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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

(MARK ONE)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2004

OR

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

COMMISSION FILE NUMBER 33-86780

PRUCO LIFE INSURANCE COMPANY

IN RESPECT OF

PRUCO LIFE VARIABLE CONTRACT REAL PROPERTY ACCOUNT
--------------------------------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

ARIZONA 22-1944557
- ------------------------------- ---------------------------------
(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)

(800) 778-2255
----------------------------------------------------
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)


INDICATE BY CHECK MARK WHETHER THE REGISTRANT: (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH
FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES [X] NO [_]


INDICATE BY CHECK MARK WHETHER THE REGISTRANT IS AN ACCELERATED FILER (AS
DEFINED IN RULE 12b-2 OF THE EXCHANGE ACT). YES [_] NO [X]

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PRUCO LIFE VARIABLE CONTRACT
REAL PROPERTY ACCOUNT
(REGISTRANT)

INDEX
-----
PAGE
----
Cover Page .................................................................. 1

Index ....................................................................... 2

Forward-Looking Statement Disclosure ........................................ 3

PART I--FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

A. PRUCO LIFE VARIABLE CONTRACT REAL PROPERTY ACCOUNT

Statements of Net Assets--March 31, 2004 and December 31, 2003 ...... 4

Statements of Operations--Three Months Ended
March 31, 2004 and 2003 ............................................. 4

Statements of Changes in Net Assets--Three Months Ended
March 31, 2004 and 2003 ............................................. 4

Notes to the Financial Statements of the Account .................... 5

B. THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

Consolidated Statements of Assets and Liabilities--
March 31, 2004 and December 31, 2003 ................................ 8

Consolidated Statements of Operations--Three Months Ended
March 31, 2004 and 2003 ............................................. 9

Consolidated Statements of Changes in Net Assets--
Three Months Ended March 31, 2004 and 2003 .......................... 10

Consolidated Statements of Cash Flows--Three Months Ended
March 31, 2004 and 2003 ............................................. 11

Consolidated Schedules of Investments--March 31, 2004 and
December 31, 2003 ................................................... 12

Notes to the Financial Statements of the Partnership ................ 14

Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations ........................................... 16

Item 3. Quantitative and Qualitative Disclosures About Market Risks ......... 22

Item 4. Controls and Procedures ............................................. 22

PART II--OTHER INFORMATION

Item 4. Submission of Matters to a Vote of Security Holders ................. 23

Item 6. Exhibits and Reports on Form 8-K .................................... 23

Signature Page .............................................................. 25


2



FORWARD-LOOKING STATEMENT DISCLOSURE

Certain of the statements included in this Quarterly Report on Form 10-Q,
including but not limited to those in the 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", 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 ("the Company") or the Pruco Life Variable Contract Real
Property Account (the "Real Property Account"). There can be no assurance that
future developments affecting the Company or 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 without limitation: general economic,
market and political conditions, including the performance of financial markets,
interest rate fluctuations and the continuing negative impact of the current
economic environment; various domestic or international military or terrorist
activities or conflicts; economic conditions in local markets in which the
properties in the Real Property Account are located; volatility in the
securities markets; reestimates of our reserves for future policy benefits and
claims; changes in our assumptions related to deferred policy acquisition costs;
our exposure to contingent liabilities; catastrophe losses; investment losses
and defaults; changes in our claims-paying or credit ratings; competition in our
product lines and for personnel; fluctuations in foreign currency exchange rates
and foreign securities markets; risks to our international operations; the
impact of changing regulation or accounting practices; adverse litigation
results; and changes in tax law. The Company does not intend, and is under no
obligation to, update any particular forward-looking statement included in this
document.


3



FINANCIAL STATEMENTS OF
PRUCO LIFE VARIABLE CONTRACT REAL PROPERTY ACCOUNT



STATEMENTS OF NET ASSETS
March 31, 2004 and December 31, 2003 MARCH 31, 2004
(UNAUDITED) DECEMBER 31, 2003
------------ ------------

ASSETS
Investment in The Prudential Variable Contract Real Property Partnership ... $100,898,552 $100,148,190
------------ ------------
Net Assets ................................................................. $100,898,552 $100,148,190
============ ============
NET ASSETS, representing:
Equity of contract owners .................................................. $ 73,759,525 $ 74,406,535
Equity of Pruco Life Insurance Company ..................................... 27,139,027 25,741,655
------------ ------------
$100,898,552 $100,148,190
============ ============
Units outstanding .......................................................... 45,383,041 45,311,604
============ ============
Portfolio shares held ...................................................... 4,061,676 4,061,676
Portfolio net asset value per share ........................................ $ 24.84 $ 24.66

STATEMENTS OF OPERATIONS
For the three months ended March 31, 2004 and 2003 1/1/2004-3/31/2004 1/1/2003-3/31/2003
(UNAUDITED) (UNAUDITED)
------------ ------------
INVESTMENT INCOME
Net investment income from Partnership operations .......................... $ 1,059,722 $ 1,302,475
------------ ------------
EXPENSES
Charges to contract owners for assuming mortality risk and expense risk
and for administration ................................................... 112,253 114,265
------------ ------------
NET INVESTMENT INCOME ...................................................... 947,469 1,188,210
------------ ------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net change in unrealized gain (loss) on investments in Partnership ......... (309,361) (2,325,402)
Net realized gain (loss) on sale of investments in Partnership ............. 0 255,459
------------ ------------
NET GAIN (LOSS) ON INVESTMENTS ............................................. (309,361) (2,069,943)
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS ............................................................. $ 638,108 $ (881,733)
============ ============

STATEMENTS OF CHANGES IN NET ASSETS
For the three months ended March 31, 2004 and 2003 1/1/2004-3/31/2004 1/1/2003-3/31/2003
(UNAUDITED) (UNAUDITED)
------------ ------------
OPERATIONS
Net investment income ...................................................... $ 947,469 $ 1,188,210
Net change in unrealized gain (loss) on investments in Partnership ......... (309,361) (2,325,402)
Net realized gain (loss) on sale of investments in Partnership ............. 0 255,459
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS ............................................................. 638,108 (881,733)
------------ ------------
CAPITAL TRANSACTIONS
Net withdrawals by contract owners ......................................... (1,077,257) (629,536)
Net contributions (withdrawals) by Pruco Life Insurance Company ............ 1,189,511 743,801
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
CAPITAL TRANSACTIONS ..................................................... 112,254 114,265
------------ ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS .................................... 750,362 (767,468)
------------ ------------
NET ASSETS
Beginning of period ........................................................ 100,148,190 101,048,531
------------ ------------
End of period .............................................................. $100,898,552 $100,281,063
============ ============


THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS


4



NOTES TO THE FINANCIAL STATEMENTS OF

PRUCO LIFE VARIABLE CONTRACT REAL PROPERTY ACCOUNT

MARCH 31, 2004

(UNAUDITED)

NOTE 1: GENERAL

Pruco Life Variable Contract Real Property Account (the "Real Property Account")
was established on August 27, 1986 and commenced business September 5, 1986.
Pursuant to Arizona law, the Real Property Account was established as a separate
investment account of Pruco Life Insurance Company ("Pruco Life"), a
wholly-owned subsidiary of The Prudential Insurance Company of America
("Prudential"), a wholly-owned subsidiary of Prudential Financial, Inc. ("PFI").
The assets of the Real Property Account are segregated from Pruco Life's other
assets. The Real Property Account is used to fund benefits under certain
variable life insurance and variable annuity contracts issued by Pruco Life.
These products are Appreciable Life ("VAL"), Variable Life ("VLI"), Discovery
Plus ("SPVA") and Discovery Life Plus ("SPVL").

The assets of the Real Property Account are invested in The Prudential Variable
Contract Real Property Partnership (the "Partnership"). The Partnership is
organized under New Jersey law and is registered under the Securities Act of
1933. The Partnership is the investment vehicle for assets allocated to the real
estate investment option under certain variable life insurance and annuity
contracts. The Real Property Account, along with The Prudential 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

A. BASIS OF ACCOUNTING

The accompanying financial statements are prepared in conformity with accounting
principles generally accepted in the United States of America ("GAAP"). The
preparation of the financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported amounts
and disclosures. Actual results could differ from those estimates.

The interim financial data as of March 31, 2004 and for the three months ended
March 31, 2004 and 2003 is unaudited; however, in the opinion of management, the
interim data includes all adjustments, consisting only of normal recurring
adjustments, necessary for a fair statement of the results for the interim
periods.

B. INVESTMENT IN PARTNERSHIP INTEREST

The investment in the Partnership is based on the Real Property Account's
proportionate interest of the Partnership's market value. At March 31, 2004 and
December 31, 2003 the Real Property Account's interest in the Partnership was
55.1% or 4,061,676 shares.

C. INCOME RECOGNITION

Net investment income and realized and unrealized gains and losses are
recognized daily. Amounts are based upon the Real Property Account's
proportionate interest in the Partnership.

5



D. EQUITY OF PRUCO LIFE INSURANCE COMPANY

Pruco Life maintains a position in the Real Property Account for liquidity
purposes including unit purchases and redemptions, Partnership share
transactions, and expense processing. The position does not have an effect on
the contract owner's account or the related unit value.

NOTE 3: CHARGES AND EXPENSES

A. MORTALITY RISK AND EXPENSE RISK CHARGES

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

B. ADMINISTRATIVE CHARGES

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

C. COST OF INSURANCE AND OTHER RELATED CHARGES

Contract owner contributions are subject to certain deductions prior to being
invested in the Real Property 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 for the cost of selling the
contract and (3) transaction costs, applicable to VAL, are deducted from each
premium payment to cover premium collection and processing costs. Contracts are
also subject to monthly charges for the costs of administering the contract to
compensate Pruco Life the guaranteed minimum death benefit risk. These charges
are assessed through the redemption of units.

D. DEFERRED SALES CHARGE

A deferred sales charge is imposed upon the surrender of certain variable life
insurance contracts to compensate Pruco Life 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% for VAL and
9% 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. A deferred sales charge is assessed through the redemption of
units.

E. PARTIAL WITHDRAWAL CHARGE

A charge is imposed by Pruco Life 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. A charge is assessed through the redemption of units.

NOTE 4: TAXES

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

6



NOTE 5: NET WITHDRAWALS BY CONTRACT OWNERS


Contract owner activity for the real estate investment option in Pruco Life's
variable insurance and variable annuity products for the three months ended
March 31, 2004 and 2003, were as follows:

MARCH 31,
2004 2003
---------- --------
(UNAUDITED)
VAL .......................................... $ 952,428 $515,136
VLI .......................................... 37,357 47,831
SPVA ......................................... 0 1,190
SPVL ......................................... 87,472 65,379
---------- --------
TOTAL ........................................ $1,077,257 $629,536
========== ========

NOTE 6: PARTNERSHIP DISTRIBUTIONS


As of March 31, 2004, no distributions had been made for the current year from
the Partnership. For the year ended December 31, 2003, the Partnership made
distributions of $6.9 million. The Pruco Life Real Property Account's share of
this distribution was $3.2 million.

NOTE 7: UNIT INFORMATION


Outstanding units and unit values at March 31, 2004 and December 31, 2003 were
as follows:

MARCH 31, 2004 DECEMBER 31, 2003
------------------ ------------------
(UNAUDITED)
UNITS OUTSTANDING: ..................... 45,383,041 45,311,604
UNIT VALUE: ............................ 2.00065 to 2.33814 1.99197 to 2.32279


7



THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES

MARCH 31, 2004 DECEMBER 31,
(UNAUDITED) 2003
------------- ------------

ASSETS
REAL ESTATE INVESTMENTS--At estimated market value:
Real estate and improvements
(cost: 3/31/2004--$225,375,104;
12/31/2003--$223,943,870) $201,644,056 $201,144,866
Real estate partnership
(cost: 3/31/2004--$10,674,923;
12/31/2003--$10,609,273) 9,530,976 8,721,319
Mortgage and other loans receivable
(cost: 3/31/2004--$556,271;
12/31/2003--$0) 556,271 --
Other real estate investments
(cost: 3/31/2004--$4,281,644;
12/31/2003--$500,000) 4,281,644 500,000
------------ ------------
Total real estate investments ............ 216,012,947 210,366,185
CASH AND CASH EQUIVALENTS ......................... 14,756,088 18,901,814
OTHER ASSETS, NET ................................. 6,719,368 6,359,853
------------ ------------
Total assets ............................. $237,488,403 $235,627,852
============ ============
LIABILITIES
MORTGAGE LOANS PAYABLE ............................ 43,758,882 43,934,494
ACCOUNTS PAYABLE AND ACCRUED EXPENSES ............. 3,603,268 2,998,752
DUE TO AFFILIATES ................................. 727,859 1,017,932
OTHER LIABILITIES ................................. 937,444 947,110
MINORITY INTEREST ................................. 5,456,926 5,086,503
------------ ------------
Total liabilities ........................ 54,484,379 53,984,791
------------ ------------
COMMITMENTS AND CONTINGENCIES
PARTNERS' EQUITY .................................. 183,004,024 181,643,061
------------ ------------
Total liabilities and partners' equity ... $237,488,403 $235,627,852
============ ============
NUMBER OF SHARES OUTSTANDING AT END OF PERIOD ..... 7,366,835 7,366,835
============ ============
SHARE VALUE AT END OF PERIOD ...................... $24.84 $24.66
============ ============

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE
CONSOLIDATED FINANCIAL STATEMENTS.


