PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY ACCOUNT, POS AMI, 1996-04-05

PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY ACCOUNT
POS AMI, 1996-04-05
LIFE INSURANCE

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AS FILED WITH THE SEC ON __________ REGISTRATION NO. 33-20083

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

--------------

FORM S-1

POST-EFFECTIVE AMENDMENT NO. 8

REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

IN RESPECT OF

THE PRUDENTIAL VARIABLE CONTRACT
REAL PROPERTY ACCOUNT

(Exact Name of Registrant)

C/O THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
PRUDENTIAL PLAZA
NEWARK, NEW JERSEY 07102-3777
(800) 445-4571
(Address and telephone number of principal executive offices)

--------------

THOMAS C. CASTANO
ASSISTANT SECRETARY
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
PRUDENTIAL PLAZA
NEWARK, NEW JERSEY 07102-3777
(800) 445-4571
(Name, address, and telephone number of agent for service)

Copy to:
JEFFREY C. MARTIN
SHEA & GARDNER
1800 MASSACHUSETTS AVENUE, N.W.
WASHINGTON, D.C. 20036

--------------

<PAGE>

CROSS REFERENCE SHEET
(AS REQUIRED BY FORM S-1)
<TABLE>
<CAPTION>
S-1 ITEM NUMBER AND CAPTION LOCATION
- --------------------------- --------
<S> <C>
1. Forepart of the Registration Statement and
Outside Front Cover Page of Prospectus........................ Cover

2. Inside Front and Outside Back Cover Pages of
Prospectus.................................................... Inside Front Cover

3. Summary Information, Risk Factors and Ratio
of Earnings to Fixed Charges.................................. Prospectus Cover; Summary; Risk Factors

4. Use of Proceeds............................................... Investment Policies; Current Real Estate-Related
Investments; Management's Discussion and Analysis
of Financial Condition and Results of Operations

5. Determination of Offering Price............................... Not Applicable

6. Dilution...................................................... Not Applicable

7. Selling Security Holders...................................... Not Applicable

8. Plan of Distribution.......................................... Distribution of the Contracts

9. Description of Securities to be Registered.................... Prospectus Cover; General Information about The
Prudential Insurance Company of America, The
Prudential Variable Contract Real Property Account,
The Prudential Variable Contract Real Property
Partnership, and The Investment Manager; The Real
Property Account's Unavailability to Certain
Contracts; Valuation of Contract Owners'
Participating Interests; Charges; Restrictions on
Withdrawals; Restrictions on Contract Owners'
Investment in the Real Property Account

10. Interests of Named Experts and Counsel........................ Not Applicable

11. Information With Respect to the Registrant.................... General Information about The Prudential Insurance
Company of America, The Prudential Variable
Contract Real Property Account, The Prudential
Variable Contract Real Property Partnership, and The
Investment Manager; Investment Policies; Current
Real Estate-Related Investments; Management's
Discussion and Analysis of Financial Condition and
Results of Operations; Per Share Investment Income
and Capital Changes; Investment Restrictions;
Conflicts of Interest; Valuation of Contract Owners'
Participating Interests; Financial Statements;
Litigation; State Regulation; Federal Income Tax
Considerations

12. Disclosure of Commission Position on Indemnification
for Securities Act Liabilities................................ Not Applicable

</TABLE>

<PAGE>

PART I

INFORMATION REQUIRED IN PROSPECTUS

<PAGE>

PROSPECTUS

MAY 1, 1996

THE PRUDENTIAL
VARIABLE CONTRACT
REAL PROPERTY ACCOUNT

This prospectus describes the real estate investment option that The Prudential
Insurance Company of America ("The Prudential") offers in connection with the
funding of benefits under certain variable life insurance and variable annuity
contracts (the "Contracts") it issues. These Contracts are described in
different prospectuses, and this prospectus is attached to the prospectus for
the type of Contract selected. Although the Contracts vary in their terms, each
provides that owners may allocate all or part of their net premiums or purchase
payments to The Prudential Variable Contract Real Property Account (the "Real
Property Account"), a separate account of The Prudential. The assets of the Real
Property Account are invested entirely through The Prudential Variable Contract
Real Property Partnership (the "Partnership") which is a general partnership
established by The Prudential and two of its subsidiaries, Pruco Life Insurance
Company ("Pruco Life") and Pruco Life Insurance Company of New Jersey ("Pruco
Life of New Jersey"), to provide for investment of assets allocated to the real
property investment option under variable contracts issued by those companies.
Through the Partnership, the assets of the Real Property Account will be
invested primarily (at least 65%) in direct ownership interests in
income-producing real property such as office buildings, shopping centers,
apartments, industrial properties, agricultural land or hotels, participating
mortgage loans originated by the Partnership, and real property sale-leaseback
transactions negotiated on behalf of the Partnership. It is expected that
typically the large majority of these real estate investments will be in direct
ownership interests in real estate, including but not limited to fee interests,
general partnership interests, leaseholds, and tenancies in common. Apart from a
portion of the Partnership's assets (normally 10-15%) invested in short-term or
intermediate-term debt instruments for liquidity purposes, the remainder of the
Partnership's assets may be invested in other types of real estate-related
investments, including primarily conventional, non-participating mortgage loans
and real estate investment trusts. Values under the Contracts, with respect to
the portion of the Contract owner's Contract fund allocated to the Real Property
Account, will vary with the performance of the Real Property Account's
investments through the Partnership.

The investment objectives of the Real Property Account and Partnership are to:
(i) preserve and protect capital; (ii) provide for compounding of income as a
result of reinvestment of cash flow from investments; and (iii) provide for
increases over time in the amount of such income through appreciation in the
value of assets. There can be no assurance, of course, that these investment
objectives will be met.

----------------------------------------------------------

THIS OFFERING INVOLVES CERTAIN RISK FACTORS. INVESTMENT IN THE REAL PROPERTY
ACCOUNT INVOLVES A SIGNIFICANT DEGREE OF RISK, ATTRIBUTABLE IN PART TO THE FACT
THAT THE ASSETS HELD IN THE PARTNERSHIP MAY NOT BE READILY SALABLE ON
COMMERCIALLY REASONABLE TERMS. SEE RISK FACTORS, PAGE 10. THE ASSETS OF THE REAL
PROPERTY ACCOUNT AND PARTNERSHIP WILL NOT BE AS LIQUID AS THE INVESTMENTS
GENERALLY MADE BY VARIABLE LIFE INSURANCE AND VARIABLE ANNUITY SEPARATE ACCOUNTS
(SEE LIQUIDITY OF INVESTMENTS, PAGE 10) AND THE ABILITY OF THE CONTRACT OWNER TO
WITHDRAW OR TRANSFER PORTIONS OF HIS OR HER CONTRACT FUND ALLOCATED TO THE REAL
PROPERTY ACCOUNT MAY BE SUBJECT TO CERTAIN RESTRICTIONS. SEE RESTRICTIONS ON
WITHDRAWALS, PAGE 17. MOREOVER, THE INVESTMENTS AND OPERATION OF THE REAL
PROPERTY ACCOUNT AND PARTNERSHIP MAY BE SUBJECT TO CERTAIN CONFLICTS OF
INTEREST. SEE CONFLICTS OF INTEREST, PAGE 12.

----------------------------------------------------------

PLEASE READ THIS PROSPECTUS AND KEEP IT FOR FUTURE REFERENCE. IT IS ATTACHED TO
A CURRENT PROSPECTUS FOR THE RELATED VARIABLE CONTRACT.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
Prudential Plaza
Newark, New Jersey 07102-3777
Telephone: (800) 445-4571

PRPA-3 Ed 5-96

<PAGE>

PROSPECTUS CONTENTS

PAGE
PER SHARE INVESTMENT INCOME AND CAPITAL CHANGES............................ 1

SUMMARY.................................................................... 2

GENERAL INFORMATION ABOUT THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA, THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY
ACCOUNT, THE PRUDENTIAL VARIABLE CONTRACT REAL
PROPERTY PARTNERSHIP, AND THE INVESTMENT MANAGER....................... 3
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA............................ 3
THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY ACCOUNT................. 3
THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP............. 4
THE INVESTMENT MANAGER................................................. 4

INVESTMENT POLICIES........................................................ 5
OVERVIEW................................................................ 5
INVESTMENT IN DIRECT OWNERSHIP INTERESTS IN REAL ESTATE................. 5
INVESTMENTS IN MORTGAGE LOANS........................................... 6
INVESTMENTS IN SALE-LEASEBACKS.......................................... 8
GENERAL INVESTMENT AND OPERATING POLICIES............................... 8

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

RISK FACTORS............................................................... 10
LIQUIDITY OF INVESTMENTS................................................ 10
GENERAL RISKS OF REAL PROPERTY INVESTMENTS.............................. 10
RELIANCE ON THE PARTNERS AND THE INVESTMENT MANAGER..................... 12

INVESTMENT RESTRICTIONS................................................... 12

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

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

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

BORROWING BY THE PARTNERSHIP.............................................. 16

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

RESTRICTIONS ON WITHDRAWALS............................................... 17

RESTRICTIONS ON CONTRACT OWNERS' INVESTMENT IN THE REAL
PROPERTY ACCOUNT....................................................... 18

FEDERAL INCOME TAX CONSIDERATIONS......................................... 18

DISTRIBUTION OF THE CONTRACTS............................................. 18

STATE REGULATION.......................................................... 18

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

EXPERTS................................................................... 19

LITIGATION................................................................ 19

FINANCIAL STATEMENTS...................................................... 19

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS..................................... 19

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

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

THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT LAWFULLY BE MADE. NO PERSON IS AUTHORIZED TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS.

The Registrant is subject to the informational requirements of the Securities
Exchange Act of 1934 and in accordance therewith files reports and other
information with the Securities and Exchange Commission. All reports and
information filed by the Registrant can be inspected and copied at the Public
Reference Section of the Commission at 450 Fifth Street, Room 1024, N.W.,
Washington, D.C. 20549, and at certain of its regional offices: Midwestern
Regional Office, CitiCorp Center, 500 West Madison Street, Suite 1400, Chicago,
IL 60661-2511; Northeastern Regional Office SEC, 7 World Trade Center, Suite
1300, New York, NY 10048.

REPORTS TO CONTRACT OWNERS

The Prudential will mail to each Contract owner who elects to allocate a portion
of his or her Contract fund to the Real Property Account an annual report
containing audited financial statements for the Real Property Account and the
Partnership and an annual statement showing the status of his or her Contract
fund and such other information as may be required by applicable regulation or
law.

