UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)

þ		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2007

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

Commission file Number 033-20018

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

  213 Washington Street, Newark, New Jersey 07102-2992  

(Address of principal executive offices) (Zip Code)

(Registrant’s telephone number, including area code)

     SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE

     SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE

     Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act. YES o NO þ

     Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
Act. YES o NO þ

     Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 75 days. YES þ NO o

     Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in part III of this Form 10-K or any amendment to this Form 10-K. o

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

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

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

DOCUMENTS INCORPORATED BY REFERENCE

     INFORMATION REQUIRED TO BE FURNISHED PURSUANT TO PART III OF THIS FORM 10-K IS SET FORTH IN, AND IS HEREBY INCORPORATED BY REFERENCE HEREIN FROM, THE DEFINITIVE PROXY STATEMENT OF PRUDENTIAL FINANCIAL, INC., FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 13, 2008, TO BE FILED BY PRUDENTIAL FINANCIAL, INC. WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO REGULATION 14A NOT LATER THAN 120 DAYS AFTER DECEMBER 31, 2007.

 

 

PRUCO LIFE OF NEW JERSEY CONTRACT
REAL PROPERTY ACCOUNT
(Registrant)

INDEX

Item				Page
No.				No.
		Cover Page
		Index		2
		Forward-Looking Statement Disclosure		3
PART I
1.		Business		4
1A.		Risk Factors		6
1B.		Unresolved Staff Comments		6
2.		Properties		6
3.		Legal Proceedings		6
4.		Submission of Matters to a Vote of Security Holders		6
PART II
5.		Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		7
6.		Selected Financial Data		7
7.		Management’s Discussion and Analysis of Financial Condition and Results of Operations		8
7A.		Quantitative and Qualitative Disclosures About Market Risk		16
8.		Financial Statements and Supplementary Data		17
9.		Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		17
9A.		Controls and Procedures		17
9B.		Other Information		17
PART III
10.		Directors, Executive Officers and Corporate Governance		18
11.		Executive Compensation		19
12.		Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		19
13.		Certain Relationships and Related Transactions, and Director Independence		19
14.		Principal Accountant Fees and Services		19
PART IV
15.		Exhibits and Financial Statement Schedules		20
		Exhibit Index		20
		Signatures		22

Forward-Looking Statement Disclosure

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

PART I

Item 1.		Business

     The Pruco Life of New Jersey Variable Contract Real Property Account (the “Real Property Account” or the “Registrant”) was established on October 30, 1987. Pursuant to New Jersey law, the Real Property Account was established as a separate investment account of The Prudential Insurance Company of America (“Prudential”). The Real Property Account was established to provide a real estate investment option offered in connection with the funding of benefits under certain variable life insurance and variable annuity contracts (the “Contracts”) issued by Prudential.

     The assets of the Real Property Account are invested in The Prudential Variable Contract Real Property Partnership (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 Insurance Company and Pruco Life Insurance Company 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.

     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.

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 87%, or 321,410 square feet, are leased between 1 and 10 years.

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 94%, or 802 units, are leased. Leases range from month to month to one year.

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 942,056 of which 85%, or 805,415 square feet, are leased between 1 and 30 years.

Hotel Property – The Partnership owns a hotel property in Lake Oswego, Oregon. This joint venture investment has 161 rooms. Occupancy for the year ended 2007 averaged 76%.

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” (See Item 7).

     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 regulatory 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.

     For information regarding the Partnership’s investments, operations, and other significant events, see Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations and Financial Statements and Supplementary Data.

     The following is a description of general conditions in the U.S. real estate markets. It does not relate to specific properties held by the Partnership. The Partnership does not have widely diversified holdings; therefore, the discussions of vacancy rates, property values and returns in this section are not necessarily relevant to the Partnership’s portfolio. These results are not indicative of future performance.

MARKET CONDITIONS

     Commercial property market fundamentals remained generally healthy in 2007 despite the ongoing turmoil in the credit market stemming from the collapse of the subprime mortgage market. Although transaction volume and leasing activity for the year as a whole remained robust, property sales and leasing slowed sharply over the second half of the year due to the still-deepening troubles in the capital markets and increasing uncertainty about the near-term trajectory of the U.S. economy. With the slowing economy likely to weigh on tenant demand in the near term and with liquidity throughout the debt markets still receding, the risks in the commercial real estate markets in 2008 are clearly weighted to the downside.

Debt Market

     The commercial real estate debt markets could not escape the fallout from the subprime mortgage debacle that disrupted the financial markets over the second half of 2007. As mounting losses in securities backed by subprime loans undermined investor confidence, investor demand for commercial mortgage-backed securities (CMBS) and commercial real estate CDOs fell sharply, causing spreads to widen dramatically. Although new issuance of CMBS still managed to reach another record high domestically and globally, with more than $230 billion issued in the United States and about $315 billion issued worldwide, most of the volume involved deals that were completed in the first half of the year. Balance sheet lenders (e.g., insurance companies) and commercial banks remain active and continue to lend on a wide range of commercial real estate opportunities, including new development. However, with conduit lenders on the sidelines, there is simply less capital available than at this time last year.

Public Real Estate Securities

     The U.S. REIT market struggled through a difficult and volatile year in 2007. After reaching an all-time high in February, equity REITs whipsawed investors over the rest of the year. On several occasions, it appeared as though the REIT market had finally found the bottom and was beginning to stabilize. The ensuing rallies, which were fueled mostly by investors covering short positions rather than building long positions, invariably lost momentum, however, and REITs resumed their downward slide. By the time 2007 mercifully came to a close, the FTSE NAREIT equity REIT index had delivered a dismal –15.7% total return. It marked the first time since 1999, the last year in which the REIT index posted negative total returns, that equity REITs have underperformed the S&P 500.

Property Markets

     Office: The office sector continued to attract significant investor interest in 2007. According to Real Capital Analytics, or “RCA,” office transaction volume soared to more than $211 billion in 2007, an increase of nearly 55% over the volume in 2006. Office space market fundamentals in most markets remain balanced in part because high replacement costs have kept new supply very modest and office employment has continued to grow. Vacancy rates have been edging higher in suburban markets; but in most central business districts (CBDs), availability remains tight and large blocks of space often are scarce. According to Torto Wheaton Research, or “TWR,” the average office vacancy rate in its 56 market coverage universe fell from 12.6% at year-end 2006 to 12.5% in 4Q07, its lowest level since 2Q01.

     Industrial: Investor demand for warehouse properties also remained fairly strong in 2007, despite a modest slowdown in leasing activity in 4Q07. According to RCA, industrial transaction volume totaled nearly $46 billion in 2007, a 7% increase over the total in 2006. As in other property types, however, transaction volumes declined over the final months in 2007. Industrial space market fundamentals remained mostly stable last year despite steady additions to supply. Deliveries of new space outpaced absorption in the fourth quarter, causing a modest increase in vacancy. According to Torto Wheaton Research, the average warehouse vacancy rate increased to 9.7% from 9.6% last year, but most markets remain at or near equilibrium today.

