt;line-height:102.6%'><b>The Prudential Insurance Company of America</b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:6.0pt;line-height:102.6%'>In Respect of</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><b>The Prudential</b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><b>Variable Contract Real Property Account</b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>&nbsp;</p>
<p
style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>By:<font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u>/s/  Scott D. Kaplan          </u> </p>
<p style='margin-left:0pt;text-indent:27.75pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>Scott D. Kaplan </p>
<p style='margin-left:0pt;text-indent:27.8pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>Vice President, Finance</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><font size=1>&nbsp;</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'>Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed below by the following persons in the capacities indicated on this 26th day of March, 2009.</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'>&nbsp;</p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="696" style=' border-collapse:collapse'>
    <tr>
        <td width="336" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><u><b>Signature and Title</b></u></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="336" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="336" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><u>/s/ *                                                                      </u>&nbsp;</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>John R. Strangfeld, Jr.</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:6.0pt;line-height:102.6%'>President and Chief Executive Officer</p> </td>
        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="336" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="336" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><u>/s/  *                                                                     </u>&nbsp;</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>Peter B. Sayre</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:6.0pt;line-height:102.6%'>Senior Vice President and Corporate Controller<u></u></p> </td>
        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="336" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="336" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><u>/s/ *                                                                      </u>&nbsp;</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>Richard J. Carbone</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:6.0pt;line-height:102.6%'>Executive Vice President and Chief Financial Officer<u></u></p> </td>
        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="336" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="336" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><u>/s/ *                                                                      </u>&nbsp;</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>Thomas Baltimore, Jr. </p>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>Director</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>&nbsp;<u></u></p> </td>
        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="336" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="336" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><u>/s/ *                                                                      </u>&nbsp;</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>Frederic K. Becker</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:6.0pt;line-height:102.6%'>Director<u></u></p> </td>
        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="336" valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>*By:<font
size=2>&nbsp;&nbsp;&nbsp;&nbsp;</font><u>/s/ Thomas C. Castano                                   </u> </p>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><font
size=2>&nbsp;&nbsp;&nbsp;&nbsp;</font>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Thomas C. Castano</p>
<p style='margin-left:0pt;text-indent:27.8pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>(Attorney-in-Fact)</p> </td> </tr>
    <tr>
        <td width="336" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><u>/s/ *                                                                      </u>&nbsp;</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>Gordon M. Bethune</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'>Director<u></u></p> </td>
        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="336" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="336" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><u>/s/ *                                                                      </u>&nbsp;</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>W. Gaston Caperton, III</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'>Director<u></u></p> </td>
        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="336" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="336" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><u>/s/ *                                                                      </u>&nbsp;</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'>Gilbert F. Casellas</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:6.0pt;line-height:102.6%'>Director<u></u></p> </td>
        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="336" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="336" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><u>/s/ *                                                                      </u>&nbsp;</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'>James G. Cullen</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:6.0pt;line-height:102.6%'>Director<u></u></p> </td>
        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="336" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="336" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><u>/s/ *                                                                    </u>&nbsp;</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'>William H. Gray, III</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'>Director</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><u>/s/ *                                                                    </u>&nbsp;</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'>Mark B. Grier</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:6.0pt'>Director<u></u></p> </td>
        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="336" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<div TITLE="EE+ Page Footer">
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=2></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM">II-5
</A></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.38in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<div TITLE="EE+ Page Break" STYLE="PAGE-BREAK-AFTER: always">

<HR noshade align="center" width="100%" size="2">
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="696" style=' border-collapse:collapse'>
    <tr>
        <td width="336" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><u>/s/ *                                                                    </u>&nbsp;</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'>Jon F. Hanson</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:6pt'>Director<u></u></p>  </td>
        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="336" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="336" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><u>/s/ *                                                                    </u>&nbsp;</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'>Constance J. Horner</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:6.0pt'>Director</p> </td>
        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="336" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="336" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><u>/s/*                                                                     </u>&nbsp;</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'>Karl J. Krapek</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:6.0pt'>Director<u></u></p> </td>
        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="336" valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>*By:<font
size=2>&nbsp;&nbsp;&nbsp;&nbsp;</font><u>/s/ Thomas C. Castano                                   </u> </p>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><font
size=2>&nbsp;&nbsp;&nbsp;&nbsp;</font>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Thomas C. Castano</p>
<p style='margin-left:0pt;text-indent:27.8pt;text-align:justify;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'>(Attorney-in-Fact)</p> </td> </tr>
    <tr>
        <td width="336" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><u>/s/*                                                                     </u>&nbsp;</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'>Christine A. Poon</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:6pt'>Director<u></u></p>  </td>
        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="336" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt;line-height:102.6%'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="336" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><u>/s/ *                                                                    </u>&nbsp;</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'>James A. Unruh</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:6.0pt'>Director<u></u></p> </td>
        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="336" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>
</div>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>

<div TITLE="EE+ Page Footer">
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=2></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM">II-6
</A></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.38in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<div TITLE="EE+ Page Break" STYLE="PAGE-BREAK-AFTER: always">

<HR noshade align="center" width="100%" size="2">
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;line-height:95.83333%;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B>EXHIBIT INDEX</B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><B>ITEM 16.</B></p>

<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="696" style=' border-collapse:collapse'>
    <tr>
        <td width="516" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:63.0pt;text-indent: -63.0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:27.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="132" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="516" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:63.0pt;text-indent: -63.0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'>(a)<font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font>(3A) <font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font>Charter of The Prudential Insurance Company of America, as amended July 19, 2004.</p>
<p style='margin-left:63.0pt;text-indent: -63.0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:27.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="132" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>II-</p> </td> </tr>
    <tr>
        <td width="516" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:63.0pt;text-indent: -63.0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:27.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="132" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="516" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:63.0pt;text-indent: -63.0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'>(a)<font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font>(3B) <font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font>By-Laws of The Prudential Insurance Company of America, as amended September 10, 2002.</p>
<p style='margin-left:63.0pt;text-indent: -63.0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:27.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="132" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>II-</p> </td> </tr>
    <tr>
        <td width="516" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:63.0pt;text-indent: -63.0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:27.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="132" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="516" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:63.0pt;text-indent: -63.0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'>(a)<font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font>(5) <font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font>Opinion and Consent of Thomas C. Castano, Esq., as to the legality of the securities being registered.</p>
<p style='margin-left:63.0pt;text-indent: -63.0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:27.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="132" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>II-</p> </td> </tr>
    <tr>
        <td width="516" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:63.0pt;text-indent: -63.0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="132" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="516" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:63.0pt;text-indent: -63.0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'>(a)<font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font>(23A) <font size=2>&nbsp;&nbsp;&nbsp;</font>Written consent of PricewaterhouseCoopers LLP, independent registered public accounting firm.</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="132" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>II-</p> </td> </tr>
    <tr>
        <td width="516" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:63.0pt;text-indent: -63.0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="132" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="516" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:63.0pt;text-indent: -63.0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'>(a)<font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font>(24)      Powers of Attorneys</p> </td>
        <td width="48" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="132" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>II-</p> </td> </tr>
    <tr>
        <td width="516" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:63.0pt;text-indent: -63.0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="48" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="132" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="516" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:27.75pt;text-indent:-27.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>(b)<font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u>Financial Statement Schedules</u></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p>
<p style='margin-left:27.75pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'>Schedule III-Real Estate Owned by The Prudential Variable Contract Real Property Partnership and Report of Independent Registered Public Account Firm thereon.</p> </td>
        <td width="48" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:27.75pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="132" valign=top style='padding:0pt 0pt 0pt 0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>II-</p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<div TITLE="EE+ Page Footer">
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=2></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM">II-7
</A></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>



</BODY>
</HTML>
[{"type": "S-1", "sequence": "1", "filename": "prurparegtofile.htm", "description": "PRUDENTIAL REAL PROPERTY ACCOUNT REGISTRATION STATEMENT", "secsgml_size_bytes": 873236}]
{"company-data": {"conformed-name": "PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY ACCOUNT", "cik": "0000846581", "assigned-sic": "6311", "irs-number": "221211670", "state-of-incorporation": "NJ", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-1", "act": "33", "file-number": "333-158228", "film-number": "09707595"}, "business-address": {"street1": "PRUDENTIAL INSURANCE COMPANY OF AMERICA", "street2": "213 WASHINGTON STREET", "city": "NEWARK", "state": "NJ", "zip": "07102", "phone": "9738026196"}, "mail-address": {"street1": "PRUDENTIAL INSURANCE COMPANY OF AMERICA", "street2": "213 WASHINGTON STREET", "city": "NEWARK", "state": "NJ", "zip": "07102"}}
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
IN RESPECT OF:
THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY ACCOUNT
(Exact name of registrant as specified in its charter)
____________________________New Jersey_____________________________
(State or other jurisdiction of incorporation or organization)
______________________________6311_______________________________
(Primary Standard Industrial Classification Code Number)
_______________________22-1211670_______________________________
(I.R.S. Employer Identification Number)
c/o The Prudential Insurance Company of America
751 Broad Street, Newark, New Jersey  07102-3777, (800) 778-2255
(Address, including zip code, and telephone number,
including area code, or registrant's principal executive offices)
Thomas C. Castano, Vice President and Corporate Counsel
The Prudential Insurance Company of America
751 Broad Street, Newark, New Jersey  07102-3777, (800) 778-2255
(Name, address, including zip code, and telephone number,
including area code, of agent for service
Copies to:
Christopher E. Palmer
Goodwin Procter LLP
901 New York Avenue, N.W.
Washington, DC 20001
_________________________________March 26, 2009________________________
(Approximate date of commencement of proposed sale to the public)
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box: [ X ]
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [   ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [   ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [   ]
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 the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer [
]
Accelerated filer [
]
Non-accelerated filer [ X ]
(Do not check if a smaller reporting company)
Smaller reporting company [     ]
Calculation of Registration Fee
Title of Each Class
Proposed Maximum
Proposed Maximum
of Securities to
Amount to be
Offering
Aggregate
Amount of
be Registered
Registered*
Price Per Unit*
Offering Price**
Registration Fee
Interests in real
property
$7,000,000
$390.60
separate account
underlying variable
life insurance and
annuity contracts__________________________________________________________________________________________
*  These securities are not issued in predetermined amounts or units and the maximum aggregate offering price is estimated solely for purposes of determining the registration fee.
** In this filing the registrant is registering $7,000,000 of securities and is paying a fee of $390.60 therefor.  The proposed maximum offering price is estimated solely for the purpose of calculating the registration fee based on Rule 457 (o).
Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to Section 8(a), may determine.
PART I
INFORMATION REQUIRED IN PROSPECTUS
PROSPECTUS
May 1, 2009
THE PRUDENTIAL
VARIABLE CONTRACT
REAL PROPERTY ACCOUNT
This prospectus is attached to two other types of prospectuses.  The first describes either a variable annuity contract or a variable life insurance contract (collectively, the "Contract") issued by The Prudential Insurance Company of America ("Prudential," "us," "we," or "our").  The second prospectus describes several investment options available under that variable contract through The Prudential Series Fund (the "Series Fund").  The Series Fund is registered under the Investment Company Act of 1940 as an open-end, diversified management investment company. The Series Fund consists of separate investment portfolios that are mutual funds, each with a different investment policy and objective.
This prospectus describes The Prudential Variable Contract Real Property Account (the "Real Property Account"), an additional available investment option.  Although it is not a mutual fund, in many ways it is like a mutual fund.  Instead of holding a diversified portfolio of securities, such as stocks or bonds, it consists mainly of a portfolio of commercial and residential real properties.
Prudential determines the price of a "share" or, as we call it, a "participating interest" in this portfolio of properties, just as it does for the other investment options.  It is based upon our best estimate of the fair market value of the properties and other assets held in this portfolio.  The portion of your "Contract Fund" (the total amount invested under the Contract) that you allocate to this investment option will change daily in value, up or down, as our estimate of the fair market value of these real properties and other assets change.
The risks of investing in real property are different from the risks of investing in mutual funds.  See
RISK FACTORS
.  Also, your ability to withdraw or transfer your investment in this option is not as freely available as it is for the other investment options.  See
RESTRICTIONS ON WITHDRAWALS
.
Please read this prospectus and keep it for future reference.
The Securities and Exchange Commission ("SEC") maintains a Web site (http://www.sec.gov) that contains material incorporated by reference and other information regarding registrants that file electronically with the SEC.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is accurate or complete.  Any representation to the contrary is a criminal offense.
The Prudential Insurance Company of America
751 Broad Street
Newark, New Jersey 07102-3777
Telephone: (800) 778-2255
PRPA-3 Ed 5-2009
TABLE OF CONTENTS

                                                                                                                            Page

PER SHARE INVESTMENT INCOME, CAPITAL CHANGES AND SELECTED RATIOS...............................................................1

SUMMARY........................................................................................................................2
   Investment of The Real Property Account Assets..............................................................................2
   Investment Objectives.......................................................................................................2
   Risk Factors................................................................................................................2
   Summary of Charges..........................................................................................................3
   Availability to Prudential Contracts........................................................................................3

GENERAL INFORMATION ABOUT THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY ACCOUNT,
THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP, AND THE INVESTMENT MANAGER.........................................3
   The Prudential Insurance Company of America.................................................................................3
   The Prudential Variable Contract Real Property Account......................................................................3
   The Prudential Variable Contract Real Property Partnership..................................................................4
   The Investment Manager......................................................................................................4

INVESTMENT POLICIES............................................................................................................5
   Overview....................................................................................................................5
   Investment in Direct Ownership Interests in Real Estate.....................................................................5
   Investments in Mortgage Loans...............................................................................................6
   Investments in Sale-Leasebacks..............................................................................................7
   General Investment and Operating Policies...................................................................................8

CURRENT REAL ESTATE-RELATED INVESTMENTS........................................................................................9
   Properties..................................................................................................................9

RISK FACTORS...................................................................................................................9
   Liquidity of Investments....................................................................................................9
   General Risks of Real Property Investments.................................................................................10
   Reliance on The Partners and The Investment Manager........................................................................11

INVESTMENT RESTRICTIONS.......................................................................................................11

DIVERSIFICATION REQUIREMENTS..................................................................................................12

CONFLICTS OF INTEREST.........................................................................................................12

THE REAL PROPERTY ACCOUNT'S UNAVAILABILITY TO CERTAIN CONTRACTS...............................................................14

VALUATION OF CONTRACT OWNERS' PARTICIPATING INTERESTS.........................................................................14

BORROWING BY THE PARTNERSHIP..................................................................................................15

CHARGES.......................................................................................................................16

RESTRICTIONS ON WITHDRAWALS...................................................................................................16

RESTRICTIONS ON CONTRACT OWNERS' INVESTMENT IN THE REAL PROPERTY ACCOUNT......................................................17

FEDERAL INCOME TAX CONSIDERATIONS.............................................................................................17

DISTRIBUTION OF THE CONTRACTS.................................................................................................17

STATE REGULATION..............................................................................................................17

ADDITIONAL INFORMATION........................................................................................................18

EXPERTS.......................................................................................................................18

LITIGATION....................................................................................................................18

REPORTS TO CONTRACT OWNERS....................................................................................................18

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.....................................................................................................18

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK....................................................................25

FINANCIAL STATEMENTS..........................................................................................................25

FINANCIAL STATEMENTS OF THE PRUDENTIAL VARIABLE CONTRACT REAL
PROPERTY ACCOUNT..............................................................................................................A1