<PAGE>

THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP
PER SHARE INVESTMENT INCOME, CAPITAL CHANGES, AND SELECTED RATIOS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)

THE FOLLOWING INFORMATION ON PER SHARE INVESTMENT INCOME, CAPITAL CHANGES, AND
SELECTED RATIOS HAS BEEN AUDITED BY DELOITTE & TOUCHE LLP, INDEPENDENT AUDITORS.
THEIR REPORT IS INCLUDED WITH THE FINANCIAL STATEMENTS AND NOTES THERETO OF THE
PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP.

01/01/95 01/01/94 01/01/93 01/01/92 01/01/91
to to to to to
12/31/95 12/31/94 12/31/93 12/31/92 12/31/91
-------- -------- -------- -------- --------

<S> <C> <C> <C> <C> <C>
Rent from properties $ 1.6387 $ 1.2754 $ 1.1659 $ 1.0727 $ 0.9899
Income from interest in properties $ 0.0527 $ 0.1838 $ 0.2139 $ 0.1970 $ 0.1791
Interest on mortgage loans $ 0.0000 $ 0.0082 $ 0.0755 $ 0.0711 $ 0.0663
Interest from short-term investments $ 0.2199 $ 0.1226 $ 0.0549 $ 0.0653 $ 0.1151
-------- -------- -------- -------- --------
INVESTMENT INCOME $ 1.9113 $ 1.5900 $ 1.5102 $ 1.4061 $ 1.3504
======== ======== ======== ======== ========
Investment management fee $ 0.1936 $ 0.1786 $ 0.1673 $ 0.1642 $ 0.1669
Real estate tax expense $ 0.1602 $ 0.1399 $ 0.1465 $ 0.1488 $ 0.1168
Administrative expenses $ 0.1484 $ 0.1103 $ 0.1187 $ 0.1046 $ 0.0946
Operating expenses $ 0.1546 $ 0.1332 $ 0.1209 $ 0.1241 $ 0.0948
Interest expense $ 0.0381 $ 0.0255 $ 0.0236 $ 0.0215 $ 0.0193
-------- -------- -------- -------- --------
EXPENSES $ 0.6949 $ 0.5875 $ 0.5770 $ 0.5632 $ 0.4924
======== ======== ======== ======== ========
NET INVESTMENT INCOME $ 1.2164 $ 1.0025 $ 0.9332 $ 0.8429 $ 0.8580
======== ======== ======== ======== ========
Net realized loss on investments sold $(0.0000) $(0.0966) $(0.1816) $ 0.0000 $ 0.0000
Net unrealized gain/(loss) on investments $ 0.0581 $ 0.2169 $ 0.0152 $(1.1359) $(0.7770)
-------- -------- -------- -------- --------
NET REALIZED AND UNREALIZED
GAIN/(LOSS) ON INVESTMENTS $ 0.0581 $ 0.1203 $(0.1664) $(1.1359) $(0.7770)
-------- -------- -------- -------- --------
Net increase/(decrease) in share value $ 1.2745 $ 1.1228 $ 0.7668 $(0.2930) $ 0.0810

Share Value at beginning of period $14.4792 $13.3564 $12.5896 $12.8826 $12.8016
-------- -------- -------- -------- --------
Share Value at end of period $15.7537 $14.4792 $13.3564 $12.5896 $12.8826
======== ======== ======== ======== ========

Ratio of expenses to average net assets 4.62% 4.27% 4.44% 4.47% 3.81%

Ratio of net investment income to
average net assets 8.08% 7.29% 7.17% 6.69% 6.63%

Number of shares outstanding at
end of period (000's) 12,037 12,241 13,031 14,189 14,993
</TABLE>

ALL CALCULATIONS ARE BASED ON AVERAGE MONTH-END SHARES OUTSTANDING WHERE
APPLICABLE.

PER SHARE INFORMATION PRESENTED HEREIN IS SHOWN ON A BASIS CONSISTENT WITH THE
FINANCIAL STATEMENTS AS DISCUSSED IN NOTE 1G.

1 - Real Property

<PAGE>

SUMMARY

This prospectus describes The Prudential Variable Contract Real Property Account
(the "Real Property Account"), a separate account of The Prudential Insurance
Company of America ("The Prudential") created pursuant to New Jersey insurance
law. See THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, page 3 and THE PRUDENTIAL
VARIABLE CONTRACT REAL PROPERTY ACCOUNT, page 3. Under that law, the assets of
the Real Property Account are not chargeable with liabilities arising out of any
other business of The Prudential. Owners of certain variable life insurance and
variable annuity contracts issued by The Prudential may allocate a portion of
their net premiums or purchase payments, or transfer a portion of the total
amount invested under their Contracts (known as the "Contract fund"), to the
Real Property Account, and values and benefits under the Contracts will
thereafter reflect the investment experience of the Real Property Account.
Contract owners, not The Prudential, bear the risks and rewards of the
investment performance of the Real Property Account to the extent of the
Contract owner's Contract fund invested in the Real Property Account. This
prospectus is attached to and should be read in conjunction with the prospectus
for the type of Contract selected.

The assets of the Real Property Account are invested through The Prudential
Variable Contract Real Property Partnership (the "Partnership"), which invests
primarily in income-producing real estate. See THE PRUDENTIAL VARIABLE CONTRACT
REAL PROPERTY PARTNERSHIP, page 4. The Prudential is the investment manager of
the Partnership. See THE INVESTMENT MANAGER, page 4. The Partnership invests at
least 65% of its assets in direct ownership interests in income-producing real
estate, participating mortgage loans (mortgages providing for participation in
the revenues generated by, or the appreciation of, the underlying property, or
both) originated for the Partnership, and real property sale-leasebacks
negotiated by The Prudential on behalf of the Partnership. It is expected that
typically the large majority of these real estate investments will be in direct
ownership interests in income producing real estate, such as office buildings,
shopping centers, apartments, industrial properties or hotels. The Partnership
may also invest up to 5% of its assets in direct ownership interests in
agricultural land. A small portion of the Partnership's assets (ordinarily
10-15%) will be invested in short-term or intermediate-term marketable debt
securities. The remainder of the Partnership's assets may be invested in other
types of real estate-related investments, including conventional,
non-participating mortgage loans and real estate investment trusts. The
investment objectives of the Partnership are to: (i) preserve and protect the
Partnership's capital; (ii) provide for compounding of income as a result of
reinvestment of cash flow from investments; and (iii) provide for increases over
time in the amount of such income through appreciation in the value of acquired
real property and, to a lesser extent, through mortgage loans and sale-leaseback
transactions. See INVESTMENT POLICIES, page 5. There is no assurance that
sufficient suitable investments will be found or that the Partnership's
objectives will be attained.

Investment in the Real Property Account, and thereby, participation in the
investment experience of the Partnership, involves significant risks. See RISK
FACTORS, page 10. These include the risk of fluctuating real estate values and
the risk that the appraised or estimated values of the Partnership's real
property investments will not be realized upon their disposition. Many of the
Partnership's real estate investments will not be quickly convertible into cash
through disposition on commercially reasonable terms. The Real Property Account
should therefore be viewed only as a long-term investment. See RESTRICTIONS ON
WITHDRAWALS, page 17. For certain other risk factors associated with the Real
Property Account, see RISK FACTORS, page 10.

The Prudential has taken steps to ensure that the Real Property Account and
Partnership will be sufficiently liquid to satisfy all withdrawal or loan
requests promptly (within 7 days). The Partnership will normally maintain 10-15%
of its assets in short-term and intermediate-term marketable debt instruments
and will have income streams from its real property investments, mortgage loans,
and leasebacks. Moreover, the Partnership may borrow funds for liquidity
purposes, if necessary. See BORROWING BY THE PARTNERSHIP, page 16. There are
currently in force limitations on transfers out of the Real Property Account.
See RESTRICTIONS ON WITHDRAWALS, page 17.

The Prudential's management of the Partnership is subject to certain conflicts
of interest, including the possible acquisition of properties from affiliates.
See CONFLICTS OF INTEREST, page 12.

The Prudential generally charges the Partnership a daily fee for investment
management which amounts to 1.25% per year of the average daily gross assets of
the Partnership. The Partnership also compensates The Prudential for providing
certain accounting and administrative services to the Partnership. See CHARGES,
page 16.

Contract owners who select the real property investment option will also be
subject to the same Contract charges with respect to the portion of their
Contract fund allocated to the Real Property Account as they are with respect to
the portion of their Contract fund allocated to a separate account that invests
in The Prudential Series Fund, Inc. (the "Series Fund"), the underlying funding
vehicle for the other variable investment options available to Contract owners.
The particular Contract prospectus should be consulted for a description of
those charges. The Real Property Account is currently available to purchasers of
PRUDENTIAL'S VARIABLE INVESTMENT PLAN(R) Contracts,

2 - Real Property

<PAGE>

The Prudential's DISCOVERY(R) Plus Contracts, The Prudential's Variable
APPRECIABLE LIFE(R) Insurance Contracts, and The Prudential's Custom VAL(sm)
Life Insurance Contracts, except for Contracts, such as those purchased in
connection with IRAs, Section 403(b) annuities, and other tax-qualified plans,
that are subject to the Employee Retirement Income Security Act of 1974
("ERISA") or to the prohibited transaction excise tax provisions of the Internal
Revenue Code. See THE REAL PROPERTY ACCOUNT'S UNAVAILABILITY TO CERTAIN
CONTRACTS, page 14. A Variable APPRECIABLE LIFE Contract owner, for example, who
elects to invest part of his or her net premiums in The Prudential Variable
Appreciable Account and part in the Real Property Account will be subject to the
same monthly sales load charges, the same risk charges, the same administrative
charges, the same insurance charges, and the same contingent deferred sales load
charges without regard to what portion is invested in The Prudential Variable
Appreciable Account and what portion is invested in the Real Property Account.
The Real Property Account has established different subaccounts, relating to the
different types of variable Contracts that may participate in the Real Property
Account, and these subaccounts provide the mechanism and maintain the records
whereby these different Contract charges are made.

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

The Prudential Insurance Company of America ("The Prudential") is a mutual
insurance company, founded in 1875 under the laws of the State of New Jersey. It
is licensed to sell life insurance and annuities in the District of Columbia,
Guam, and in all states. These Contracts are not offered in any state in which
the necessary approvals have not yet been obtained.

The Prudential's consolidated financial statements appear in either the attached
Contract prospectus or in the statement of additional information for the
Contract prospectus, which is available upon request.

THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY ACCOUNT

The Prudential Variable Contract Real Property Account (the "Real Property
Account") was established on November 20, 1986 under New Jersey law as a
separate investment account. The account meets the definition of a "separate
account" under the federal securities laws. The Real Property Account holds
assets that are segregated from all the other assets of The Prudential. The Real
Property Account is used only to support those variable benefits payable under
the Contracts that are funded by the real estate investment option.