8



THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)



Three Months Three Months
Ended Ended
March 31, 2004 March 31, 2003
-------------- --------------
INVESTMENT INCOME:

Revenue from real estate and improvements ........................ $ 6,484,513 $ 6,224,502
Equity in income of real estate partnership ...................... 165,887 160,736
Interest and equity income on mortgage loans receivable and
other loans receivable ........................................ 8,126 --
Income from other real estate investments ........................ 31,644 --
Interest on short-term investments ............................... 43,177 65,414
Other income ..................................................... 51,000 --
------------ ------------
Total investment income ....................................... 6,784,347 6,450,652
------------ ------------
INVESTMENT EXPENSES:
Operating ........................................................ 1,661,254 1,314,572
Investment management fee ........................................ 635,701 577,586
Real estate taxes ................................................ 722,033 667,791
Administrative ................................................... 1,216,664 805,145
Interest expense ................................................. 595,075 581,267
Minority interest ................................................ 31,557 128,049
------------ ------------
Total investment expenses ..................................... 4,862,284 4,074,410
------------ ------------
NET INVESTMENT INCOME ................................................ 1,922,063 2,376,242
------------ ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON REAL ESTATE INVESTMENTS:
Net proceeds from real estate investments sold ................... -- 5,689,488
Less: Cost of real estate investments sold ....................... -- 6,620,263
Realization of prior periods' unrealized gain (loss)
on real estate investments sold .......................... -- (1,396,836)
------------ ------------
Net gain (loss) realized on real estate investments sold ......... -- 466,061
------------ ------------
Change in unrealized gain (loss) on real estate investments ...... (188,037) (4,266,583)
Less: Minority interest in unrealized gain (loss) on
real estate investments .................................. 373,063 (24,107)
------------ ------------
Net unrealized gain (loss) on real estate investments ............ (561,100) (4,242,476)
------------ ------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON REAL ESTATE
INVESTMENTS ...................................................... (561,100) (3,776,415)
------------ ------------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS .......... $ 1,360,963 $ (1,400,173)
============ ============


THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE
CONSOLIDATED FINANCIAL STATEMENTS.

9



THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
(UNAUDITED)



THREE MONTHS THREE MONTHS
ENDED ENDED
MARCH 31, 2004 MARCH 31, 2003
-------------- --------------

INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS:
Net investment income ............................................ $ 1,922,063 $ 2,376,242
Net gain (loss) realized on real estate investments sold ......... -- 466,061
Net unrealized gain (loss) from real estate investments .......... (561,100) (4,242,476)
------------ ------------
Increase (decrease) in net assets resulting from operations ... 1,360,963 (1,400,173)
------------ ------------
INCREASE (DECREASE) IN NET ASSETS .................................... 1,360,963 (1,400,173)
NET ASSETS--Beginning of period ...................................... 181,643,061 184,353,506
------------ ------------
NET ASSETS--End of period ............................................ $183,004,024 $182,953,333
============ ============


THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE
CONSOLIDATED FINANCIAL STATEMENTS.

10



THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)



THREE MONTHS THREE MONTHS
ENDED ENDED
MARCH 31, 2004 MARCH 31, 2003
-------------- --------------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net increase (decrease) in net assets resulting from operations ............. $ 1,360,963 $(1,400,173)
Adjustments to reconcile net increase (decrease) in net assets
to net cash flows from operating activities:
Net realized and unrealized loss on investments .......................... 561,100 3,776,415
Equity in income of real estate partnership in excess of distributions ... 38,301 (86,486)
Minority interest from operating activities .............................. 31,557 128,049
(Increase) Decrease in accrued interest included in other real
estate investments ................................................... (31,644) --
(Increase) Decrease in accrued interest included in mortgage and
other loans receivable ............................................... (8,126) --
Bad debt expense ......................................................... 136,932 33,661
(Increase) Decrease in:
Other assets ......................................................... (496,447) (262,935)
Increase (Decrease) in:
Accounts payable and accrued expenses ................................ 262,198 66,697
Due to affiliates .................................................... (290,073) (14,259)
Other liabilities .................................................... (9,666) 5,079
----------- -----------
Net cash flows from operating activities .......................... 1,555,095 2,246,048
----------- -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
Net proceeds from real estate investments sold .............................. -- 5,689,488
Additions to real estate and improvements ................................... (1,088,916) (637,232)
Contribution to real estate partnership ..................................... (103,951) (605,236)
Origination of mortgage and other loans receivable .......................... (548,145) --
Origination of other real estate investments ................................ (3,750,000) --
----------- -----------
Net cash flows from (used in) investing activities .......................... (5,491,012) 4,447,020
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on mortgage loan payable ................................. (175,612) (218,471)
Distributions to minority interest partners ................................. (34,197) (17,316)
Contributions from minority interest partners ............................... -- 466
----------- -----------
Net cash flows used in financing activities ................................. (209,809) (235,321)
----------- -----------
NET CHANGE IN CASH AND CASH EQUIVALENTS ........................................ (4,145,726) 6,457,747

CASH AND CASH EQUIVALENTS--Beginning of period ................................. 18,901,814 18,591,149
----------- -----------
CASH AND CASH EQUIVALENTS--End of period ....................................... $14,756,088 $25,048,896
=========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the quarter for interest ...................................... $ 612,727 $ 619,641
=========== ===========
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND
FINANCING ACTIVITIES:
Accrued construction costs ..................................................... $ 342,318 --
=========== ===========


THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE
CONSOLIDATED FINANCIAL STATEMENTS.