     Residential: The sharp downturn in the housing market is having mixed effects on the apartment market. In cities and regions where housing was booming and where new development was most active, excess inventory of housing units has caused apartment vacancy rates to rise and rent growth to stall. But in most markets, home prices still have farther to fall before the gap between the costs of owning and renting begin to favor ownership. Although apartment transaction volume increased slightly last year, a handful of large transactions, including the privatization of one of the largest apartment REITs, Archstone-Smith, accounted for much of the total activity.

     Retail: Concerns about the consumer continue to weigh on the near-term outlook for retail real estate. Retail sales growth has slowed noticeably since this time last year, and after backing out gas and food — non-discretionary expenses that have been growing much faster than “core” inflation — retail sales growth is much weaker even than headlines might suggest. Although retail transaction activity increased more than 34% in 2007, the volume and velocity of deals slowed sharply over the second half of the year as large transactions became very difficult to finance.

     Hotel: The lodging sector appears to have been the least affected so far by the recent hesitation in business and consumer spending. Hotel occupancies were little changed in 2007. According to Smith Travel Research, the average occupancy rate across the U.S. hotel market was about 63% in 2007, roughly the same as in 2006. With stable occupancy and a 5.9% increase in average daily rates, revenue per available room (RevPAR) grew at a healthy 5.7% pace in 2007. Luxury hotels in urban markets continued to outperform all other segments, thanks in part to an undersupply of rooms in a few major markets and to strong demand from foreign travelers in gateway cities.

Item 1A.		Risk Factors

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

     All real estate investments are subject to varying degrees of risk. The yields available from investments depend on the amounts of income generated and expenses incurred. If investment properties do not generate revenues sufficient to meet operating expenses, including debt service and capital expenditures, cash flow will be adversely affected.

     The revenues and value of a particular real estate investment may be adversely affected by a number of factors, including, but not limited to: the cyclical nature of the real estate market, general national economic conditions, local economic conditions, local real estate conditions, and fluctuations in operating costs, including real estate taxes and utilities. Certain significant expenditures associated with each equity investment, such as mortgage payments, real estate taxes, insurance and maintenance costs, are generally not reduced when circumstances cause a reduction in income from the investment. If a property is mortgaged to secure payment of indebtedness, and if the mortgaged property is unable to produce enough revenue to cover its mortgage or other debt payments, a loss could be sustained as a result of foreclosure on the property or the exercise of other remedies by the lender. In addition, a property’s revenues and real estate value may also be affected by such factors as potential liability under applicable federal, state and local laws and regulations, which may vary widely depending upon location, including tax laws, environmental laws, Americans with Disabilities Act accessibility requirements, and rent stabilization laws.

Item 1B.		Unresolved Staff Comments

     None.

Item 2.		Properties

     Not Applicable.

Item 3.		Legal Proceedings

     None.

Item 4.		Submission of Matters to a Vote of Security Holders

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

PART II

Item 5.		Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

     Owners of the Contracts may participate by allocating all or part of the net premiums or purchase payments to the Real Property Account. Contract values vary with the performance of the Real Property Account’s investments through the Partnership. Participating interests in the Real Property Account are not traded in any public market; therefore a discussion of market information is not relevant.

     As of December 31, 2007 approximately 2,328 contract owners of record held investments in the Real Property Account.

Item 6.		Selected Financial Data

     Prudential Variable Contract Real Property Partnership Results of Operations and Financial Position are summarized as follows:

RESULTS OF OPERATIONS:

		Year Ended December 31,
		2007				2006				2005				2004				2003
Total Investment Income		$	31,700,063			$	28,623,487			$	28,644,271			$	29,076,163			$	27,060,494
Net Investment Income		$	12,663,580			$	11,161,728			$	9,219,171			$	7,799,606			$	10,613,409
Net Realized and Unrealized Gain (Loss) on Real Estate Investments			5,453,595				18,352,005				15,460,619				3,280,394				(6,467,364	)
Net Increase in Net Assets Resulting From Operations		$	18,117,175			$	29,513,733			$	24,679,790			$	11,080,000			$	4,146,045
FINANCIAL POSITION:
		Year Ended December 31,
		2007				2006				2005				2004				2003
Total Assets		$	290,166,898			$	272,136,819			$	246,015,115			$	240,575,611			$	235,627,852
Long Term Lease Obligation		$	—			$	—			$	—			$	—			$	—
Investment Level Debt		$	32,121,712			$	32,710,488			$	33,195,607			$	43,773,767			$	43,934,494

Item 7.		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 of 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, 2007, the Partnership’s liquid assets, consisting of cash and cash equivalents, were approximately $18.2 million, a decrease of approximately $15.2 million from approximately $33.4 million at December 31, 2006. The decrease was primarily due to the acquisition of the Partnership’s retail investment in Dunn, North Carolina and apartment investments in Charlotte, North Carolina and Austin, Texas, as described below. Partially offsetting this decrease was the sale of the Partnership’s industrial investment in Aurora, Colorado and retail investment in Kansas City, Kansas, as described below. In addition, sources of liquidity included net cash flow from property operations. The Partnership uses cash for its real estate investment activities and for its distributions to its partners. As of December 31, 2007, approximately 6% of the Partnership’s total assets consisted of cash and cash equivalents.

     Acquisitions for the year ended December 31, 2007 included the purchase of three properties. In May, the Partnership invested approximately $22.7 million to acquire a 225-unit garden apartment property located in Austin, Texas. In August, the Partnership made a contribution of approximately $6.0 million to fund the purchase of a 193,235 square foot neighborhood/community shopping center located in Dunn, North Carolina. In September, the Partnership invested approximately $13.5 million to acquire a 140-unit garden apartment property located in Charlotte, North Carolina.

     Dispositions for the year ended December 31, 2007 included the sale of two properties. On February 7, 2007 the Partnership’s industrial property located in Aurora, Colorado was sold, resulting in net proceeds of approximately $14.7 million to the Partnership. On June 29, 2007 the Partnership sold the retail investment in Kansas City, Kansas, which resulted in net proceeds of approximately $3.7 million after the repayment of debt.

     The Partnership spent approximately $3.2 million on capital improvements to various existing properties during 2007. Approximately $1.5 million was associated with redevelopment costs at the retail property in Ocean City, Maryland, approximately $0.6 million funded the renovation of the apartment property in Atlanta, Georgia, approximately $0.3 million was associated with capital improvements at the office properties in Nashville, Tennessee and approximately $0.3 million was associated with leasing costs at the office property in Beaverton, Oregon. The remaining $0.5 million was associated with minor capital improvements and transaction costs related to leasing expenses of various other properties.

(b) Results of Operations

     The following is a comparison of the Partnership’s results of operations for the periods ended December 31, 2007 and 2006.

Net Investment Income Overview

     The Partnership’s net investment income for the year ended December 31, 2007 was approximately $12.7 million, an increase of approximately $1.5 million from approximately $11.2 million from the prior year. The office, apartment, retail and hotel sector investments posted increases of approximately $0.5 million, $1.0 million, $0.9 and $0.1 million, respectively, from the prior year. Partially offsetting this increase was a decrease in net investment income in the industrial sector of approximately $0.7 million. Other net investment income (loss) increased approximately $0.3 million during the year ended December 31, 2007 from the prior year. The components of this net investment income are discussed below by property type sector.