FINANCIAL STATEMENTS OF THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY
PARTNERSHIP...................................................................................................................B1
PER SHARE INVESTMENT INCOME, CAPITAL CHANGES AND
SELECTED RATIOS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
The following information on per share investment income, capital changes and selected ratios has been provided for your information.  This page should be read in conjunction with the financial statements and notes thereto of The Prudential Variable Contract Real Property Partnership included in this prospectus.
01/01/2008
01/01/2007
01/01/2006
01/01/2005
01/01/2004
To
To
To
To
To
12/31/2008
12/31/2007
12/31/2006
12/31/2005
12/31/2004
Revenue from real estate and improvements
$4.55
$4.25
$3.69
$3.80
$3.78
Equity in income of real estate partnership
$0.15
$0.17
$0.14
$0.04
$0.09
Dividend income from real estate investment trusts
$0.00
$0.00
$0.00
$0.00
$0.00
Interest and equity income on mortgage and other loans receivable
$0.00
$0.00
$0.02
$0.04
$0.02
Income from other real estate investments
$0.00
$0.06
$0.03
$0.00
$0.03
Interest on short-term investments
$0.06
$0.22
$0.27
$0.14
$0.03
TOTAL INVESTMENT INCOME
$4.76
$4.70
$4.15
$4.02
$3.95
Investment Management fee
$0.51
$0.50
$0.45
$0.40
$0.36
Real Estate Taxes
$0.45
$0.36
$0.30
$0.33
$0.36
Administrative expense
$0.88
$0.60
$0.57
$0.62
$0.71
Operation expense
$1.07
$1.03
$0.92
$1.04
$1.02
Interest expense
$0.29
$0.30
$0.26
$0.30
$0.40
Minority interest in consolidated partnership
($0.08)
$0.02
$0.03
$0.02
$0.03
TOTAL INVESTMENT EXPENSES
$3.12
$2.81
$2.53
$2.71
$2.89
NET INVESTMENT INCOME
$1.64
$1.89
$1.62
$1.29
$1.06
Net realized gain (loss) on real estate investments sold
or converted
$0.00
$0.10
$0.01
$0.87
$0.23
Change in unrealized gain (loss) on real estate investments
($6.75)
$0.83
$2.94
$1.47
$0.33
Minority interest in unrealized gain (loss) on investments
($0.21)
$0.12
$0.29
$0.17
$0.12
Net unrealized gain (loss) on real estate investments
($6.54)
$0.71
$2.65
$1.30
$0.21
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
($6.54)
$0.81
$2.66
$2.17
$0.45
Net change in share value
($4.90)
$2.68
$4.28
$3.44
$1.49
Share value at beginning of period
$36.55
$33.87
$29.59
$26.15
$24.66
Share value at end of period
$31.65
$36.55
$33.87
$29.59
$26.15
Ratio of expenses to average net assets (1)
8.57%
7.94%
7.98%
9.78%
11.34%
Ratio of net investment income to average net assets (1)
4.55%
5.28%
5.10%
4.64%
4.16%
Number of weighted shares outstanding at
end of period (000's)
6,759
6,759
6,893
7,133
7,364
All per share calculations are based on weighted average shares outstanding.
(1)  Average net assets are calculated based on an average of ending monthly net assets.
*Per Share amount less than $0.01 (rounded)
1 - Real Property
SUMMARY
This Summary provides a brief overview of the more significant aspects of the Real Property Account.  We provide further detail in the subsequent sections of this prospectus.
The Real Property Account is a separate account of Prudential created pursuant to New Jersey insurance law.  Under that law, the assets of the Real Property Account are not chargeable with liabilities arising out of any other business of Prudential.  Owners of certain variable life insurance and variable annuity contracts issued by Prudential may allocate a portion of their net premiums or purchase payments, or transfer a portion of their Contract Fund, to the Real Property Account.  Values and benefits under the Contracts will thereafter reflect the investment experience of the Real Property Account.  Contract owners, not Prudential, bear the risks and rewards of the investment performance of the Real Property Account to the extent of the Contract owner's Contract Fund invested in the Real Property Account. This prospectus is attached to and should be read in conjunction with the prospectus
for the Contract you selected.
Investment of The Real Property Account Assets
The Real Property Account assets are invested primarily in income-producing real estate through The Prudential Variable Contract Real Property Partnership (the "Partnership"), which is a general partnership that was established by Prudential and two of its wholly-owned subsidiaries, Pruco Life Insurance Company ("Pruco Life") and Pruco Life Insurance Company of New Jersey ("Pruco Life of New Jersey"). See
The Prudential Variable Contract Real Property Partnership
.  Currently Prudential serves as the investment manager of the Partnership. Prudential acts through Prudential Investment Management, Inc.  See
The Investment Manager
.  The Partnership invests at least 65% of its assets in direct ownership interests in:
1.
income-producing real estate;
2.
participating mortgage loans (mortgages providing for participation in the revenues generated by, or the appreciation of, the underlying property, or both) originated for the Partnership; and
3.
real property sale-leasebacks negotiated  on behalf of the Partnership.
The large majority of these real estate investments will be in direct ownership interests in income producing real estate, such as office buildings, shopping centers, apartments, industrial properties or hotels.  The Partnership may also invest up to 5% of its assets in direct ownership interests in agricultural land.  Approximately 10% of the Partnership's assets will be held in cash or invested in liquid instruments and securities.  The remainder of the Partnership's assets may be invested in other types of real estate related investments, including non-participating mortgage loans and real estate investment trusts.
Investment Objectives
The investment objectives of the Partnership are to:
1.
preserve and protect the Partnership's capital;
2.
compound income by reinvesting  investment cash flow; and
3.
over time, increase the income amount through appreciation in the value of permitted investments and, to a lesser extent, through mortgage loans and sale-leaseback transactions.
There is no assurance that the Partnership's objectives will be attained.  See
INVESTMENT POLICIES
.
Risk Factors
Investment in the Real Property Account, and thereby, participation in the investment experience of the Partnership, involves significant risks.  See
RISK FACTORS
.  These include the risk of fluctuating real estate values and the risk that the appraised or estimated values of the Partnership's real property investments will not be realized upon their disposition.  Many of the Partnership's real estate investments will not be quickly convertible into cash. Therefore, the Real Property Account should be viewed as a long-term investment.  See
RESTRICTIONS ON WITHDRAWALS
.  Prudential and the investment manager have taken steps that are designed to ensure that the Real Property Account and Partnership will be sufficiently liquid to satisfy all withdrawal
or loan requests promptly (within seven days), see
Liquidity of Investments
.
Prudential's management of the Partnership is subject to certain conflicts of interest, including the possible acquisition of properties from Prudential Financial affiliates.  See
CONFLICTS OF INTEREST
.
2 - Real Property
Summary of Charges
The Partnership pays a daily investment management fee, which amounts to 1.25% per year of the average daily gross assets of the Partnership.  The Partnership also compensates the investment manager for providing certain accounting and administrative services.  See
CHARGES
.  The portion of your Contract Fund allocated to the Real Property Account is subject to the same Contract charges as the portion of your Contract Fund allocated to The Prudential Series Fund, Inc. (the "Series Fund").  The Series Fund is the underlying funding vehicle for the other variable investment options available to Contract owners.  You should read the Contract prospectus for a description of those charges.
Availability to Prudential Contracts
The Real Property Account is currently available to purchasers of Prudential's
Variable Investment Plan
®
Contracts, Prudential's
Discovery
®
Plus
Contracts, Prudential's
Variable Appreciable Life
®
Insurance Contracts, and Prudential's
Custom
VAL
SM
Life Insurance Contracts.  It is not available on Contracts that are purchased in connection with IRAs, Section 403(b) annuities, and other
tax-qualified plans, that are subject to the Employee Retirement Income Security Act of 1974 ("ERISA") or to the prohibited transaction excise tax provisions of the Internal Revenue Code. See
THE REAL PROPERTY ACCOUNT'S UNAVAILABILITY TO CERTAIN CONTRACTS
.  For example, a
Variable Appreciable Life
Contract owner who elects to invest part of his or her net premiums in The Prudential Variable Appreciable Account, a separate account of Prudential registered as a unit investment trust under the Investment Company Act of 1940, and part in the Real Property Account, will be subject to the same:  (1) monthly sales charges; (2) risk charges; (3) administrative charges; (4) insurance charges; and (5) contingent deferred sales charges without regard to what portion is invested in The Prudential Variable Appreciable Account and what portion is invested
in the Real Property Account.  The Real Property Account has established different subaccounts, relating to the different types of variable Contracts that may participate in the Real Property Account. These subaccounts provide the mechanism and maintain the records whereby these different Contract charges are made.
This prospectus may only be offered in jurisdictions in which the offering is lawful.  No person is authorized to make any representations in connection with this offering other than those contained in this prospectus.
GENERAL INFORMATION ABOUT THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY ACCOUNT, THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP, AND THE INVESTMENT MANAGER
The Prudential Insurance Company of America
Prudential, a stock life insurance company, has been doing business since October 13, 1875.  Prudential is licensed to sell life insurance and annuities in the District of Columbia, Guam, U.S. Virgin Islands, and in all states.  These Contracts are not offered in any state in which the necessary approvals have not yet been obtained.
Prudential is an indirect, wholly-owned subsidiary of Prudential Financial, Inc. ("Prudential Financial"), a New Jersey insurance holding company.  Prudential Financial exercises significant influence over the operations and capital structure of Prudential.  However, neither Prudential Financial nor any other related company has any legal responsibility to pay amounts that Prudential may owe under the Contract.
The Prudential Variable Contract Real Property Account
The Real Property Account was established on November 20, 1986 under New Jersey law as a separate investment account.  The Real Property Account meets the definition of a "separate account" under the federal securities laws.  The Real Property Account holds assets that are separated from all of Prudential's other assets.  The Real Property Account is used only to support the variable benefits payable under the Contracts that are funded by the real estate investment option.
The Contract obligations to Contract owners and beneficiaries are general corporate obligations of Prudential. Prudential is also the legal owner of the Real Property Account assets.  Prudential will maintain assets in the Real Property Account with a total market value at least equal to the amounts credited under the real estate option to all the Contracts participating in the Real Property Account.  These assets may not be charged with liabilities, which arise from any other business that Prudential conducts.  In addition to these assets, the Real Property Account's assets may include funds contributed by Prudential, and reflect any accumulations of the charges Prudential makes against the Real Property Account.  See
VALUATION OF CONTRACT OWNER'S PARTICIPATING INTERESTS
.
3 - Real Property
Prudential will bear the risks and rewards of the Real Property Account's investment experience to the extent of its investment in the Real Property Account.  Prudential may withdraw or redeem its investment in the Real Property Account at any time.  We will not make any such redemption if it will have a materially adverse impact on the Real Property Account.  Accumulations of charges will be withdrawn on a regular basis.
Unlike the other separate accounts funding the Contracts, the Real Property Account is not registered with the Securities and Exchange Commission ("SEC") under the Investment Company Act of 1940 as an investment company. For state law purposes, the Real Property Account is treated as a part or division of Prudential.  Contract owners have no voting rights with respect to the Real Property Account.  The Real Property Account is under the control and management of Prudential.  The Board of Directors and officers of Prudential are responsible for the management of the Real Property Account.  No salaries of Prudential personnel are paid by the Real Property Account.  Information regarding the directors and officers of Prudential is contained in the attached prospectus for the Contract.  The financial statements of the Real Property Account begin on page A1.
The Prudential Variable Contract Real Property Partnership
The assets of the Real Property Account are invested in the Partnership.  The Partnership, a general partnership organized under New Jersey law on April 29, 1988, was formed through an agreement among Prudential, Pruco Life, and Pruco Life of New Jersey, to provide a means for assets allocated to the real estate investment option under certain variable life insurance and variable annuity contracts issued by the respective companies to be invested in a commingled pool.  This was done to provide greater diversification of investments and lower transaction costs than would be possible if the assets were separately invested by each company.  All amounts allocated to the Real Property Account are contributed by Prudential to the Partnership.  Prudential's general partnership interest in the Partnership is held in the Real Property Account.
The initial contributions to the Partnership were made on April 29, 1988.  Prudential contributed  $100,000 in cash to the Partnership; Pruco Life of New Jersey contributed $100,000 in cash to the Partnership; and Pruco Life contributed the real estate and other assets held in its real estate separate account, which had been actively investing in real estate for more than a year.  Those assets had an estimated market value of $91,538,737 on that date.  Each Partner is entitled to its respective proportionate share of all income, gains, and losses of the Partnership.
The Partnership assets are valued on each business day.  The value of each Partner's interest will fluctuate with the investment performance of the Partnership.  In addition, the Partners' interests are proportionately readjusted, at the current value, on each day when a Partner makes a contribution to, or withdrawal from, the Partnership.  When you choose to allocate a portion of your net premiums or purchase payments, or transfer a portion of your Contract Fund, to the Real Property Account, Prudential will contribute that amount to the Partnership as a capital contribution.  It will correspondingly increase the Real Property Account's interest in the Partnership.  Values and benefits under the Contract will thereafter vary with the performance of the Partnership's investments.  For more information on how the value of your interest in the Real Property Account and the value of the
Partnership's investments are calculated, see
VALUATION OF CONTRACT OWNERS' PARTICIPATING INTERESTS
.
Contract owners have no voting rights with respect to the Partnership operations.  The financial statements of the Partnership begin on page B1.
The Investment Manager
Currently, Prudential Investment Management, Inc. ("PIM") acts as investment manager of the Partnership.  PIM invests in and manages real estate equities and mortgages for the general account and separate accounts of Prudential Financial affiliates, and other third party accounts.
PIM, on behalf of the general account, and separate accounts of Prudential Financial affiliates, and other third party accounts, is one of the largest real estate investors in North America. PIM and Prudential Financial affiliates participate in real estate ventures through public and private partnerships.  As of December 31, 2008, PIM managed $59.1 billion of net domestic real estate mortgages and equities of which $29.8 billion is in Prudential's general account and $29.3 billion is in separate accounts and other third party accounts.  Statement value for general account assets is recorded at depreciated cost and for assets in separate accounts and other third party accounts at market value.  For a discussion of how the Partnership's real estate-related investments are valued, see
VALUATION OF CONTRACT OWNERS' PARTICIPATING INTERESTS
.
PIM has organized its real estate activities into separate business units within Prudential's Global Asset Management Group.  Prudential Real Estate Investors ("PREI"™) is the unit responsible for the investments of the Real Property
4 - Real Property
Partnership.  PREI's investment staff is responsible for both general account and third party account real estate investment management activities.
PREI provides global investment management services to institutional investors worldwide.  PREI is headquartered in Parsippany, New Jersey and has 5 field offices across the United States.  As of December 31, 2008, PREI had under management, within the US, approximately 30.1 million net rentable square feet of office real estate, 37.1 million net rentable square feet of industrial real estate, 13.5 million net rentable square feet of retail real estate, 109,586 hotel rooms, 16,081,751 multifamily residential units, and 15.3 million units of self-storage real estate.
PIM has entered into an administrative services agreement with Prudential, Pruco Life, and Pruco Life of New Jersey under which it pays the companies a fee for performing certain of PIM's record keeping and other obligations under its investment management agreement with the Partnership.
INVESTMENT POLICIES
Overview
The Partnership has an investment policy of investing at least 65% of its assets in direct ownership interests in income-producing real estate and participating mortgage loans.  The largest portion of these real estate investments are direct ownership interests in income-producing real estate, such as office buildings, shopping centers, hotels, apartments, or industrial properties.  Approximately 10% of the Partnership's assets are generally held in cash or invested in liquid instruments and securities although the Partners reserve discretion to increase this amount to meet partnership liquidity requirements.  The remainder of the Partnership's assets are invested in other types of real estate-related investments, including real estate investment trusts.
Investment in Direct Ownership Interests in Real Estate
Acquisition.
The Partnership's principal investment policy involves acquiring direct ownership interests in existing (including newly constructed) income-producing real estate, including office buildings, shopping centers, apartment buildings, industrial properties, and hotels.  The Partnership may also invest up to 5% of its assets in direct ownership interests in agricultural land.  Property acquisitions will generally be carried out by the real estate acquisition offices in PREI's network of field offices located in Parsippany, New Jersey, Atlanta, Georgia, Chicago, Illinois and San Francisco, California.  A field office or an affiliate of Prudential Financial supervises the management of properties in all of
PIM's
accounts
.
Proposals to acquire properties for the Partnership are usually originated by a field office.  They are reviewed and approved by the Investment Management Committee of PREI.  Depending upon the size of the acquisition and other factors, a proposed real estate investment may also be submitted for review to the Investment Committee of the Board of Directors of Prudential.
Although percentage limitations on the type and location of properties that may be acquired by the Partnership have not been established, the Partnership plans to diversify its investments through the type of property acquired and its geographic location.  The Partnership's investments will be maintained to meet the Internal Revenue Code diversification requirements.  See
General Investment and Operating Policies
.
In order for the Partnership to meet its stated objectives, it will have to acquire properties that generate more cash than needed to pay its gross operating expenses.  To do this, a substantial portion of the Partnership's assets will be invested in properties with operating histories that include established rent and expense schedules.  However, the Partnership may also acquire recently constructed properties that may be subject to agreements with sellers providing for certain minimum levels of income.  Upon the expiration of or default under these agreements, there is no assurance that the Partnership will maintain the level of operating income necessary to produce the return it was previously experiencing.  The Partnership may purchase real property from Prudential Financial or its affiliates under certain conditions.  See
CONFLICTS OF
INTEREST
.
The property acquired by the Partnership is usually real estate, which is ready for use.  Accordingly, the Partnership is not usually subject to the development or construction risks inherent in the purchase of unimproved real estate.  From time to time, however, the Partnership may invest in a developmental real estate project that is consistent with the Partnership's objectives.  The Partnership will then be subject to those risks.
The Partnership will often own the entire fee interest in an acquired property, but it may also hold other direct ownership interests.  These include, but are not limited to, partnership interests, limited liability company interests, leaseholds, and tenancies in common.
5 - Real Property
Property Management and Leasing Services
.
The Partnership usually retains a management company operating in the area of a property to perform local property management services.  A field office or other affiliate of Prudential Financial will usually:  (1) supervise and monitor the performance of the local management company; (2) determine and establish the required accounting information to be supplied; (3) periodically inspect the property; (4) review and approve property operating budgets; and (5) review actual operations to ensure compliance with budgets.  In addition to day-to-day management of the property, the local management company will have responsibility for:  (1) supervision of any on-site personnel; (2) negotiation of maintenance and service contracts; (3) major repair advice; (4) replacements and
capital improvements; (5) the review of market conditions to recommend rent schedule changes; and (6) creation of marketing and advertising programs to obtain and maintain good occupancy rates by responsible tenants.  The local management company fees will reduce the cash flow from the property to the Partnership.
The Partnership usually retains a leasing company to perform leasing services on any property with actual or projected vacancies.  The leasing company will coordinate with the property management company to provide marketing and leasing services for the property.  When the property management company is qualified to handle leasing, it may also be hired to provide leasing services.  Leasing commissions and expenses will reduce the cash flow from the property to the Partnership.
PREI may, on behalf of the Partnership, hire a Prudential Financial affiliate to perform property management or leasing services. The affiliate's services must be provided on terms competitive with unaffiliated entities performing similar services in the same geographic area.  See
CONFLICTS OF INTEREST
.
Annually, the field office which oversees the management of each property owned by the Partnership will, together with the local property management firm, develop a business plan and budget for each property.  It will consider, among other things, the projected rollover of individual leases, necessary capital expenditures and any expansion or modification of the use of the property.  The approval of an officer of PREI is required.  The field office will also periodically report the operating performance of the property to PREI.
Investments in Mortgage Loans
Types of Mortgage Loans
The Partnership is authorized to invest in mortgage loans, including conventional mortgage loans that may pay fixed or variable rates of interest and mortgage loans that have a Participation (as defined below).  The Partnership will not make mortgage loans to Prudential Financial affiliates.
The Partnership intends to give mortgage loans on:  (1) commercial properties (such as office buildings, shopping centers, hotels, industrial properties, and office showrooms); (2) agricultural properties; and (3) residential properties (such as garden apartment complexes and high-rise apartment buildings).  These loans are usually secured by properties with income-producing potential based on historical or projected data.  Usually, they are not personal obligations of the borrower and are not insured or guaranteed.
1.
First Mortgage Loans.
The Partnership will primarily make first mortgage loans secured by mortgages on existing income-producing property.  These loans may provide for interest-only payments and a balloon payment at maturity.
2.
Wraparound Mortgage Loans
.
The Partnership also may make wraparound mortgage loans on income-producing properties which are already mortgaged to unaffiliated entities.  A wraparound mortgage loan is a mortgage with a principal amount equal to the outstanding balance of the prior existing mortgage plus the amount to be advanced by the lender under the wraparound mortgage loan, thereby providing the property owner with additional funds without disturbing the existing loan.  The terms of wraparound mortgage loans made by the Partnership require the borrower to make all principal and interest payments on the underlying loan to the Partnership, which will then pay the holder of the prior loan.  Because the
existing first mortgage loan is preserved, the lien of the wraparound mortgage loan is junior to it.  The Partnership will make wraparound mortgage loans only in states where local applicable foreclosure laws permit a lender, in the event of the borrower's default, to obtain possession of the property, which secures the loan.
3. Junior Mortgage Loans
.
The Partnership may also invest in other junior mortgage loans.  Junior mortgage loans will be secured by mortgages, which are subordinate to one or more prior liens on the real property.  They will generally, but not in all cases, provide for repayment in full prior to the end of the amortization period of the senior mortgages.  Recourse on such loans will include the real property encumbered by the Partnership's mortgage and may also include other collateral or personal guarantees by the borrower.
The Partnership will generally make junior or wraparound mortgage loans only if the senior mortgage, when combined with the amount of the Partnership's mortgage loan, would not exceed the maximum amount which the Partnership
6 - Real Property
would be willing to commit to a first mortgage loan and only under such circumstances and on such property as to which the Partnership would otherwise make a first mortgage loan.
4. Participations.
The Partnership may make mortgage loans, which, in addition to charging a base rate of interest, will include provisions permitting the Partnership to participate (a "Participation") in the economic benefits of the underlying property.  The Partnership would receive a percentage of:  (1) the gross or net revenues from the property operations; and/or (2) the increase in the property value realized by the borrower, such as through sale or refinancing of the property.  These arrangements may also grant the Partnership an option to acquire the property or an undivided interest in the property securing the loan.  When the Partnership negotiates the right to receive additional interest in the form of a percentage of the gross revenues or otherwise, the fixed cash return to the Partnership from
that investment will generally be less than would otherwise be the case.  It is expected that the Partnership will be entitled to percentage Participations when the gross or net revenues from the property operations exceed a certain base amount.  This base amount may be adjusted if real estate taxes or similar charges are increased.  The form and extent of the additional interest that the Partnership receives will vary with each transaction depending on:  (1) the equity investment of the owner or developer of the property; (2) other financing or credit obtained by the owner or developer; (3) the fixed base interest rate on the mortgage loan by the Partnership; (4) any other security arrangement; (5) the cash flow and pro forma cash flow from the property; and (6) market conditions.
The Partnership intends to use this additional interest as a hedge against inflation.  It assumes that as prices increase in the economy, the rental prices on properties, such as shopping centers or office buildings, will increase and  there should be a corresponding increase in the property value.  There is no assurance that additional interest or increased property values will be received.  In that event, the Partnership will be entitled to receive only the fixed portion of its return.
Standards for Mortgage Loan Investments
In making mortgage loans, the investment manager will consider relevant real property and financial factors, including: (1) the location, condition, and use of the underlying property; (2) its operating history; (3) its future income-producing capacity; and (4) the quality, experience, and creditworthiness of the unaffiliated borrower.
Before the Partnership makes a mortgage loan, the investment manager analyzes the fair market value of the underlying real estate.  In general, the amount of each mortgage loan made by the Partnership will not exceed, when added to the amount of any existing indebtedness, 80% of the estimated or appraised value of the property mortgaged.
Dealing With Outstanding Loans
The Partnership may sell its mortgage loans prior to maturity if it is deemed advisable by the investment manager and consistent with the Partnership's investment objectives.  The investment manager may also:  (1) extend the maturity of any mortgage loan made by the Partnership; (2) consent to a sale of the property subject to a mortgage loan or finance the purchase of a property by making a new mortgage loan in connection with the sale of a property (either with or without requiring the repayment of the mortgage loan); (3) renegotiate the terms of a mortgage loan; and (4) otherwise deal with the mortgage loans of the Partnership.
Investments in Sale-Leasebacks
A portion of the Partnership's investments may consist of real property sale-leaseback transactions ("Leasebacks").  In this type of transaction, the Partnership will purchase land and income-producing improvements on the land and simultaneously lease the land and improvements, generally to the seller, under a long-term lease.  Leasebacks may be for very long periods and may provide for increasing payments from the lessee.
Under the terms of the Leaseback, the tenant will operate, or provide for the operation of, the property and generally be responsible for the payment of all costs, including: (1) taxes; (2) mortgage debt service; (3) maintenance and repair of the improvements; and (4) insurance.  In some cases, the Partnership may also grant the lessee an option to acquire the land and improvements from the Partnership after a period of years.  The option exercise price would  be based on the fair market value of the property, as encumbered by the lease, the increase in the gross revenues from the property or other objective criteria reflecting the increased value of the property.
In some Leaseback transactions, the Partnership may only purchase the land under an income-producing building and lease the land to the building owner.  In such cases, the Partnership may seek, in addition to base rents in its Leasebacks, Participations in the gross revenues from the building in a form such as a percentage of the gross revenues of the lessee above a base amount (which may be adjusted if real property taxes increase or for other events).  The Partnership may invest in Leasebacks which are subordinate to other interests in the land, buildings, and
7 - Real Property
improvements, such as a first mortgage, other mortgage, or lien.  In those situations, the Partnership's Leaseback interest will be subject to greater risks.
The Partnership will only acquire a property for a Leaseback transaction if the purchase price is equal to not more than 100% of the estimated or appraised property value.  The Partnership may dispose of its Leasebacks when deemed advisable by the investment manager and consistent with the Partnership's investment objectives.
General Investment and Operating Policies
The Partnership does not intend to invest in any direct ownership interests in properties, mortgage loans or Leasebacks in order to make short-term profits from their sale, although in exceptional cases, the investment manager may decide to do so in the best interests of the Partnership.  The Partnership may dispose of its investments whenever necessary to meet its cash requirements or when it is deemed to be desirable by the investment manager because of market conditions or otherwise.  The Partnership will reinvest any proceeds from the disposition of assets (and any cash flow from operations) which are not necessary for the Partnership's operations and which are not withdrawn by the Partners in order to make distributions to investors pursuant to the variable contracts issued by the Partners, or to Prudential to return its equity interests pursuant to this prospectus.  The proceeds will be
reinvested in investments consistent with the Partnership's investment objectives and policies.
In making investments in properties, mortgage loans, Leasebacks or other real estate investments, the Partnership will rely on the investment manager's analysis of the investment and will not receive an independent appraisal prior to acquisition.  The Partnership expects, however, that all the properties it owns, and most mortgage loans it holds, will be appraised or valued annually by an independent appraiser who is a member of a nationally recognized society of appraisers.  Each appraisal will be maintained in the Partnership records for at least five years.  It should be noted that appraised values are opinions and, as such, may not represent the true worth or realizable value of the property being appraised.
The Partnership usually purchases properties on an unleveraged basis.  The properties acquired will typically be free and clear of mortgage debt immediately after their acquisition.  The Partnership may, however, acquire properties subject to existing mortgage loans.  In addition, the Partnership may mortgage or acquire properties partly with the proceeds of purchase money mortgage loans, up to 80% of the property value.  Although this is not usually done, the Partnership may do so if the investment manager decides that it is consistent with its investment objectives.  When the Partnership mortgages its properties, it bears the expense of mortgage payments.  See
BORROWING BY THE PARTNERSHIP
.
The Partnership may also invest a portion of its assets in non-participating mortgage loans, real estate limited partnerships, limited liability companies, real estate investment trusts, and other vehicles whose underlying investment is in real estate.
The Partnership's investments will be maintained in order to meet the diversification requirements set forth in regulations under the Internal Revenue Code (the "Code") relating to the investments of variable life insurance and variable annuity separate accounts.  In order to meet the diversification requirements under the regulations, the Partnership will meet the following test: (1) no more than 55% of the assets will be invested in any one investment; (2) no more than 70% of the assets will be invested in any two investments; (3) no more than 80% of the assets will be invested in any three investments; and (4) no more than 90% of the assets will be invested in any four investments.  All interests in the same real property project are treated as a single investment.  The Partnership must meet the above test within 30 days of the end of each calendar quarter.  To comply with the
diversification requirements of the State of Arizona, the Partnership will limit additional investments in any one parcel or related parcels to an amount not exceeding 10% of Partnership's gross assets, as of the prior fiscal year end.
In managing the assets of the Partnership, the investment manager will use its discretion in determining whether to foreclose on defaulting borrowers or to evict defaulting tenants.  The investment manager will decide which course of action is in the best interests of the Partnership in maintaining the value of the investment.
Property management services are usually required for the Partnership's investments in properties which are owned and operated by the Partnership, but usually will not be needed for mortgage loans owned by the Partnership, except for mortgage servicing.  It is possible, however, that these services will be necessary or desirable in exercising default remedies under a foreclosure on a mortgage loan.  The investment manager may engage, on behalf of the Partnership, Prudential Financial affiliated or unaffiliated entities to provide these additional services to the Partnership. The investment manager may engage Prudential Financial affiliates to provide property management, property development services, loan servicing or other services if and only if the fees paid to an affiliate do not exceed the amount that would be paid to an independent party for similar services rendered in the same
geographic area.  See
CONFLICTS OF INTEREST
.
8 - Real Property
The investment manager will manage the Partnership so that the Real Property Account will not be subject to registration under the Investment Company Act of 1940.  This requires monitoring the proportion of the Partnership's assets to be placed in various investments.
CURRENT REAL ESTATE-RELATED INVESTMENTS
The current principal real estate-related investments held by the Partnership are described below. Many of these investments were originated by, and previously held in, The Prudential Real Property Account of Pruco Life Insurance Company (the "Pruco Life Account"), a separate account established to fund the real estate investment option under variable contracts issued by Pruco Life.  Prior to the formation of the Partnership, the Pruco Life Account followed the same investment policies as those followed by the Partnership.  Pruco Life contributed the assets held in the Pruco Life Account to the Partnership as its initial capital contribution to the Partnership.
Properties
The Partnership owns the following properties as of December 31, 2008.
1.
Office Properties
The Partnership owns office properties in Lisle, Illinois; Brentwood, Tennessee; and Beaverton, Oregon. Total square footage owned is approximately 370,550, of which 85%, or 315,116 square feet, are leased between 1 and 10 years.
2.
Apartment Complexes
The Partnership owns apartment properties in Atlanta, Georgia; Austin, Texas; Charlotte, North Carolina; and Raleigh, North Carolina, comprising a total of 855 apartment units, of which 92%, or 785 units, are leased. Leases range from month to month to one year.
3.
Retail Property
The Partnership owns retail properties in Roswell, Georgia; Ocean City, Maryland; Hampton, Virginia; Dunn, North Carolina; and Westminster, Maryland. Total square footage owned is approximately 953,095 of which 79%, or 751,877 square feet, are leased between 1 and 30 years.
4.
Hotel Property
The Partnership owns a hotel property in Lake Oswego, Oregon. This joint venture investment has 161 rooms. Occupancy for the year ended 2008 averaged 71%.
5.
Investment in Real Estate Trust
The Partnership liquidated its entire investment in REIT shares in December 2001. The Partnership does, however, maintain a preferred equity investment in an existing private real estate investment trust, or "REIT."
RISK FACTORS
There are certain risk factors that you should consider before allocating a portion of your net premiums or purchase payments, or transferring a portion of your Contract Fund, to the Real Property Account.  These include valuation risks, (see
VALUATION OF CONTRACT OWNERS' PARTICIPATING INTERESTS
), certain conflicts of interest, (see
CONFLICTS OF INTEREST
), as well as the following risks:
Liquidity of Investments
Because the Real Property Account will, through the Partnership, invest primarily in real estate, its assets will not be as liquid as the investments generally made by separate accounts of life insurance companies funding variable life insurance and variable annuity contracts.  The Partnership will, however, hold approximately 10% of its assets in cash and invested in liquid securities.  The primary purposes for such investments are to meet the expenses involved in the operation of the Partnership and to allow it to have sufficient liquid assets to meet any requests for withdrawals from the Real Property Account.  Such withdrawals would be made in order to meet requested or required payments under the Contracts.  The Partnership may also borrow funds to meet liquidity needs.  See
BORROWING BY THE PARTNERSHIP
.
We have taken steps to ensure that the Partnership will be liquid enough to meet all anticipated withdrawals by the Partners to meet the separate accounts' liquidity requirements. It is possible that the Partnership may need to dispose of a real property or mortgage loan investment promptly in order to meet such withdrawal requests.
9 - Real Property
General Risks of Real Property Investments
By participating in the Real Property Account and thereby in the investment performance of the
Partnership, you will be subject to many of the risks of real property investments.  These include:
1.
Risks of Ownership of Real Properties
.
The
Partnership will be subject to the risks inherent in the ownership of real property such as fluctuations in occupancy rates and operating expenses and variations in rental schedules. It may be adversely affected by general and local economic conditions, the supply of and demand for properties of the type in which the Partnership invests, zoning laws, and real property tax rates.  Operation of property in which the Partnership invests will primarily involve rental of that property to tenants.  The financial failure of a tenant resulting in the termination of their lease might cause a reduction in the cash flow to the Partnership.  If a lease is
terminated, there is no assurance that the Partnership will be able to find a new tenant for the property on terms as favorable to the Partnership as those from the prior tenant.  Investments in hotels are subject to additional risk from the daily turnover and fluctuating occupancy rates of hotel rooms and the absence of long-term tenants.
The Partnership's properties will also be subject to the risk of loss due to certain types of property damage (such as from nuclear power plant accidents and wars) which are either uninsurable or not economically insurable.
2.
Risks of Mortgage Loan Investments
.
The Partnership's mortgage loan investments will be subject to the risk of default by the borrowers.  In this event the Partnership would have the added responsibility of foreclosing on or pursuing other remedies on the underlying properties to protect the value of its mortgage loans.  A borrower's ability to meet its mortgage loan payments will be dependent upon the risks generally inherent to the ownership of real property. Mortgage loans made by the Partnership will generally not be personal obligations of the borrowers.  The Partnership will only rely on the value of the underlying property for its security.  Mechanics', material men's, government, and other liens may have or obtain priority over the
Partnership's security interest in the property.
In addition, the Partnership's mortgage loan investments will be subject to prepayment risks.  If the terms of the mortgage loans permit, mortgagors may prepay the loans, thus possibly changing the Partnership's return.
Junior mortgage loans (including wraparound mortgage loans) will be subject to greater risk than first mortgage loans, since they will be subordinate to liens of senior mortgagees. In the event a default occurs on a senior mortgage, the Partnership may be required to make payments or take other actions to cure the default (if it has the right to do so) in order to prevent foreclosure on the senior mortgage and possible loss of all or portions of the Partnership's investment. "Due on sale" clauses included in some senior mortgages, accelerating the amount due under the senior mortgage in the case of sale of the property, may be applied to the sale of the property upon foreclosure by the Partnership of its junior mortgage loan.
The risk of lending on real estate increases as the proportion, which the amount of the mortgage loan bears to the fair market value of the real estate increases.  The Partnership usually does not make mortgage loans of over 80% of the estimated or appraised value of the property that secures the loan.  There can be no assurance, that in the event of a default, the Partnership will realize an amount equal to the estimated or appraised value of the property on which a mortgage loan was made.
Mortgage loans made by the Partnership may be subject to state usury laws.  These laws impose limits on interest charges and possible penalties for violation of those limits, including restitution of excess interest, unenforceability of debt, and treble damages.  The Partnership does not intend to make mortgage loans at usurious rates of interest. Uncertainties in determining the legality of interest rates and other borrowing charges under some statutes could result in inadvertent violations, in which case the Partnership could incur the penalties mentioned above.
3.
Risks with Participations
.