The obligations to Contract owners and beneficiaries arising under the Contracts
are general corporate obligations of The Prudential. The Prudential is also the
legal owner of the assets in the Real Property Account. The Prudential will at
all times maintain assets in the Real Property Account with a total market value
at least equal to the amounts credited under the real estate option to all the
Contracts participating in the Real Property Account. These assets may not be
charged with liabilities which arise from any other business The Prudential
conducts. In addition to these assets, the Real Property Account's assets may
include funds contributed by The Prudential, and may include accumulations of
the charges The Prudential makes against the Real Property Account.

The Prudential will bear the risks and rewards of the Real Property Account's
investment experience to the extent of its investment in the Real Property
Account. After the Real Property Account has been in operation for some time,
The Prudential may withdraw or redeem its investment in the Real Property
Account, but will not make any such redemption unless it is satisfied that the
redemption will not have a materially adverse impact on the Real Property
Account. Accumulations of charges will be withdrawn on a regular periodic basis.

Unlike the other separate accounts funding the Contracts, the Real Property
Account is not registered with the Securities and Exchange Commission ("SEC")
under the Investment Company Act of 1940 as an investment company. For state law
purposes, the Real Property Account is treated as a part or division of The
Prudential. Contract owners have no voting rights with respect to the Real
Property Account. The Real Property Account is under the control and management
of The Prudential, and the Board of Directors and officers of The Prudential are
responsible for the management of the Real Property Account. No salaries of The
Prudential personnel are paid by the Real Property Account. Information
regarding the directors and officers of The Prudential is contained in the
attached prospectus for the Contract. The financial statements of the Real
Property Account begin on page A1.

3 - Real Property

<PAGE>

THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

All amounts allocated to the Real Property Account are invested through The
Prudential Variable Contract Real Property Partnership (the "Partnership"), a
general partnership organized under New Jersey law on April 29, 1988. The only
partners in the Partnership (collectively, the "Partners") are The Prudential
and two of its subsidiaries, Pruco Life Insurance Company ("Pruco Life") and
Pruco Life Insurance Company of New Jersey ("Pruco Life of New Jersey"). The
Partnership was established to provide a means for assets allocated to the real
estate investment options under variable life insurance and variable annuity
contracts issued by these three companies to be invested in a commingled pool,
so as to provide greater diversification of investments and lower transaction
costs than would be possible if such assets were separately invested by each
company. All amounts allocated to the Real Property Account are contributed by
The Prudential to the Partnership. The Prudential's general partnership interest
in the Partnership is held in the Real Property Account.

The initial contributions to the Partnership were made on April 29, 1988. The
Prudential contributed $100,000 in cash to the Partnership; Pruco Life of New
Jersey contributed $100,000 in cash to the Partnership; and Pruco Life
contributed the real estate and other assets held in its real estate separate
account, which had been actively investing in real estate for more than a year.
Those assets had an estimated market value of $91,538,737 on that date. Each
Partner is entitled to its prospective proportionate share of all income, gains,
and losses of the Partnership.

The assets of the Partnership are valued on each business day and the value of
each Partner's interest will fluctuate with the investment performance of the
Partnership. In addition, the interests of the Partners are proportionately
readjusted, at the then current value, on each day when a Partner makes a
contribution to, or withdrawal from, the Partnership. When a Contract owner
chooses to allocate a portion of his or her net premiums or purchase payments,
or transfer a portion of his or her Contract fund, to the Real Property Account,
The Prudential will contribute that amount to the Partnership as a capital
contribution, which will correspondingly increase the Real Property Account's
interest in the Partnership. Values and benefits under the Contract will
thereafter vary with the performance of the Partnership's investments. For
further discussion on how the value of a Contract owner's interest in the Real
Property Account and the value of the Partnership's investments are calculated,
see VALUATION OF CONTRACT OWNERS' PARTICIPATING INTERESTS, page 14.

Contract owners have no voting rights with respect to the operations of the
Partnership. The financial statements of the Partnership begin on page B1.

THE INVESTMENT MANAGER

Pursuant to an investment management agreement, the Partnership has retained The
Prudential to act as investment manager of the Partnership. The Prudential is
one of the largest real estate investors in North America. The Prudential has
been making mortgage loans since before 1900 and is one of the most experienced
real estate mortgage lenders in the United States. The Prudential, through its
affiliates, has a nationwide staff to underwrite, originate, and service such
loan activity. Its network of field offices has direct working relationships
with regional and national real estate developers, brokers, managers, and
investors providing The Prudential with mortgage investment opportunities on a
national basis. Since the early 1970's, The Prudential's mortgage lending has
been concentrated in the commercial and agricultural markets. The urban
commercial lending activities include loans secured by apartment, office, and
industrial buildings, hotels and motels, and shopping centers.

In the late 1940's, The Prudential began to acquire real estate equities. Today,
The Prudential and its affiliates continue to make equity investments in
investment properties and develop income-producing real estate.

At present, The Prudential directly and through affiliates invests in and
manages real estate equities and mortgages for its general account and for
several separate accounts. The Prudential and its affiliates also participate in
real estate ventures through public and private partnerships. As of December 31,
1995, The Prudential owned or controlled $31.3 billion of net real estate
mortgages and equities of which $24.2 billion is in the general account, $3.6
billion is in separate accounts and $3.5 billion is in subsidiaries. Statement
value for general account assets is recorded at depreciated cost and for
separate account assets at market value. For a discussion of how the
Partnership's real estate-related investments are valued, see VALUATION OF
CONTRACT OWNERS' PARTICIPATING INTERESTS, page 14.

The Prudential has organized its real estate activities into separate business
units within Prudential's Private Asset Management Group. Prudential Real Estate
Investors (PREI) is the unit responsible for the investments of the Real
Property Account. PREI's investment staff is separate and distinct from that of
Prudential's general account real estate activities.

PREI provides investment management services on a domestic basis and also acts
as part of a global team providing these services to institutional investors
worldwide. PREI is headquartered in Short Hills, New Jersey and has 4 field
offices across the United States. As of December 31, 1995, PREI had under
management

4 - Real Property

<PAGE>

approximately 14.1 million net rentable square feet of office real estate, 20.1
million net rentable square feet of industrial real estate, 5.6 million net
rentable square feet of retail real estate, 7,670 hotel rooms, 14,400
multifamily residential units, and 868 acres of unimproved land.

Prudential's general account real estate operation may provide PREI with such
services as may be required in connection with the investment management
agreement regarding the Partnership. Such operations are now located in Newark
and Parsippany, New Jersey and have 5 regional offices across the United States.
As of December 31, 1995, these operations had under management approximately
30.1 million net rentable square feet of office real estate, 7.9 million net
rentable square feet of industrial real estate, 4.8 million net rentable square
feet of retail real estate, 12,500 hotel rooms, 4,700 multifamily residential
units and manages a portfolio of mortgage loans totaling approximately $19.7
billion.

Proposals to acquire properties for the Partnership will generally be originated
by the field office and reviewed and approved by the Investment Management
Committee of PREI. Depending upon the size of the acquisition and other factors,
a proposed real estate investment may also be submitted for review to the
Finance Committee of the Board of Directors of The Prudential.

INVESTMENT POLICIES

OVERVIEW

The Partnership has an investment policy of investing at least 65% of its assets
in direct ownership interests in income-producing real estate, participating
mortgage loans originated for the Partnership, and real property sale-leasebacks
negotiated by The Prudential on behalf of the Partnership. It is expected that
the largest portion of these real estate investments will be in direct ownership
interests (including fee interests, general partnership interests, leaseholds,
and tenancies in common) in income-producing real estate, such as office
buildings, shopping centers, apartments, industrial properties or hotels. The
Partnership may also invest up to 5% of its assets in direct ownership interests
in agricultural land. From 10-15% of the Partnership's assets will ordinarily be
invested in short-term debt obligations of the type purchased by the Money
Market Portfolio of the Series Fund or in intermediate-term bonds of the type
invested in by the Diversified Bond Portfolio of the Series Fund. The Partners
reserve the right to increase this amount up to 30% of the Partnership's assets.
Such an increase in the portion invested in debt obligations could occur, for
example, because of property sales, a rapid influx of Contract owners' funds or
because of a perceived need to increase the Partnership's liquidity. The
remainder of the Partnership's assets may be invested in other types of real
estate-related investments, including primarily conventional, non-participating
mortgage loans and real estate investment trusts.

INVESTMENT IN DIRECT OWNERSHIP INTERESTS IN REAL ESTATE

ACQUISITION. The Partnership's principal investment policy involves acquiring
primarily direct ownership interests in existing (including newly constructed)
income-producing real estate, including office buildings, shopping centers,
apartments, industrial properties, and hotels. The Partnership may also invest
up to 5% of its assets in direct ownership interests in agricultural land.
Property acquisitions will generally be carried out by the real estate
acquisition offices in PREI's network of field offices located throughout the
continental United States. The field office or an affiliate of The Prudential
also supervise the management of properties in all of The Prudential's accounts.
Proposed investments identified by an field office are reviewed and approved by
the Investment Management Committee of PREI, and in the case of larger
proposals, by the Finance Committee of the Board of Directors of The Prudential.

Although it has not been deemed appropriate to establish percentage limitations
on the type and location of properties that may be acquired by the Partnership,
the Partnership plans to diversify its investments both as to the type of
property acquired and its geographic location. Moreover, the Partnership's
investments will be maintained to meet the diversification requirements of the
Internal Revenue Code and the regulations thereunder. See GENERAL INVESTMENT AND
OPERATING POLICIES, page 8.

In order to attain the Partnership's stated objectives, it will be necessary for
the Partnership to acquire properties which will generate cash in excess of that
required to meet the gross operating expenses of the Partnership. To do this, a
substantial portion of the Partnership's assets will be invested in properties
with operating histories that include established rent and expense schedules.
However, the Partnership may also acquire recently constructed properties that
may be subject to agreements with sellers providing for certain minimum levels
of income. Upon the expiration of or default under these agreements, there can
be no assurance that the Partnership will be able to maintain the level of
operating income which is necessary to produce the return it was previously
experiencing. The Partnership may under certain conditions purchase real
property from The Prudential or its affiliates. See CONFLICTS OF INTEREST, page
12.

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The property acquired by the Partnership will generally be real estate which is
ready for use. Accordingly, the Partnership will not usually be subject to the
risks of development or construction inherent in the purchase of unimproved real
estate. From time to time, however, the Partnership may invest in a
developmental real estate project deemed consistent with the Partnership's
objectives, and the Partnership will then be subject to those risks.