Valuation Overview

     The Partnership recorded a net realized gain of approximately $0.7 million for the year ended December 31, 2007, compared to a net realized gain of approximately $0.1 million for the prior year. The Partnership recorded a net unrealized gain of approximately $4.8 million for the year ended December 31, 2007, compared to a net unrealized gain of approximately $18.3 million for the prior year. The Partnership recorded a net realized and unrealized gain of approximately $5.5 million for the year ended December 31, 2007, compared to a net realized and unrealized gain of approximately $18.4 million for the prior year. The net realized and unrealized gain of approximately $5.5 million for the year ended December 31, 2007 was attributable to valuation gains in the office, apartment and hotel sectors. Partially offsetting these gains for the year ended December 31, 2007 was a loss recorded in the retail sector. The components of these valuation gains and/or losses are discussed below by property type sector.

     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, 2007 and 2006.

		Twelve Months Ended December 31,
		2007				2006
Net Investment Income:
Office properties		$	3,945,096			$	3,407,082
Apartment properties			2,119,681				1,059,134
Retail properties			6,998,954				6,128,671
Industrial property			49,279				773,668
Hotel property			1,343,200				1,288,716
Land			—				(36,582	)
Other (including interest income, investment mgt fee, etc.)			(1,792,630	)			(1,458,961	)
Total Net Investment Income		$	12,663,580			$	11,161,728
Net Realized Gain (Loss) on Real Estate Investments:
Apartment properties			—				70,689
Retail properties			323,649				—
Land			—				(2,919	)
Industrial property			345,832				—
Total Net Realized Gain (Loss) on Real Estate Investments			669,481				67,770
Net Unrealized Gain (Loss) on Real Estate Investments:
Office properties			1,967,086				2,514,348
Apartment properties			3,123,154				3,588,692
Retail properties			(2,716,050	)			6,265,806
Industrial property			—				2,132,560
Hotel property			2,409,924				3,782,829
Total Net Unrealized Gain (Loss) on Real Estate Investments			4,784,114				18,284,235
Net Realized and Unrealized Gain (Loss) on Real Estate Investments		$	5,453,595			$	18,352,005

OFFICE PROPERTIES

		Net Investment				Net Investment				Unrealized				Unrealized
		Income/(Loss)				Income/(Loss)				Gain/(Loss)				Gain/(Loss)				Occupancy								Occupancy
Year Ended December 31,		2007				2006				2007				2006				2007								2006
Property
Lisle, IL		$	650,916			$	376,939			$	804,870			$	(644,356	)							67	%							38	%
Brentwood, TN			1,153,443				1,084,255				9,918				69,832								100	%							100	%
Oakbrook Terrace, IL (1)			—				1,323				—				—								N/A								N/A
Beaverton, OR			1,093,305				940,713				990,238				1,888,872								88	%							79	%
Brentwood, TN			1,047,432				1,003,852				162,060				1,200,000								100	%							100	%
		$	3,945,096			$	3,407,082			$	1,967,086			$	2,514,348

Net Investment Income

     Net investment income for the Partnership’s office properties was approximately $3.9 million for the year ended December 31, 2007, an increase of approximately $0.5 million from the prior year. The increase was primarily due to increased occupancy at the office properties in Lisle, Illinois and Beaverton, Oregon and stabilized occupancy and increased rents at the office properties in Brentwood, Tennessee.

Unrealized Gain/(Loss)

     The office properties owned by the Partnership recorded a net unrealized gain of approximately $2.0 million during the year ended December 31, 2007, compared to a net unrealized gain of approximately $2.5 million for the prior year. The net unrealized gain of approximately $2.0 million for the year ended December 31, 2007 was primarily due to increased occupancy at the office properties in Lisle, Illinois and Beaverton, Oregon and continued improving market fundamentals at the office properties in Brentwood, Tennessee.

APARTMENT PROPERTIES

														Realized /
		Net Investment				Net Investment				Unrealized				Unrealized
		Income/(Loss)				Income/(Loss)				Gain/(Loss)				Gain/(Loss)				Occupancy				Occupancy
Year Ended December 31,		2007				2006				2007				2006				2007				2006
Property
Atlanta, GA		$	447,290			$	505,136			$	(530,277	)		$	2,507,734				92	%			90	%
Raleigh, NC			613,122				589,289				(687,270	)			1,080,958				94	%			92	%
Jacksonville, FL (1)			17,342				(25,126	)			—				70,520				N/A				N/A
Gresham/Salem, OR (2)			—				(10,165	)			—				169				N/A				N/A
Austin, TX (3)			860,746				—				4,376,151				—				92	%			N/A
Charlotte, NC (4)			181,181				—				(35,450	)			—				87	%			N/A
		$	2,119,681			$	1,059,134			$	3,123,154			$	3,659,381

Net Investment Income

     Net investment income for the Partnership’s apartment properties was $2.1 million for the year ended December 31, 2007, an increase of approximately $1.0 million from the prior year. The increase in net investment income for the year ended December 31, 2007 was primarily due to 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 gain of approximately $3.1 million for the year ended December 31, 2007, compared to a net realized and unrealized gain of approximately $3.7 million for the prior year. The net unrealized gain for the year ended December 31, 2007 was primarily due to the acquisition of the apartment property in Austin, Texas that resulted in approximately $4.4 million in valuation gains. Partially offsetting this gain were unrealized losses of approximately $0.7 million at the apartment property in Raleigh, North Carolina, due to continued soft market conditions and $0.5 million at the apartment property in Atlanta, Georgia, due to capital improvements expended in connection with the renovation of the property.

RETAIL PROPERTIES

		Net				Net				Realized/
		Investment				Investment				Unrealized				Unrealized
		Income/(Loss)				Income/(Loss)				Gain/(Loss)				Gain/(Loss)				Occupancy				Occupancy
Year Ended December 31,		2007				2006				2007				2006				2007				2006
Property
Roswell, GA		$	2,072,194			$	2,096,974			$	(3,807,895	)		$	1,071,439				82	%			93	%
Kansas City, KS; MO (1)			158,664				(34,810	)			323,649				(164,205	)			N/A				90	%
Hampton, VA			1,299,715				1,307,686				492,521				(107,277	)			100	%			100	%
Ocean City, MD			702,556				746,520				(122,583	)			79,619				67	%			92	%
Westminster, MD (2)			1,576,148				908,788				69,981				5,386,230				100	%			98	%
Dunn, NC (3)			215,118				—				651,926				—				90	%			N/A
CARS Preferred Equity (4)			974,559				979,151				—				—				N/A				N/A
Westminster, MD (5)			—				124,362				—				—				N/A				N/A
		$	6,998,954			$	6,128,671			$	(2,392,401	)		$	6,265,806

Net Investment Income

     Net investment income for the Partnership’s retail properties was approximately $7.0 million for the year ended December 31, 2007, an increase of approximately $0.9 million from the prior year. The increase was primarily due to the additional net investment income generated by the Westminster, Maryland and Dunn, North Carolina retail properties that were acquired on June 13, 2006, and August 17, 2007, respectively, and reduced expenses at the Kansas City, Kansas retail property prior to the sale.