11



THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

CONSOLIDATED SCHEDULES OF INVESTMENTS



TOTAL RENTABLE
SQUARE FEET MARCH 31, 2004
UNLESS (UNAUDITED) DECEMBER 31, 2003
OTHERWISE -------------------------- --------------------------
INDICATED ESTIMATED ESTIMATED
PROPERTY NAME OWNERSHIP CITY, STATE (UNAUDITED) COST MARKET VALUE COST MARKET VALUE
- ------------- ----------- ----------- --------- ----------- ----------- ----------- -----------

REAL ESTATE INVESTMENTS

OFFICES
750 Warrenville WO Lisle, IL 103,193 $23,023,835 $10,005,984 $23,023,835 $12,110,725
Oakbrook Terrace WO Oakbrook, IL 123,734 14,639,027 9,747,954 14,619,120 10,097,932
Summit @ Cornell Oaks WO Beaverton , OR 72,109 11,890,209 10,000,005 11,890,209 10,000,005
Westpark WO Brentwood, TN 97,199 10,423,727 9,200,000 10,423,727 9,239,260
Financial Plaza WO Brentwood, TN 95,768 10,276,615 7,573,450 9,837,482 6,700,041
- ------------------------------------------------------------------------------------------------------------------------------------
Offices % as of 3/31/04 25% 70,253,413 46,527,393 69,794,373 48,147,963
APARTMENTS
Brookwood Apartments WO Atlanta, GA 240 Units 15,794,665 17,303,403 15,781,263 17,000,000
Dunhill Trace Apartments WO Raleigh, NC 250 Units 16,037,340 17,627,015 16,010,326 17,665,000
Riverbend Apartments CJV Jacksonville, FL 458 Units 19,957,421 22,400,000 19,946,920 22,400,000
SIMA Apartments CJV Gresham/Salem, OR 493 Units 19,288,814 17,700,000 19,281,738 17,975,000
- ------------------------------------------------------------------------------------------------------------------------------------
Apartments % as of 3/31/0 41% 71,078,240 75,030,418 71,020,247 75,040,000
RETAIL
King's Market WO Rosewell, GA 314,358 33,112,287 23,509,840 33,102,401 23,539,665
Hampton Towne Center WO Hampton, VA 174,540 18,025,918 20,298,350 18,013,068 20,000,000
White Marlin Mall CJV Ocean City, MD 186,016 14,022,061 17,800,000 13,198,649 15,900,000
Kansas City Portfolio EJV Kansas City, KS;MO 487,660 10,674,923 9,530,976 10,609,273 8,721,319
- ------------------------------------------------------------------------------------------------------------------------------------
Retail % as of 3/31/04 39% 75,835,189 71,139,166 74,923,391 68,160,984
INDUSTRIAL
Smith Road WO Aurora, CO 277,930 10,884,456 10,578,055 10,806,403 10,508,509
- ------------------------------------------------------------------------------------------------------------------------------------
Industrial % as of 3/31/0 6% 10,884,456 10,578,055 10,806,403 10,508,509
HOTEL
Portland Crown Plaza CJV Lake Oswego, OR 161 Rooms 7,998,729 7,900,000 8,008,729 8,008,729
- ------------------------------------------------------------------------------------------------------------------------------------
Hotel % as of 3/31/04 4% 7,998,729 7,900,000 8,008,729 8,008,729

MORTGAGE AND OTHER LOANS RECEIVABLE
Englar K-Mart MD Westminster, MD 556,271 556,271 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Mortgage and Other Loans Receivable % as of 3/31/04 0% 556,271 556,271 -- --

OTHER REAL ESTATE INVESTMENTS
Englar Lowes Loan NR Westminster, MD 4,281,644 4,281,644 500,000 500,000
- ------------------------------------------------------------------------------------------------------------------------------------
Other Real Estate Investments % as of 3/31/04 2% 4,281,644 4,281,644 500,000 500,000

TOTAL REAL ESTATE INVESTMENTS AS A PERCENTAGE OF
NET ASSETS AS OF 3/31/04 117% 240,887,942 216,012,947 235,053,143 210,366,185
==== =========== =========== =========== ===========


WO - Wholly Owned Investment
CJV - Consolidated Joint Venture
EJV - Joint Venture Investment accounted for under the equity method
NR - Note Receivable
MD - Mezzanine Debt

12



THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

CONSOLIDATED SCHEDULES OF INVESTMENTS



MARCH 31, 2004
(UNAUDITED) DECEMBER 31, 2003
------------------------- ------------------------
FACE ESTIMATED ESTIMATED
AMOUNT COST MARKET VALUE COST MARKET VALUE
---------- ---------- ------------ ---------- -----------

CASH AND CASH EQUIVALENTS--PERCENTAGE OF NET ASSETS 8.1% 10.4%
Federal National Mortgage Assoc., 1.00%, April 1, 2004 ........ $3,730,000 $ 3,729,899 $ 3,729,899 $ -- $ --
Federal National Mortgage Assoc., 1.01%, April 21, 2004 ....... 9,000,000 8,987,750 8,987,750 -- --
Federal National Mortgage Assoc., 1.01%, April 28, 2004 ....... 1,200,000 1,198,133 1,198,133 -- --
Federal National Mortgage Assoc., 1.06%, February 4, 2004 ..... 5,974,000 -- -- 5,967,907 5,967,907
Federal Home Loan Mortgage Corp., 0.88%, January 2, 2004 ...... 12,331,000 -- -- 12,330,520 12,330,520
---------- ---------- ---------- ----------
TOTAL CASH EQUIVALENTS ........................................ 13,915,782 13,915,782 18,298,427 18,298,427
CASH .......................................................... 840,306 840,306 603,387 603,387
---------- ---------- ---------- ----------
TOTAL CASH AND CASH EQUIVALENTS ............................... $14,756,088 $14,756,088 $18,901,814 $18,901,814
=========== =========== =========== ===========


THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE
CONSOLIDATED FINANCIAL STATEMENTS.


13



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF

PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

MARCH 31, 2004 AND 2003

(UNAUDITED)

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited financial statements included herein have been
prepared in accordance with the requirements of Form 10-Q and accounting
principles generally accepted in the United States of America for interim
financial information. In the opinion of management, all adjustments (consisting
only of normal recurring adjustments) considered necessary for a fair statement
have been included. Operating results for the three months ended March 31, 2004
are not necessarily indicative of the results that may be expected for the year
ended December 31, 2004. For further information, refer to the financial
statements and notes thereto included in each Partner's December 31, 2003 Annual
Report on Form 10K.