While the Partnership will often own the entire fee interest in an acquired
property, it may also hold other direct ownership interests, including, but not
limited to, general partnership interests, limited liability company interests,
leaseholds, and tenancies in common.

PROPERTY MANAGEMENT AND LEASING SERVICES. It is anticipated that the Partnership
generally will retain a management company operating in the area of a property
to perform local property management services. Generally, a field office or
other affiliate of The Prudential will supervise and monitor the performance of
the local management company, determine and establish the required accounting
information to be supplied, periodically inspect the property, review and
approve property operating budgets, and review actual operations to ensure
compliance with budgets. In addition to day-to-day management of the property,
the local management company will have responsibility for supervision of any
on-site personnel, negotiation of maintenance and service contracts, advice
regarding major repairs, replacements and capital improvements, the review of
market conditions to recommend desirable changes in rent schedules, and the
formulation of marketing and advertising programs to obtain and maintain good
occupancy rates by responsible tenants. The fees of the local management company
will reduce the cash flow from the property to the Partnership. Certain of the
Partnership's properties are expected to be managed by PREMISYS Real Estate
Services, Inc., a wholly-owned property management company of The Prudential.

It is anticipated that the Partnership will retain a leasing company to perform
leasing services on any property with actual or projected vacancies. The leasing
company will coordinate with the property management company to provide
marketing and leasing services with respect to the property. In some cases, the
property management company will be qualified to handle leasing and in those
cases a separate leasing company will not be hired. Leasing commissions and
expenses will reduce the cash flow from the property to the Partnership.

The Prudential may, on behalf of the Partnership, hire an affiliate to perform
property management or leasing services, so long as the affiliate's services are
provided on terms competitive with those available from unaffiliated entities
performing comparable services in the same geographic area. See CONFLICTS OF
INTEREST, page 12.

Annually, the field office which oversees the management of each property owned
by the Partnership will, together with the local property management firm,
formulate a business plan and budget for each property. This plan and budget
will consider, among other things, the projected rollover of individual leases,
necessary capital expenditures and any expansion or modification of the use of
the property and will require the approval of an officer of PREI. The field
office will also report periodically to PREI regarding the operating performance
of the property.

INVESTMENTS IN MORTGAGE LOANS

TYPES OF MORTGAGE LOANS. One of the Partnership's investment policies is the
making of mortgage loans. These will include conventional mortgage loans that
may pay fixed or variable rates of interest and, to the extent available,
mortgage loans that have a "participation" (as defined below). The Partnership
will not make mortgage loans to affiliates of The Prudential.

The properties to be subject to the Partnership's mortgage loans are intended to
consist of commercial properties (such as office buildings, shopping centers,
hotels, industrial properties, and office showrooms), agricultural properties,
and residential properties (such as garden apartment complexes and high-rise
apartment buildings). The Partnership's mortgage loans will generally be secured
by properties with a demonstrable income-producing potential based on historical
or projected data. Such mortgage loans will generally not be personal
obligations of the borrower and will generally not be insured or guaranteed by
government agencies or otherwise.

1. FIRST MORTGAGE LOANS. It is expected that the Partnership will primarily make
first mortgage loans secured by mortgages on existing income-producing property.
Such first mortgage loans may provide for interest-only payments and a balloon
payment at maturity.

The yield on a traditional first mortgage loan has historically been less than
that of a wraparound mortgage loan on the same property. However, because of
recent innovations involving the terms and conditions of first mortgage loans,
such as the use of variable interest rates, equity participations and similar
devices, the yield on a first mortgage loan may, in certain instances, be
greater than that of a wraparound mortgage on the same property.

2. WRAPAROUND MORTGAGE LOANS. The Partnership also may make wraparound mortgage
loans on income-producing real properties which are already subject to prior
mortgage indebtedness to unaffiliated entities. A wraparound mortgage loan is a
mortgage having a principal amount equal to the outstanding balance under the
prior existing mortgage loan plus the amount actually to be advanced by the
lender under the wraparound mortgage loan,

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thereby providing the owner of a property with additional funds without
disturbing the existing loan. The terms of any wraparound mortgage loans made by
the Partnership will require the borrower to make all principal and interest
payments on the underlying loan to the Partnership, which will in turn pay the
holder of the prior loan. Because the existing first mortgage loan is preserved,
the lien of the wraparound mortgage loan is necessarily junior to it. The
Partnership will make wraparound mortgage loans only in states where local
applicable foreclosure laws permit a lender, in the event of the borrower's
default, to obtain possession of the property which secures the loan, and it
will be the policy of the Partnership to file notices of default and attempt to
obtain a court-appointed receiver where appropriate as quickly as possible after
any default.

3. JUNIOR MORTGAGE LOANS. The Partnership may also invest in other junior
mortgage loans. Junior mortgage loans will be secured by mortgages which are
subordinate to one or more prior liens on the real property and generally, but
not in all cases, will provide for repayment in full prior to the end of the
amortization period of the senior mortgages. Recourse on such loans will include
the real property encumbered by the Partnership's mortgage and additionally may
include other collateral or personal guarantees by the borrower.

The Partnership will generally make junior or wraparound mortgage loans only if
the senior mortgage, when combined with the amount of the Partnership's mortgage
loan, would not exceed the maximum amount which the Partnership would be willing
to commit to a first mortgage loan and only under such circumstances and on such
property as to which the Partnership would otherwise make a first mortgage loan.

4. PARTICIPATIONS. The Partnership may seek to make mortgage loans which, in
addition to charging a base rate of interest, will include provisions permitting
the Partnership to participate (a "participation") in the economic benefits of
the underlying property through the receipt of additional interest in the form
of a percentage of the gross or net revenues derived from operation of the
property and/or of the increase in the value of the property realized by the
borrower, such as through sale or refinancing of the property. Such arrangements
may also involve the grant to the Partnership of an option to acquire the
property or an undivided interest in the property securing the loan. To the
extent that the Partnership negotiates the right to receive additional interest
in the form of a percentage of the gross revenues or otherwise, the fixed cash
return to the Partnership from such an investment will generally be less than
would otherwise be the case. It is expected that the Partnership generally will
be entitled to such percentage participations when the gross or net revenues
derived from operation of the property exceed a certain base amount, which may
be subject to adjustment upon an increase in real estate taxes or similar
charges. The form and extent of such additional interest to be received by the
Partnership will vary with each transaction depending on such factors as the
equity investment of the owner or developer of the property, other financing or
credit obtained by the owner or developer, the fixed base interest rate on the
mortgage loan by the Partnership, any other security arrangement, the cash flow
and pro forma cash flow from the property, and market conditions.

The Partnership intends to utilize such additional interest as a hedge against
inflation on the assumption that as prices increase in the economy generally,
the rental prices obtained by properties, such as shopping centers or office
buildings, will increase and that there should be a corresponding increase in
the value of such properties. There can be no assurance that such additional
interest or increased values will in fact be received. In that event, the
Partnership would be entitled to receive only the fixed portion of its return.

STANDARDS FOR MORTGAGE LOAN INVESTMENTS. In making mortgage loans, the
investment manager will consider relevant real property and financial factors,
including the location, condition, and use of the underlying property, its
operating history, its future income-producing capacity and the quality,
experience, and creditworthiness of the unaffiliated borrower.

Prior to the Partnership's making any mortgage loan, the investment manager will
analyze the fair market value of the underlying real estate. In general, the
amount of each mortgage loan made by the Partnership will not exceed, when added
to the amount of any existing indebtedness, 80% of the estimated or appraised
value of the property mortgaged.

DEALING WITH OUTSTANDING LOANS. The Partnership may sell its mortgage loans
prior to maturity if such action is deemed advisable by the investment manager
and consistent with the Partnership's investment objectives. The investment
manager may also extend the maturity of any mortgage loan made by the
Partnership, consent to a sale of the property subject to a mortgage loan or
finance the purchase of a property by making a new mortgage loan in connection
with the sale of a property (either with or without requiring the repayment of
the mortgage loan), renegotiate the terms of a mortgage loan, and otherwise deal
with the mortgage loans of the Partnership.

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INVESTMENTS IN SALE-LEASEBACKS

A portion of the Partnership's investments may consist of real property
sale-leaseback transactions ("leasebacks"). In a transaction of this type, the
Partnership will typically purchase land and income-producing improvements on
the land and simultaneously lease the land and improvements, generally to the
seller, under a long-term lease. Leasebacks may be for very long terms and may
provide for payments from the lessee in escalating amounts.

Generally, under the terms of the leaseback, the tenant will operate, or provide
for the operation of, the property and be responsible for the payment of all
costs, including taxes, mortgage debt service, maintenance and repair of the
improvements, and insurance. The Partnership may also, in some cases, grant to
the lessee an option to acquire the land and improvements from the Partnership
after a period of years. The option exercise price would generally be based upon
such factors as the fair market value of the property, as encumbered by the
lease, the increase in the gross revenues from the property or other objective
criteria reflecting the increased value of the property.

In some leaseback transactions, the Partnership may only purchase the land under
an income-producing building and lease the land to the owner of the building. In
such cases, the Partnership may seek, in addition to base rents in its
leasebacks, participations in the gross revenues from the building in a form
such as a percentage of the gross revenues of the lessee above a base amount
(which may be subject to adjustment upon an increase in real property taxes or
upon other events). The Partnership may invest in leasebacks which are
subordinated to other interests in the land, buildings, and improvements, such
as a first mortgage, other mortgage or lien. In those situations, the
Partnership's leaseback interest will be subject to greater risks.

The Partnership will only acquire a property for a leaseback transaction if the
purchase price is equal to not more than 100% of the estimated or appraised
value of the property. The Partnership may dispose of its leasebacks when deemed
advisable by the investment manager and consistent with the Partnership's
investment objectives.

GENERAL INVESTMENT AND OPERATING POLICIES

The Partnership does not intend to invest in any direct ownership interests in
properties, mortgage loans, leasebacks or other real estate investments with a
view to making short-term profits from their sale. However, the Partnership may
dispose of its investments to the extent such disposition is necessary to meet
its cash requirements or where it is deemed to be desirable by the investment
manager because of market conditions or otherwise. Any proceeds from the
disposition of assets (and any cash flow from operations) which are not
necessary for the Partnership's operations and which are not withdrawn by the
Partners in order to make distributions pursuant to the variable contracts
issued by the Partners will be reinvested by the Partnership in investments
consistent with the Partnership's investment objectives and policies.