Total Realized and Unrealized Gain/(Loss)

     The retail properties owned by the Partnership recorded a net realized and unrealized loss of approximately $2.4 million for the year ended December 31, 2007, compared to a net realized and unrealized gain of approximately $6.3 million for the prior year. The net realized and unrealized loss for the year ended December 31, 2007 was primarily due to the $3.8 million loss recorded at the retail property in Roswell, Georgia, which reflects revised offers received in connection with the continued sale marketing efforts of the property. In addition, redevelopment and leasing expenses amounted to approximately $0.1 million in unrealized losses for the retail property in Ocean City, Maryland. Partially offsetting these unrealized losses were (a) unrealized gains at the retail property in Dunn, North Carolina subsequent to its acquisition on August 17, 2007 at a discount to replacement cost, which resulted in approximately $0.7 million in valuation gains; (b) unrealized gains of approximately $0.5 million at the retail property in Hampton, Virginia due to continued investor demand; (c) realized gains of $0.3 million due to the disposition of the retail property in Kansas City, Kansas on June 29, 2007; and (d) unrealized gains of $0.1 million at the retail property in Westminster, Maryland due to improving market fundamentals.

INDUSTRIAL PROPERTY

		Net Investment				Net Investment				Realized				Unrealized
		Income/(Loss)				Income/(Loss)				Gain/(Loss)				Gain/(Loss)				Occupancy				Occupancy
Year Ended December 31,		2007				2006				2007				2006				2007				2006
Property
Aurora, CO (1)		$	49,279			$	773,668			$	345,832			$	2,132,560			N/A				85%

Net Investment Income

     Net investment income for the Partnership’s industrial property was nominal for the year ended December 31, 2007, reflecting a decrease of approximately $0.7 million from the prior year. The decrease was primarily due to the loss of rent and certain post closing adjustments at the property as a result of the sale on February 7, 2007.

Total Realized and Unrealized Gain/(Loss)

     The industrial property owned by the Partnership recorded a realized gain of approximately $0.3 million for the year ended December 31, 2007, compared to an unrealized gain of approximately $2.1 million for the prior year. The realized gain for the year ended December 31, 2007 was primarily due to the February 7, 2007 sale at a price above the previously appraised value.

HOTEL PROPERTY

		Net Investment				Net Investment				Unrealized				Unrealized
		Income/(Loss)				Income/(Loss)				Gain/(Loss)				Gain/(Loss)				Occupancy				Occupancy
Year Ended December 31,		2007				2006				2007				2006				2007				2006
Property
Lake Oswego, OR		$	1,343,200			$	1,288,716			$	2,409,924			$	3,782,829				76%				80%

Net Investment Income

     Net investment income for the Partnership’s hotel property was approximately $1.3 million for the year ended December 31, 2007, relatively unchanged from the prior year.

Unrealized Gain/(Loss)

     The hotel property owned by the Partnership recorded an unrealized gain of approximately $2.4 million for the year ended December 31, 2007, compared to an unrealized gain of approximately $3.8 million for the prior year. The unrealized gain for the year ended December 31, 2007 reflects continued improving property fundamentals as a result of improvements and renovations performed at the property.

Other

     Other net investment income (loss) increased approximately $0.3 million during the year ended December 31, 2007 from the prior year. Other net investment income includes interest income from short-term investments and investment management fees, and portfolio level expenses.

c) Inflation

     The Partnership’s leases with a majority of its commercial tenants provide for recoveries of expenses based upon the tenant’s proportionate share of, and/or increases in, real estate taxes and certain operating costs, which may partially reduce the Partnership’s exposure to increases in operating costs resulting from inflation.

Critical Accounting Policies

     The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America, or “U.S. GAAP”, requires the application of accounting policies that often involve a significant degree of judgment. Management reviews critical estimates and assumptions on an ongoing basis. If management determines, as a result of its consideration of facts and circumstances that modifications in assumptions and estimates are appropriate, results of operations and financial position as reported in the 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 audited Consolidated Financial Statements of the Account and the Partnership that are most dependent on the application of estimates and assumptions.

Valuation of Investments

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

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

     The Partnership periodically enters into forward contracts to acquire, for a fixed price, real estate investments to be constructed in accordance with predetermined plans and specifications or that achieve a certain level of leasing. Where conditions precedent to funding have been met by its development partner, and the Partnership’s commitment to fund is firm, the amount of any unrealized gain or loss is recognized based upon the difference between the estimated investment’s market value as described above and the Partnership’s funding obligation. The funding obligation and related assets are recorded in the consolidated financial statements.

     Land and development properties held for future development are carried at acquisition cost including soft costs incurred prior to development.

     As described above, the estimated market value of real estate and real estate related assets is determined through an appraisal process. These estimated market values may vary significantly from the prices at which the real estate investments would sell, because market prices of real estate investments can only be determined by negotiation between a willing buyer and seller and could be material to the consolidated financial statements. Although the estimated market values represent subjective estimates, management believes that these estimated market values are reasonable approximations of market prices and that the aggregate estimated value of investments in real estate is fairly presented as of December 31, 2007 and 2006.

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.

Item 7A.		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 20.4% of its investment portfolio as of December 31, 2007, 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, 2007:

Estimated Market Value

Average

Maturity

(in $ millions)

Interest Rate

Cash and Cash equivalents

0-3 months

$

18.2

4.64%

     The table below discloses the Partnership’s debt as of December 31, 2007. All of the Partnership’s long-term debt bears interest at fixed rates and therefore the fair value of these instruments is affected by changes in market interest rates. The following table presents principal cash flows based upon maturity dates of the debt obligations and the related weighted-average interest rates by expected maturity dates for the fixed rate debt.

Debt (in $ thousands),																														Estimated
including current portion		2008				2009				2010				2011				2012				Thereafter				Total				Fair Value
Weighted Average Fixed Interest Rate			5.35	%			5.74	%			6.75	%			6.75	%			6.75	%			6.75	%			6.14	%
Fixed Rate		$	16,090			$	9,277			$	565			$	604			$	646			$	4,940			$	32,122			$	32,262
Variable Rate			—				—				—				—				—				—				—				—
Total Mortgage Loans Payable		$	16,090			$	9,277			$	565			$	604			$	646			$	4,940			$	32,122			$	32,262

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

Item 8.		Financial Statements and Supplementary Data

     The financial statements and supplementary data are listed in the accompanying Index to the Financial Statements and Supplementary Data on F-1.

Item 9.		Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

     None.

Item 9A.		Controls and Procedures

     In order to ensure that the information we must disclose in our filings with the Securities and Exchange Commission, or “SEC”, is recorded, processed, summarized, and reported on a timely basis, the Company’s management, including our Chief Executive Officer and Chief Financial Officer, have reviewed and evaluated the effectiveness of our disclosure controls and procedures, as defined in Exchange Act Rules 13a-15(e) and 15d-15(e), under the Securities Exchange Act of 1934, as amended, as of December 31, 2007. Based on such evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of December 31, 2007, our disclosure controls and procedures were effective. There has been no change in our internal control over financial reporting, as defined in Exchange Act Rules 13a-15(e) and 15d-15(e), during the quarter ended December 31, 2007, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information

     None.

PART III

Item 10.		Directors, Executive Officers and Corporate Governance

     JAMES J. AVERY, JR., Director and Vice Chairman– President of Individual Life Insurance, Prudential since 1998. Age 56.