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

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"), which 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
effective date is delayed while the AICPA finalizes the proposed Statement of
Position ("SOP") on the clarification of the scope of the Audit Guide. Following
the issuance of the final SOP, the FASB will consider modifying FIN 46-R to
provide an exception for companies that apply the Audit Guide. The Prudential
Variable Contract Real Property Partnership ("Partnership") is awaiting the
final determination from the FASB in order to evaluate the extent in which, if
any, its equity investments may need to be consolidated as a result of this FIN
46-R.

NOTE 2: COMMITMENTS AND CONTINGENCIES

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

NOTE 3: RELATED PARTY TRANSACTIONS

Pursuant to an investment management agreement, Prudential Investment Management
("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 three months ended March 31, 2004 and 2003 investment management fees
incurred by the Partnership were $635,701 and $577,586 respectively.

The Partnership also reimburses PIM for certain administrative services rendered
by PIM. The amounts incurred for the three months ended March 31, 2004 and 2003
were $29,157 for each period, and are classified as administrative expense in
the Consolidated Statements of Operations.

14



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF

PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

MARCH 31, 2004 AND 2003

(UNAUDITED)

NOTE 4: FINANCIAL HIGHLIGHTS



FOR THE THREE MONTHS ENDED MARCH 31,
------------------------------------------------------
2004 2003 2002 2001 2000
------ ------ ------ ------ ------

PER SHARE(UNIT) OPERATING PERFORMANCE:
Net Asset Value, beginning of period ...................... $24.66 $24.11 $23.82 $22.74 $20.86
INCOME FROM INVESTMENT OPERATIONS:
Investment income, before management fee .................. 0.35 0.39 0.42 0.39 0.42
Management fee ............................................ (0.09) (0.08) (0.07) (0.07) (0.07)
Net realized and unrealized gain (loss) on investments .... (0.08) (0.49) (0.45) (0.07) (0.28)
------ ------ ------ ------ ------
Net Increase in Net Assets Resulting from Operations ... 0.18 (0.18) (0.10) 0.25 0.07
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ............................ $24.84 $23.93 $23.72 $22.99 $20.93
====== ====== ====== ====== ======
TOTAL RETURN, BEFORE MANAGEMENT FEE (a): .................. 1.10% (0.45)% (0.12)% 1.46% 0.68%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (in millions) ................... $ 183 $ 183 $ 197 $ 209 $ 211
Ratios to average net assets (b):
Management Fee ...................................... 0.35% 0.31% 0.31% 0.32% 0.32%
Investment Income, before Management Fee ............ 1.41% 1.60% 1.80% 1.74% 2.01%

(a) Total Return, before 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.


15



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


All of the assets of the Real Property Account (the "Account") are invested in
the Prudential Variable Contract Real Property Partnership (the "Partnership").
Correspondingly, the liquidity, capital resources and results of operations for
the Real Property Account are contingent upon the Partnership. Therefore, all of
management's discussion of these items is at the Partnership level. The partners
in the Partnership are The Prudential Insurance Company of America, Pruco Life
Insurance Company, and Pruco Life Insurance Company of New Jersey (collectively,
the "Partners").

The following analysis of the liquidity and capital resources and results of
operations of the Partnership should be read in conjunction with the Financial
Statements and the related Notes to the Financial Statements included elsewhere
herein.

(a) LIQUIDITY AND CAPITAL RESOURCES


As of March 31, 2004, the Partnership's liquid assets consisting of cash and
cash equivalents were $14.8 million, a decrease of $4.1 million from $18.9
million at December 31, 2003. The change in the Partnership's cash position was
primarily due to an additional funding of $3.75 million to the note receivable
associated with a retail center located in Westminster, Maryland.

The Partnership's investment policy allows up to 30% investment in cash and
short-term obligations, although the Partnership generally holds approximately
10% of its assets in cash and short-term obligations. At March 31, 2004, 6.2% of
the Partnership's total assets consisted of cash and short-term obligations.

The Partnership made $6.9 million in distributions to the Partners during 2003.
Distributions may be made to the Partners during 2004 based upon the percentage
of assets invested in short-term obligations, taking into consideration
anticipated cash needs of the Partnership including potential property
acquisitions, property dispositions and capital expenditures. Management
anticipates that its current liquid assets and ongoing cash flow from operations
will satisfy the Partnership's needs over the next twelve months and the
foreseeable future.

During the first three months of 2004, the Partnership spent approximately $1.4
million in capital expenditures on wholly owned and consolidated joint venture
properties. Approximately $0.8 million was associated with the development of
the retail center located in Ocean City, Maryland. Of the remaining $0.6 million
balance, $0.4 million was primarily associated with leasing related costs at one
of the office buildings located in Brentwood, Tennessee. The Partnership also
increased its investment in real estate partnerships by approximately $0.1
million in connection with the redevelopment and expansion of the retail centers
located in Kansas City, Missouri.

On March 24, 2004, the Partnership increased its investment in the note
receivable associated with a retail center located in Westminster, Maryland for
$3.75 million. Commencing on January 6, 2004, with additional contributions
throughout the quarter, the Partnership invested in a $0.5 million mezzanine
debt investment on a second retail center located in Westminster, Maryland.

(b) RESULTS OF OPERATIONS

The following is a brief quarter-to-date comparison of the Partnership's results
of operations for the periods ended March 31, 2004 and 2003.

MARCH 31, 2004 VS. MARCH 31, 2003

The following table presents a quarter-to-date comparison of the Partnership's
sources of net investment income, and realized and unrealized gains or losses by
investment type.

16





QUARTER ENDED MARCH 31,
---------------------------
2004 2003

NET INVESTMENT INCOME:
Office properties .................................................... $ 502,797 $ 646,699
Apartment complexes .................................................. 741,550 874,685
Retail properties .................................................... 1,158,256 1,142,723
Industrial properties ................................................ 147,786 225,850
Hotel property ....................................................... 59,731 --
Other (including interest income, investment mgt fee, etc.) .......... (688,057) (513,715)
----------- -----------
TOTAL NET INVESTMENT INCOME .......................................... $ 1,922,063 $ 2,376,242
=========== ===========
NET UNREALIZED GAIN (LOSS) ON REAL ESTATE INVESTMENTS:
Office properties .................................................... $(2,079,610) $(3,945,836)
Apartment complexes .................................................. (85,075) 66,284
Retail properties .................................................... 1,563,107 345,040
Industrial properties ................................................ (8,506) (707,964)
Hotel property ....................................................... 48,984 --
----------- -----------
TOTAL NET UNREALIZED GAIN (LOSS) ON REAL ESTATE INVESTMENTS .......... (561,100) (4,242,476)
=========== ===========
NET REALIZED GAIN (LOSS) ON REAL ESTATE INVESTMENTS:
Industrial properties ................................................ -- 466,061
----------- -----------
TOTAL NET REALIZED GAIN (LOSS) ON REAL ESTATE INVESTMENTS ............ -- 466,061
----------- -----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON REAL ESTATE INVESTMENTS ... $ (561,100) $(3,776,415)
----------- -----------


NET INVESTMENT INCOME OVERVIEW


The Partnership's net investment income for the three months ended March 31,
2004 was $1.9 million, a decrease of $0.5 million from $2.4 million when
compared to the corresponding period in 2003. The decrease is primarily due to
continued vacancy within the office portfolio.