In making investments in properties, mortgage loans, leasebacks or other real
estate investments, the Partnership will rely on the investment manager's own
analysis of the investment and will not receive an independent appraisal prior
to acquisition. The Partnership expects, however, that all properties owned by
the Partnership, and most mortgage loans held by the Partnership, will be
appraised or valued on an annual basis by an independent appraiser who is a
member of a nationally recognized society of appraisers. Each such appraisal
shall be maintained in the records of the Partnership for at least 5 years. It
should be noted that appraised values are opinions and, as such, may not
represent the true worth or realizable value of the property being appraised.

The Partnership will ordinarily purchase properties on an unleveraged basis and
the properties acquired will typically be free and clear of mortgage
indebtedness immediately after their acquisition. The Partnership may, however,
acquire properties subject to existing mortgage loans. In addition, while the
Partnership will generally not mortgage its properties or acquire properties
partly with the proceeds of purchase money mortgage loans, it may do so up to
75% of the value of the property where the investment manager deems such action
consistent with the Partnership's investment objectives. Where the Partnership
does mortgage its properties, it will, of course, bear the expense of mortgage
payments. See BORROWING BY THE PARTNERSHIP, page 16.

In addition to the types of real estate investments previously discussed, the
Partnership may also invest a portion of its assets in real estate limited
partnerships and shares of real estate investment trusts.

The Partnership's investments will be maintained so as to meet the
diversification requirements set forth in Treasury Regulations issued pursuant
to Section 817(h) of the Internal Revenue Code (the "Code") relating to the
investments of variable life insurance and variable annuity separate accounts.
In order to meet the diversification requirements under the regulations, the
Partnership will meet the following test: no more than 55% of the assets will be
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. All interests in the same real property project are treated as
a single investment. The Partnership must meet the above test within 30 days of
the end of each calendar quarter. To

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comply with the diversification requirements of the State of Arizona, the
Partnership will limit additional investments in any one parcel or related
parcels to an amount not exceeding 10% of Partnership assets.

In managing the assets of the Partnership, The Prudential will use its
discretion in determining whether to foreclose on defaulting borrowers or to
evict defaulting tenants. Such determination will depend on the course of action
The Prudential concludes will be in the best interests of the Partnership in
maintaining the value of the investment.

Property management services generally will be required in connection with the
Partnership's investments in properties which are owned and operated by the
Partnership but usually will not be needed with respect to mortgage loans owned
by the Partnership, except for mortgage servicing. It is possible, however, that
such services will be necessary or desirable in exercising default remedies
under a foreclosure on a mortgage loan. The Prudential may engage on behalf of
the Partnership affiliated or unaffiliated entities to provide such additional
services to the Partnership. The Prudential may engage its affiliates to provide
property management, property development services, loan servicing or other
services if and only if the fees paid to an affiliate do not exceed the amount
that would be paid to an independent party for similar services rendered in the
same geographic area. See CONFLICTS OF INTEREST, page 12.

Finally, The Prudential will manage the Partnership so that the Real Property
Account will not be subject to registration under the Investment Company Act of
1940 (the "1940 Act"). This will require monitoring the proportion of the
Partnership's assets to be placed in various investments so that the Real
Property Account does not become subject to the 1940 Act.

CURRENT REAL ESTATE-RELATED INVESTMENTS

The current principal real estate-related investments held by the Partnership
are described below. Many of these investments were originated by, and
previously held in, The Prudential Real Property Account of Pruco Life Insurance
Company (the "Pruco Life Account"), a separate account established to fund the
real estate investment option under variable contracts issued by Pruco Life.
Prior to the formation of the Partnership, the Pruco Life Account followed the
same investment policies as those followed by the Partnership. Pruco Life
contributed the assets held in the Pruco Life Account to the Partnership as its
initial capital contribution to the Partnership.

PROPERTIES

1. WAREHOUSE FACILITY IN AZUSA, CALIFORNIA. This facility consists of three
one-story warehouse buildings in Azusa, California, approximately 20 miles east
of downtown Los Angeles. The buildings were constructed in 1986. They contain
approximately 432,000 rentable square feet which were 100% leased to five
tenants at December 31, 1995.

2. OFFICE FACILITY IN LISLE, ILLINOIS. The property is a four-story office
building on 5.6 acres of land. It was constructed in 1985 and contains
approximately 102,000 square feet of leasable space. R.R. Donnelley & Sons
Company currently leases the entire building under a renewable lease expiring in
1997. The facility is located at 750 Warrenville Road in the Corporetum Office
Park in Lisle, Illinois. Corporetum Office Park is a 75 acre planned office
development located 25 miles west of downtown Chicago.

3. APARTMENT COMPLEX IN ATLANTA, GEORGIA. Brookwood Valley Apartments is a
garden apartment complex located approximately 3 miles north of downtown
Atlanta. It consists of eight three-story buildings containing a total of 240
units. Construction of the 7.1 acre site was completed in 1987. At December 31,
1995 the property was 97% occupied.

4. WAREHOUSE FACILITY IN POMONA, CALIFORNIA. The Partnership owns a leasehold
estate in six industrial buildings on approximately 28 acres in Pomona,
California. The site is approximately 30 miles east of downtown Los Angeles. The
buildings were constructed between 1982 and 1984 and contain approximately
531,000 square feet of leasable space. The property was 100% occupied by seven
tenants at December 31, 1995.

Land under the leasehold estate was capitalized upon the assignment of a ground
lease from the previous owner. The lease term extends until November 2078 with
no renewal options. The annual ground lease payments are $250,000 through
November 1994, and, for each ten year increment thereafter, are subject to
increase by 50% of the increase in the Consumer Price Index during the previous
period. For 1995, the annual ground lease payment increased by $126,450 to
$376,450. The ground lease agreement contains a purchase option from November
1994 to November 1997 at a fixed price of $4,000,000.

5. SHOPPING CENTER IN ROSWELL, GEORGIA. King's Market shopping center was
constructed in 1988. It is located approximately 22 miles north of downtown
Atlanta on a 30 acre site. It contains approximately 296,584 square feet of
rentable space. At December 31, 1995 it was 99% occupied by 32 tenants.

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6. OFFICE FACILITY IN MORRISTOWN, NEW JERSEY. This four-story suburban office
building was constructed in 1981 and contains 85,000 rentable square feet. It is
located on a 5.1 acre site, approximately 30 miles west of New York City. At
December 31, 1995 it was 95% leased to 12 tenants.

7. WAREHOUSE FACILITY IN BOLINGBROOK, ILLINOIS. This single-story warehouse was
completed in 1989. It contains 224,640 rentable square feet. It is located
approximately 20 miles southwest of downtown Chicago. The entire facility is
leased to the Gillette Company under a lease expiring in October, 2000.

8. APARTMENT COMPLEX IN FARMINGTON HILLS, MICHIGAN. Indian Creek Apartments
consists of fifteen two-story buildings containing 156 two-bedroom and 40 one-
bedroom units. It was constructed in 1988 and is located approximately 20 miles
northwest of Detroit. At December 31, 1995, the property was 98% occupied.

9. OFFICE PARK IN FLINT, MICHIGAN. This investment consists of twelve
single-story buildings located in an office park in Flint, Michigan. The
property contains 113,393 rentable square feet. It is currently 92% occupied by
52 tenants.

The property was obtained by the Partnership on July 1, 1994 through foreclosure
on the mortgage loan made to Oak Creek Associates. The Partnership took title to
the property at the end of the redemption period on January 3, 1995. During this
period, the Partnership received all income generated by the property.

10. WAREHOUSE FACILITIES IN JACKSONVILLE, FLORIDA. The Partnership owns a 50%
interest in four single-story warehouse/distribution buildings located in
Jacksonville, Fl. The remaining 50% is owned by The Prudential and one of its
subsidiaries. The buildings contain approximately 502,000 rentable square feet
and were 100% occupied at December 31, 1995.

11. APARTMENT COMPLEX IN RALEIGH, NORTH CAROLINA. Dunhill Trace consists of
fourteen two and three story apartment buildings, containing a total of 250
units. It was acquired upon completion of construction in June, 1995. The
property, located on a 16.2 acre site in northwest, downtown Raleigh, North
Carolina, was 95% occupied at December 31, 1995

12. OFFICE FACILITY IN NASHVILLE, TENNESSEE. Westpark is a 97,000 square foot
office center located in Brentwood, Tennessee, a suburb of Nashville. The
property was constructed in 1982. The partnership purchased this property in
October 1995. At December 31, 1995 the building was 98.6% leased.

13. OFFICE FACILITY IN OAKBROOK TERRACE, ILLINOIS. Oakbrook Terrace Corporate
Center is a 123,000 square foot building located in a western suburb of Chicago,
Illinois. The Partnership purchased this property in December 1995. At December
31, 1995 the property was 99.5% leased.

RISK FACTORS

There are certain risk factors that a Contract owner should consider before
allocating a portion of his or her net premiums or purchase payments, or
transferring a portion of his or her Contract fund, to the Real Property
Account, so as to participate in the real estate-related investments held by the
Partnership. These include valuation risks, see VALUATION OF CONTRACT OWNERS'
PARTICIPATING INTERESTS, page 14, certain conflicts of interest, see CONFLICTS
OF INTEREST, page 12, as well as the following risks:

LIQUIDITY OF INVESTMENTS

Because the Real Property Account will, through the Partnership, invest
primarily in real estate, its assets will not be as liquid as the investments
generally made by separate accounts of life insurance companies funding variable
life insurance and variable annuity contracts. The Partnership will, however,
hold 10-15% of its assets in the form of marketable short-term or
intermediate-term debt securities. The primary purposes for such investments are
to meet the expenses involved in the operation of the Partnership and to allow
it to have sufficient liquid assets to meet any requests for withdrawals from
the Real Property Account to meet requested or required payments under the
Contracts. The Partnership may also borrow funds to meet liquidity needs. See
BORROWING BY THE PARTNERSHIP, page 16.

The Prudential has taken steps to ensure that the Partnership will be
sufficiently liquid to meet all anticipated withdrawals by the Partners to meet
the separate accounts' liquidity requirements, but it is nonetheless possible
that the Partnership may need to dispose of a real property or mortgage loan
investment promptly in order to meet such withdrawal requests.

GENERAL RISKS OF REAL PROPERTY INVESTMENTS

By participating in the Real Property Account and thereby in the investment
performance of the Partnership, a Contract owner will be subject to many of the
risks of real property investments. These include:

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1. RISKS OF OWNERSHIP OF REAL PROPERTIES. The Partnership will be subject to the
risks inherent in the ownership of real property such as fluctuations in
occupancy rates and operating expenses and variations in rental schedules, which
in turn may be adversely affected by general and local economic conditions, the
supply of and demand for properties of the type in which the Partnership
invests, zoning laws, and real property tax rates. Operation of property in
which the Partnership invests will primarily involve rental of that property to
tenants. The financial failure of a tenant resulting in the termination of such
tenant's lease might cause a reduction in the cash flow to the Partnership. In
the event of termination of any lease, there can be no assurance that the
Partnership would be able to find a new tenant for the property on terms as
favorable to the Partnership as obtained from the prior tenant. Investments in
hotels are subject to additional risk inherent in the daily turnover and
fluctuating occupancy rates of hotel rooms and the absence of long-term tenants.