The Partnership may seek to invest in mortgage loans and Leasebacks with Participations, which will provide the Partnership with both fixed interest and additional interest based upon gross revenues, sale proceeds, and/or other variable amounts.  If the interest income received by the Partnership is based, in part, on a percentage of the gross revenues or sale proceeds of the underlying property, the Partnership's income will depend on the success in the leasing of the underlying property, the management and operation of such property by the borrower or lessee and upon the market value of the property upon ultimate disposition.  If the Partnership negotiates a mortgage loan with a lower fixed interest rate and an additional percentage of the
gross revenues or eventual sale proceeds of the underlying property, and the underlying property fails to generate increased revenues or to appreciate, the Partnership will have foregone a potentially greater fixed return without receiving the benefit of appreciation.  State laws may limit Participations.  In the event of the borrower's bankruptcy, it is possible that as a result of the Partnership's interest in the gross revenues or sale proceeds, a court could treat the Partnership as a partner or joint venturer with the borrower, and the Partnership could lose the priority its security interest would have
10 - Real Property
been given, or be liable for the borrower's debts.  The Partnership will structure its Participations to avoid being characterized as a partner or joint venturer with the borrower.
4
. Risks with Sale-Leaseback Transactions
.
Leaseback transactions typically involve the acquisition of land and improvements thereon and the leaseback of such land and improvements to the seller or another party.  The value of the land and improvements will depend, in large part, on the performance and financial stability of the lessee and its tenants, if any.  The tenants' leases may have shorter terms than the leaseback.  Therefore, the lessee's future ability to meet payment obligations to the Partnership will depend on its ability to obtain renewals of such leases or new leases upon satisfactory terms and the ability of the tenants to meet their rental payments to the lessee.
PREI investigates the stability and creditworthiness of lessees in all commercial properties it may acquire, including leaseback transactions.  However, a lessee in a leaseback transaction may have few, if any, assets.  The Partnership will therefore rely for its security on the value of the land and improvements.  When the Partnership's leaseback interest is subordinate to other interests in the land or improvements, such as a first mortgage or other lien, the Partnership's leaseback will be subject to greater risk.  A default by a lessee or other premature termination of the leaseback may result in the Partnership being unable to recover its investment unless the property is sold or leased on favorable terms.  The ability of the lessee to meet its obligations under the leaseback, and the value of a property, may be affected by a number of factors inherent in the ownership of real property
which are described above. Furthermore, the long-term nature of a leaseback may, in the future, result in the Partnership receiving lower average annual rentals. However, this risk may be lessened if the Partnership obtains Participations in connection with its Leasebacks.
Reliance on The Partners and The Investment Manager
You do not have a vote in determining the policies of the Partnership or the Real Property Account.  You also have no right or power to take part in the management of the Partnership or the Real Property Account.  The investment manager alone, subject to the supervision of the Partners, will make all decisions with respect to the management of the Partnership, including the determination as to what properties to acquire, subject to the investment policies and restrictions.  Although the Partners have the right to replace the investment manager, it should be noted that Prudential, Pruco Life, Pruco Life of New Jersey, and the investment manager are wholly-owned subsidiaries of Prudential Financial.
The Partnership will compete in the acquisition of its investments with many other individuals and entities engaged in real estate activities, including the investment manager and its affiliates. See
CONFLICTS OF INTEREST
.  There may be intense competition in obtaining properties or mortgages in which the Partnership intends to invest.  Competition may result in increased costs of suitable investments.
Since the Partnership will continuously look for new investments, you will not be able to evaluate the economic merit of many of the investments, which may be acquired by the Partnership.  You must depend upon the ability of the investment manager to select investments.
INVESTMENT RESTRICTIONS
The Partnership has adopted certain restrictions relating to its investment activities.  These restrictions may be changed, if the law permits, by the Partners.  Pursuant to these restrictions, the Partnership will not:
1.
Make any investments not related to real estate, other than liquid instruments and securities.
2.
Engage in underwriting of securities issued by others.
3.
Invest in securities issued by any investment company.
4.
Sell securities short.
5.
Purchase or sell oil, gas, or other mineral exploration or development programs.
6.
Make loans to the Partners, any of their affiliates, or any investment program sponsored by such parties.
7.
Enter into leaseback transactions in which the lessee is Prudential, Pruco Life, Pruco Life of New Jersey, their affiliates, or any investment program sponsored by such parties.
8.
Borrow more than 33
1/3
% (pursuant to California state requirements) of the value of the assets of the Partnership (based upon periodic valuations and appraisals).  See
VALUATION OF CONTRACT OWNERS'
PARTICIPATING INTERESTS.
11 - Real Property
DIVERSIFICATION REQUIREMENTS
The Partnership's investments are maintained so as to meet the diversification requirements set forth in Treasury Regulations issued pursuant to
Section 817(h)
of the Internal Revenue Code relating to the investments of variable life insurance and variable annuity separate accounts.  Section 817(h) requires, among other things, that the partnership will have no more than 55% of the assets invested in any one investment, no more than 70% of the assets will be invested in any two investments, no more than 80% of the assets will be invested in any three investments, and no more than 90% of the assets will be invested in any four investments.  To comply with requirements of the State of Arizona, the
Partnership will limit additional investments in any one parcel or related parcels to an amount not exceeding 10% of the Partnership's gross assets as of the prior fiscal year.
CONFLICTS OF INTEREST
The investment manager, will be subject to various conflicts of interest in managing the Partnership.  PIM invests in real estate equities and mortgages for the general account of Prudential Financial affiliates and for third parties, including through separate accounts established for the benefit of qualified pension and profit-sharing plans. PIM also manages, or advises in the management of, real estate equities and mortgages owned by other persons.  In addition, affiliates of Prudential Financial are general partners in publicly offered limited partnerships that invest in real estate equities and mortgage loans.  Prudential Financial and its affiliates may engage in business activities, which will be competitive with the Partnership.  Moreover, the Partnership may purchase properties from Prudential Financial or its affiliates.
The potential conflicts involved in managing the Partnership include:
1.
Lack of Independent Negotiations between the Partnership and The Investment Manager.
All agreements and arrangements relating to compensation between the Partnership and the investment manager, or any affiliate of Prudential Financial, may not be the result of arm's-length negotiations.
2.
Competition by the Partnership with Prudential Financial's Affiliates for Acquisition and Disposition of Investments
.
Prudential Financial affiliates are involved in numerous real estate investment activities for their general account, their separate accounts, and other entities.  They may involve investment policies comparable to the Partnership's and may compete with the Partnership for the acquisition and disposition of investments.  Moreover, additional accounts or affiliated entities may be formed in the future with investment objectives similar to those of the Partnership.  In short, existing or future real estate investment accounts or entities managed or advised by Prudential Financial affiliates may have the same management as the Partnership and may be in
competition with the Partnership regarding real property investments, mortgage loan investments, Leasebacks, and the management and sale of such investments.  Prudential Financial affiliates are not obligated to present to the Partnership any particular investment opportunity, regardless of whether the opportunity would be suitable for investment by the Partnership.
Prudential Financial affiliates have, however, adopted procedures to distinguish between equity investments available for the Partnership as opposed to the other programs and entities described above.  If investment accounts or entities managed by Prudential Financial affiliates have investment objectives and policies similar to the Partnership and are in the market to acquire properties or make investments at the same time as the Partnership, the following procedures will be followed to resolve any conflict of interest.  The Investment Allocation Procedure ("IAP") has been established to provide a reasonable and fair procedure for allocating real estate investments among the several accounts managed by PREI.  The IAP is administered by an Allocation Committee composed of the Managing Directors, Portfolio Management.  Allocation decisions are made by vote of the Allocation Committee,
and are approved by the Chief Executive Officer of PREI ("CEO").  Sufficient information on each investment opportunity is distributed to all portfolio managers, who each indicate to the Allocation Committee their account's interest in the opportunity.  Based on such expressions of interest, the Allocation Committee allocates the investment opportunity to an account (and may also determine a back-up account or accounts to receive the allocation in the event the account, which is first allocated the opportunity, fails to pursue the investment for any reason) after giving appropriate consideration to the following factors and with the goal of providing each account a fair allotment of investment opportunities: (1) the investment opportunity's conformity with an account's investment criteria and objectives (including property type, size and location, diversification, anticipated returns, investment structure, etc.); (2) the amount of funds available for
investment (in total and by property type) by an account; (3) the length of time such funds (in total and by property type) have been available for investment; (4) any limitations or restrictions upon the availability of funds for investment; (5) the absolute and relative (to amount of funds available) amount of funds invested and committed for the account; (6) whether funds available for investment are discretionary or non-discretionary, particularly in relation to the timing of the investment opportunity; (7) an account's prior dealings or investments with the seller, developer, lender or other counterparty; and
12 - Real Property
(8) other factors which the Allocation Committee feel should be considered in fairness to all accounts participating in the IAP.
If an account which has been allocated an investment opportunity does not proceed with the acquisition, and either (i) no back-up account has been determined by the Allocation Committee, or (ii) all accounts which were deemed back-up accounts do not proceed with the acquisition, the opportunity may be reallocated to another account by the Allocation Committee.  If an investment opportunity is appropriate for more than one account, the Allocation Committee may (subject to the CEO's approval) permit the sharing of the investment among accounts, which permit such sharing. Such division of the investment opportunity may be accomplished by separating properties (in a multi-property investment), by co-investment, or otherwise.
3
. Competition with the Partnership from Affiliates for the Time and Services of Common Officers, Directors, and Management Personnel.
As noted above, PIM and Prudential Financial affiliates are involved in numerous real estate investment activities.  Accordingly, many of the personnel of PIM and Prudential Financial affiliates who will be involved in performing services for the Partnership have competing demands on their time.  Conflicts of interest may arise with respect to allocating time among such entities and the Partnership.  The directors and officers of Prudential Financial and affiliates will determine how much time will be devoted to the Partnership affairs.  Prudential Financial believes it has sufficient personnel to meet its responsibilities to all
entities to which it is affiliated.
4.
Competitive Properties
.
Some properties of affiliates may be competitive with Partnership properties.  Among other things, the properties could be in competition with the Partnership's properties for prospective tenants.
5
. Lessee Position.
It is possible that Prudential Financial or its affiliates may be a lessee in one or more of the properties owned by the Partnership.  The terms of such a lease will be competitive with leases with non-affiliated third parties.  The Partnership limits the amount of space that an affiliate of Prudential may rent in a property owned by the Partnership.
6
. Use of Affiliates to Perform Additional Services for the Partnership
.
The Partnership may engage Prudential Financial affiliates to provide additional services to the Partnership, such as real estate brokerage, mortgage servicing, property management, leasing, property development, and other real estate-related services.  The Partnership may utilize the services of such affiliates and pay their fees, as long as the fees paid to an affiliate do not exceed the amount that would be paid to an independent party for similar services rendered in the same geographic area.
7
. Joint Ventures with Affiliates.
The Partnership may enter into investments through joint ventures with Prudential Financial, its affiliates, or investment programs they sponsor.  The Partnership may enter into such a joint venture investment with an affiliate only if the following conditions are met: (1) the affiliate must have investment objectives substantially identical to those of the Partnership; (2) there must be no duplicative property management fee, mortgage servicing fee or other fees; (3) the compensation payable to the sponsor of the affiliate must be no greater than that payable to the Partnership's investment manager; (4) the Partnership must have a right of first refusal to buy if such affiliate wishes to sell the property held in the joint venture; and (5) the investment of the Partnership
and the affiliate in the joint venture must be made on the same terms and conditions (although not the same percentage).  In connection with such an investment, both affiliated parties would be required to approve any decision concerning the investment. Thus, an impasse may result in the event the affiliated joint venture partners disagree.  However, in the event of a disagreement regarding a proposed sale or other disposition of the investment, the party not desiring to sell would have a right of first refusal to purchase the affiliated joint venture partner's interest in the investment.  If this happens, it is possible that in the future the joint venture partners would no longer be affiliated.  In the event of a proposed sale initiated by the joint venture partner, the Partnership would also have a right of first refusal to purchase the joint venture partner's interest in the investment.  The exercise of a right of first refusal would be subject to the Partnership's having the
financial resources to effectuate such a purchase.
If the Partnership invests in joint venture partnerships which own properties, instead of investing directly in the properties themselves, they may be subject to risks not otherwise present.  These risks include risks associated with the possible bankruptcy of the Partnership's co-venturer or such co-venturer at any time having economic or business interests or goals which are inconsistent with those of the Partnership.
8.
Purchase of Real Property From Prudential Financial or Affiliates
.
The Partnership may acquire properties owned by Prudential Financial or its affiliates, subject to compliance with special conditions designed to minimize the conflicts of interests. The Partnership may purchase property satisfying the Partnership's investment objectives and policies from an affiliate only if: (1) the applicable insurance regulators approve the Partnership's acquisition of real property from Prudential Financial or affiliates to the extent such approval is required under applicable insurance regulations; (2) the Partnership acquires the property at a price not greater than the appraised value, with the appraisal being conducted by a qualified, unaffiliated appraiser; (3) a qualified
and independent real estate adviser (other than the appraiser) reviews the proposed acquisition and provides a letter of opinion that the transaction is fair to the
13 - Real Property
Partnership; and (4) the affiliate has owned the property at least two years, the cost paid by the affiliate is established, and any increase in the proposed purchase price over the cost to the affiliate is, in the opinion of the independent real estate adviser, explicable by material factors (including the passage of time) that have increased the value of the property.
THE REAL PROPERTY ACCOUNT'S UNAVAILABILITY TO CERTAIN CONTRACTS
Prudential has determined that it is in the best interest of Contract owners participating in the Real Property Account to provide the Real Property Account with the flexibility to engage in transactions that may be prohibited if the Real Property Account accepts funds under Contracts subject to ERISA or the prohibited transaction excise tax provisions of the Internal Revenue Code.  Accordingly, owners of Prudential Contracts that are purchased in connection with: (1) IRAs; (2) tax deferred annuities subject to Section 403(b) of the Code; (3) other employee benefit plans which are subject to ERISA; or (4) prohibited transaction excise tax provisions of the Code, may not select the Real Property Account as one of the investment options under their Contract.  By not offering the Real Property Account as an investment option under such contracts, Prudential is able to comply with state insurance
law requirements that policy loans be made available to Contract owners.
VALUATION OF CONTRACT OWNERS' PARTICIPATING INTERESTS
A Contract owner's interest in the Real Property Account will initially be the amount they allocated to the Real Property Account.  Thereafter, that value will change daily.  The value of a Contract owner's interest in the Real Property Account at the close of any day is equal to its amount at the close of the preceding day, multiplied by the "net investment factor" for that day arising from the Real Property Account's participation in the Partnership, plus any additional amounts allocated to the Real Property Account by the Contract owner, and reduced by any withdrawals by the Contract owner from the Real Property Account and by the applicable Contract charges recorded in that Contract's subaccount.  Some of the charges will be made:  (1) daily; (2) on the Contract's monthly anniversary date; (3) at the end of each Contract year; and (4) upon withdrawal or annuitization.  Periodically
Prudential will withdraw from the Real Property Account an amount equal to the aggregate charges recorded in the subaccounts.
The "net investment factor" is calculated on each business day by dividing the value of the net assets of the Partnership at the end of that day (ignoring, for this purpose, changes resulting from new contributions to or withdrawals from the Partnership) by the value of the net assets of the Partnership at the end of the preceding business day.  The value of the net assets of the Partnership at the end of any business day is equal to the sum of all cash held by the Partnership plus the aggregate value of the Partnership's liquid securities and instruments, the individual real properties and the other real estate-related investments owned by the Partnership, determined in the manner described below, and an estimate of the accrued net operating income earned by the Partnership from properties and other real estate-related investments, reduced by the liabilities of the Partnership, including the
daily investment management fee and certain other expenses attributable to the operation of the Partnership.  See
CHARGES
.
The Partnership may invest in various liquid securities and instruments.  These investments will generally be carried at their market value as determine by a valuation method, which the Partners deem appropriate for the particular type of liquid security or instrument.
The value of the individual real properties and other real estate-related investments, including mortgages, acquired by the Partnership will be determined as follows.  Each property or other real estate-related investment acquired by the Partnership will initially be valued at its purchase price.  In acquiring a property or other real estate-related investment, PIM will not obtain an independent appraisal but will instead rely on its own analysis of the investment's fair market value.  Thereafter, all properties and most real estate-related investments will ordinarily be appraised by an independent appraiser at least annually.  At least every three months, PIM will review each property or other real estate-related investments and adjust its valuation if it concludes there has been a change in the value of the property or other real estate-related investment since the last valuation.  The
revised value will remain in effect and will be used in each day's calculation of the value of the Partnership's assets until the next review or appraisal.  It should be noted that appraisals are only estimates and do not necessarily reflect the realizable value of an investment.
The estimated amount of the net operating income of the Partnership from properties and other real estate-related investments will be based on estimates of revenues and expenses for each property and other real estate-related investments.  Annually, PIM will prepare a month-by-month estimate of the revenues and expenses ("Estimated Net Operating Income") for each property and other real estate-related investments owned by the Partnership.  Each day PIM will add to the value of the assets, as determined above, a proportionate part of the Estimated Net Operating Income for the month.  In effect, PIM will establish a daily accrued receivable of the Estimated Net Operating Income
14 - Real Property
from each property and other real estate-related investments owned by the Partnership (the "Daily Accrued Receivable").  On a monthly basis, the Partnership will receive a report of actual operating results for each property and other real estate-related investments ("Actual Net Operating Income").  Such Actual Net Operating Income will be recognized on the books of the Partnership and the amount of the then-outstanding daily accrued receivable will be correspondingly adjusted.  In addition, as cash from a property or other real estate-related investment is actually received by the Partnership, receivables and other accounts will be appropriately adjusted.
Periodically, but at least every three months, PIM will review its prospective estimates of net operating income in light of actual experience and make an adjustment to
such estimates if circumstances indicate that such an adjustment is warranted.  PIM follows this practice of accruing Estimated Net Operating Income from properties and other real estate-related investments because net operating income from such investments is generally received on an intermittent rather than daily basis, and the Partners believe it is more equitable to participating Contract owners if such net operating income is estimated and a proportionate amount is recognized daily.  Because the daily accrual of Estimated Net Operating Income is based on estimates that may not turn out to reflect actual revenue and expenses, Contract owners will bear the risk that this practice will result in the undervaluing or overvaluing of the Partnership's assets.
PIM may adjust the value of any asset held by the Partnership based on events that have increased or decreased the realizable value of a property or other real estate-related investment.  For example, adjustments may be made for events indicating an impairment of a borrower's or a lessee's ability to pay any amounts due or events which affect the property values of the surrounding area.  There can be no assurance that the factors for which an adjustment may be made will immediately come to the attention of PIM.  Additionally, because the evaluation of such factors may be subjective, there can be no assurance that such adjustments will be timely made in all cases where the value of the Partnership's investments may be affected.  All adjustments made to the valuation of the Partnership's investments, including adjustments to Estimated Net Operating Income, the daily accrued receivable, and
adjustments to the valuation of properties and other real estate-related investments, will be on a prospective basis only.
The above method of valuation of the Partnership's assets may be changed, without the consent of Contract owners, should the Partners determine that another method would more accurately reflect the value of the Partnership's investments.  Changes in the method of valuation could result in a change in the Contract Fund values which may have either an adverse or beneficial effect on Contract owners.  Information concerning any material change in the valuation method will be given to all Contract owners in the annual report of the operations of the Real Property Account.
Although the above-described valuation methods have been adopted because the Partners believe they will provide a reasonable way to estimate the fair market value of the Partnership's investments, there may well be variations between the amount realizable upon disposition and the Partnership's valuation of such assets.  Contract owners may be either favorably or adversely affected if the valuation method results in either overvaluing or undervaluing the Partnership's investments.  If a Contract owner invests in the Real Property Account at a time in which the Partnership's investments are overvalued, the Contract owner will be credited with less of an interest than if the value had been correctly stated.  A Contract owner withdrawing from the Real Property Account during such time will receive more than he or she would if the value had been correctly stated, to the detriment of other Contract
owners. The converse situation will exist if the Partnership's assets are undervalued.
BORROWING BY THE PARTNERSHIP
The Partnership may borrow for Partnership purposes, including to meet its liquidity requirements and the leveraging of currently-owned property to buy new property, subject to a maximum debt to value ratio of 33
1/3
% (pursuant to California state requirements) based on the aggregate value of all Partnership assets.  The Partnership will bear the cost of all such borrowings.  The Real Property Account, and Contract owners participating in it, will bear a portion of any borrowing costs equal to their percentage interest in the Partnership.  Moreover, although the Partnership will generally make unleveraged investments, it reserves the right to borrow up to 80% of the value of a property (with the value of a property determined as explained under
VALUATION OF CONTRACT OWNERS' PARTICIPATING
INTERESTS
).  Increasing the Partnership's assets through leveraged investments would increase the compensation paid to PIM since its investment management fee is a percentage of the Partnership's gross assets. Any borrowing by the Partnership would increase the Partnership's risk of loss.  It could also inhibit the Partnership from achieving its investment objectives because the Partnership's payments on any loans would have to be made regardless of the profitability of its investments.
CHARGES
Pursuant to the investment management agreement, the Partnership pays a daily investment management fee, which is equal to an effective annual rate of 1.25% of the average daily gross assets of the Partnership.  Certain other expenses and charges attributable to the operation of the Partnership are also charged against the Partnership.  In acquiring an investment, the Partnership may incur various types of expenses paid to third parties, including but not
15 - Real Property
limited to, brokerage fees, attorneys' fees, architects' fees, engineers' fees, and accounting fees.  After acquisition of an investment, the Partnership will incur recurring expenses for the preparation of annual reports, periodic appraisal costs, mortgage servicing fees, annual audit charges, accounting and legal fees, and various administrative expenses. These expenses will be charged against the Partnership's assets.  Some of these operating expenses represent reimbursement of the investment manager for the cost of providing certain services necessary to the operation of the Partnership, such as daily accounting services, preparation of annual reports, and various administrative services. The investment manager charges the Partnership mortgage loan servicing fees pursuant to the standards outlined in item 6 under
CONFLICTS OF INTEREST
.  In addition to the various expenses charged against the Partnership's assets, other expenses such as insurance costs, taxes, and property management fees will ordinarily be deducted from rental income, thereby reducing the gross income of the Partnership.
As explained earlier, charges to the Contracts will be recorded in the corresponding subaccounts of the Real Property Account.  From time to time, Prudential will withdraw from the Real Property Account an amount equal to the aggregate amount of these charges.  Aside from the charges to the Contracts, Prudential does not charge the Real Property Account for the expenses involved in the Real Property Account's operation.  The Real Property Account will, however, bear its proportionate share of the charges made to the Partnership as described above.
The Partnership is not a taxable entity under the provisions of the Internal Revenue Code.  The income, gains, and losses of the Partnership are attributed, for federal income tax purposes, to the Partners in the Partnership.  The earnings of the Real Property Account are, in turn, taxed as part of the operations of Prudential.  Prudential is currently not charging the Real Property Account for company federal income taxes.   Prudential may make such a charge in the future.
Under current laws Prudential may incur state and local taxes (in addition to premium taxes) in several states.  At present, Prudential does not charge these taxes against the Contracts or the Real Property Account, but Prudential may decide to charge the Real Property Account for such taxes in the future.
RESTRICTIONS ON WITHDRAWALS
Before allocating any portion of your net premium or purchase payments, or transferring any portion of your Contract Fund, to the Real Property Account, you should be aware that withdrawals from the Real Property Account may have greater restrictions than the other variable investment options available under the Contracts.  Prudential reserves the right to restrict transfers into or out of the Real Property Account.  Apart from the limitations on transfers out of the Real Property Account described below, Prudential will only restrict transfers out of the Real Property Account if there is insufficient cash available to meet Contract owners' requests and prompt disposition of the Partnership's investments to meet such requests could not be made on commercially reasonable terms.
Generally, we will pay any death benefit, cash surrender value, loan proceeds, or partial withdrawal within seven days after all the documents required for such a payment are received at the Payment Office.  Other than the death benefit, which is determined as of the date of death, the amount will be determined as of the end of the valuation period in which the necessary documents are received at a Service Office.
The funds necessary to pay any death benefit, cash surrender value, withdrawal or loan proceeds funded by the Real Property Account will normally be obtained, first, from any cash flows into the Real Property Account on the day the funds are required.  If, on the day the funds are required, cash flows into the Real Property Account are less than the amount of funds required, Prudential will seek to obtain such funds by withdrawing a portion of its interest in the Partnership.  The Partnership will normally obtain funds to meet such a withdrawal request from its net operating income and from the liquid securities and instruments it holds.  If the Partners determine that these sources are insufficient to meet anticipated withdrawals from the Partnership, the Partnership may use a line of credit or otherwise borrow up to 33
1/3
%
(pursuant to California state requirements) of the value of the Partnership's assets.  See
BORROWING BY THE PARTNERSHIP
.  If the Partners determine that such a borrowing by the Partnership would not serve the best interests of Contract owners, Prudential may, in the event of a Contract loan or withdrawal, rather than take the amount of any loan or withdrawal request proportionately from all investment options under the Contract (including the Real Property Account), take any such loan or withdrawal first from the other investment options under the Contract.
Transfers from the Real Property Account to the other investment options available under the Contract are currently permitted only during the 30-day period beginning on the Contract anniversary.  The maximum amount that may be transferred out of the Real Property Account each year is the greater of: (a) 50% of the amount invested in the Real Property Account or (b) $10,000.  Such transfer requests received prior to the Contract anniversary will be effected on the Contract anniversary.  Transfer requests received within the 30-day period beginning on the Contract anniversary will be effected as of the end of the valuation period in which a proper written request or authorized telephone request is received.  The "valuation period" means the period of time from one determination of the value of the amount
16 - Real Property
invested in the Real Property Account to the next.  Such determinations are made when the value of the assets and liabilities of the Partnership is calculated, which is generally at 4:00 p.m. Eastern time on each day during which the New York Stock Exchange is open.  Transfers into or out of the Real Property Account are also subject to the general limits under the Contracts.
RESTRICTIONS ON CONTRACT OWNERS' INVESTMENT IN THE REAL PROPERTY ACCOUNT
As explained earlier, identification and acquisition of real estate investments meeting the Partnership's investment objectives is a time-consuming process.  Because the Real Property Account and the Partnership are managed so they will not become investment companies subject to the Investment Company Act of 1940, the portion of the Partnership's assets that may be invested in securities, as opposed to non-securities real estate investments, is strictly limited.  For these reasons, Prudential reserves the right to restrict or limit Contract owners' allocation of funds to the Real Property Account.  Any such restrictions are likely to take the form of restricting the timing, amount and/or frequency of transfers into the Real Property Account and/or precluding Contract owners who have not previously selected the Real Property Account from allocating a portion of their net premiums or purchase
payments to the Real Property Account.
FEDERAL INCOME TAX CONSIDERATIONS
The federal income tax treatment of Contract benefits is described briefly in the attached prospectus for the particular Contract you selected.  Prudential believes that the same principles will apply with respect to Contracts funded in whole or part by the Real Property Account.  The Partnership's conformity with the diversification standards for the investments of variable life insurance and variable annuity separate accounts is essential to ensure that treatment. See
General Investment and Operating Policies
.  Prudential urges you to consult a qualified tax adviser.
Under the Internal Revenue Code, the Partnership is not a taxable entity and any income, gains or losses of the Partnership are passed through to the Partners, including Prudential, with respect to the Real Property Account.  The Real Property Account is not a separate taxpayer for purposes of the Internal Revenue Code.  The earnings of the Real Property Account are taxed as part of the operations of Prudential.  No charge is currently being made to the Real Property Account for company federal income taxes.  We may make such a charge in the future, see
CHARGES
.
DISTRIBUTION OF THE CONTRACTS
As explained in the attached prospectus for the Contracts, Pruco Securities, LLC, a wholly-owned subsidiary of Prudential Financial, acts as the principal underwriter of the Contracts.  Consult that prospectus for information about commission scales and other facts relating to sale of the Contracts.
STATE REGULATION
Prudential is subject to regulation and supervision by the Department of Insurance of the State of New Jersey, which periodically examines its operations and financial condition.  It is also subject to the insurance laws and regulations of all jurisdictions in which it is authorized to do business.
Prudential is required to submit annual statements of its operations, including financial statements, to the insurance departments of the various jurisdictions in which it does business to determine solvency and compliance with local insurance laws and regulations.
In addition to the annual statements referred to above, Prudential is required to file with New Jersey and other jurisdictions a separate statement with respect to the operations of all its variable contract accounts, in a form promulgated by the National Association of Insurance Commissioners.
ADDITIONAL INFORMATION
Prudential has filed a registration statement with the Securities and Exchange Commission ("SEC") under the Securities Act of 1933, relating to the offering described in this prospectus.  This prospectus does not include all of the information set forth in the registration statement.  Certain portions have been omitted pursuant to the rules and regulations of the SEC.  All reports and information filed by Prudential can be inspected and copied at the Public Reference Section of the Commission at 100 F Street, N.E., Washington, D.C. 20549, and at certain of its regional
17 - Real Property
offices: Midwestern Regional Office, 175 West Jackson Boulevard, Suite 900, Chicago, IL 60604; Northeastern Regional Office SEC, 233 Broadway, New York, NY 10279, or by telephoning (202) 551-5850.
The SEC maintains a Web site (http://www.sec.gov) that contains material incorporated by reference and other information regarding registrants that file electronically with the SEC.
Further information may also be obtained from Prudential.  The address and telephone number are on the cover of this prospectus.
EXPERTS
The financial statements of the Partnership as of December 31, 2008 and 2007 and for each of the three years in the period ended December 31, 2008, the financial statement schedules of the Partnership as of December 31, 2008 and the financial statements of the Real Property Account as of December 31, 2008 and 2007 and for each of the three years in the period ended December 31, 2008 included in this prospectus have been so included in reliance on the reports of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.  PricewaterhouseCoopers LLP's principal business address is 300 Madison Avenue, New York, New York 10017.
LITIGATION
No litigation is pending, and no litigation is known to be contemplated by governmental authorities, that would have an adverse material effect upon the Real Property Account or the Partnership.
REPORTS TO CONTRACT OWNERS
If you allocate a portion of your Contract Fund to the Real Property Account, Prudential will mail you an annual report containing audited financial statements for the Partnership and an annual statement showing the status of your Contract Fund and any other information that may be required by applicable regulation or law.
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 audited Consolidated Financial Statements of the Account and the Partnership and the related Notes included in this filing.
(a) Liquidity and Capital Resources
As of December 31, 2008, the Partnership's liquid assets, consisting of cash and cash equivalents, were approximately $27.7 million, an increase of approximately $9.5 million from $18.2 million at December 31, 2007.  The increase was primarily due to cash flows received from the Partnership's operating activities and the repayment of the Partnership's preferred equity investment, as discussed below.  Partially offsetting this increase was a contribution to an existing retail property in Dunn, North Carolina as well as capital expenditures to existing properties, as detailed below.  Sources of liquidity included net cash flow from property operations, financings, 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 December 31, 2008, approximately 10.5% of the
Partnership's total assets consisted of cash and cash equivalents.
During 2008, the Partnership made an additional $2.6 million preferred equity investment in an existing retail property located in Ocean City, Maryland to fund costs associated with the redevelopment of the center.  This investment was repaid with interest on April 1, 2008 with proceeds to the Partnership totaling $4.0 million in conjunction with the refinancing of the existing loan as discussed below.
18 - Real Property
The Partnership did not have any dispositions or acquisitions for the year ended December 31, 2008.  The Partnership refinanced two existing loans during the year ended December 31, 2008.   The retail property in Ocean City, Maryland was refinanced for loan proceeds of $16.6 million, of which $9.8 million represents additional indebtedness.  $1.6 million of the loan remains to be funded for future costs associated with the redevelopment of the property. The apartment property in Raleigh, North Carolina was refinanced for the amount of $9.0 million.
During the year ended December 31, 2008, the Partnership spent approximately $3.7 million on capital improvements to various existing properties. Approximately $1.2 million was associated with the renovation of the hotel property in Lake Oswego, Oregon; approximately $0.7 million funded renovation and tenant improvements costs at the office property in Lisle, Illinois; approximately $0.7 million contributed to interior renovations at one of the office properties in Brentwood, Tennessee; and approximately $0.4 million financed tenant improvements at the retail property in Dunn, North Carolina. The remaining $0.7 million was associated with minor capital improvements and transaction costs associated with leasing expenses related to other properties in the Partnership.  Additionally, $6.3 million of capital improvements was funded at the retail property in Ocean City, Maryland through the
aforementioned third party loan.
(b) Results of Operations
The following is a comparison of the Partnership's results of operations for the periods ended December 31, 2008 and 2007.
Net Investment Income Overview
The Partnership's net investment income for the year ended December 31, 2008 was approximately $11.1 million, a decrease of approximately $1.5 million from the prior year.  The decrease in net investment income was primarily attributable to a $1.4 million increase in other net investment loss from the prior year. Additionally, the retail, office, and hotel sectors' net investment income declined approximately $0.9 million, $0.1 million, and $0.1 million, respectively during the year ended December 31, 2008 from the prior year.  Partially offsetting these decreases was an increase in the apartment sector's net investment income of approximately $1.0 million from the prior year.  The industrial sector's net investment income remained relatively unchanged.  The components of this net investment income are discussed below by investment type.
Valuation Overview
The Partnership did not have any realized gains for the year ended December 31, 2008, compared with a net realized gain of approximately $0.7 million for the prior year.  The Partnership recorded a net unrealized loss of approximately $44.2 million for the year ended December 31, 2008, compared with a net unrealized gain of approximately $4.8 million for the prior year. The Partnership recorded a net realized and unrealized loss of approximately $44.2 million for the year ended December 31, 2008, compared with a net realized and unrealized gain of approximately $5.5 million for the prior year. The net unrealized loss of approximately $44.2 million for the year ended December 31, 2008 was attributable to valuation declines in every sector primarily due to increased investment rates suggesting an industry-wide repricing. Investment rates include direct and terminal capitalization rates, and
discount rates, which reflect investors' yield requirements on investments. The increase in investment rates was caused by the national economic downturn, frozen credit markets, weakening market fundamentals, and deteriorated demand for commercial real estate. The components of these valuation losses are discussed below by investment type.
19 - Real Property
The following table presents a comparison of the Partnership's sources of net investment income, and realized and unrealized gains or losses by investment type for the years ended December 31, 2008 and 2007.
Twelve Months Ended December 31,
                                                                            2008                       2007
                                                                    ---------------------      ----------------------
Net Investment Income:

Office properties                                                         $3,893,422                 $3,945,096
Apartment properties                                                       3,129,457                  2,119,681
Retail properties                                                          6,062,399                  6,998,954
Industrial property                                                             -                        49,279
Hotel property                                                             1,213,328                  1,343,200
Other (including interest income, investment mgt fee, etc.)               (3,160,422)                (1,792,630)
                                                                    ---------------------      ----------------------
Total Net Investment Income                                             $11,138,184                $12,663,580
                                                                    ---------------------      ----------------------

Net Realized Gain (Loss) on Real Estate Investments:

Retail properties                                                               -                       323,649
Industrial property                                                             -                       345,832
                                                                    ---------------------      ----------------------
Net Realized Gain (Loss) on Real Estate Investments
                                                                                -                       669,481
                                                                    ---------------------      ----------------------

Net Unrealized Gain (Loss) on Real Estate Investments:

Office properties                                                         (6,677,199)                1,967,086
Apartment properties                                                     (12,344,133)                3,123,154
Retail properties                                                        (23,864,965)               (2,716,050)
Hotel property                                                            (1,347,338)                2,409,924
                                                                    ---------------------      ----------------------
Net Unrealized Gain (Loss) on Real Estate Investments
                                                                        (44,233,635)                 4,784,114
                                                                    ---------------------      ----------------------