     HELEN M. GALT, Director – Senior Vice President and Company Actuary, Prudential since 2005; prior to 2005: Company Actuary, Prudential. Age 61.

     BERNARD J. JACOB, Director and Treasurer– Senior Vice President and Treasurer, Prudential. Age 52.

     DAVID R. ODENATH, JR., Director – President, Prudential Annuities since 2003; prior to 2003: President, Prudential Investments. Age 52.

     SCOTT D. KAPLAN, Director, Chief Executive Officer and President – Vice President, Finance, Prudential since 2006. Age 43.

     TUCKER I. MARR, Chief Financial Officer and Chief Accounting Officer — Vice President, Financial Reporting. Age 52.

     THOMAS C. CASTANO, Chief Legal Officer and Secretary – Vice President and Corporate Counsel, Variable Products, Prudential Law Department. Age 60.

     JAMES M. O’CONNOR, Senior Vice President and Actuary – Vice President, Guaranteed Products since 2001. Age 52.

     SCOTT G. SLEYSTER, Director – Senior Vice President, Prudential since 1999. Age 48.

     PHILLIP J. GRIGG, Senior Vice President and Chief Actuary – Vice President, Actuary, Prudential since 1987. Age 61.

     KENT D. SLUYTER, Senior Vice President – Vice President and Chief Actuary of Individual Life Insurance, Prudential since 2002. Age 48

     KENNETH S. SOLON, Senior Vice President – Vice President, Customer Service, Prudential since 1999. Age 47

     The business address of all directors and officers of Pruco Life of New Jersey is 213 Washington Street, Newark, New Jersey 07102-2992. Pruco Life of New Jersey directors and officers are elected annually.

Code of Ethics

     We have adopted a code of business conduct and ethics, known as “Making the Right Choices,” which applies to our Chief Executive Officer, Chief Financial Officer, as well as to our directors and other employees. Making the Right Choices is posted on our website at www.investor.prudential.com. Our code of business conduct and ethics, any amendments and any waiver granted to any of our directors or executive officers are available free of charge on our website at www.investor.prudential.com.

     The Board of Directors has not designated a separate audit committee, and therefore the full Board serves as the Company’s audit committee. None of the members of the Board of Directors is independent of management within the meaning of SEC rules. The Board of Directors has determined that at least one of its members, Mr. Kaplan, has the requisite experience to be designated an audit committee financial expert as that term is defined by rules of the SEC. Specifically, Mr. Kaplan has accounting and financial management expertise, which he gained through his experience as Vice President, Finance, of Prudential Financial, Inc., the New York Stock Exchange listed parent of the Company, as well as experience in senior financial management positions and other similar positions. Mr. Kaplan also received an M.B.A. degree in Finance from the New York University Stern School of Business.

Item 11.		Executive Compensation

     The Real Property Account does not pay any fees, compensation or reimbursement to any Director or Officer of the Registrant.

Item 12.		Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

     Not applicable.

Item 13.		Certain Relationships and Related Transactions, and Director Independence

     See Related Transactions in Note 10 of Notes to Financial Statements of the Partnership on page F–23.

     The Registrant is an indirect wholly-owned subsidiary of Prudential, which, in turn, is an indirect, wholly-owned subsidiary of Prudential Financial, Inc. All Directors and Executive Officers of the Registrant are employees and officers of Prudential.

Item 14.		Principal Accountant Fees and Services

     The Audit Committee of the Board of Directors of Prudential Financial, Inc. has appointed PricewaterhouseCoopers LLP as the independent registered public accounting firm of Prudential Financial, Inc. and certain of its domestic and international subsidiaries, including the Registrant. The Audit Committee has established a policy requiring its pre-approval of all audit and permissible non-audit services provided by the independent auditor. The specific information called for by this item is hereby incorporated by reference to the section entitled “Item 2 – Ratification of the Appointment of the Independent Registered Public Accounting Firm” in the definitive proxy statement of Prudential Financial, Inc. for the Annual Meeting of Shareholders to be held on May 13, 2008, to be filed with the SEC pursuant to Regulation 14A within 120 days after the year ended December 31, 2007.

PART IV

Item 15.		Exhibits and Financial Statement Schedules

(a)

The following documents are filed as part of this report:

1.

Financial Statements

See the Index to Financial Statements and Supplementary Data on page F-1.

2.

Financial Statement Schedules

			The following financial statement schedules of The Prudential Variable Contract Real Property Partnership should be read in conjunction with the financial statements in Item 8 of this Annual Report on Form 10-K:
			Schedule III. Real Estate Owned: Properties
			Schedule IV — Mortgage Loans On Real Estate
			See the Index to Financial Statements and Supplementary Data on page F-1.

3.

Documents Incorporated by Reference

See the following list of exhibits.

4.

Exhibits

See the following list of exhibits.

(b)		None.
(c)		The following is a list of Exhibits to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007. The Registrant will furnish a copy of any Exhibit listed below to any security holder of the Registrant who requests it upon payment of a fee of 15 cents per page. All Exhibits are either contained in this Annual Report on Form 10-K or are incorporated by reference as indicated below.

3.1		Amended Articles of Incorporation of Pruco Life Insurance Company of New Jersey filed as Exhibit 1.A.(6)(a) in Post Effective Amendment No. 26 to Form S-6, Registration Statement No. 2-89780, filed April 28, 1997, and incorporated herein by reference.
3.2		Certificate of Amendment of the Articles of Incorporation of Pruco Life Insurance Company of New Jersey, filed as Exhibit (3B) in Post-Effective Amendment No. to Form S-6, Registration Statement No.12 to Form S-1, Registration No. 33-20018, filed April 16, 1999,, and incorporated herein by reference.
3.3		Amended By-Laws of Pruco Life Insurance Company of New Jersey, filed as Exhibit 1.A.(6)(c) to Form S-6, Registration Statement No. 333-85117, filed August 13, 1999, and incorporated herein by reference.
3.4		Resolution of the Board of Directors establishing the Pruco Life of New Jersey Variable Contract Real Property Account, filed as Exhibit (3C) in Post-Effective Amendment No. 9 to Form S-1, Registration Statement No. 33-20018, filed April 9, 1997, and incorporated herein by reference.
4.1		Variable Life Insurance Contract filed as Exhibit 1.A.(5) in Post-Effective Amendment No. 24 to Form s-6, Registration Statement No. 2-81243, filed April 29, 1997, and incorporated herein by reference.
4.2		Revised Variable Appreciable Life Insurance Contract with fixed death benefit, filed as Exhibit 1.A.(5)(c) in Post-Effective Amendment No. 26 to Form S-6, Registration Statement No. 2-89780, filed April 28,1997, and incorporated herein by reference.
4.3		Revised Variable Appreciable Life Insurance Contract with variable death benefit, filed as Exhibit 1.A.(5)(d) in Post-Effective Amendment No. 26 to Form S-6, Registration Statement No. 2-89780, filed April 28, 1997, and incorporated herein by reference.
4.4		Single Premium Variable Annuity Contract, filed as Exhibit (4C) in Post-Effective Amendment No. 9 to Form S-1, Registration Statement No. 33-20018, filed April 9, 1997, and incorporated herein by reference.
4.5		Flexible Premium Variable Life Insurance Contract, filed as Exhibit (4D) in Post-Effective Amendment No. 9 to Form S-1, Registration Statement No. 33-20018, filed April 9, 1997, and incorporated herein by reference.
9.		None.
10.1		Investment Management Agreement between Prudential Investment Management, Inc. and The Prudential Variable Contract Real Property Partnership, filed in Post-Effective Amendment No. 16 to Form S-1, Registration Statement No. 33-20083-01, filed April 10, 2003, and incorporated herein by reference.