The Partnership's properties will also be subject to the risk of loss due to
certain types of property damage (such as that resulting from nuclear power
plant accidents and wars) which are either uninsurable or not economically
insurable.

2. RISKS OF MORTGAGE LOAN INVESTMENTS. The Partnership's mortgage loan
investments will be subject to the risk of default by the borrowers, in which
event the Partnership would have the added responsibility of foreclosing on or
pursuing other remedies on the underlying properties to protect the value of its
mortgage loans. A borrower's ability to meet its mortgage loan payments will be
dependent upon the risks generally incident to the ownership of real property.
Mortgage loans made by the Partnership will generally not be personal
obligations of the borrowers, and the Partnership will accordingly be relying
solely on the value of the underlying property for its security. Mechanics',
materialmen's, government, and other liens may have or obtain priority over the
Partnership's security interest in the property.

In addition, the Partnership's mortgage loan investments will generally be
subject to prepayment risks. If the terms of the mortgage loans so permit,
mortgagors may prepay the loans, thus possibly changing the Partnership's
return.

Junior mortgage loans (including wraparound mortgage loans) will be subject to
greater risk than first mortgage loans, since they will be subordinate to liens
of senior mortgagees. In the event a default occurs on a senior mortgage, the
Partnership may be required to make payments or take other actions to cure the
default (if it has the right to do so) in order to prevent foreclosure on the
senior mortgage and possible loss of all or portions of the Partnership's
investment. "Due on sale" clauses included in some senior mortgages,
accelerating the amount due under the senior mortgage in the case of sale of the
property, may be deemed to apply to the sale of the property upon foreclosure by
the Partnership of its junior mortgage loan.

The risk of lending on real estate increases as the proportion which the amount
of the mortgage loans bears to the fair market value of the real estate
increases. The Partnership will generally not make mortgage loans in excess of
80% of the estimated or appraised value of the property that secures the loan.
There can be no assurance, however, that in the event of a default, the
Partnership will realize an amount equal to the estimated or appraised value of
the property on which a mortgage loan was made.

Mortgage loans made by the Partnership may be subject to state usury laws
imposing limits on interest charges and possible penalties for violation of
those limits, including restitution of excess interest, unenforceability of
debt, and treble damages. The Partnership does not intend to make mortgage loans
at usurious rates of interest, but uncertainties in determining the legality of
rates of interest and other borrowing charges under some statutes could result
in inadvertent violations, in which case the Partnership could incur the
penalties mentioned above.

3. RISKS WITH PARTICIPATIONS. The Partnership may seek to invest in mortgage
loans and leasebacks with participations, which will provide the Partnership
with both fixed interest and additional interest based upon gross revenues, sale
proceeds, and/or other variable amounts. To the extent that the interest income
received by the Partnership is based, in part, on a percentage of the gross
revenues or sale proceeds of the underlying property, the Partnership's income
will be dependent upon the success in the leasing of the underlying property,
the management, and operation of such property by the borrower or lessee and
upon the market value of the property upon ultimate disposition. If the
Partnership negotiates a mortgage loan with a lower fixed interest rate and an
additional percentage of the gross revenues or eventual sale proceeds of the
underlying property, and the underlying property fails to generate increased
revenues or to appreciate, the Partnership will have foregone a potentially
greater fixed return without receiving the benefit of appreciation. In addition,
there may be limitations on participations as a result of applicable state law.
It is also possible that as a result of the Partnership's interest in the gross
revenues or sale proceeds, a court in the event of the borrower's bankruptcy
could possibly treat the Partnership as a partner or joint venturer with the
borrower, and the Partnership could, accordingly, lose the priority its security
interest would otherwise have been given, or be liable for the debts of the
borrower. The Partnership will seek to structure its participations to avoid
being characterized as a partner or joint venturer with the borrower.

4. RISKS WITH SALE-LEASEBACK TRANSACTIONS. In leaseback transactions, which
typically involve the acquisition of land and improvements thereon and the
leaseback of such land and improvements to the seller or another party, the
value of the land and improvements will depend, in large part, on the
performance and financial stability of the

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lessee and its tenants, if any. The lessee's leases with its tenants may have
shorter terms than the leaseback and, accordingly, the lessee's future ability
to meet payment obligations to the Partnership will depend on its ability to
obtain renewals of such leases or new leases upon satisfactory terms and the
ability of the tenants to meet their rental payments to the lessee.

PREI investigates the stability and creditworthiness of lessees in all
commercial properties it may acquire, including leaseback transactions. However,
a lessee in a leaseback transaction may have few, if any assets. The Partnership
will therefore be required to rely on the value of the land and the improvements
for its security. When the Partnership's leaseback interest is subordinate to
other interests in the land or improvements, such as a first mortgage or other
lien, the Partnership's leaseback will be subject to greater risk. A default by
a lessee or other premature termination of the leaseback may result in the
Partnership being unable to recover its investment unless the property is sold
or leased on favorable terms. The ability of the lessee to meet its obligations
under the leaseback, and the value of a property, may be affected by a number of
factors inherent in the ownership of real property which are described above.
Furthermore, the long-term nature of a leaseback may, in the future, result in
the Partnership receiving annual rentals below what it might then be receiving
under prevailing market conditions. However, such risk may be materially reduced
to the extent the Partnership is able to obtain participations in connection
with its leasebacks.

RELIANCE ON THE PARTNERS AND THE INVESTMENT MANAGER

A Contract owner does not have a vote in determining the policies of the
Partnership or the Real Property Account and will have no right or power to take
part in the management of the Partnership or the Real Property Account. The
investment manager alone, subject to the supervision of the Partners, will make
all decisions with respect to the management of the Partnership, including the
determination as to what properties to acquire, subject to the investment
policies and restrictions. Although the Partners have the right to replace The
Prudential as the investment manager, it should be noted that Pruco Life is a
direct wholly-owned subsidiary of The Prudential, and Pruco Life of New Jersey
is an indirect wholly-owned subsidiary of The Prudential.

The Partnership will compete in the acquisition of its investments with many
other individuals and entities engaged in real estate activities, including the
investment manager and its affiliates. See CONFLICTS OF INTEREST, page 12. There
may be intense competition in obtaining properties or mortgages of the type in
which the Partnership intends to invest and competition may result in increases
in the costs of suitable investments.

Since the Partnership will continuously look for new investments, Contract
owners will be unable to evaluate for themselves the economic merit of many of
the investments which may be acquired by the Partnership and must depend solely
upon the ability of the investment manager to select investments.

INVESTMENT RESTRICTIONS

The Partnership has adopted certain restrictions relating to its investment
activities. These restrictions may be changed, if the law permits, by the
Partners. Pursuant to these restrictions, the Partnership will not:

1. Make any investments not related to real estate, other than short-term or
intermediate-term debt instruments.

2. Engage in underwriting of securities issued by others.

3. Invest in securities issued by any investment company.

4. Sell securities short.

5. Purchase or sell oil, gas or other mineral exploration or development
programs.

6. Make loans to the Partners or any of their affiliates or any investment
program sponsored by such parties.

7. Enter into leaseback transactions in which the lessee is The Prudential,
Pruco Life, Pruco Life of New Jersey or their affiliates or any investment
program sponsored by such parties.

8. Borrow more than 50% of the value of the assets of the Partnership (based
upon periodic valuations and appraisals). See VALUATION OF CONTRACT
OWNERS' PARTICIPATING INTERESTS, page 14.

CONFLICTS OF INTEREST

The Prudential, as the investment manager, will be subject to various conflicts
of interest in managing the Partnership. The Prudential invests in real estate
equities and mortgages for its own general account and for a

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<PAGE>

number of separate accounts for qualified pension and profit-sharing plans. The
Prudential also manages, or advises in the management of, real estate equities
and mortgages owned by other persons. In addition, affiliates of The Prudential
are general partners in publicly offered limited partnerships that invest in
real estate equities and mortgage loans. The Prudential and its affiliates may
engage in additional business activities which will be competitive with the
Partnership. Moreover, the Partnership may purchase properties from The
Prudential or its affiliates.

The conflicts involved in managing the Partnership include:

1. LACK OF INDEPENDENT NEGOTIATIONS BETWEEN THE PARTNERSHIP AND THE PRUDENTIAL.
All agreements and arrangements relating to compensation between the Partnership
and The Prudential or any affiliate of The Prudential will not be the result of
arm's-length negotiations.

2. COMPETITION BY THE PARTNERSHIP WITH THE PRUDENTIAL'S AFFILIATES FOR
ACQUISITION AND DISPOSITION OF INVESTMENTS. The Prudential and its affiliates
are involved in numerous real estate investment activities for Prudential's own
general account, its separate accounts, and other entities, many of which may
involve investment policies comparable to those of the Partnership and thus may
compete with the Partnership for the acquisition and disposition of investments.
Moreover, additional accounts or affiliated entities may be formed in the future
with investment objectives similar, in whole or part, to those of the
Partnership. In short, existing or future real estate investment accounts or
entities managed or advised by The Prudential or its affiliates may have the
same management as the Partnership and may be in competition with the
Partnership regarding real property investments, mortgage loan investments,
leasebacks, and the management and sale of such investments. The Prudential and
its affiliates are not obligated to present to the Partnership any particular
investment opportunity, regardless of whether such opportunity is of a character
that might be suitable for investment by the Partnership.

The Prudential and its affiliates have, however, adopted certain procedures for
the purpose of distinguishing between equity investments available for the
Partnership as opposed to the other programs and entities described above. To
the extent that investment accounts or entities managed by The Prudential or its
affiliates have investment objectives and policies similar to the Partnership
and are in the market to acquire properties or make investments at the same time
as the Partnership, the following procedures will be followed to resolve any
conflict of interest. The Prudential will seek to locate through its contacts
and business relationships an adequate supply of equity investments for all of
the accounts and other entities which are managed by The Prudential and its
affiliates and to allocate such investments equitably among such accounts and
entities based upon their respective investment goals and requirements. In those
situations where the aggregate demand by all such accounts and entities exceeds
the amount of equity investments then available, allocations will be made based
upon such factors as currently available cash flow of particular portfolios,
existing financing on the property, estimated future cash flow of such
portfolios, the effect of the acquisition on diversification of each portfolio,
and other relevant legal or investment policy factors. The rotation system
designates which of those accounts or entities has the next opportunity to make
an equity investment for which it is eligible. The use of such a system is
monitored to ensure that equitable treatment of all investment accounts and
entities is achieved.