Net Realized and Unrealized Gain (Loss) on Real Estate Investments
                                                                         (44,233,635)               $5,453,595
                                                                    ---------------------      ----------------------
OFFICE PROPERTIES
Year Ended
December 31, 2008
Net Investment Income/(Loss)
2008
Net Investment Income/(Loss) 2007
Unrealized Gain/(Loss) 2008
Unrealized Gain/(Loss) 2007
Occupancy 2008
Occupancy 2007
Property
Lisle, IL
$767,766
$650,916
(2,664,209)
$804,870
70%
67%
Brentwood, TN
972,063
1,153,443
(83,142)
9,918
83%
100%
Beaverton, OR
1,090,039
1,093,305
(2,911,733)
990,238
88%
88%
Brentwood, TN
1,063,554
1,047,432
(1,018,115)
162,060
100%
100%
$3,893,422
$3,945,096
(6,677,199
$1,967,086
Net Investment Income
Net investment income for the Partnership's office properties was approximately $3.9 million for the year ended December 31, 2008, relatively unchanged from the prior year. The net investment income at the property in Lisle, Illinois increased $0.1 million due to an increase in occupancy. This increase was offset by a net investment loss of $0.1 million at a property in Brentwood, Tennessee due to reduced occupancy.
Unrealized Gain/(Loss)
The office properties owned by the Partnership recorded a net unrealized loss of approximately $6.7 million during the year ended December 31, 2008, compared with a net unrealized gain of approximately $2.0 million for the prior year.
20 - Real Property
The net unrealized loss of approximately $6.7 million for the year ended December 31, 2008 was primarily due to increased investment rates across the office sector that caused each property to decline in value.  Additionally, at the office property in Lisle, Illinois notification from the property's largest tenant to vacate upon lease expiration in January 2009 resulted in decreased projected cash flows, which contributed to its net unrealized loss of $2.7 million.
APARTMENT PROPERTIES
Year Ended
December 31, 2008
Net Investment Income/(Loss) 2008
Net Investment Income/(Loss) 2007
Unrealized Gain/(Loss) 2008
Realized/
Unrealized Gain/(Loss) 2007
Occupancy 2008
Occupancy 2007
Property
Atlanta, GA
$480,064
$447,290
$(4,362,625)
$(530,277)
91%
92%
Raleigh, NC
608,481
613,122
(3,258,506)
(687,270)
87%
94%
Jacksonville, FL
(1)
-
17,342
-
-
N/A
N/A
Austin, TX
(2)
1,440,973
860,746
2,108,514
4,376,151
92%
92%
Charlotte, NC
(3)
599,939
181,181
(2,614,488)
(35,450)
90%
87%
$3,129,457
$2,119,681
$12,344,133
$3,123,154
(1)
The Jacksonville, Florida apartment property was sold on November 30, 2005, but certain post-closing adjustments were recognized in the years ended December 31, 2007.
(2)
Net investment income for the year ended December 31, 2007 reflects partial period results for the Austin, Texas apartment property acquired on May 8, 2007.
(3)
Net investment income for the year ended December 31, 2007 reflects partial period results for the Charlotte, North Carolina apartment property acquired on September 6, 2007.
Net Investment Income
Net investment income for the Partnership's apartment properties was $3.1 million for the year ended December 31, 2008, an increase of approximately $1.0 million from the prior year. The increase in net investment income for the year ended December 31, 2008 was primarily due to the additional rental income generated from the acquisition of the apartment properties in Austin, Texas and Charlotte, North Carolina on May 8, 2007 and September 6, 2007, respectively.
Total Realized and Unrealized Gain/(Loss)
The apartment properties owned by the Partnership recorded a net unrealized loss of approximately $12.3 million for the year ended December 31, 2008, compared with a net unrealized gain of approximately $3.1 million for the prior year.  The net unrealized loss for the year ended December 31, 2008 was primarily due to increased investment rates and decreased market rents across the apartment sector that caused each property to decline in value.
RETAIL PROPERTIES
Year Ended
December 31, 2008
Net Investment Income/(Loss) 2008
Net Investment Income/(Loss) 2007
Realized/
Unrealized Gain/(Loss) 2008
Unrealized Gain/(Loss) 2007
Occupancy 2008
Occupancy 2007
Property
Roswell, GA
$1,674,996
$2,072,194
$(10,610,373)
$(3,807,895)
38%
82%
Kansas City, KS
(1)
(15,941)
158,664
-
323,649
N/A
N/A
Hampton, VA
1,318,984
1,299,715
(3,160,726)
492,521
98%
100%
Ocean City,
MD
820,593
702,556
(686,899)
(122,583)
95%
67%
Westminster, MD
1,181,465
1,576,148
(3,394,988)
69,981
100%
100%
Dunn, NC
(2)
81,363
215,118
(3,484,491)
651,926
34%
90%
CARS Preferred Equity
1,000,939
974,559
(2,527,488)
-
N/A
N/A
$6,062,399
$6,998,954
$(23,864,965)
$(2,392,401)
(1)
The Kansas City, Kansas retail property was sold on June 29, 2007 but certain post-closing adjustments were recognized during the year ended December 31, 2008.  Net investment income for the year ended 2007 reflects partial period results to the June 29, 2007 sale.
(2)
Net investment income for the year ended December 31, 2007 reflects partial period results for the Dunn, North Carolina retail property acquired on August 17, 2007.
21 - Real Property
Net Investment Income
Net investment income for the Partnership's retail properties was approximately $6.1 million for the year ended December 31, 2008, a decrease of approximately $0.9 million from the prior year.  The decrease was primarily due to (a) the allowance for accrued income that was deemed uncollectible at the retail property in Westminster, MD; (b) increased vacancy at the Roswell, Georgia retail property; (c) lost rent related to the Kansas City, Kansas retail property sold on June 29, 2007; and (d) a one-time occurrence related to bad debt expense at the retail property in Dunn, North Carolina.  Partially offsetting these losses was an increase in net investment income at the property in Ocean City, Maryland due to completion of renovation and increased occupancy.
Total Realized and Unrealized Gain/Loss
The retail properties owned by the Partnership recorded a net unrealized loss of approximately $23.9 million for the year ended December 31, 2008, compared with a net realized and unrealized loss of approximately $2.4 million for the prior year.  The net unrealized loss for the year ended December 31, 2008 was primarily due to increased investment rates across the retail sector based on declining national consumption, which caused each property to decline in value. The aggregate net unrealized loss was also partially attributable to the $10.6 million loss recorded at the retail property in Roswell, Georgia, which is consistent with the most recent offers received in connection with the continued sale efforts of the property.
INDUSTRIAL PROPERTY
Year Ended
December 31, 2008
Net Investment Income/(Loss) 2008
Net Investment Income/(Loss) 2007
Realized Gain/(Loss) 2008
Unrealized Gain/(Loss) 2007
Occupancy 2008
Occupancy 2007
Property
Aurora, CO
(1)
$              -
$49,279
$              -
$345,832
N/A
N/A
(1) The Partnership sold the property on February 7, 2007.
Net Investment Income
The Partnership sold its industrial property on February 7, 2007. Therefore no net investment income was received for the year ended December, 2008, reflecting a minimal decrease from the prior year.
Total Realized and Unrealized Gain/Loss
The Partnership's industrial property was sold on February 7, 2007. Therefore no realized gains and/or losses were recorded for the year ended December 31, 2008, compared with realized gains of $0.3 million during the prior year.
HOTEL PROPERTY
Year Ended
December 31, 2008
Net Investment Income/(Loss) 2008
Net Investment Income/(Loss) 2007
Unrealized Gain/(Loss) 2008
Unrealized Gain/(Loss) 2007
Occupancy 2008
Occupancy 2007
Property
Lake Oswego, OR
$1,213,328
$1,343,200
$(1,347,338)
$2,409,924
71%
76%
Net Investment Income
Net investment income for the Partnership's hotel property was approximately $1.2 million for the year ended December 31, 2008, reflecting a decrease of $0.1 million from the prior year due to lost occupancy.
Unrealized Gain/Loss
The hotel property owned by the Partnership recorded an unrealized loss of approximately $1.3 million for the year ended December 31, 2008, compared with an unrealized gain of approximately $2.4 million for the prior year.  The unrealized loss for the year ended December 31, 2008 reflects increased investment rates and decreased average daily rate growth projections.
22 - Real Property
Other
Other net investment loss increased approximately $1.4 million during the year ended December 31, 2008 from the prior year. Other net
investment loss 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 audited 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
The Partnership adopted FASB Interpretation No. 48 ("FIN 48"), "Accounting for Uncertainty in Income Taxes," an Interpretation of FASB Statement No. 109 as of January 1, 2007.  This interpretation prescribes a comprehensive model for how a Partnership should recognize, measure, present, and disclose in its financial statements uncertain tax positions that the Partnership has taken or expects to take on a tax return.  The adoption of FIN 48 had no effect to the financial position and result of operations of the Partnership.
In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements." This statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and requires additional disclosures about fair value measurements. This statement does not require any new fair value measurements, but the application of this statement could change current practices in determining fair value. This adoption did not change the methodology used to fair value our real estate investments.
In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities," including an amendment of FASB Statement No. 115. This statement provides partnerships with an option to report selected financial assets and liabilities at fair value.
SFAS No. 157 and SFAS No. 159 are effective for fiscal years beginning after November 15, 2007 with early adoption permitted.  The Partnership adopted SFAS No. 157 and SFAS No. 159 effective January 1, 2008, however, the Partnership did not make a fair value option election for its existing debt. The adoption does not have any effect on the Partnership's consolidated financial position and results of operations.  Please refer to Notes 2D and 5 for details.
New Accounting Pronouncements
FASB Interpretation No. 46, "Consolidation of Variable Interest Entities" ("FIN 46"), was issued in January 2003.  In December 2003, FASB issued a revised interpretation of FIN 46 ("FIN 46-R") that supersedes FIN 46.  FIN 46-R defers the effective date for applying the provisions of FIN 46 for those companies currently accounting for their investments in accordance with the AICPA Audit and Accounting Guide, "Audits of Investment Companies" (the "Audit Guide").  The FASB is currently considering modifying FIN 46-R to provide an exception for companies that apply the Audit Guide.  The Partnership is awaiting further guidance from the FASB in order to evaluate the extent in which, if any, its investments may need to be consolidated as a result of this FIN 46-R.
In June 2007, the Accounting Standards Executive Committee issued Statement of Position 07-1, "Clarification of the Scope of the Audit and Accounting Guide Investment Companies and Accounting by Parent Companies and Equity Method Investors for Investments in Investment Companies" ("SOP 07-1"). SOP 07-1 provides guidance for determining whether an entity is within the scope of the Audit Guide. SOP 07-1 was originally determined to be
23 - Real Property
effective for fiscal years beginning on or after December 15, 2007, however, on February 6, 2008, FASB issued a Staff Position indefinitely deferring the effective date.
In December 2007, FASB issued SFAS No. 141 (revised 2007) ("SFAS 141R"), "Business Combinations", and SFAS No. 160, "Non-controlling interests in Consolidated Financial Statements, an Amendment to ARB No. 51" ("SFAS 160").  SFAS 141R expands the definition of a business and redefines the acquisition date in a merger and acquisition transaction. It significantly modifies the existing SFAS 141, including changes to acquisition related contingent consideration, pre-acquisition contingencies, non-controlling interest, restructuring costs, in-process R&D, goodwill and partial acquisition.  SFAS 160 requires the non-controlling interest to be reported as a separate component of equity.  It also changes the allocation of losses and accounting in step acquisitions.  The provisions in SFAS 160 should be applied prospectively except for the presentation and
disclosure requirements, which are required retrospectively for all periods presented.  SFAS 141R and SFAS 160 are effective for the acquisitions closing after the first annual reporting period beginning after December 15, 2008.  The Partnership is currently reviewing the provisions in SFAS 141R and SFAS 160, and assessing whether the changes would be material to its financial statements upon adoption.
Valuation of Investments
Real Estate Investments
- Real estate investments are carried at fair value. Properties owned are initially recorded at the purchase price plus closing costs.  Development costs and major renovations are capitalized as a component of cost, and routine maintenance and repairs are charged to expense as incurred.  Real estate costs include the cost of acquired property, including all the tangible and intangible assets.  Tangible assets include the value of all land, building and tenant improvements at the time of acquisition.  Intangible assets include the value of any above and below market leases, in-place leases, and tenant relationships at the time of acquisition.
In general fair value estimates are based upon property appraisal reports prepared by independent real estate appraisers (members of the Appraisal Institute or an equivalent organization) within a reasonable amount of time following acquisition of the real estate and no less frequently than annually thereafter. The Chief Real Estate Appraiser of Prudential Investment Management, Inc. ("PIM"), which is an indirectly owned subsidiary of Prudential Financial, Inc. ("PFI"), is responsible to assure that the valuation process provides independent and reasonable property fair value estimates.  An unaffiliated third party 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 SFAS 157, 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.
In general, the input values used in the appraisal process are unobservable, therefore unless indicated otherwise; real estate investments are classified as Level 3 under SFAS 157 fair value hierarchy.
Unconsolidated real estate partnerships and preferred equity investments are carried at fair value and are generally valued at the Partnership's equity in net assets as reflected in the partnerships' financial statements with properties valued as described above.  Under the equity method, the investment is initially recorded at the original investment amount, plus or minus additional amounts invested or distributed, and is subsequently adjusted for the Partnership's share of undistributed earnings or losses, including unrealized appreciation and depreciation, from the partnership.
As described above, the estimated fair value of real estate and real estate related assets is determined through an appraisal process.  There continues to be significant disruptions in the global capital, credit and real estate markets.
These disruptions have led to, among other things, a significant decline in the volume of transaction activity, in the fair value of many real estate and real estate related investments, and a significant 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 and could be material to the financial statements. Although the
24 - Real Property
estimated fair values represent subjective estimates, management believes these estimated fair values are reasonable approximations of market prices and the aggregate estimated value of investments in real estate is fairly presented as of December 31, 2008 and December 31, 2007.
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 audited Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.
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 31.68% of its investment portfolio as of December 31, 2008, which consists primarily of short-term fixed rate commercial paper and fixed and variable interest rate debt. The Partnership does not use derivative financial instruments. In accordance with its 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 December 31, 2008:
Maturity
Estimated Market Value
(in $ millions)
Average
Interest Rate
Cash and Cash equivalents
0-3 months
$27.7
1.96%
The table below discloses the Partnership's debt as of December 31, 2008. All of the Partnership's long-term debt bears interest at fixed rates and therefore the fair value of these instruments is affected by changes in market interest rates. The following table presents principal cash flows based upon maturity dates of the debt obligations and the related weighted-average interest rates by expected maturity dates for the fixed rate debt.
Investment level debt (in $ thousands),
including current portion
2009
2010
2011
2012
2013
Thereafter
Total
Estimated
Fair
Value
Average Fixed Interest Rate
6.75%
6.75%
6.75%
6.75%
6.75%
6.75%
6.75%
Fixed Rate
$9,277
$566
$604
$646
$463
$4,475
$16,031
$16,332
Variable Rate
-
$15,043
-
-
$9,000
$0
$24,043
$24,053
Premium/(Discount) on Mortgage Loans Payable
-
-
-
-
-
($26)
($26)
-
Total Mortgage Loans Payable
$9,277
$15,609
$604
$646
$9,463
$4,449
$40,048
$40,384
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.
FINANCIAL STATEMENTS
Following are the financial statements and Independent Registered Public Accounting Firm auditor's reports of the Real Property Account, as well as the financial statements and Independent Registered Public Accounting Firm auditor's reports of the Partnership.
25 - Real Property
FINANCIAL
STATEMENTS OF
THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY ACCOUNT
STATEMENTS OF NET
ASSETS
December 31, 2008 and 2007
2008
2007
ASSETS
Investment in The
      Prudential Variable Contract Real Property Partnership
$
86,786,975
$
100,212,593
Net Assets
$
86,786,975
$
100,212,593
NET ASSETS,
representing:
Equity of contract
      owners
$
59,902,956
$
72,012,128
Equity of The
      Prudential Insurance Company of America
26,884,019
28,200,465
$
86,786,975
$
100,212,593
Units
    outstanding
36,703,680
36,396,005
Portfolio shares
      held
2,741,864
2,741,864
Portfolio net asset
      value per share
$
31.65
$
36.55
STATEMENTS OF
OPERATIONS
For the years ended December 31, 2008, 2007 and 2006
2008
2007
2006
INVESTMENT
      INCOME
Net investment income
      from Partnership operations
$
4,518,355
$
5,137,153
$
4,526,160
EXPENSES
Charges to contract
      owners for assuming mortality risk and expense risk and for
      administration
556,142
563,608
509,687
NET INVESTMENT
      INCOME
3,962,213
4,573,545
4,016,473
NET REALIZED AND
      UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net change in
      unrealized gain (loss) on investments in Partnership
(17,943,973
)
1,940,739
7,413,826
Net realized gain on
      sale of investments in Partnership
0
271,584
27,482
NET GAIN
      (LOSS) ON INVESTMENTS
(17,943,973
)
2,212,323
7,441,308
NET INCREASE
      (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS
$
(13,981,760
)
$
6,785,868
$
11,457,781
STATEMENTS OF
CHANGES IN NET ASSETS
For the years ended December 31, 2008, 2007
and 2006
2008
2007
2006
OPERATIONS
Net investment
      income
$
3,962,213
$
4,573,545
$
4,016,473
Net change in
      unrealized gain (loss) on investments in Partnership
(17,943,973
)
1,940,739
7,413,826
Net realized gain on
      sale of investments in Partnership
0
271,584
27,482
NET INCREASE
      (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS
(13,981,760
)
6,785,868
11,457,781
CAPITAL
      TRANSACTIONS
Net withdrawals by
      contract owners
(2,238,147
)
(904,047
)
(865,224
)
Net contributions by
      The Prudential Insurance Company of America
2,794,289
1,467,655
(1,006,825
)
NET INCREASE
      (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL
    TRANSACTIONS
556,142
563,608
(1,872,049
)
TOTAL INCREASE
      (DECREASE) IN NET ASSETS
(13,425,618
)
7,349,476
9,585,732
NET
    ASSETS
Beginning of
      period
100,212,593
92,863,117
83,277,385
End of period
$
86,786,975
$
100,212,593
$
92,863,117
The accompanying
notes are an integral part of these financial statements.
A-1 Real Property
NOTES TO THE
FINANCIAL STATEMENTS OF
THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY
ACCOUNT
December 31, 2008
Note 1: General
The Prudential Variable
Contract Real Property Account (the "Account") was established on November 20,
1986 by resolution of the Board of Directors of The Prudential Insurance Company
of America ("Prudential" or the "Company"), which is 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 Prudential's
other assets. The Account is used to fund benefits under certain variable life
insurance and variable annuity contracts issued by Prudential. These products
are Variable Appreciable Life ("PVAL and PVAL $100,000+ Face Value"), Discovery
Plus ("PDISCO+"), and Variable Investment Plan ("VIP").
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 variable annuity contracts. The Account, along with the Pruco
Life Variable Contract Real Property Account and the Pruco Life of New Jersey
Variable Contract Real Property Account, are the sole investors in the
Partnership. These financial statements should be read in conjunction with the
financial statements of the Partnership.
The Partnership has a
policy of investing at least 65% of its assets in direct ownership interests in
income-producing real estate and participating mortgage loans.
Note 2: Summary of
Significant Accounting Policies and Pronouncements
A. Basis of
Accounting
The accompanying
financial statements are prepared in conformity with 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.
In September 2006,
the FASB issued SFAS No. 157, "Fair Value Measurements." This Statement
defines fair value, establishes a framework for measuring fair value in
generally accepted accounting principles, and requires additional disclosures
about fair value measurements. This Statement does not require any new fair
value measurements, but the application of this Statement could change current
practices in determining fair value. The Account adopted this guidance effective
January 1, 2008. The adoption of SFAS No. 157 has no effect on the
Account's financial position and results of operations. See Note 9 for more
information on SFAS No. 157.
In February 2007,
the FASB issued SFAS No. 159, "The Fair Value Option for Financial Assets
and Financial Liabilities," including an amendment of FASB Statement
No. 115. This statement provides companies with an option to report
selected financial assets and liabilities at fair value. This statement is
effective for fiscal years beginning after November 15, 2007 with early
adoption permitted. The Account adopted this guidance effective January 1,
2008. The Account did not make a fair value option election for its existing
debt. The adoption of SFAS No. 159 has no effect on the Account's financial
position and results of operations.
In December 2007,
the FASB issued SFAS No. 141R, "Business Combinations." This statement,
which addresses the accounting for business acquisitions, is effective for
fiscal years beginning on or after December 15, 2008, with early adoption
prohibited, and generally applies to business acquisitions completed after
December 31, 2008. Among other things, the new standard requires that all
acquisition-related costs be expensed as incurred, and that all restructuring
costs related to acquired operations be expensed as incurred. This new standard
also addresses the current and subsequent accounting for assets and liabilities
arising from contingencies acquired or assumed and, for acquisitions both prior
and subsequent to December 31, 2008, requires the acquirer to recognize
changes in the amount of its deferred tax benefits that are recognizable because
of a business combination either in income from continuing operations in the
period of the combination or directly in contributed capital, depending on the
circumstances. The Account is currently assessing the impact of SFAS
No. 141R on its financial position and results of operations.
In December 2007,
the FASB issued SFAS No. 160, "Noncontrolling Interests in Consolidated
Financial Statements." SFAS No. 160 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 statement is
effective for fiscal years beginning on or after December 15, 2008, with
early adoption prohibited. Upon adoption, SFAS No. 160 requires retroactive
adoption of the presentation and disclosure requirements for existing minority
interests and prospective adoption for all other requirements. The Account is
currently assessing the impact of SFAS No. 160 on its financial position
and results of operations.
A-2 Real Property
NOTES TO THE
FINANCIAL STATEMENTS OF
THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY
ACCOUNT
December 31, 2008
B. Investment in
Partnership Interest
The investment in the
Partnership is based on the Account's proportionate interest of the
Partnership's market value. At December 31, 2008 and 2007 the Account's
interest in the Partnership was 40.6% or 2,741,864 shares.
C. Income
Recognition
Net investment income
and realized and unrealized gains and losses are recognized daily. Amounts are
based upon the Account's proportionate interest in the Partnership.
D. Equity of The
Prudential Insurance Company of America
Prudential 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: Taxes
Prudential 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.
A-3 Real Property
NOTES TO THE
FINANCIAL STATEMENTS OF
THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY
ACCOUNT
December 31, 2008
Note 4: Net
Withdrawals by Contract Owners
Net contract owner
withdrawals for the real estate investment option in Prudential's variable
insurance and variable annuity products for the years ended December 31,
2008, 2007 and 2006 were as follows:
2008:
PVAL & PVAL
VIP &
$100,000+ face
PDISCO+
value
TOTAL
Contract Owner Net
      Payments:
$
6,963
$
4,528,338
$
4,535,301
Policy Loans:
0
(1,868,168
)
(1,868,168
)
Policy Loan Repayments
      and Interest:
0
1,370,568
1,370,568
Surrenders,
      Withdrawals, and Death Benefits:
(492,456
)
(3,690,570
)
(4,183,026
)
Net Transfers From/To
      Other Subaccounts or Fixed Rate Option:
34,626
665,582
700,208
Administrative and
      Other Charges:
(1,282
)
(2,791,748
)
(2,793,030
)
Net Withdrawals by
      Contract Owners
$
(452,149
)
$
(1,785,998
)
$
(2,238,147
)
2007:
PVAL & PVAL
VIP &
$100,000+ face
PDISCO+
value
TOTAL
Contract Owner Net
      Payments:
$
8,130
$
3,775,341
$
3,783,471
Policy Loans:
0
(1,455,672
)
(1,455,672
)
Policy Loan Repayments
      and Interest:
0
1,242,605
1,242,605
Surrenders,
      Withdrawals, and Death Benefits:
(357,459
)
(2,555,663
)
(2,913,122
)
Net Transfers From/To
      Other Subaccounts or Fixed Rate Option:
65,033
1,060,820
1,125,853
Administrative and
      Other Charges:
(1,274
)
(2,685,908
)
(2,687,182
)
Net Withdrawals by
      Contract Owners
$
(285,570
)
$
(618,477
)
$
(904,047
)
2006:
PVAL & PVAL
VIP &
$100,000+ face
PDISCO+
value
TOTAL
Contract Owner Net
      Payments:
$
7,765
$
3,832,194
$
3,839,959
Policy Loans:
0
(1,337,252
)
(1,337,252
)
Policy Loan Repayments
      and Interest:
0
1,216,739
1,216,739
Surrenders,
      Withdrawals, and Death Benefits:
(611,189
)
(2,485,769
)
(3,096,958
)
Net Transfers From/To
      Other Subaccounts or Fixed Rate Option:
134,505
1,152,025
1,286,530
Administrative and
      Other Charges:
(1,390
)
(2,772,852
)
(2,774,242
)
Net Withdrawals by
      Contract Owners
$
(470,309
)
$
(394,915
)
$
(865,224
)
A-4 Real Property
NOTES TO THE
FINANCIAL STATEMENTS OF
THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY
ACCOUNT
December 31, 2008
Note 5: Unit
Activity
Transactions in units
for the years ended December 31, 2008, 2007 and 2006 were as follows:
2008:
PVAL
$100,000+
PDISCO+
VIP
PVAL
face value
Company
      Contributions:
1,542,396
Contract Owner Contributions:
16,953
40,638
1,259,052
1,220,472
Company
      Redemptions:
(395,329
)
Contract Owner Redemptions:
(134,494
)
(99,015
)
(1,694,232
)
(1,448,853
)
2007:
$100,000+
PDISCO+
VIP
PVAL
face value
Company
      Contributions:
1,339,992
Contract Owner Contributions:
34,347
40,647
1,174,449
1,549,695
Company
      Redemptions:
(695,138
)
Contract Owner Redemptions:
(81,964
)
(104,016
)