10.2		Administrative Service Agreement among PIM, Prudential Insurance Company of America, Pruco Life Insurance Company, and Pruco Life Insurance Company of New Jersey, filed as Exhibit (10B) in Post-Effective Amendment No. 17 to Form S-1, Registration Statement No. 33-20083-01, filed April 14, 2004, and incorporated herein by reference.
10.3		Partnership Agreement of The Prudential Variable Contract Real Property Partnership filed as Exhibit (10C) in Post-Effective Amendment No. 9 to Form S-1, Registration Statement No. 33-20083-01, filed April 9, 1997, and incorporated herein by reference.
11.		Not applicable.
12.		Not applicable.
16.		None.
18.		None.
22.		Not applicable.
23.		None.
24.		Powers of Attorney are filed herewith.
31.1		Section 302 Certification of Chief Executive Officer.
31.2		Section 302 Certification of Chief Accounting Officer.
32.1		Section 906 Certification of Chief Executive Officer.
32.2		Section 906 Certification of Chief Accounting Officer.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
in respect of
Pruco Life of New Jersey Variable
Contract Real Property Account
(Registrant)

     Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Signature		Title		Date
*James J. Avery, Jr.   James J. Avery, Jr.		Director		March 21, 2008
*Bernard J. Jacob   Bernard J. Jacob		Director		March 21, 2008
*Helen M. Galt   Helen M. Galt		Director		March 21, 2008
*David R. Odenath, Jr.   David R. Odenath, Jr.		Director		March 21, 2008
*Scott G. Sleyster   Scott G. Sleyster		Director		March 21, 2008

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

INDEX

						Page
A.				PRUCO LIFE OF NEW JERSEY VARIABLE CONTRACT REAL PROPERTY ACCOUNT
				Financial Statements:
				Management’s Annual Report on Internal Control Over Financial Reporting			F-2
				Report of Independent Registered Public Accounting Firm			F-3
				Statements of Net Assets – December 31, 2007 and 2006			F-4
				Statements of Operations – Years Ended December 31, 2007, 2006 and 2005			F-4
				Statements of Changes in Net Assets – Years Ended December 31, 2007, 2006 and 2005			F-4
				Notes to Financial Statements			F-5
B.				THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP
				Financial Statements:
				Report of Independent Registered Public Accounting Firm			F-10
				Report of Independent Registered Public Accounting Firm on Financial Statement Schedules			F-11
				Consolidated Statements of Assets and Liabilities – December 31, 2007 and 2006			F-12
				Consolidated Statements of Operations – Years Ended December 31, 2007, 2006 and 2005			F-13
				Consolidated Statements of Changes in Net Assets – Years Ended December 31, 2007, 2006 and 2005			F-14
				Consolidated Statements of Cash Flows – Years Ended December 31, 2007, 2006 and 2005			F-15
				Consolidated Schedule of Investments – December 31, 2007 and 2006			F-16
				Notes to Financial Statements			F-18
				Financial Statement Schedules:
				For the period ended December 31, 2007
				Schedule III – Real Estate Owned: Properties			F-26
				Schedule IV– Mortgage Loans on Real Estate			F-27

     All other schedules are omitted because they are not applicable, or because the required information is included in the financial statements or notes thereto.

Management’s Annual Report on Internal Control Over Financial Reporting

Management of Pruco Life of New Jersey is responsible for establishing and maintaining adequate internal control over financial reporting. Management conducted an assessment of the effectiveness, as of December 31, 2007, of the Company’s internal control over financial reporting, based on the framework established in Internal Control — Integrated Framework Issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on our assessment under that framework, management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2007.

Our internal control over financial reporting is a process designed by or under the supervision of our principal executive and principal financial officers to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our internal control over financial reporting includes policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of management and the directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on our financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this annual report.

March 21, 2008

Report of Independent Registered Public Accounting Firm

To the Contract Owners of the
Pruco Life of New Jersey Variable Contract Real Property Account
and the Board of Directors of
Pruco Life Insurance Company of New Jersey

     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 Pruco Life of New Jersey Variable Contract Real Property Account at December 31, 2007 and 2006, 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, 2007, in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the management of Pruco Life Insurance Company of New Jersey. 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, which included confirmation of shares at December 31, 2007 with The Prudential Variable Contract Real Property Partnership, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP
New York, New York
March 21, 2008

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

STATEMENTS OF NET ASSETS
December 31, 2007 and 2006

		2007				2006
ASSETS
Investment in The Prudential Variable Contract Real Property Partnership		$	10,764,653			$	9,975,186
Net Assets		$	10,764,653			$	9,975,186
NET ASSETS, representing:
Equity of contract owners		$	7,715,262			$	7,511,015
Equity of Pruco Life Insurance Company of New Jersey			3,049,391				2,464,171
		$	10,764,653			$	9,975,186
Units outstanding			3,333,399				3,313,818
Portfolio shares held			294,526				294,526
Portfolio net asset value per share		$	36.55			$	33.87

STATEMENTS OF OPERATIONS
For the years ended December 31, 2007, 2006 and 2005

		2007				2006				2005
INVESTMENT INCOME
Net investment income from Partnership operations		$	551,823			$	485,430			$	399,203
EXPENSES
Charges to contract owners for assuming mortality risk and expense risk and for administration			44,386				40,852				36,704
NET INVESTMENT INCOME			507,437				444,578				362,499
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net change in unrealized gain (loss) on investments in Partnership			208,471				794,887				399,181
Net realized gain (loss) on sale of investments allocated from the Partnership			29,173				2,947				269,283
NET GAIN (LOSS) ON INVESTMENTS			237,644				797,834				668,464
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		$	745,081			$	1,242,412			$	1,030,963

STATEMENTS OF CHANGES IN NET ASSETS
For the years ended December 31, 2007, 2006 and 2005

		2007				2006				2005
OPERATIONS
Net investment income		$	507,437			$	444,578			$	362,499
Net change in unrealized gain (loss) on investments in Partnership			208,471				794,887				399,181
Net realized gain (loss) on sale of investments allocated from the Partnership			29,173				2,947				269,283
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS			745,081				1,242,412				1,030,963
CAPITAL TRANSACTIONS
Net contribution (withdrawals) by contract owners			(339,677	)			(226,211	)			13,036
Net contributions (withdrawals) by Pruco Life Insurance Company of New Jersey			384,063				34,026				(201,988	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL TRANSACTIONS			44,386				(192,185	)			(188,952	)
TOTAL INCREASE (DECREASE) IN NET ASSETS			789,467				1,050,227				842,011
NET ASSETS
Beginning of period			9,975,186				8,924,959				8,082,948
End of period		$	10,764,653			$	9,975,186			$	8,924,959

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

NOTES TO THE FINANCIAL STATEMENTS OF
PRUCO LIFE OF NEW JERSEY VARIABLE CONTRACT REAL PROPERTY ACCOUNT
December 31, 2007

Note 1:      General

Pruco Life of New Jersey Variable Contract Real Property Account (the “Account”) was established on October 30, 1987 by resolution of the Board of Directors of Pruco Life Insurance Company of New Jersey (“Pruco Life of New Jersey”), a wholly-owned subsidiary of The Prudential Insurance Company of America (“Prudential”), an indirect wholly-owned subsidiary of Prudential Financial, Inc. (“PFI”) as a separate investment account pursuant to New Jersey law and is registered under the Securities Act of 1933, as amended. The assets of the Account are segregated from Pruco Life of New Jersey’s other assets. The Account is used to fund benefits under certain variable life insurance and variable annuity contracts issued by Pruco Life of New Jersey. These products are Appreciable Life (“VAL”), Variable Life (“VLI”), Discovery Plus (“SPVA”), and Discovery Life Plus (“SPVL”).