3. COMPETITION WITH THE PARTNERSHIP FROM AFFILIATES FOR THE TIME AND SERVICES OF
COMMON OFFICERS, DIRECTORS, AND MANAGEMENT PERSONNEL. As noted above, The
Prudential and its affiliates are involved in numerous real estate investment
activities. Accordingly, many of the personnel of The Prudential and its
affiliates who will be involved in performing services for the Partnership have
competing demands on their time. Thus, conflicts of interest may arise with
respect to allocating time among such entities and the Partnership. The
directors, officers, and other personnel of The Prudential and affiliates will
devote such time to the affairs of the Partnership as the officers and directors
determine in their sole discretion, exercised in good faith. The Prudential
believes it has sufficient personnel to discharge its responsibilities to all
entities to which it is responsible.

4. COMPETITIVE PROPERTIES. Some properties of affiliated entities may be
competitive with properties in which the Partnership has an interest. Among
other things, such properties could be in competition with the Partnership's
properties for prospective tenants.

5. LESSEE POSITION. It is possible that The Prudential or its affiliates may
have a lessee's position in one or more of the properties owned by the
Partnership. In the case of any such lease, however, the terms of such lease
will be competitive with leases of space in such properties entered into with
non-affiliated third parties, and the Partnership currently follows a practice
of limiting the amount of space that an affiliate of The Prudential may rent in
a property owned by the Partnership.

6. USE OF AFFILIATES TO PERFORM ADDITIONAL SERVICES FOR THE PARTNERSHIP. The
Partnership may engage entities affiliated with The Prudential to provide
additional services to the Partnership, such as real estate brokerage, mortgage
servicing, property management, leasing, property development, and other real
estate-related services. The Partnership may utilize the services of such
affiliates and pay their fees, so long as the fees paid to an affiliate

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do not exceed the amount that would be paid to an independent party for similar
services rendered in the same geographic area.

7. JOINT VENTURES WITH AFFILIATES. The Partnership may enter into investments
through joint ventures with The Prudential or its affiliates or investment
programs they sponsor. The Partnership may enter into such a joint venture
investment with an affiliate only if the following conditions are met: (i) such
affiliate must have investment objectives substantially identical to those of
the Partnership; (ii) there must be no duplicative property management fee,
mortgage servicing fee or other fees; (iii) the compensation payable to the
sponsor of such affiliate must be no greater than that payable to the
Partnership's investment manager; (iv) the Partnership must have a right of
first refusal to buy if such affiliate wishes to sell the property held in the
joint venture; and (v) the investment of the Partnership and the affiliate in
the joint venture must be made on substantially the same terms and conditions
(although not the same percentage). In connection with such an investment, both
affiliated parties would be required to approve any decision concerning the
investment. Thus, an impasse may result in the event the affiliated joint
venture partners disagree. However, in the event of a disagreement regarding a
proposed sale or other disposition of the investment, the party not desiring to
sell would have a right of first refusal to purchase the affiliated joint
venture partner's interest in the investment. In the event of such an
investment, there exists the possibility under limited circumstances that at
some future time the joint venture partners would no longer be affiliated. In
such a case, in the event of a proposed sale initiated by the joint venture
partner, the Partnership would also have a right of first refusal to purchase
the joint venture partner's interest in the investment. The exercise of a right
of first refusal would be subject to the Partnership's having the financial
resources to effectuate such a purchase, and there can be no assurance that it
would have such resources.

The investment by the Partnership in joint venture partnerships which own
properties, instead of investing directly in the properties themselves, may
under certain circumstances involve risks not otherwise present, including, for
example, risks associated with the possible bankruptcy of the Partnership's
co-venturer or such co-venturer at any time having economic or business
interests or goals which are inconsistent with the business interests or goals
of the Partnership.

8. PURCHASE OF REAL PROPERTY FROM THE PRUDENTIAL OR AFFILIATES. The Partnership
may acquire properties owned by The Prudential or its affiliates, subject to
compliance with special conditions designed to minimize the conflicts of
interests. The Partnership may purchase property satisfying the Partnership's
investment objectives and policies from an affiliate only if: (i) the applicable
insurance regulators approve the principle of permitting the Partnership to
acquire real property from The Prudential or affiliates; (ii) the Partnership
acquires the property at a price not greater than the appraised value, with the
appraisal being conducted by a qualified, unaffiliated appraiser; (iii) the
affiliate has owned the property at least 2 years, the cost paid by the
affiliate is established, and any increase in the proposed purchase price over
the cost to the affiliate is, in the opinion of the independent real estate
advisor mentioned in the next provision, explicable by reference to material
factors (including the passage of time) that have in fact increased the value of
the property; and (iv) a qualified and independent real estate advisor (other
than the appraiser) reviews the proposed acquisition and provides a letter of
opinion that the transaction is fair to the Partnership.

THE REAL PROPERTY ACCOUNT'S UNAVAILABILITY TO
CERTAIN CONTRACTS

The Prudential has determined that it is in the best interest of Contract owners
participating in the Real Property Account to provide the Real Property Account
with the flexibility to engage in transactions that may be prohibited if the
Real Property Account accepts funds under Contracts subject to ERISA or the
prohibited transaction excise tax provisions of the Internal Revenue Code.
Accordingly, owners of The Prudential Contracts that are purchased in connection
with IRAs, tax deferred annuities subject to Section 403(b) of the Code, or
other employee benefit plans which are subject to ERISA or to the prohibited
transaction excise tax provisions of the Code, may not select the Real Property
Account as one of the investment options under their Contract. By not offering
the Real Property Account as an investment option under such contracts,
Prudential is able to comply with state insurance law requirements that policy
loans be made available to Contract owners.

VALUATION OF CONTRACT OWNERS' PARTICIPATING
INTERESTS

A Contract owner's interest in the Real Property Account will initially be the
amount allocated to the Real Property Account in accordance with the Contract
owner's instructions. Thereafter, that value will change daily. The value of a
Contract owner's interest in the Real Property Account at the close of any day
is equal to its amount at the close of the preceding day, multiplied by the "net
investment factor" for that day arising from the Real Property

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<PAGE>

Account's participation in the Partnership, plus any additional amounts
allocated to the Real Property Account by the Contract owner, and reduced by any
withdrawals by the Contract owner from the Real Property Account and by the
applicable Contract charges recorded in that Contract's subaccount. Some of the
charges will be made daily, some on the Contract's monthly anniversary date,
some at the end of each Contract year, and some upon withdrawal or
annuitization. Periodically The Prudential will withdraw from the Real Property
Account an amount equal to the aggregate charges recorded in the subaccounts.

The "net investment factor" is calculated on each business day by dividing the
value of the net assets of the Partnership at the end of that day (ignoring, for
this purpose, changes resulting from new contributions to or withdrawals from
the Partnership) by the value of the net assets of the Partnership at the end of
the preceding business day. The value of the net assets of the Partnership at
the end of any business day is equal to the sum of the value of the
Partnership's short-term and intermediate-term debt instruments, the value of
the individual real properties and other real estate-related investments owned
by the Partnership, determined in the manner described below, and an estimate of
the accrued net operating income earned by the Partnership from properties and
other real estate-related investments, reduced by the liabilities of the
Partnership, including the daily investment management fee and certain other
expenses attributable to the operation of the Partnership. See CHARGES, page 16.

The Partnership's short-term debt investments (obligations of 1 year's maturity
or less) will be of the type that may be held by the Series Fund's Money Market
Portfolio and will be valued on an amortized cost basis. This means that each
obligation will be valued initially at its purchase price and thereafter by
amortizing any discount or premium uniformly to maturity. This method of
valuation almost always results in a value that is extremely close to market
value. In the event of a sizable change in interest rates, the value determined
by this method may be more or less than market value. If this should occur, the
Partners will consider whether an appropriate adjustment should be made in the
valuation of these obligations. The Partnership's intermediate-term bonds will
be of the type that may be held by the Series Fund's Diversified Bond Portfolio
and will be valued utilizing an independent pricing service to determine
valuations for normal institutional size trading units of such securities. The
pricing service considers such factors as security prices, yields, maturities,
call features, ratings, and developments relating to specific securities in
arriving at securities valuations.

The value of the individual real properties and other real estate-related
investments, including mortgages, acquired by the Partnership will be determined
as follows. Each property or other real estate-related investment acquired by
the Partnership will initially be valued at its purchase price. In acquiring a
property or other real estate-related investment, The Prudential will not obtain
an independent appraisal but will instead rely on its own analysis of the
investment's fair market value. Thereafter, all properties and most real
estate-related investments will ordinarily be appraised by an independent
appraiser no less frequently than annually. At least every 3 months, The
Prudential will make internal reviews of each property or other real
estate-related investments and make an adjustment to its valuation if there is
reason to conclude that there has been a change in the value of the property or
other real estate-related investment since the last valuation. The revised value
will remain in effect and will be used in each day's calculation of the value of
the Partnership's assets until the next review or appraisal. It should be noted
that appraisals are only estimates and do not necessarily reflect the realizable
value of an investment.

The estimated amount of the net operating income of the Partnership from
properties and other real estate-related investments will be based on estimates
of revenues and expenses for each property and other real estate-related
investments. Annually The Prudential will prepare a month-by-month estimate of
the revenues and expenses ("estimated net operating income") for each property
and other real estate-related investments owned by the Partnership. Each day The
Prudential will add to the value of the assets as determined above a
proportionate part of the estimated net operating income for the month. In
effect, The Prudential will establish a daily accrued receivable of the
estimated net operating income from each property and other real estate-related
investments owned by the Partnership (the "daily accrued receivable"). On a
monthly basis, the Partnership will receive a report of actual operating results
for each property and other real estate-related investments ("actual net
operating income"). Such actual net operating income will be recognized on the
books of the Partnership and the amount of the then-outstanding daily accrued
receivable will be correspondingly adjusted. In addition, as cash from a
property or other real estate-related investment is actually received by the
Partnership, receivables and other accounts will be appropriately adjusted.
Periodically, but at least every 3 months, The Prudential will review its
prospective estimates of net operating income in light of actual experience and
make an adjustment to such estimates if circumstances indicate that such an
adjustment is warranted. The Prudential follows this practice of accruing
estimated net operating income from properties and other real estate-related
investments because net operating income from such investments is generally
received on an intermittent rather than daily basis, and the Partners believe it
is more equitable to participating Contract owners if such net operating income
is estimated and a proportionate amount thereof recognized daily. Because the
daily accrual of estimated net operating income is based on estimates that may
not turn out to reflect actual revenue and expenses, Contract owners will bear
the risk that this practice will result in the undervaluing or overvaluing of
the Partnership's assets.