Administrative expense increased $0.4 million, or 51.1%, in the first quarter of
2004 when compared to the same period in 2003. This increase was primarily due
to the Partnership's acquisition of a controlling interest in a 161-room hotel
located in Lake Oswego, Oregon in late 2003.

Operating expense increased $0.3 million, or 26.4%, in the first quarter of 2004
when compared to the same period in 2003. This increase is also primarily due to
the Partnership's acquisition of a controlling interest in a 161-room hotel
located in Lake Oswego, Oregon in late 2003.

VALUATION OVERVIEW

The Partnership experienced a net unrealized loss of $0.6 million for the three
months ended March 31, 2004 compared to a net unrealized loss of $4.2 million
during the corresponding period in 2003. The unrealized loss during the first
three months of 2004 was primarily experienced in the office sector. The office
portfolio recorded an unrealized loss totaling $2.1 million primarily due to
decreases in occupancy coupled with soft market conditions which have resulted
in reductions in market rental rates and increased leasing costs. Partially
offsetting this loss in the office sector was the gain in value in the retail
sector, primarily due to strengthening market fundamentals, renovation and
re-leasing efforts, at the retail centers located in Kansas City, Kansas and
Missouri and the pre-leased expansion at the center located in Ocean City,
Maryland.

OFFICE PORTFOLIO



NET NET
INVESTMENT INVESTMENT UNREALIZED UNREALIZED
INCOME INCOME GAIN/(LOSS) GAIN/(LOSS) OCCUPANCY OCCUPANCY
PROPERTY 03/31/04 03/31/03 03/31/04 03/31/03 03/31/04 03/31/03
- -------- -------- -------- ----------- ----------- --------- ---------

QUARTER TO DATE
Lisle, IL .................... $ 93,201 $387,083 $(2,104,741) $(1,355,000) 44% 47%
Brentwood, TN ................ 200,286 120,997 (39,260) (351,832) 79% 78%
Oakbrook Terrace, IL ......... 63,635 (8,248) (369,885) (1,329,709) 41% 31%
Beaverton, OR ................ 236,305 248,069 -- (200,000) 78% 81%
Brentwood, TN ................ (90,630) (101,202) 434,276 (709,295) 0% 0%
-------- -------- ----------- -----------
$502,797 $646,699 $(2,079,610) $(3,945,836)
-------- -------- ----------- -----------


17



NET INVESTMENT INCOME

Net investment income from property operations for the office sector decreased
approximately $0.1 million, or 22.3%, for the three months ended March 31, 2004
when compared to the corresponding period in 2003 primarily due to increased
vacancy resulting from weak market fundamentals.

UNREALIZED GAIN/LOSS

The five office properties owned by the Partnership experienced a net unrealized
loss of approximately $2.1 million during the first three months of 2004. The
losses were primarily due to decreased occupancy, lower market rents, and
increased lease up costs.

The five office properties owned by the Partnership experienced a net unrealized
loss of approximately $3.9 million during the first three months of 2003. The
decrease in values was primarily due to a reduction in market rental rates,
softening market conditions, increased lease-up costs, increased expenses and a
decrease in occupancy due to various near-term lease expirations.

As of March 31, 2004 all vacant spaces were being marketed.

APARTMENT COMPLEXES



NET NET
INVESTMENT INVESTMENT UNREALIZED UNREALIZED
INCOME INCOME GAIN/(LOSS) GAIN/(LOSS) OCCUPANCY OCCUPANCY
PROPERTY 03/31/04 03/31/03 03/31/04 03/31/03 03/31/04 03/31/03
- ------------ -------- -------- -------- -------- --------- ---------

QUARTER TO DATE
Atlanta, GA .................. $207,368 $243,049 $290,000 $(28,802) 91% 88%
Raleigh, NC .................. 147,693 219,121 (65,000) (2,998) 93% 95%
Jacksonville, FL ............. 273,617 267,235 (28,000) 130,710 91% 94%
Gresham/Salem, OR ............ 112,872 145,280 (282,075) (32,626) 90% 91%
-------- -------- -------- --------
$741,550 $874,685 $(85,075) $ 66,284
-------- -------- -------- --------


NET INVESTMENT INCOME

Net investment income from property operations for the apartment sector was $0.7
million for the three months ended March 31, 2004, a decrease of $0.1 million,
or 15.2%, when compared to the corresponding period in 2003. The decrease was
mainly due to increased concessions and mortgage interest at the complex located
in Raleigh, North Carolina that was not applicable during the first quarter of
2003. Also increased expenses at the Atlanta, Georgia complex for repairs and
maintenance added to the decreased net investment income for the sector.

UNREALIZED GAIN/LOSS

The apartment complexes owned by the Partnership experienced a net unrealized
loss of $0.1 million for the three months ended March 31, 2004 compared to a net
unrealized gain of $0.1 million for the three months ended March 31, 2003. The
unrealized loss for the first quarter of 2004 was mainly attributable to the
apartment complex located in Gresham/Salem, Oregon due to an increase in
projected operating expenses and lower market rental rates. Partially offsetting
this loss is the unrealized gain at the apartment complex located in Atlanta,
Georgia due to decreased projected expenses. The unrealized gain for 2003 was
primarily attributable to the apartment complex located in Jacksonville, Florida
due to an increase in occupancy.

As of March 31, 2004, all available vacant units were being marketed.