(1,536,359
)
(1,414,704
)
2006:
PVAL
$100,000+
PDISCO+
VIP
PVAL
face value
Company
      Contributions:
1,289,694
Contract Owner Contributions:
61,105
42,871
1,371,500
1,814,985
Company
      Redemptions:
(1,567,945
)
Contract Owner Redemptions:
(208,442
)
(97,978
)
(1,589,371
)
(1,776,915
)
Note 6: Purchases
and Sales of Investments
The aggregate costs of
purchases and proceeds from sales of investments in the Partnership for the
years ended December 31, 2008, 2007 and 2006 were as follows:
December 31, 2008
December 31, 2007
December 31, 2006
Purchases:
$0
$0
$
0
Sales:
$0
$0
$
(2,381,736
)
A-5 Real Property
NOTES TO THE
FINANCIAL STATEMENTS OF
THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY
ACCOUNT
December 31, 2008
Note 7: Financial
Highlights
Prudential sells a
number of variable annuity and variable life insurance products. These products
have unique combinations of features and fees that are charged against the
contract owner's account balance. Differences in the fee structures result in a
variety of unit values, expense ratios and total returns.
The following table was
developed by determining which products offered by Prudential have the lowest
and highest total expense ratio. The summary may not reflect the minimum and
maximum contract charges offered by the Company as contract owners may not have
selected all available and applicable contract options as discussed in Note 1.
The table reflects contract owner units only.
At year ended
For year ended
Investment
Unit Value
Income
Expense Ratio **
Total Return ***
Units (000's)
Lowest- Highest
Net Assets (000's)
Ratio*
Lowest-Highest
Lowest-Highest
December 31, 2008
25,104
$
2.22351 to 2.47629
$
59,903
4.55
%
0.60% to 1.20%
-14.43% to -13.92%
December 31,
      2007
25,943
$
2.59836 to 2.87660
$
72,012
5.28
%
0.60% to 1.20%
6.63% to
      7.27%
December 31,
      2006
26,281
$
2.43678 to 2.68168
$
68,091
5.10
%
0.60% to 1.20%
13.11% to 13.78%
December 31,
      2005
26,664
$
2.15433 to 2.35694
$
60,797
4.64
%
0.60% to 1.20%
11.82% to 12.48%
December 31,
      2004
27,073
$
1.92668 to 2.09540
$
54,956
4.15
%
0.60% to 1.20%
4.81% to
      5.43%
The table above
reflects information for units held by contract owners. Prudential also
maintains a position in the Real Property Account, to provide for property
acquisitions and capital expenditure funding needs. Prudential held 11,599,873,
10,452,719, 9,807,865, 10,086,116 and 10,421,720 units representing $26,884,019,
$28,200,465, $24,772,123, $22,480,400 and $20,733,052 of net assets as of
December 31, 2008, 2007, 2006, 2005 and 2004, respectively. Charges for
mortality risk, expense risk and administrative expenses are used by Prudential
to purchase additional units in its account resulting in no impact to its net
assets.
*
This amount represents the proportionate share of the net investment
      income from the underlying Partnership divided by the total average assets
      of the Account. This ratio excludes those expenses, such as mortality
      risk, expense risk and administrative charges that result in direct
      reductions in the unit values.
**
These ratios represent the annualized contract expenses of the
      separate account, consisting primarily of mortality and expense charges,
      for each period indicated. The ratios include only those expenses that
      result in a direct reduction to unit values. Charges made directly to
      contract owner accounts through the redemption of units and expenses of
      the underlying Partnership are excluded.
***
These amounts represent the total return for the periods indicated,
      including changes in the value of the underlying Partnership, and reflect
      deductions for all items included in the expense ratio. The total return
      does not include any expense assessed through the redemption of units;
      inclusion of these expenses in the calculation would result in a reduction
      in the total return presented.
Charges and
Expenses
A. Mortality Risk
and Expense Risk Charges
Mortality risk and
expense risk charges are determined daily using an effective annual rate of
1.2%, 0.9%, 0.6% and 1.2% for PDISCO+, PVAL, PVAL $100,000 + face value and VIP,
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 Prudential. The mortality risk and expense risk
charges are assessed through reduction in unit values.
A-6 Real Property
NOTES TO THE
FINANCIAL STATEMENTS OF
THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY
ACCOUNT
December 31, 2008
B. 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 PVAL and PVAL $100,000 + face value are
(1) state premium taxes; (2) sales charges, up to 0.50%, which are deducted
in order to compensate Prudential for the cost of selling the contract and
(3) transaction costs 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 Prudential 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.
C. Deferred Sales
Charge
A deferred sales
charge, applicable to PVAL and PVAL $100,000 + face value and not to exceed 50%
of the first year's primary annual premium for PVAL contracts, is imposed upon
surrenders of certain variable life insurance contracts to compensate Prudential
for sales and other marketing expenses. The amount of any sales charge will
depend on the number of years that have elapsed since the contract was issued.
No sales charge will be imposed after the tenth year of the contract. No sales
charge will be imposed on death benefits.
Also a deferred sales
charge is imposed upon the withdrawals of certain purchase payments to
compensate Prudential for sales and other marketing expenses for PDISCO+ and
VIP. The amount of any sales charge will depend on the amount withdrawn and the
number of contract years that have elapsed since the contract owner or annuitant
made the purchase payments deemed to be withdrawn. No sales charge is made
against the withdrawal of investment income. A reduced sales charge is imposed
in connection with the withdrawal of a purchase payment to affect an annuity if
three or more contract years have elapsed since the contract date, unless the
annuity affected is an annuity certain. No sales charge is imposed upon death
benefit payments or upon transfers made between subaccounts. This deferred sales
charge is assessed through the redemption of units.
D. Partial
Withdrawal Charge
A charge is imposed by
Prudential on partial withdrawals of the cash surrender value for PVAL and PVAL
$100,000 + face value. 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.
E. Annual
Maintenance Charge
An annual maintenance
charge, applicable to PDISCO+ and VIP, of $30 will be deducted if and only if
the contract fund is less than $10,000 on a contract anniversary or at the time
a full withdrawal is effected, including a withdrawal to effect an annuity. The
charge is made by reducing accumulation units credited to a contract owner's
account.
Note 8: Related Party
Prudential and its
affiliates perform various services on behalf of the Partnership in which the
Account invests and may receive fees for the services performed. These services
include, among other things, shareholder communications, preparation, postage,
fund transfer agency and various other record keeping and customer service
functions.
A-7 Real Property
Report of
Independent Registered Public Accounting Firm
To the Contract Owners
of
The Prudential Variable Contract Real Property Account
and the Board of
Directors of
The Prudential Insurance Company of America
In our opinion, the
accompanying statements of net assets and the related statements of operations
and of changes in net assets present fairly, in all material respects, the
financial position of The Prudential Variable Contract Real Property Account at
December 31, 2008 and 2007, and the results of its operations and the
changes in its net assets for each of the three years in the period ended
December 31, 2008, in conformity with accounting principles generally
accepted in the United States of America. These financial statements are the
responsibility of the management of The Prudential Insurance Company of America.
Our responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these financial statements in
accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
PricewaterhouseCoopers
LLP
New York, New York
March 20, 2009
A-8 Real Property
THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP FINANCIAL STATEMENTS
Consolidated Statements of Assets and Liabilities – December 31, 2008 and 2007
B1
Consolidated Statements of Operations – Years Ended December 31, 2008, 2007, and 2006
B2
Consolidated Statements of Changes in Net Assets – Years Ended December 31, 2008, 2007, and 2006
B3
Consolidated Statements of Cash Flows – Years Ended December 31, 2008, 2007, and 2006
B4
Consolidated Schedules of Investments – December 31, 2008 and 2007
B5
Notes to Consolidated Financial Statements
B7
Report of Independent Registered Public Accounting Firm
B20
INDEX - Real Property
THE PRUDENTIAL
VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP
CONSOLIDATED
STATEMENTS OF ASSETS AND LIABILITIES
December 31, 2008
December 31, 2007
ASSETS
REAL ESTATE INVESTMENTS
      - At estimated fair value:
Real estate and
      improvements (cost: 12/31/2008 - $245,808,214; 12/31/2007 -
      $236,466,116)
$
221,196,000
$
254,394,053
Real estate
      partnerships and preferred equity investments (cost: 12/31/2008 -
      $14,324,204; 12/31/2007 - $14,523,934)
11,796,716
14,523,934
Total real estate
      investments
$
232,992,716
$
268,917,987
CASH AND CASH
      EQUIVALENTS
27,736,520
18,215,871
OTHER ASSETS,
    NET
2,936,037
3,033,040
Total assets
$
263,665,273
$
290,166,898
LIABILITIES &
      PARTNERS' EQUITY
INVESTMENT LEVEL DEBT
      (net of unamortized discount: 12/31/08 $26,480; 12/31/07 $-)
$
40,047,827
$
32,121,712
ACCOUNTS PAYABLE AND
      ACCRUED EXPENSES
2,924,938
2,184,812
DUE TO
    AFFILIATES
851,595
901,371
OTHER
    LIABILITIES
978,342
920,454
MINORITY
    INTEREST
4,924,263
7,004,790
Total
    liabilities
49,726,965
43,133,139
COMMITMENTS AND
      CONTINGENCIES
PARTNERS'
    EQUITY
213,938,308
247,033,759
Total liabilities and
      partners' equity
$
263,665,273
$
290,166,898
NUMBER OF SHARES
      OUTSTANDING AT END OF PERIOD
6,758,960
6,758,960
PER SHARE NET ASSET
      VALUE AT END OF PERIOD
$
31.65
$
36.55
The accompanying
notes are an integral part of these consolidated financial statements.
B-1 Real Property
THE PRUDENTIAL
VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP
CONSOLIDATED
STATEMENTS OF OPERATIONS
Year Ended December 31,
2008
2007
2006
INVESTMENT
    INCOME:
Revenue from real
      estate and improvements
$
30,723,626
$
29,094,968
$
25,460,860
Equity in income of
      real estate partnerships
994,333
1,136,936
1,181,772
Interest and equity
      income on mortgage and other loans receivable
-
-
125,510
Interest on short-term
      investments
406,431
1,468,159
1,855,345
Total investment
      income
32,124,390
31,700,063
28,623,487
INVESTMENT
      EXPENSES:
Operating
7,193,577
6,954,999
6,355,543
Investment management
      fee
3,447,030
3,380,090
3,075,176
Real estate
    taxes
2,957,947
2,466,704
2,069,169
Administrative
5,927,773
4,056,557
3,923,413
Interest
    expense
1,970,462
2,019,937
1,814,686
Minority
    interest
(510,583
)
158,196
223,772
Total investment
      expenses
20,986,206
19,036,483
17,461,759
NET INVESTMENT
      INCOME
11,138,184
12,663,580
11,161,728
REALIZED AND UNREALIZED
      GAIN (LOSS) ON INVESTMENTS:
Net proceeds from real
      estate investments sold
-
18,353,122
67,770
Less: Cost of real
      estate investments sold
-
19,063,985
-
Gain
      (loss) realized from real estate investments sold
-
(710,863
)
67,770
Less: Reversal of prior
      periods' unrealized gain (loss) on real estate investments
    sold
-
(1,380,344
)
-
Net gain
      (loss) recognized on real estate investments sold
-
669,481
67,770
Unrealized gain
      (loss) on investments:
Change in unrealized
      gain (loss) on real estate investments
(45,661,694
)
5,620,864
20,294,808
Less: Minority interest
      in unrealized gain (loss)
(1,428,059
)
836,750
2,010,573
Net unrealized gain
      (loss) on real estate investments
(44,233,635
)
4,784,114
18,284,235
NET REALIZED AND
      UNREALIZED GAIN (LOSS) ON REAL ESTATE INVESTMENTS
(44,233,635
)
5,453,595
18,352,005
INCREASE
      (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS
($33,095,451
)
$
18,117,175
$
29,513,733
The accompanying
notes are an integral part of these consolidated financial statements.
B-2 Real Property
THE PRUDENTIAL
VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP
CONSOLIDATED
STATEMENTS OF CHANGES IN NET ASSETS
Year Ended December 31,
2008
2007
2006
INCREASE
      (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS:
Net investment
      income
$
11,138,184
$
12,663,580
$
11,161,728
Net gain
      (loss) realized and unrealized from real estate investments
(44,233,635
)
5,453,595
18,352,005
Increase
      (decrease) in net assets resulting from operations
(33,095,451
)
18,117,175
29,513,733
INCREASE
      (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL
TRANSACTIONS:
Withdrawals
(2008- 0; 2007 -0; and
      2006 -182,671 shares, respectively)
-
-
(6,000,000
)
Increase
      (decrease) in net assets resulting from capital transactions
-
-
(6,000,000
)
INCREASE
      (DECREASE) IN NET ASSETS
(33,095,451
)
18,117,175
23,513,733
NET ASSETS - Beginning
      of period
247,033,759
228,916,584
205,402,851
NET ASSETS - End of
      period
$
213,938,308
$
247,033,759
$
228,916,584
The accompanying
notes are an integral part of these consolidated financial statements.
B-3 Real Property
THE PRUDENTIAL
VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP
CONSOLIDATED
STATEMENTS OF CASH FLOWS
Year Ended December 31,
2008
2007
2006
CASH FLOWS FROM
      OPERATING ACTIVITIES:
Net increase
      (decrease) in net assets from operations
($33,095,451
)
$
18,117,175
$
29,513,733
Adjustments to
      reconcile net increase (decrease) in net assets to net cash from
      operating activities
Net realized and
      unrealized loss (gain)
44,233,635
(5,453,595
)
(18,352,005
)
Amortization of
      deferred financing costs
94,554
193,594
-
Distributions in excess
      of (less than) equity in income of real estate partnerships
      operations
199,730
35,287
(87,396
)
Minority interest in
      consolidated partnerships
(510,583
)
158,196
223,772
Bad debt
    expense
1,139,238
101,185
(239,380
)
(Increase) decrease
      in:
Other assets
(1,136,791
)
166,010
37,951
Increase
      (decrease) in:
Accounts payable and
      accrued expenses
740,126
(907,118
)
546,878
Due to
    affiliates
(49,776
)
111,482
28,963
Other
    liabilities
57,888
43,967
404,151
Net cash flows from
      (used in) operating activities
11,672,570
12,566,183
12,076,667
CASH FLOWS FROM
      INVESTING ACTIVITIES:
Net proceeds from real
      estate investments sold
-
18,353,122
67,770
Acquisition of real
      estate and improvements
-
(42,218,143
)
(14,797,730
)
Additions to real
      estate and improvements
(9,936,151
)
(3,554,451
)
(3,417,034
)
Contributions to real
      estate partnerships
-
-
(7,289,487
)
Return of investment in
      real estate partnerships
-
-
3,620,455
Collection of mortgage
      loan receivable
-
-
4,277,769
Net cash flows from
      (used in) investing activities
(9,936,151
)
(27,419,472
)
(17,538,257
)
CASH FLOWS FROM
      FINANCING ACTIVITIES:
Withdrawals
-
-
(6,000,000
)
Proceeds from
      investment level debt
24,016,161
-
-
Principal payments on
      investment level debt
(16,090,046
)
(588,776
)
(485,119
)
Contributions to
      minority interest partners
80,000
294,143
-
Distributions to
      minority interest partners
(221,885
)
(35,739
)
(121,244
)
Net cash flows from
      (used in) financing activities
7,784,230
(330,372
)
(6,606,363
)
NET CHANGE IN CASH AND
      CASH EQUIVALENTS
9,520,649
(15,183,661
)
(12,067,953
)
CASH AND CASH
      EQUIVALENTS - Beginning of period
18,215,871
33,399,532
45,467,485
CASH AND CASH
      EQUIVALENTS - End of period
$
27,736,520
$
18,215,871
$
33,399,532
The accompanying
notes are an integral part of these consolidated financial statements.
B-4 Real Property
THE PRUDENTIAL
VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP
CONSOLIDATED
SCHEDULE OF INVESTMENTS
2008 Total Rentable
Square
      Feet
December 31,
Unless
      Otherwise
2008
2007
December 31, 2008
Indicated
Estimated Fair
Estimated Fair
Property Name
Ownership
City, State
(Unaudited)
Cost
Value
Cost
Value
OFFICES
750
Warrenville
WO
Lisle, IL
103,193
$   25,218,777
$     9,542,046
$   24,512,521
$   11,500,000
Summit @ Cornell
      Oaks
WO
Beaverton , OR
72,109
12,512,985
11,000,000
12,401,252
13,800,000
Westpark
WO
Nashville, TN
97,199
12,060,981
13,753,954
11,323,885
13,100,000
Financial
Plaza
WO
Brentwood, TN
98,049
12,389,207
12,700,000
12,371,092
13,700,000
Offices % as of 12/31/08
22%
62,181,950
46,996,000
60,608,750
52,100,000
APARTMENTS
Brookwood
      Apartments
WO
Atlanta, GA
240 Units
19,810,918
16,100,000
19,548,293
20,200,000
Dunhill Trace
      Apartments
WO
Raleigh, NC
250 Units
16,433,544
16,600,000
16,375,037
19,800,000
Broadstone
      Crossing
WO
Austin, TX
225 Units
22,732,363
25,000,000
22,723,849
27,100,000
The Reserve At
      Waterford Lakes
WO
Charlotte, NC
140 Units
13,649,938
11,000,000
13,535,450
13,500,000
Apartments % as of 12/31/08
32%
72,626,763
68,700,000
72,182,629
80,600,000
RETAIL
King's Market
WO
Rosewell, GA
314,358
37,893,595
14,100,000
37,883,222
24,700,000
Hampton Towne
      Center
WO
Hampton, VA
174,540
18,110,816
23,400,000
18,050,090
26,500,000
White Marlin
    Mall
CJV
Ocean City, MD
186,016
23,271,014
28,600,000
17,016,325
23,900,000
Westminster Crossing
      East, LLC
CJV
Westminster, MD
89,890
15,044,721
17,700,000
15,637,841
21,094,053
Kansas City
      Portfolio
EJV
Kansas City, KS;MO
487,660
13,595
13,595
140,911
140,911
CARS Preferred
      Equity
PE
Various
N/A
14,310,609
11,783,121
14,383,023
14,383,023
Harnett
    Crossing
CJV
Dunn, NC
193,235
6,366,767
3,900,000
5,958,844
7,200,000
Retail % as of 12/31/08
47%
115,011,117
99,496,716
109,070,256
117,917,987
HOTEL
Portland Crown
      Plaza
CJV
Portland, OR
161 Rooms
10,312,588
17,800,000
9,128,415
18,300,000
Hotel % as of 12/31/08
8%
10,312,588
17,800,000
9,128,415
18,300,000
Total Real Estate
      Investments as a Percentage of Net Assets as of 12/31/08
109%
$260,132,418
$232,992,716
$250,990,050
$268,917,987
WO
-
Wholly Owned Investment
CJV
-
Consolidated Joint Venture
EJV
-
Joint Venture Investment accounted for under the
      equity method
PE
-
Preferred equity investments accounted for under
      the equity method
The accompanying
notes are an integral part of these consolidated financial statements.
B-5 Real Property
THE PRUDENTIAL
VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP
CONSOLIDATED
SCHEDULE OF INVESTMENTS
December 31, 2008
December 31, 2007
Estimated
Estimated
Face Amount
Cost
Fair Value
Cost
Fair Value
CASH AND CASH
      EQUIVALENTS - Percentage of Net Assets
13.0
%
7.4
%
Federal Home Loan Bank,
      0 coupon bond, January, 2009
$
1,000,000
$
1,000,000
$
1,000,000
$
2,065,813
$
2,065,813
Federal Home Loan Bank,
      0 coupon bond, January, 2009
4,446,932
4,446,932
4,446,932
4,998,313
4,998,313
Federal Home Loan Bank,
      0 coupon bond, January, 2009
1,999,985
1,999,985
1,999,985
9,997,633
9,997,633
Federal Home Loan Bank,
      0 coupon bond, February, 2009
18,831,977
18,831,977
18,831,977
-
-
Total Cash
      Equivalents
26,278,894
26,278,894
17,061,759
17,061,759
Cash
1,457,626
1,457,626
1,154,112
1,154,112
Total Cash and Cash
      Equivalents
$
27,736,520
$
27,736,520
$
18,215,871
$
18,215,871
The accompanying
notes are an integral part of these consolidated financial statements.
B-6 Real Property
NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS OF
THE PRUDENTIAL VARIABLE CONTRACT REAL
PROPERTY PARTNERSHIP
For Years Ended December 31, 2008, 2007, and
2006
Note 1:
Organization
On April 29, 1988,
The Prudential Variable Contract Real Property Partnership (the "Partnership"),
a general partnership organized under New Jersey law, was formed through an
agreement among The Prudential Insurance Company of America ("Prudential"),
Pruco Life Insurance Company ("Pruco Life"), and Pruco Life Insurance Company of
New Jersey ("Pruco Life of New Jersey"). The Partnership was established as a
means by which assets allocated to the real estate investment option under
certain variable life insurance and variable annuity contracts issued by the
respective companies could be invested in a commingled pool. The partners in the
Partnership are Prudential, Pruco Life and Pruco Life of New Jersey. The
Partners may make additional daily cash contributions to or withdrawals from the
Partnership in accordance with the provisions of the Partnership Agreement.
The Partnership's
policy is to invest at least 65% of its assets in direct ownership interests in
income-producing real estate and participating mortgage loans.
The per share net asset
value of the Partnership's shares is determined daily, consistent with the
Partnership Agreement. On each day during which the New York Stock Exchange is
open for business, the net asset value of the Partnership is estimated using the
estimated fair value of its assets, principally as described in Notes 2A, 2B and
2C below, reduced by any liabilities of the Partnership. The periodic
adjustments to property values described in Notes 2A, 2B and 2C below and other
adjustments to previous estimates are made on a prospective basis. There can be
no assurance that all such adjustments to estimates will be made timely.
Shares of the
Partnership are held by The Prudential Variable Contract Real Property Account,
Pruco Life Variable Contract Real Property Account and Pruco Life of New Jersey
Variable Contract Real Property Account (the "Real Property Accounts") and may
be purchased and sold at the then current per share net asset value of the
Partnership's net assets. Per share net asset value is calculated by dividing
the net asset value of net assets of the Partnership as determined above by the
number of shares outstanding. A contract owner participates in the Partnership
through interests in the Real Property Accounts.
PREI® is the real
estate advisory unit of Prudential Investment Management, Inc. ("PIM"), which is
an indirectly owned subsidiary of Prudential Financial Inc. ("PFI"). PREI
provides investment advisory services to the Partnership's partners pursuant to
the terms of the Advisory Agreement as described in Note 12.
Note 2: Summary of
Significant Accounting Policies
A.
Basis of Presentation
- The accompanying consolidated financial
      statements of the Partnership have been presented on the fair value basis
      of accounting in conformity with accounting principles generally accepted
      in the United States of America. The consolidated financial statements of
      Partnership include wholly owned entities, and those real estate
      partnerships in which the Partnership has a controlling interest. All
      significant inter-company balances and transactions have been eliminated
      in consolidation.
B.
Management's Use of Estimates in the Financial Statements -
The
      preparation of financial statements in conformity with accounting
      principles generally accepted in the United States of America requires
      management to make estimates and assumptions that affect the amounts
      reported in the consolidated financial statements and accompanying notes.
      Actual results could differ from those
estimates.
B-7 Real Property
NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS OF
THE PRUDENTIAL VARIABLE CONTRACT REAL
PROPERTY PARTNERSHIP
For Years Ended December 31, 2008, 2007, and
2006
Note 2: Summary of
Significant Accounting Policies (continued)
C.
Accounting Pronouncements Adopted -
The Partnership adopted
      FASB Interpretation No. 48 ("FIN 48"), "Accounting for Uncertainty in
      Income Taxes," an Interpretation of FASB Statement No. 109 as of
      January 1, 2007. This interpretation prescribes a comprehensive model
      for how a Partnership should recognize, measure, present, and disclose in
      its financial statements uncertain tax positions that the Partnership has
      taken or expects to take on a tax return. The adoption of FIN 48 had no
      effect to the financial position and result of operations of the
      Partnership.
In September 2006, the FASB issued SFAS No. 157, "Fair Value
      Measurements." This statement defines fair value, establishes a framework
      for measuring fair value in generally accepted accounting principles, and
      requires additional disclosures about fair value measurements. This
      statement does not require any new fair value measurements, but the
      application of this statement could change current practices in
      determining fair value.
In February 2007, the FASB issued SFAS No. 159, "The Fair
      Value Option for Financial Assets and Financial Liabilities," including an
      amendment of FASB Statement No. 115. This statement provides
      partnerships with an option to report selected financial assets and
      liabilities at fair value.
SFAS No. 157 and SFAS No. 159 are effective for fiscal years
      beginning after November 15, 2007 with early adoption permitted. The
      Partnership adopted SFAS No. 157 and SFAS No. 159 effective
      January 1, 2008, however, the Partnership did not make a fair value
      option election for its existing debt. The adoption of SFAS No. 157 and
      SFAS No. 159 did not have any effect on the Partnership's
      consolidated financial position and results of operations. Please refer to
      Notes 2D and 5 for details.
D.
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
      PIM, which is an indirectly owned subsidiary of PFI, is responsible to
      assure that the valuation process provides independent and reasonable
      property fair value estimates. An unaffiliated third party 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.
B-8 Real Property
NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS OF
THE PRUDENTIAL VARIABLE CONTRACT REAL
PROPERTY PARTNERSHIP
For Years Ended December 31, 2008, 2007, and
2006
Note 2: Summary of
Significant Accounting Policies (continued)
D.
Real Estate Investments (continued)
The purpose of an appraisal is to estimate the fair value of real
      estate as of a specific date. In accordance with SFAS 157, 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.
In general, the input values used in the appraisal process are
      unobservable, therefore unless indicated otherwise; real estate
      investments are classified as Level 3 (see Note 5 for detail) under SFAS
      157 fair value hierarchy.
Unconsolidated real estate partnerships and preferred equity
      investments are carried at fair value and are generally valued at the
      Partnership's equity in net assets as reflected in the partnerships'
      financial statements with properties valued as described above. Under the
      equity method, the investment is initially recorded at the original
      investment amount, plus or minus additional amounts invested or
      distributed, and is subsequently adjusted for the Partnership's share of
      undistributed earnings or losses, including unrealized appreciation and
      depreciation, from the partnership.
As described above, the estimated fair value of real estate and real
      estate related assets is determined through an appraisal process. There
      continues to be significant disruptions in the global capital, credit and
      real estate markets. These disruptions have led to, among other things, a
      significant decline in the volume of transaction activity, in the fair
      value of many real estate and real estate related investments, and a
      significant 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 these estimated fair values are reasonable approximations of
      market prices and the aggregate estimated value of investments in real
      estate is fairly presented as of December 31, 2008 and
      December 31, 2007.
B-9 Real Property
NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS OF
THE PRUDENTIAL VARIABLE CONTRACT REAL
PROPERTY PARTNERSHIP
For Years Ended December 31, 2008, 2007, and
2006
Note 2: Summary of
Significant Accounting Policies (continued)
E.
Cash and Cash Equivalents -
Cash and cash equivalent are
      comprised of all short-term investments and investments in money market
      funds with a maximum maturity of three months. Cash equivalents consist of
      investments in the Prudential Investment Liquidity Pool offered and