The assets of the Account are invested in The Prudential Variable Contract Real Property Partnership (the “Partnership”). The Partnership is the investment vehicle for assets allocated to the real estate investment option under certain variable life insurance and annuity contracts. The Account, along with the Pruco Life Variable Contract Real Property Account and The Prudential Variable Contract Real Property Account, are the sole investors in the Partnership. These financial statements should be read in conjunction with the financial statements of the Partnership.

The Partnership has a policy of investing at least 65% of its assets in direct ownership interests in income-producing real estate and participating mortgage loans.

Note 2:      Summary of Significant Accounting Policies and Pronouncements

A.

Basis of Accounting

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

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 expects to adopt this guidance effective January 1, 2008. The Account’s adoption of this guidance is not expected to have a material effect on the Account’s financial position and results of operations.

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 expects to adopt this guidance effective January 1, 2008. The Account’s adoption of this guidance is not expected to have a material effect on the Account’s financial position and results of operations.

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, 2007 and 2006 the Account’s interest in the Partnership was 4.3% or 294,526 shares. Properties owned by the Partnership are illiquid and based on estimated fair value as discussed in the notes to the Partnership’s audited financial statements.

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.

NOTES TO THE FINANCIAL STATEMENTS OF
PRUCO LIFE OF NEW JERSEY VARIABLE CONTRACT REAL PROPERTY ACCOUNT
December 31, 2007

D.

Equity of Pruco Life Insurance Company of New Jersey

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

Note 3:      Taxes

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

Note 4:      Net Contributions (Withdrawals) by Contract Owners

Net contract owner contributions (withdrawals) for the real estate investment option in Pruco Life of New Jersey’s variable insurance and variable annuity products for the years ended December 31, 2007, 2006 and 2005 were as follows:

2007:		VAL				VLI				SPVA				SPVL				TOTAL
Contract Owner Net Payments:		$	262,694			$	52,362			$	0			$	3			$	315,059
Policy Loans:			(148,314	)			(21,253	)			0				(872	)			(170,439	)
Policy Loan Repayments and Interest:			140,844				14,441				0				5,383				160,668
Surrenders, Withdrawals, and Death Benefits:			(371,717	)			(65,896	)			0				0				(437,613	)
Net Transfers From/To Other Subaccounts or Fixed Rate Option:			27,721				3,778				0				(6,855	)			24,644
Administrative and Other Charges:			(193,372	)			(37,783	)			0				(841	)			(231,996	)
Net Contributions (Withdrawals) by Contract Owners		$	(282,144	)		$	(54,351	)		$	0			$	(3,182	)		$	(339,677	)

2006:		VAL				VLI				SPVA				SPVL				TOTAL
Contract Owner Net Payments:		$	276,168			$	53,311			$	0			$	0			$	329,479
Policy Loans:			(135,583	)			(13,945	)			0				(683	)			(150,211	)
Policy Loan Repayments and Interest:			196,678				16,870				0				791				214,339
Surrenders, Withdrawals, and Death Benefits:			(278,015	)			(40,286	)			(2,456	)			0				(320,757	)
Net Transfers From/To Other Subaccounts or Fixed Rate Option:			(34,125	)			(7,264	)			(23,223	)			0				(64,612	)
Administrative and Other Charges:			(197,510	)			(36,128	)			0				(811	)			(234,449	)
Net Contributions (Withdrawals) by Contract Owners		$	(172,387	)		$	(27,442	)		$	(25,679	)		$	(703	)		$	(226,211	)

2005:		VAL				VLI				SPVA				SPVL				TOTAL
Contract Owner Net Payments:		$	292,838			$	55,247			$	0			$	0			$	348,085
Policy Loans:			(99,753	)			(19,434	)			0				(655	)			(119,842	)
Policy Loan Repayments and Interest:			140,745				29,734				0				789				171,268
Surrenders, Withdrawals, and Death Benefits:			(138,982	)			(64,806	)			0				0				(203,788	)
Net Transfers From/To Other Subaccounts or Fixed Rate Option:			17,392				4,075				27,050				0				48,517
Administrative and Other Charges:			(196,947	)			(33,527	)			0				(730	)			(231,204	)
Net Contributions (Withdrawals) by Contract Owners		$	15,293			$	(28,711	)		$	27,050			$	(596	)		$	(13,036	)

NOTES TO THE FINANCIAL STATEMENTS OF
PRUCO LIFE OF NEW JERSEY VARIABLE CONTRACT REAL PROPERTY ACCOUNT
December 31, 2007

Note 5:      Unit Activity

Transactions in units for the years ended December 31, 2007, 2006 and 2005 were as follows:

2007:										VAL				VLI				SPVA				SPVL
Company Contributions:			164,691			Contract Owner Contributions:					143,947				21,788				0				1,941
Company Redemptions:			(39,046	)		Contract Owner Redemptions:					(232,502	)			(38,018	)			0				(3,220	)

2006:										VAL				VLI				SPVA				SPVL
Company Contributions:			150,849			Contract Owner Contributions:					179,582				24,372				0				318
Company Redemptions:			(130,023	)		Contract Owner Redemptions:					(240,611	)			(33,689	)			(10,732	)			(605	)

2005:										VAL				VLI				SPVA				SPVL
Company Contributions:			87,397			Contract Owner Contributions:					188,975				27,168				12,293				356
Company Redemptions:			(158,586	)		Contract Owner Redemptions:					(182,362	)			(38,560	)			(1	)			(635	)

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, 2007, 2006 and 2005 were as follows:

		December 31,				December 31,				December 31,
		2007				2006				2005
Purchases:		$	0			$	0			$	0
Sales:		$	0			$	(233,036	)		$	(225,656	)