18



RETAIL PROPERTIES




NET NET
INVESTMENT INVESTMENT UNREALIZED UNREALIZED
INCOME INCOME GAIN/(LOSS) GAIN/(LOSS) OCCUPANCY OCCUPANCY
PROPERTY 03/31/04 03/31/03 03/31/04 03/31/03 03/31/04 03/31/03
- -------- ---------- ---------- ---------- ---------- --------- ---------

QUARTER TO DATE
Roswell, GA .................. $ 426,419 $ 690,217 $ (39,710) $ 466,952 75% 93%
Kansas City, KS; MO .......... 160,614 160,736 744,008 (307,349) 87% 90%
Hampton, VA .................. 304,081 218,228 285,500 3,425 100% 100%
Ocean City, MD ............... 176,372 73,542 573,309 182,012 99% 100%
Westminster, MD* ............. 31,644 N/A -- N/A N/A N/A
Westminster, MD ** ........... 59,126 N/A -- N/A N/A N/A
---------- ---------- ---------- ----------
$1,158,256 $1,142,723 $1,563,107 $ 345,040
---------- ---------- ---------- ----------


* Note Receivable (Acquired October 2003)
** Mortgage Loan Receivable (Acquired January 2004)

NET INVESTMENT INCOME

Net investment income for the Partnership's retail properties was approximately
$1.2 million for the three months ended March 31, 2004 and 2003. While net
investment income was essentially the same for both periods, the properties
contributing have changed somewhat. Increases were due to the expanded center
located in Ocean City, Maryland and the acquisition of the two Westminster,
Maryland investments. It should also be noted that on April 15, 2003 the
Partnership acquired its joint venture partner's membership interest in the
retail center located in Hampton, Virginia, thus entitling the Partnership to
all of the net investment income generated by the investment. Offsetting these
increases was the retail center located in Roswell, Georgia, which experienced
increased vacancy due to a lease termination.

UNREALIZED GAIN/LOSS

The retail properties experienced a net unrealized gain of $1.6 million for the
three months ended March 31, 2004. The Kansas City, Kansas and Missouri retail
centers experienced a net unrealized gain primarily due to strengthening market
fundamentals, renovation and re-leasing efforts. The Ocean City, Maryland retail
center experienced a gain due to the pre-leased expansion. The center located in
Hampton, Virginia also experienced a gain due to strengthening market
fundamentals.

The retail properties experienced a net unrealized gain of $0.3 million for the
quarter ended March 31, 2003. The retail center located in Roswell, GA
experienced a net unrealized gain due to a major tenant signing a lease renewal.
The retail center in Ocean City, MD also experienced a net unrealized gain due
to an increase in value resulting from capital expenditures. Offsetting these
gains was the unrealized losses experienced at the retail centers located in
Kansas City, Kansas and Missouri, primarily due to renovations from the
expansion of the existing grocery store anchor that were not reflected as an
increase in market value.

As of March 31, 2004, all vacant spaces were being marketed.

INDUSTRIAL PROPERTIES



NET NET UNREALIZED/ UNREALIZED/
INVESTMENT INVESTMENT REALIZED REALIZED
INCOME INCOME GAIN/(LOSS) GAIN/(LOSS) OCCUPANCY OCCUPANCY
PROPERTY 03/31/04 03/31/03 03/31/04 03/31/03 03/31/04 03/31/03
- -------- -------- -------- --------- --------- --------- ---------

QUARTER TO DATE
Aurora, CO ................... $145,412 $201,043 $ (8,506) $(707,964) 84% 84%
Bolingbrook, IL .............. 2,603 -- -- -- Sold September 2002
Salt Lake City, UT ........... (229) 24,807 -- 466,061 Sold January 2003
-------- -------- --------- ---------
$147,786 $225,850 $ (8,506) $(241,903)
-------- -------- --------- ---------


19



NET INVESTMENT INCOME

Net investment income from property operations for the industrial properties
decreased from $0.2 million for the three months ended March 31, 2003 to $0.1
million for the corresponding period ended March 31, 2004. The decrease was due
to a rental concession given to a new tenant at the industrial property located
in Aurora, Colorado and the sale of the industrial property located in Salt Lake
City, Utah during the first quarter of 2003.

UNREALIZED GAIN/LOSS

The Aurora, Colorado industrial property owned by the Partnership experienced an
immaterial net unrealized loss for the three months ended March 31, 2004
compared to a net unrealized loss of approximately $0.7 million for the three
months ended March 31, 2003. The net unrealized loss for the quarter ended March
31, 2003 was due to softening market conditions.

As of March 31, 2004, all vacant spaces were being marketed.

REALIZED GAIN

On January 28, 2003 the industrial property located in Salt Lake City, Utah was
sold for a realized gain of $0.5 million.

HOTEL PROPERTY



NET NET
INVESTMENT INVESTMENT UNREALIZED UNREALIZED
INCOME INCOME GAIN/(LOSS) GAIN/(LOSS) OCCUPANCY OCCUPANCY
PROPERTY 03/31/04 03/31/03 03/31/04 03/31/03 03/31/04 03/31/03
- -------- -------- --------- --------- --------- --------- ---------

QUARTER TO DATE
Lake Oswego, OR * ............ $ 59,731 N/A $ 48,984 N/A 69% N/A


* Hotel purchased in December 2003

NET INVESTMENT INCOME

On December 10, 2003, the Partnership acquired a controlling interest in a
161-room hotel located in Portland, Oregon for $8.0 million. Net investment
income from hotel operations was $0.1 million for the three months ended March
31, 2004.

UNREALIZED GAIN/LOSS

The Lake Oswego, Oregon hotel property owned by the Partnership experienced a
net unrealized gain of $0.05 million for the three months ended March 31, 2004.

OTHER

Other net investment income decreased $0.2 million during the three months ended
March 31, 2004 compared to the corresponding period in 2003. Other net
investment income includes interest income from short-term investments,
investment management fees, and portfolio level expenses.

(c) INFLATION

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

20



CRITICAL ACCOUNTING POLICIES

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires the application of
accounting policies that often involve a significant degree of judgment.
Management, on an ongoing basis, reviews critical estimates and assumptions. 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 Consolidated
Financial Statements may change significantly.

The following sections discuss critical accounting policies applied in preparing
our financial statements that are most dependent on the application of estimates
and assumptions.

VALUATION OF INVESTMENTS

REAL ESTATE INVESTMENTS--The Partnership's investments in real estate are
initially valued at their purchase price. Thereafter, real estate investments
are reported at their estimated market values based upon 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
is responsible to assure that the valuation process provides objective and
accurate market value estimates.

The purpose of an appraisal is to estimate the market value of real estate as of
a specific date. Market value has been defined as the most probable price for
which the appraised real estate will sell in a competitive market under all
conditions requisite for a fair sale, with the buyer and seller each acting
prudently, knowledgeably, and for self interest, and assuming that neither is
under undue duress.

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.

Mortgage and other loans receivable, which are accounted for as loans, are
independently valued as described above.