      managed by an affiliate of PFI and are accounted for at fair value.
F.
Other Assets
- Restricted cash of $207,343 and $186,736 was
      maintained by the wholly owned and consolidated properties at
      December 31, 2008 and 2007, respectively, for tenant security
      deposits and is included in Other Assets on the Consolidated Statements of
      Assets and Liabilities. Other assets also include tenant receivables and
      are net of allowance for uncollectible accounts of $1,028,539 and $39,764
      at December 31, 2008 and 2007, respectively.
G.
Investment Level Debt
- Investment level debt is generally
      stated at the principal amount of the obligations outstanding, except for
      debt assumed. 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. Deferred
      financing costs related to debt were capitalized and amortized over the
      terms of the related obligations.
H.
Revenue and Expense Recognition -
Revenue from real estate is
      recognized when earned in accordance with the terms of the respective
      leases. Operating expenses are recognized as incurred. Revenue from
      certain real estate investments is net of all or a portion of related real
      estate expenses, as lease arrangements vary as to responsibility for
      payment of these expenses between tenants and the Partnership. Since real
      estate investments are stated at estimated fair value, net income is not
      reduced by depreciation or amortization expense. Interest expenses are
      accrued periodically based on the contractual interest rate and terms of
      the loans, which approximates the effective interest method. Interest
      expenses are included in Net Investment Income in the Statement of
      Operations.
I.
Equity in Income of Real Estate Partnerships
- Equity in income
      of real estate partnerships represents the Partnership's share of the
      current year's partnership income as provided for under the terms of the
      partnership agreements. As is the case with real estate investments,
      partnerships' net income are not reduced by depreciation or amortization
      expense. Frequency of distribution of income is determined by formal
      agreements or by the executive committee of the partnership. Any cash in
      excess of the amount of income generated from the underlying joint venture
      is treated as a return of the Partnership's equity investment.
J.
Federal Income Taxes -
The Partnership is not a taxable entity
      under the provisions of the Internal Revenue Code. The income and capital
      gains and losses of the Partnership are attributed, for federal income tax
      purposes, to the Partners in the Partnership. The Partnership may be
      subject to state and local taxes in jurisdictions in which it
      operates
.
B-10 Real Property
NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS OF
THE PRUDENTIAL VARIABLE CONTRACT REAL
PROPERTY PARTNERSHIP
For Years Ended December 31, 2008, 2007, and
2006
Note 2: Summary of
Significant Accounting Policies (continued)
K.
New Accounting Pronouncements
- FASB Interpretation
      No. 46, "Consolidation of Variable Interest Entities" ("FIN 46"), was
      issued in January 2003. In December 2003, FASB issued a revised
      interpretation of FIN 46 ("FIN 46-R") that supersedes FIN 46. FIN 46-R
      defers the effective date for applying the provisions of FIN 46 for those
      companies currently accounting for their investments in accordance with
      the AICPA Audit and Accounting Guide, "Audits of Investment Companies"
      (the "Audit Guide"). The FASB is currently considering modifying FIN 46-R
      to provide an exception for companies that apply the Audit Guide. The
      Partnership is awaiting further guidance from the FASB in order to
      evaluate the extent in which, if any, its investments may need to be
      consolidated as a result of this FIN 46-R.
In June 2007, the Accounting Standards Executive Committee issued
      Statement of Position 07-1, "Clarification of the Scope of the Audit and
      Accounting Guide Investment Companies and Accounting by Parent Companies
      and Equity Method Investors for Investments in Investment Companies" ("SOP
      07-1"). SOP 07-1 provides guidance for determining whether an entity is
      within the scope of the Audit Guide. SOP 07-1 was originally determined to
      be effective for fiscal years beginning on or after December 15,
      2007, however, on February 6, 2008, FASB issued a Staff Position
      indefinitely deferring the effective date.
In December 2007, FASB issued SFAS No. 141 (revised 2007)
      ("SFAS 141R"), "Business Combinations", and SFAS No. 160,
      "Non-controlling interests in Consolidated Financial Statements, an
      Amendment to ARB No. 51" ("SFAS 160"). SFAS 141R expands the
      definition of a business and redefines the acquisition date in a merger
      and acquisition transaction. It significantly modifies the existing SFAS
      141, including changes to acquisition related contingent consideration,
      pre-acquisition contingencies, non-controlling interest, restructuring
      costs, in-process R&D, goodwill and partial acquisition. SFAS 160
      requires the non-controlling interest to be reported as a separate
      component of equity. It also changes the allocation of losses and
      accounting in step acquisitions. The provisions in SFAS 160 should be
      applied prospectively except for the presentation and disclosure
      requirements, which are required retrospectively for all periods
      presented. SFAS 141R and SFAS 160 are effective for the acquisitions
      closing after the first annual reporting period beginning after
      December 15, 2008. The Partnership is currently reviewing the
      provisions in SFAS 141R and SFAS 160, and no significant impact is
      expected from the adoption.
Note 3:
Reclassification
Certain prior period
balances have been reclassified to conform with current period presentation.
Such reclassifications had no effect on previously reported net assets.
Note 4: Disclosure
of Supplemental Cash Flow Information and Non-Cash Investing and Financing
Activity
Cash paid for interest
during the years ended December 31, 2008, 2007 and 2006, was $1,878,870,
$1,746,115 and $1,806,320, respectively.
B-11 Real Property
NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS OF
THE PRUDENTIAL VARIABLE CONTRACT REAL
PROPERTY PARTNERSHIP
For Years Ended December 31, 2008, 2007, and
2006
Note 5: Fair Value
Measurements
Fair Value
Measurements:
SFAS 157 establishes a
fair value measurement framework, provides a single definition of fair value and
requires expanded disclosure summarizing fair value measurements. This statement
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 values
is based on unadjusted quoted prices inactive markets that are accessible to the
company for identical assets or liabilities. These generally provide the most
reliable evidence and should be used tom 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.
For items classified as
Level 3, a reconciliation of the beginning and ending balances, as shown in
table 2 below, is also required.
Please refer to Note 2D
for discussion of valuation methodology.
B-12 Real Property
NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS OF
THE PRUDENTIAL VARIABLE CONTRACT REAL
PROPERTY PARTNERSHIP
For Years Ended December 31, 2008, 2007, and
2006
Note 5: 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 December 31, 2008 using
Amounts
Quoted prices in
measured at
active markets for
Significant other
Significant
fair value
identical assets
observable
unobservable inputs
Assets:
12/31/2008
(level 1)
inputs (level 2)
(level 3)
Real estate and
      improvements
$
221,196
$
-
$
-
$
221,196
Real estate
      partnerships and preferred equity investments
11,797
-
-
11,797
Total
$
232,993
$
-
$
-
$
232,993
As required under SFAS
157, table 2 below present 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 year ended December 31, 2008.
Table 2
(in
000's)
Fair value measurements using significant unobservable
inputs
(Level 3)
Real estate and
partnerships and
Real estate and
preferred equity
improvements
investments
Total
Beginning balance @
      1/1/08
$
254,394
$
14,524
$
268,918
Net gains
      (losses) realized/unrealized included in earnings (or changes in net
      assets)
(43,134
)
(2,527
)
(45,661
)
Equity income
      (losses)/interest income
-
994
994
Acquisitions/issuances/contributions
9,936
-
9,936
Dispositions/settlements/distributions
-
(1,194
)
(1,194
)
Ending balance @
      12/31/08
$
221,196
$
11,797
$
232,993
Unrealized gains
      (losses) for the period relating to level 3 assets still held at the
      reporting date
$
(43,134
)
$
(2,527
)
$
(45,661
)
B-13 Real Property
NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS OF
THE PRUDENTIAL VARIABLE CONTRACT REAL
PROPERTY PARTNERSHIP
For Years Ended December 31, 2008, 2007, and
2006
Note 6: Investment
Level Debt
Investment level debt
includes mortgage loans payable as summarized below (in 000's):
As of 12/31/08
As of 12/31/07
As of 12/31/08
(Unaudited)
Partnership's
100% Principal
Share of
100% Principal
Balance
Principal Balance
Balance
Interest
Maturity
Outstanding
Outstanding
1
Outstanding
Rate
2, 3
Date
Terms
4
Mortgages of Wholly
      Owned Properties & Consolidated Partnerships
Hampton, VA
$
7,284
$
7,284
$
7,778
6.75
%
2018
PP, P&I
Ocean City, MD
15,044
12,105
6,847
Libor +225
2010
I
Raleigh, NC
9,000
9,000
8,750
DMBS +142
2013
I
Atlanta, GA
8,746
8,746
8,747
4.90
%
2009
PP, P&I
Unamortized Premium
      (Discount)
(26
)
-
-
Total
$
40,048
$
37,135
$
32,122
1.
Represents the Partnership's interest in the loan based upon the
      estimated percentage of net assets which would be distributed to the
      Partnership if the partnership were liquidated at December 31, 2008.
      It does not represent the Partnership's legal obligation.
2.
The Partnership's weighted average interest rate was 5.78% and 6.14%
      at December 31, 2008 and 2007, respectively. The weighted average
      interest rates were calculated using the Partnership's annualized interest
      expense for each loan (derived using the same percentage as that in
      (1) above) divided by the Partnership's share of total debt.
3.
At December 31, 2008, the 30 day LIBOR is .43625% and the
      DMBS is 3.28%.
4.
Loan Terms PP=Prepayment penalties applicable to loan, I=Interest
      only, P&I=Principal and Interest
B-14 Real Property
NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS OF
THE PRUDENTIAL VARIABLE CONTRACT REAL
PROPERTY PARTNERSHIP
For Years Ended December 31, 2008, 2007, and
2006
Note 6: Investment
Level Debt (continued)
As of December 31,
2008 principal amounts of mortgage loans payable on wholly owned properties and
consolidated partnerships are payable as follows:
Year Ending
      December 31,
(in 000's)
2009
$
9,277
2010
15,609
2011
604
2012
646
2013
9,463
Thereafter
4,475
Total Principal Balance
      Outstanding
$
40,074
Premium
    (Discount)
(26
)
Principal Balance
      Outstanding, net of premium (discount)
$
40,048
The mortgage loans
payable of wholly owned properties and consolidated partnerships are secured by
real estate investments with an estimated fair value of $84.7 million.
Based on borrowing
rates available to the Partnership at December 31, 2008 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 $40 million, and a carrying value of $40 million.
Different assumptions or changes in future market conditions could significantly
affect estimated fair value.
Note 7: 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 December 31, 2008, 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 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.
B-15 Real Property
NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS OF
THE PRUDENTIAL VARIABLE CONTRACT REAL
PROPERTY PARTNERSHIP
For Years Ended December 31, 2008, 2007, and
2006
Note 8: Significant
Transactions
During 2008, the
Partnership did not have any significant transactions in excess of
$10 million.
Note 9:
Concentration of Risk on Real Estate Investments
Concentration of risk
on real estate investments represents the risk associated with investments that
are concentrated in certain geographic regions and industries. The Partnership
mitigates this risk by diversifying its investments in various regions and
different types of real estate investments. Please refer to the Schedule of
Investments for the Partnership's diversification on the types of real estate
investments.
At December 31,
2008, the Partnership had real estate investments located throughout the United
States. The diversification of the Partnership's holdings based on the estimated
fair values and established NCREIF regions is as follows:
Estimated
Fair Value
Region
(in 000's)
Region %
East North
    Central
$
11,485
4.93
%
Mideast
103,704
44.51
%
Mountain
1,408
0.60
%
Northeast
243
0.10
%
Pacific
29,774
12.78
%
Southeast
58,602
25.15
%
Southwest
27,731
11.90
%
West North
    Central
46
0.02
%
Total
$
232,993
100.00
%
The allocations above
are based on (1) 100% of the estimated fair value of wholly-owned
properties and consolidated joint ventures, and (2) the estimated fair
value of the Partnership's net equity in non-consolidated ventures and preferred
equity investments.
B-16 Real Property
NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS OF
THE PRUDENTIAL VARIABLE CONTRACT REAL
PROPERTY PARTNERSHIP
For Years Ended December 31, 2008, 2007, and
2006
Note 10: Leasing
Activity
The Partnership leases space to tenants
under various operating lease agreements. These agreements, without giving
effect to renewal options, have expiration dates ranging from January 1,
2009 to March 31, 2025. At December 31, 2008, the aggregate future
minimum base rental payments under non-cancelable operating leases for wholly
owned and consolidated joint venture properties by year are as follows:
Year Ending
      December 31,
(in 000's)
2009
$
12,990
2010
11,774
2011
9,239
2012
6,833
2013
5,387
Thereafter
21,735
Total
$
67,958
Note 11:
Commitments and Contingencies
In 1986, Prudential
committed to fund up to $100 million to enable the Partnership to acquire
real estate investments. Contributions to the Partnership under this commitment
have been utilized for property acquisitions, and were to be returned to
Prudential on an ongoing basis from contract owners' net contributions and other
available cash. The amount of the commitment has been reduced by
$10 million for every $100 million in current value net assets of the
Partnership. As of December 31, 2008, the cost basis of Prudential's equity
interest in the Partnership under this commitment (held through the Real
Property Accounts) was $44.2 million. Prudential terminated this commitment
on December 31, 2002.
The Partnership is
subject to various legal proceedings and claims arising in the ordinary course
of business. These matters are generally covered by insurance. In the opinion of
Partnership's management, the outcome of such matters will not have a
significant effect on the financial position of the Partnership.
Note 12: Related
Party Transactions
Pursuant to an
investment management agreement, PIM charges the Partnership a daily investment
management fee at an annual rate of 1.25% of the average daily gross asset
valuation of the Partnership. For the years ended December 31, 2008, 2007
and 2006 management fees incurred by the Partnership were $3.4 million,
$3.4 million and $3.1 million, for each of the years, respectively.
The Partnership also reimburses PIM for certain administrative services rendered
by PIM. The amounts incurred for the years ended December 31, 2008, 2007,
and 2006 were $53,630, $53,630 and $146,930; respectively, and are classified as
administrative expenses in the Consolidated Statements of Operations.
During the years ended
December 31, 2008, 2007 and 2006, the Partnership made the following
distributions to the Partners:
Year
      Ended December 31,
(000's)
2008
$
-
2007
$
-
2006
$
6,000
B-17 Real Property
Note 13: Financial
Highlights
For The Twelve Months Ended December 31,
2008
2007
2006
2005
2004
Per Share(Unit)
      Operating Performance:
Net Asset Value,
      beginning of period
$
36.55
$
33.87
$
29.59
$
26.15
$
24.66
Income From
      Investment Operations:
Net investment income,
      before management fee
2.15
2.37
2.07
1.67
1.44
Investment Management
      fee
(0.51
)
(0.50
)
(0.45
)
(0.40
)
(0.36
)
Net realized and
      unrealized gain (loss) on investments
(6.54
)
0.81
2.66
2.17
0.41
Net Increase in Net
      Assets Resulting from Operations
(4.90
)
2.68
4.28
3.44
1.49
Net Asset Value, end
      of period
$
31.65
$
36.55
$
33.87
$
29.59
$
26.15
Total Return, before
      Management Fee:
-12.14
%
9.44
%
16.03
%
14.76
%
7.61
%
Total Return, after
      Management Fee (a):
-13.40
%
7.91
%
14.46
%
13.15
%
6.06
%
Ratios/Supplemental
      Data:
Net Assets, end of
      period (in millions)
$
214
$
247
$
229
$
205
$
187
Ratios to average net
      assets for the year ended (b):
Total Portfolio Level
      Expenses
1.44
%
1.55
%
1.51
%
1.46
%
1.43
%
Net Investment Income,
      before Management Fee
5.87
%
6.76
%
6.58
%
4.89
%
5.76
%
(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.
B-18 Real Property
THE PRUDENTIAL VARIABLE CONTRACT
      REAL PROPERTY PARTNERSHIP
SCHEDULE III - REAL ESTATE OWNED:
      PROPERTIES
DECEMBER 31, 2008
Gross Amount at Which
Initial Costs to the Partnership
Costs
Carried at Close of Year
Capitalized
Encumbrances
Building &
Subsequent to
Building &
2008
Year of
Date
Description
at 12/31/08
Land
Improvements
Acquisition
Land
Improvements
Sales
Total
Construction
Acquired
Properties:
Office
Building
Lisle, IL
None
1,780,000
15,743,881
7,694,896
1,949,206
23,269,571
25,218,777
1985
Apr., 1988
Garden
    Apartments
Atlanta, GA
8,746,000
3,631,212
11,168,904
5,010,802
(b)
4,937,369
14,873,549
19,810,918
1987
Apr., 1988
Retail Shopping
      Center
Roswell, GA
None
9,454,622
21,513,677
6,925,296
11,135,593
26,758,002
37,893,595
1988
Jan., 1989
Garden
    Apartments
Raleigh, NC
8,973,520
(c)
1,623,146
14,135,553
674,845
1,785,544
14,648,000
16,433,544
1995
Jun., 1995
Hotel
Portland, OR
-
1,500,000
6,508,729
2,303,859
1,500,000
8,812,588
10,312,588
1989
Dec., 2003
Office
Building
Nashville, TN
None
1,797,000
6,588,451
3,675,530
1,855,339
10,205,642
12,060,981
1982
Oct., 1995
Office
Building
Beaverton, OR
None
816,415
9,897,307
1,799,263
845,887
11,667,098
12,512,985
1995
Dec., 1996
Office Complex
Brentwood, TN
None
2,425,000
7,063,755
2,900,452
2,463,601
9,925,606
12,389,207
1987
Oct., 1997
Retail Shopping
      Center
Hampton, VA
7,284,195
2,339,100
12,767,956
3,003,760
4,839,418
13,271,398
18,110,816
1998
May, 2001
Retail Shopping
      Center
Westminster,
MD
-
3,031,735
9,326,605
2,686,381
3,031,735
12,012,986
15,044,721
2005
June, 2006
Retail Shopping
      Center
Ocean City, MD
15,044,112
1,517,099
8,495,039
13,258,876
1,517,099
21,753,915
23,271,014
1986
Nov., 2002
Garden
    Apartments
Austin, TX
-
2,577,097
20,125,169
30,097
2,577,097
20,155,266
22,732,363
2007
May, 2007
Retail Shopping
      Center
Dunn, NC
None
586,500
5,372,344
407,923
586,500
5,780,267
6,366,767
1984
Aug., 2007
Garden
    Apartments
Charlotte, NC
-
1,350,000
12,184,750
115,188
1,350,000
12,299,938
13,649,938
1998
Sep., 2007
40,047,827
34,428,926
160,892,120
50,487,168
40,374,388
205,433,826
-
245,808,214
2008
2007
2006
(a
)
Balance at beginning of
      year
236,466,116
199,124,056
183,767,148
Additions:
Acquistions
-
42,218,143
12,358,340
Improvements,
    etc.
9,936,151
3,179,960
2,998,568
Reclass of other real
      estate investments
-
3,232,337
-
Deletions:
Sale
-
(11,288,380
)
-
Write off of
      uncollectible interest receivable
(594,053
)
-
-
Balance at end of
      year
245,808,214
236,466,116
199,124,056
(b
)
Net of $1,000,000
      settlement received from lawsuit.
(c
)
Net of an unamortized
      discount of $26,480
B-19 Real Property
Report of
Independent Registered Public Accounting Firm
To the Partners
of
The Prudential Variable Contract Real Property Partnership:
In our opinion, the
accompanying consolidated statements of assets and liabilities, including the
schedule of real estate investments, and the related consolidated statements of
operations, of changes in net assets and of cash flows present fairly, in all
material respects, the financial position of The Prudential Variable Contract
Real Property Partnership (the "Partnership") at December 31, 2008 and
2007, and the results of its operations, the changes in its net assets and its
cash flows for each of the three years in the period ended December 31,
2008 in conformity with accounting principles generally accepted in the United
States of America. These financial statements are the responsibility of the
management of The Prudential Insurance Company of America. Our responsibility is
to express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
PricewaterhouseCoopers
LLP
New York, New York
February 23, 2009
B-20 Real Property
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13.  OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Registration Fees
In this registration statement the Prudential Variable Contract Real Property Account is registering $7 million of securities and paying a filing fee of $390.60 therefor.
Federal Taxes
The Prudential Variable Contract Real Property Account estimates the federal tax effect associated with the deferred acquisition costs attributable to $1 million of premium payments to a variable life insurance contract for which the account serves as an underlying investment over a two year period to be $12,500.
State Taxes
The Prudential Variable Contract Real Property Account estimates that approximately $20,000 in premium taxes per  $1 million of premium payments would be owed upon receipt of purchase payments under variable life insurance contracts for which the account serves as an underlying investment.
Printing Costs
The Prudential Variable Contract Real Property Account estimates that the annual cost of printing prospectuses for the variable insurance products associated with the securities registered herein would be $140,000.
Legal Costs
This registration statement was prepared by Prudential attorneys whose time is allocated to The Prudential Insurance Company of America.
Accounting Costs
PricewaterhouseCoopers LLP, the independent registered public accounting firm that audits The Prudential Insurance Company of America's financial statements, charges approximately $10,000.00 in connection with each filing of this registration statement with the Commission.
ITEM 14.  INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Registrant, in connection with certain affiliates, maintains various insurance coverages under which the underwriter and certain affiliated persons may be insured against liability, which may be incurred in such capacity, subject to the terms, conditions, and exclusions of the insurance policies.
New Jersey, being the state of organization of Prudential Insurance Company of America ("Prudential"), permits entities organized under its jurisdiction to indemnify directors and officers with certain limitations.  The relevant provisions of New Jersey law permitting indemnification can be found in Section 14A:3-5 of the New Jersey Statutes Annotated.  The text of Prudential's By-law Article VII, Section 1, which relates to indemnification of officers and directors, is incorporated by reference to Exhibit (a)(3B) of this registration statement.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the "Act") may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
ITEM 15.  RECENT SALES OF UNREGISTERED SECURITIES
Not Applicable.
II-1
ITEM 16.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a)
Exhibits
(1A) Distribution Agreement between Pruco Securities, LLC and The Prudential Insurance Company of America with respect to The Prudential Individual Variable Contract Account.
Incorporated by reference to Post-Effective Amendment No. 9 to Form S-1, Registration No. 33-20083-01, filed April 9, 1997 on behalf of The Prudential Variable Contract Real Property Account.
(1B) Distribution Agreement between Pruco Securities LLC and The Prudential Insurance Company of America with respect to The Prudential Variable Appreciable Account.
Incorporated by reference to Post-Effective Amendment No. 19 to Form S-6, Registration No. 33-20000, filed April 19, 1997, on behalf of The Prudential Variable Appreciable Account.
(3A) Charter of The Prudential Insurance Company of America, as amended July 19, 2004.
Filed herewith.
(3B) By-Laws of The Prudential Insurance Company of America, as amended September 10, 2002.
Filed herewith.
(3C) Resolution of the Board of Directors establishing The Prudential Variable Contract Real Property Account.
Incorporated by reference to Post-Effective Amendment No. 9 to Form S-1, Registration No. 33-20083-01, filed April 9, 1997 on behalf of The Prudential Variable Contract Real Property Account.
(4A)(i) Revised Individual Variable Annuity Contract.
Incorporated by reference to Post-Effective Amendment No. 9 to Form S-1, Registration No. 33-20083-01, filed April 9, 1997 on behalf of The Prudential Variable Contract Real Property Account.
(4A)(ii) Discovery Plus Contract.
Incorporated by reference to Post-Effective Amendment No. 9 to Form S-1, Registration No. 33-20083-01, filed April 9, 1997 on behalf of The Prudential Variable Contract Real Property Account.
(4B)(i) Variable Appreciable Life Insurance Contract with fixed death benefit.
Incorporated by reference to Post-Effective Amendment No. 19 to Form S-6, Registration No. 33-20000, filed April 28, 1997, on behalf of The Prudential Variable Appreciable Account.
(4B)(ii) Variable Appreciable Life Insurance Contract with variable death benefit.
Incorporated by reference to Post-Effective Amendment No. 19 to Form S-6, Registration No. 33-20000, filed April 28, 1997, on behalf of The Prudential Variable Appreciable Account.
(4C)(i) Custom VAL Life Insurance Contract with fixed death benefit.
Incorporated by reference to Post-Effective Amendment No. 19 to Form S-6, Registration No. 33-20000, filed April 28, 1997, on behalf of The Prudential Variable Appreciable Account.
(4C)(ii) Custom VAL Life Insurance Contract with variable death benefit.
Incorporated by reference to Post-Effective Amendment No. 19 to Form S-6, Registration No. 33-20000, filed April 28, 1997, on behalf of The Prudential Variable Appreciable Account.
II-2
(5) Opinion and Consent of Thomas C. Castano, Esq., as to the legality of the securities being registered.
Filed herewith.
(10A) Investment Management Agreement between Prudential Investment Management, Inc. and The Prudential Variable Contract Real Property Partnership.
Incorporated by reference to Post-Effective Amendment No. 16 to Form S-1, Registration No. 33-20083-01, filed April 10, 2003.
(10B) Administrative Service Agreement among PIM,  Prudential Insurance Company of America, Pruco Life Insurance Company, and Pruco Life Insurance Company of New Jersey.
Incorporated by reference to Post-Effective Amendment No. 17 to Form S-1, Registration No. 33-20083-01, filed April 14, 2004.
(10C) Partnership Agreement of The Prudential Variable Contract Real Property Partnership.
Incorporated by reference to Post-Effective Amendment No. 9 to Form S-1, Registration No. 33-20083-01, filed April 9, 1997 on behalf of The Prudential Variable Contract Real Property Account.
(23A) Written consent of PricewaterhouseCoopers LLP, independent registered public accounting firm.
Filed herewith.
(23B) Written consent of Thomas C. Castano, Esq.
Incorporated by reference to Exhibit (5) hereto.
(24) Powers of Attorneys:
T. Baltimore Jr., F. Becker, G. Bethune, W. Caperton III, R. Carbone, G. Casellas, J. Cullen, W. Gray III, M. Grier, J. Hanson, C. Horner, K. Krapek, C. Poon, P. Sayre, J. Strangfeld Jr., and  J. Unruh
Filed herewith.
(b)
Financial Statement Schedules
Schedule III-Real Estate Owned by The Prudential Variable Contract Real Property Partnership and Report of Independent Registered Public Accounting Firm thereon.
Filed herewith.
II-3
ITEM 17.  UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i)
To include any prospectus required by Section 10 (a)(3) of the Securities Act of 1933;
(ii)
To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information in the registration statement; and
(iii)
To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at the time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser: each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness; provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of th