NOTES TO THE FINANCIAL STATEMENTS OF
PRUCO LIFE OF NEW JERSEY VARIABLE CONTRACT REAL PROPERTY ACCOUNT
December 31, 2007

Note 7:      Financial Highlights

Pruco Life of New Jersey 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 Pruco Life of New Jersey 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 end										For the year end
		Units				Unit Value		Net Assets				Investment				Expense Ratio**		Total Return***
		(000’s)				Lowest- Highest		(000’s)				Incomeb Ratio*				Lowest-Highest		Lowest-Highest
December 31, 2007			2,382			$2.80966 to $3.39532		$	7,715				5.28	%		0.35% to 1.25%		6.58% to 7.54%
December 31, 2006			2,489			$2.63621 to $3.15740		$	7,511				5.10	%		0.35% to 1.25%		13.05% to 14.06%
December 31, 2005			2,570			$2.33181 to $2.76817		$	6,812				4.64	%		0.35% to 1.25%		11.76% to 12.76%
December 31, 2004			2,563			$2.08645 to $2.45484		$	6,042				4.15	%		0.35% to 1.25%		4.74% to 5.68%
December 31, 2003			2,618			$1.99197 to $2.32279		$	5,853				5.77	%		0.35% to 1.25%		0.98% to 1.89%

The table above reflects information for units held by contract owners. Pruco Life of New Jersey also maintains a position in the Real Property Account, to provide for property acquisitions and capital expenditure funding needs. Pruco Life of New Jersey held 950,695, 825,050, 804,224, 875,413 and 901,524 units representing $3,049,391, $2,464,171, $2,112,648, $2,040,688 and $1,993,278 of net assets as of December 31, 2007, 2006, 2005, 2004 and 2003, respectively. Charges for mortality risk, expense risk and administrative expenses are used by Pruco Life of New Jersey to purchase additional units in its account resulting in no impact of its net assets.

Charges and Expenses

A.

Mortality Risk and Expense Risk Charges

Mortality risk and expense risk charges are determined daily using an effective annual rate of 0.6%, 0.35%, 0.9% and 0.9% for VAL, VLI, SPVA and SPVL, respectively. Mortality risk is the risk that life insurance contract owners may not live as long as estimated or annuitants may live longer than estimated and expense risk is the risk that the cost of issuing and administering the policies may exceed related charges by Pruco Life of New Jersey. The mortality risk and expense risk charges are assessed through reduction in unit values.

B.

Administrative Charges

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

NOTES TO THE FINANCIAL STATEMENTS OF
PRUCO LIFE OF NEW JERSEY VARIABLE CONTRACT REAL PROPERTY ACCOUNT
December 31, 2007

C.

Cost of Insurance and Other Related Charges

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

D.

Deferred Sales Charge

A deferred sales charge is imposed upon surrenders of certain variable life insurance contracts to compensate Pruco Life of New Jersey for sales and other marketing expenses. The amount of any sales charge will depend on the number of years that have elapsed since the contract was issued but will not exceed 45% of one scheduled annual premium for VAL and 9% of the initial premium payment for SPVL. No sales charge will be imposed after the sixth and tenth year of the contract for SPVL and VAL, respectively. No sales charge will be imposed on death benefits. This deferred sales charge is assessed through the redemption of units.

E.

Partial Withdrawal Charge

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

Note 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.

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, 2007 and 2006, 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, 2007 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 audits 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 22, 2008

Report of Independent Registered Public Accounting Firm on
Financial Statement Schedules

To the Partners of
The Prudential Variable Contract Real Property Partnership:

     Our audits of the consolidated financial statements referred to in our report dated February 22, 2008 appearing in this Annual Report on Form 10-K also included an audit of the financial statement schedules listed in Item 15(a)(2) of this Form 10-K. In our opinion, these financial statement schedules present fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements.

PricewaterhouseCoopers LLP
New York, New York
February 22, 2008

THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES

		December 31, 2007				December 31, 2006
ASSETS
REAL ESTATE INVESTMENTS – At estimated market value:
Real estate and improvements (cost: 12/31/2007 – $233,233,775; 12/31/2006 -$199,124,056)		$	251,161,712			$	214,444,568
Real estate partnerships and preferred equity investments (cost:
12/31/2007 – $14,523,934; 12/31/2006 – $22,334,823)			14,523,934				17,941,039
Other real estate investments (cost: 12/31/2007 – $3,232,341; 12/31/2006 – $2,857,851)			3,232,341				2,857,851
Total real estate investments		$	268,917,987			$	235,243,458
CASH AND CASH EQUIVALENTS			18,215,871				33,399,532
OTHER ASSETS, NET			3,033,040				3,493,829
Total assets		$	290,166,898			$	272,136,819
LIABILITIES & PARTNERS’ EQUITY
INVESTMENT LEVEL DEBT		$	32,121,712			$	32,710,488
ACCOUNTS PAYABLE AND ACCRUED EXPENSES			2,184,812				3,091,930
DUE TO AFFILIATES			901,371				789,889
OTHER LIABILITIES			920,454				876,487
MINORITY INTEREST			7,004,790				5,751,441
Total liabilities			43,133,139				43,220,235
COMMITMENTS AND CONTINGENCIES
PARTNERS’ EQUITY			247,033,759				228,916,584
Total liabilities and partners’ equity		$	290,166,898			$	272,136,819
NUMBER OF SHARES OUTSTANDING AT END OF PERIOD			6,758,960				6,758,960
SHARE VALUE AT END OF PERIOD		$	36.55			$	33.87

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

THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

CONSOLIDATED STATEMENTS OF OPERATIONS

		Year Ended December 31,
		2007				2006				2005
INVESTMENT INCOME:
Revenue from real estate and improvements		$	28,720,477			$	25,460,860			$	27,087,813
Equity in income of real estate partnerships			1,136,936				962,208				252,618
Interest and equity income on mortgage and other loans receivable			—				125,510				281,134
Income from other real estate investments			374,491				219,564				—
Interest on short-term investments			1,468,159				1,855,345				1,022,706
Total investment income			31,700,063				28,623,487				28,644,271
INVESTMENT EXPENSES:
Operating			6,954,999				6,355,543				7,420,509
Investment management fee			3,380,090				3,075,176				2,845,519
Real estate taxes			2,466,704				2,069,169				2,382,626
Administrative			4,056,557				3,923,413				4,438,482
Interest expense			2,019,937				1,814,686				2,173,789
Minority interest			158,196				223,772				164,175
Total investment expenses			19,036,483				17,461,759				19,425,100
NET INVESTMENT INCOME			12,663,580				11,161,728				9,219,171
REALIZED AND UNREALIZED GAIN (LOSS) ON REAL ESTATE INVESTMENTS:
Net proceeds from real estate investments sold			18,353,122				67,770				55,054,217
Less: Cost of real estate investments sold			19,063,985				—				47,015,948
Realization of prior years’ unrealized gain (loss) on real estate investments sold			(1,380,344	)			—				(655,341	)
Minority interest in realized gain (loss) on real estate investments sold			—				—				2,474,788
NET GAIN (LOSS) REALIZED ON REAL ESTATE INVESTMENTS SOLD			669,481				67,770				6,218,822
Change in unrealized gain (loss) on real estate investments			5,620,864				20,294,808				10,475,654
Less: Minority interest in unrealized gain (loss) on real estate investments			836,750				2,010,573				1,233,857
Net unrealized gain (loss) on real estate investments			4,784,114				18,284,235				9,241,797
NET REALIZED AND UNREALIZED GAIN (LOSS) ON REAL ESTATE INVESTMENTS			5,453,595				18,352,005				15,460,619
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		$	18,117,175			$	29,513,733			$	24,679,790