Other real estate investments include notes receivable, which are valued at the
amount due and approximate market value.

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 since market prices of real estate investments can only
be determined by negotiation between a willing buyer and seller. Although the
estimated market values represent subjective estimates, management believes
these estimated market values are reasonable approximations of market prices and
the aggregate value of investments in real estate is fairly presented as of
March 31, 2004 and March 31, 2003.

OTHER ESTIMATES

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 reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.

21



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk. The Partnership's exposure to market rate risk for changes
in interest rates relates to about 31.97% of its investment portfolio consisting
primarily of short-term fixed rate commercial paper and fixed and variable
interest rate debt. The Partnership does not use derivative financial
instruments. By policy, the Partnership places its investments with high quality
debt security issuers, limits the amount of credit exposure to any one issuer,
limits duration by restricting the term, and holds investments to maturity
except under rare circumstances.

The table below presents the amounts and related weighted interest rates of the
Partnership's cash equivalents and short-term investments at March 31, 2004:

ESTIMATED MARKET
VALUE AVERAGE
MATURITY (IN $ MILLIONS) INTEREST RATE
------------ ------------------- ---------------
Cash equivalents............ 0-3 months $14.8 1.01%

The table below discloses the Partnership's fixed rate debt as of March 31,
2004. 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 (in thousands)
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), 4/1/2004- ESTIMATED
INCLUDING CURRENT PORTION 12/31/2004 2005 2006 2007 2008 THEREAFTER TOTAL FAIR VALUE
- ------------------------- ---------- ------ ------ ------ ------- ---------- ------- ----------

Average Fixed Interest Rate ........... 5.85% 5.83% 5.28% 5.26% 5.04% 6.75% 6.32%
Fixed Rate ............................ $543 $774 $8,479 $588 $26,091 $7,284 $43,759 $46,322
-------------------------------------------------------------------------------------------
Total Mortgage Loans Payable .......... $543 $774 $8,479 $588 $26,091 $7,284 $43,759 $46,322
-------------------------------------------------------------------------------------------


The Partnership is exposed to market risk from tenants. While the Partnership
has not experienced any significant credit losses, in the event of a significant
rising interest rate environment and/or economic downturn, defaults could
increase and result in losses to the Partnership, which would adversely affect
its operating results and liquidity.

ITEM 4. CONTROLS AND PROCEDURES

In order to ensure that the information we must disclose in our filings with the
Securities and Exchange Commission is recorded, processed, summarized, and
reported on a timely basis, the Company's management, including our Chief
Executive Officer and President and Chief Accounting 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), as of March 31, 2004.
Based on such evaluation, the Chief Executive Officer and President and Chief
Accounting Officer have concluded that, as of March 31, 2004, our disclosure
controls and procedures were effective in timely alerting them to material
information relating to us required to be included in our periodic SEC filings.
There has been no change in our internal control over financial reporting during
the quarter ended March 31, 2004, that has materially affected, or is reasonably
likely to materially affect, our internal control over financial reporting.

22



PART II

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

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

ITEM 6. EXHIBITS AND REPORT ON FORM 8-K

(a) EXHIBITS

2. Not applicable.

3.1 Amended Articles of Incorporation of Pruco Life Insurance
Company, filed as Exhibit A(6)(a) to Form S-6, Registration
Statement No. 333-07451, filed July 2, 1996 on behalf of Pruco
Life Variable Appreciable Account, and incorporated herein by
reference.

3.2 Amended By-Laws of Pruco Life Insurance Company, filed as
Exhibit A(3)(3ii) to Form 10-Q, Registration Statement No.
33-37587, filed August 15, 1997 on behalf of Pruco Life
Insurance Company, and incorporated herein by reference.

3.3 Resolution of the Board of Directors establishing the Pruco Life
Variable Contract Real Property Account, filed as Exhibit (3C)
to Form S-1, Registration Statement No. 33-8698, filed September
12, 1986, and incorporated herein by reference.

4.1 Variable Life Insurance Contract, filed as Exhibit 1.A.(5)(a) to
Pre-Effective Amendment No. 1 to Form S-6, Registration
Statement No. 2-80513, filed February 17, 1983, and incorporated
herein by reference.

4.2 Revised Variable Appreciable Life Insurance Contract with fixed
death benefit, filed as Exhibit 1.A.(5)(f) to Post-Effective
Amendment No. 5 to Form S-6, Registration Statement No. 2-89558,
filed July 10, 1986, and incorporated herein by reference.

4.3 Revised Variable Appreciable Life Insurance Contract with
variable death benefit, filed as Exhibit 1.A.(5)(g) to
Post-Effective Amendment No. 5 to Form S-6, Registration
Statement No. 2-89558, filed July 10, 1986, and incorporated
herein by reference.

4.4 Single Premium Variable Annuity Contract, filed as Exhibit 4(i)
to Form N-4, Registration Statement No. 2-99616, filed August
13, 1985, and incorporated herein by reference.

4.5 Flexible Premium Variable Life Insurance Contract, filed as
Exhibit 1.A.(5) to Form S-6, Registration Statement No. 2-99260,
filed July 29, 1985, 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 as 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 Service Agreement between The Prudential Insurance Company of
America and The Prudential Investment Corporation, filed as
Exhibit (10B) to Form S-1, Registration Statement No. 33-8698,
filed September 12, 1986, and incorporated herein by reference.

10.3 Partnership Agreement of The Prudential Variable Contract Real
Property Partnership filed as Exhibit (10C) to Post-Effective
Amendment No. 4 to Form S-1, Registration Statement No. 33-8698,
filed May 2, 1988, and incorporated herein by reference.

11. Not applicable.

12. Not applicable.

18. None

23



22. Not applicable.

23. None.

24. Not applicable.

27. Not applicable.

31.1 Certification of Chief Executive Officer and President required
pursuant to Exchange Act Rules 13a-15(e) and 15d-15(e), as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.

31.2 Certification of Chief Accounting Officer required pursuant to
Exchange Act Rules 13a-15(e) and 15d-15(e), as adopted pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1 Certification of Chief Executive Officer and President required
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.

32.2 Certification of Chief Accounting Officer required pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.

(b) REPORT ON FORM 8-K

None.

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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
IN RESPECT OF
PRUCO LIFE VARIABLE CONTRACT REAL PROPERTY ACCOUNT
--------------------------------------------------
(REGISTRANT)


Date: May 14, 2004 By: /s/ Andrew J. Mako
------------ ------------------
Andrew J. Mako
Chief Executive Officer
and President

25