e registration statement or made in any such document immediately prior to such date of first use.
(5) That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities: The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser: (i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; (ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the
 undersigned registrant; (iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and (iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
(6) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, this registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Newark, State of New Jersey, on the 26th day of March, 2009.
The Prudential Insurance Company of America
In Respect of
The Prudential
Variable Contract Real Property Account
By:
/s/  Scott D. Kaplan
Scott D. Kaplan
Vice President, Finance
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed below by the following persons in the capacities indicated on this 26th day of March, 2009.
Signature and Title
/s/ *
John R. Strangfeld, Jr.
President and Chief Executive Officer
/s/  *
Peter B. Sayre
Senior Vice President and Corporate Controller
/s/ *
Richard J. Carbone
Executive Vice President and Chief Financial Officer
/s/ *
Thomas Baltimore, Jr.
Director
/s/ *
Frederic K. Becker
Director
*By:
/s/ Thomas C. Castano
Thomas C. Castano
(Attorney-in-Fact)
/s/ *
Gordon M. Bethune
Director
/s/ *
W. Gaston Caperton, III
Director
/s/ *
Gilbert F. Casellas
Director
/s/ *
James G. Cullen
Director
/s/ *
William H. Gray, III
Director
/s/ *
Mark B. Grier
Director
II-5
/s/ *
Jon F. Hanson
Director
/s/ *
Constance J. Horner
Director
/s/*
Karl J. Krapek
Director
*By:
/s/ Thomas C. Castano
Thomas C. Castano
(Attorney-in-Fact)
/s/*
Christine A. Poon
Director
/s/ *
James A. Unruh
Director
II-6
EXHIBIT INDEX
ITEM 16.
(a)
(3A)
Charter of The Prudential Insurance Company of America, as amended July 19, 2004.
II-
(a)
(3B)
By-Laws of The Prudential Insurance Company of America, as amended September 10, 2002.
II-
(a)
(5)
Opinion and Consent of Thomas C. Castano, Esq., as to the legality of the securities being registered.
II-
(a)
(23A)
Written consent of PricewaterhouseCoopers LLP, independent registered public accounting firm.
II-
(a)
(24)      Powers of Attorneys
II-
(b)
Financial Statement Schedules
Schedule III-Real Estate Owned by The Prudential Variable Contract Real Property Partnership and Report of Independent Registered Public Account Firm thereon.
II-
II-7