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The value of any asset held by the Partnership may be adjusted by The Prudential
at any time based upon events which come to the attention of The Prudential
affecting a property or other real estate-related investment that The Prudential
believes has increased or decreased its realizable value. For example,
adjustments may be made for events indicating an impairment of a borrower's or a
lessee's ability to pay any amounts due or events which affect the property
values of the surrounding area. There can be no assurance that the factors for
which an adjustment may be made will immediately come to the attention of The
Prudential. Additionally, because the evaluation of such factors may be
subjective, there can be no assurance that such adjustments will be timely made
in all cases where the value of the Partnership's investments may be affected.
All adjustments made to the valuation of the Partnership's investments,
including adjustments to estimated net operating income, the daily accrued
receivable, and adjustments to the valuation of properties and other real
estate-related investments, will be on a prospective basis only.

The above method of valuation of the Partnership's assets may be changed,
without the consent of Contract owners, should the Partners determine that
another method would more accurately reflect the value of the Partnership's
investments. Changes in the method of valuation could result in a change in the
Contract fund values which may have either an adverse or beneficial effect on
both existing Contract owners and new purchasers of Contracts. Information
concerning any material change in the valuation method will be given to all
Contract owners in the annual report of the operations of the Real Property
Account.

Although the above-described valuation methods have been adopted because the
Partners believe they will provide a reasonable way to determine the fair market
value of the Partnership's investments, there may well be variations between the
amount realizable upon disposition and the Partnership's valuation of such
assets. Contract owners may be either favorably or adversely affected if the
valuation method results in either overvaluing or undervaluing the Partnership's
investments. If a Contract owner invests in the Real Property Account at a time
in which the Partnership's investments are overvalued, the Contract owner will
be credited with less of an interest than if the value had been correctly
stated. A Contract owner withdrawing from the Real Property Account during such
time will receive more than he or she would if the value had been correctly
stated, to the detriment of other Contract owners. The converse situation will
exist if the Partnership's assets are undervalued.

BORROWING BY THE PARTNERSHIP

The Partnership may borrow to meet its liquidity requirements, and the
Partnership will bear the cost of all such borrowings. Thus, the Real Property
Account, and Contract owners participating in it, will bear a portion of any
such borrowing costs equal to their percentage interest in the Partnership.
Moreover, although the Partnership will generally make unleveraged investments,
it reserves the right to borrow up to 75% of the value of a property (with the
value of a property determined as explained under VALUATION OF CONTRACT OWNERS'
PARTICIPATING INTERESTS, page 14). Increasing the Partnership's assets through
leveraged investments would result in increasing the compensation paid to The
Prudential since its investment management fee is calculated as a percentage of
the Partnership's gross assets. Moreover, any borrowing by the Partnership would
increase the Partnership's risk of loss and could inhibit the Partnership from
achieving its investment objectives because the Partnership's payments on any
loans would have to be made regardless of the profitability of the Partnership's
investments. The aggregate indebtedness of the Partnership for all purposes will
not exceed 50% of the value of the Partnership's assets.

CHARGES

Pursuant to an investment management agreement, The Prudential charges the
Partnership a daily investment management fee which is equal to an effective
annual rate of 1.25% of the average daily gross assets of the Partnership.
Certain other expenses and charges attributable to the operation of the
Partnership are also charged against the Partnership. Thus, in acquiring an
investment, the Partnership may incur various types of expenses paid to third
parties, including but not limited to, brokerage fees, attorneys' fees,
architects' fees, engineers' fees, and accounting fees. After acquisition of an
investment, the Partnership will incur recurring expenses for such things as the
preparation of annual reports, periodic appraisal costs, mortgage servicing
fees, annual audit charges, accounting and legal fees, and various
administrative expenses. These expenses will be charged against the
Partnership's assets. Some of these operating expenses represent reimbursement
of The Prudential for the cost of providing certain services necessary to the
operation of the Partnership, such as daily accounting services, preparation of
annual reports, and various administrative services. Moreover, The Prudential
charges the Partnership mortgage loan servicing fees pursuant to the standards
outlined in item 6 under CONFLICTS OF INTEREST, page 12. In addition to the
various expenses charged against the Partnership's assets, other expenses such
as insurance costs, taxes, and property management fees will ordinarily be
deducted from rental income, thereby reducing the gross income of the
Partnership.

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As explained above, charges made pursuant to the Contracts will be recorded in
the corresponding subaccounts of the Real Property Account. From time to time,
The Prudential will withdraw from the Real Property Account an amount equal to
the aggregate amount of such charges. Aside from these charges pursuant to the
Contracts, The Prudential makes no charges to the Real Property Account for the
expenses involved in operation of the Real Property Account, although the Real
Property Account will, of course, bear its proportionate share of the charges
made to the Partnership which are described above.

The Partnership is not a taxable entity under the provisions of the Internal
Revenue Code. Rather, the income, gains, and losses of the Partnership are
attributed, for federal income tax purposes to the Partners in the Partnership,
including The Prudential with respect to the Real Property Account. The earnings
of the Real Property Account are, in turn, taxed as part of the operations of
The Prudential. No charge is being made currently to the Real Property Account
for company federal income taxes. The Prudential will review periodically the
question of a charge to the Real Property Account for company Federal income
taxes attributable to the Contracts. Such a charge may be made in future years
for any federal income taxes attributable to the Contracts.

Under current laws The Prudential may incur state and local taxes (in addition
to premium taxes) in several states. At present, these taxes are not significant
and they are not charged against the Contracts or the Real Property Account. If
there is a material change in applicable state or local tax laws, the imposition
of any such taxes upon The Prudential that are attributable to the Real Property
Account may result in a corresponding charge against the Real Property Account.

RESTRICTIONS ON WITHDRAWALS

Before allocating any portion of his or her net premium or purchase payments, or
transferring any portion of his or her Contract fund, to the Real Property
Account, a Contract owner should be aware that withdrawal of an investment in
the Real Property Account may be subject to greater restrictions than an
investment in the other variable investment options available under the
Contracts. The Prudential reserves the right to restrict transfers into or out
of the Real Property Account. Apart from the routine limitations on transfers
out of the Real Property Account described below, The Prudential will exercise
its right to restrict transfers out of the Real Property Account only if there
appears to be insufficient cash available to meet Contract owners' requests and
prompt disposition of the Partnership's investments to meet such requests could
not be made on commercially reasonable terms.

The Prudential will pay any death benefit, cash surrender value, withdrawal or
loan proceeds within 7 days after receipt at a Prudential Home Office of all the
documents required for such a payment. Other than the death benefit, which is
determined as of the date of death for life insurance products, the amount will
be determined as of the date of receipt of the request.

The funds necessary to pay any death benefit, cash surrender value, withdrawal
or loan proceeds funded by the Real Property Account will normally be obtained,
first, from any cash flows into the Real Property Account on the day such funds
are required. If, on the day such funds are required, cash flows into the Real
Property Account are less than the amount of funds required, The Prudential will
seek to obtain such funds by withdrawing a portion of its interest in the
Partnership. The Partnership will normally obtain funds to meet such a
withdrawal request from its net operating income and from the short-term and
intermediate-term debt obligations it holds. If the Partners determine that
these sources are insufficient to meet anticipated withdrawals from the
Partnership, the Partnership may use a line of credit or otherwise borrow up to
50% of the value of the Partnership's assets. See BORROWING BY THE PARTNERSHIP,
page 16. In the event that The Prudential and the other Partners in the
Partnership determine that such a borrowing by the Partnership would not best
serve the interests of Contract owners, The Prudential may, in the event of a
Contract loan or withdrawal, rather than taking the amount of any loan or
withdrawal request proportionately from all investment options under the
Contract (including the Real Property Account), take any such loan or withdrawal
first from the other investment options under the Contract.

Transfers from the Real Property Account to the other investment options
available under the Contract are currently permitted only during the 30-day
period beginning on the Contract anniversary. The maximum amount that may be
transferred out of the Real Property Account each year is the greater of: (a)
50% of the amount invested in the Real Property Account or (b) $10,000. Such
transfer requests received prior to the Contract anniversary will be effected on
the Contract anniversary. Transfer requests received within the 30-day period
beginning on the Contract anniversary will be effected as of the end of the
valuation period in which a proper written request or authorized telephone
request is received. The "valuation period" means the period of time from one
determination of the value of the amount invested in the Real Property Account
to the next. Such determinations are made when the value of the assets and
liabilities of the Partnership is calculated, which is generally at 4:15 p.m.
New York City time on each day during which the New York Stock Exchange is open.
Transfers into or out of the Real Property Account are also subject to the
general limits under the Contracts regarding transfers.

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RESTRICTIONS ON CONTRACT OWNERS'
INVESTMENT IN THE REAL PROPERTY ACCOUNT

As noted earlier, identification and acquisition of real estate investments
meeting the Partnership's investment objectives is a time-consuming process.
Moreover, because the Real Property Account and the Partnership are managed so
as to ensure that they will not become investment companies subject to the
Investment Company Act of 1940, the portion of the Partnership's assets that may
be invested in securities, as opposed to non-securities real estate investments,
is strictly limited. For these reasons, The Prudential reserves the right to
restrict or limit Contract owners' allocation of funds to the Real Property
Account. Any such restrictions are likely to take the form of restricting the
timing, amount and/or frequency of transfers into the Real Property Account
and/or precluding Contract owners who have not previously selected the Real
Property Account from allocating a portion of their net premiums or purchase
payments to the Real Property Account.

FEDERAL INCOME TAX CONSIDERATIONS

The tax treatment of variable Contract owners is described briefly in the
attached prospectus for the particular variable life insurance or variable
annuity Contract selected. The Prudential believes that the same principles will
apply with respect to Contracts funded in whole or part by the Real Property
Account. The Partnership's conformity with the diversification standards for the
investments of variable life insurance and variable annuity separate accounts is
essential to ensure that treatment. See GENERAL INVESTMENT AND OPERATING
POLICIES, page 8. Each individual is urged to consult a qualified tax advisor.

Under the Internal Revenue Code, the Partnership is not a taxable entity and any
income, gains or losses of the Partnership are passed through to the Partners,
including The Prudential, with respect to the Real Property Account. The Real
Property Account is not a separate taxpayer for purposes of the Internal Revenue
Code. The earnings of the Real Property Account are taxed as part of the
operations of The Prudential. No charge is being made currently to the Real
Property Account for company federal income taxes. The Prudential will review
periodically the question of a charge to the Real Property Account for company
federal income taxes attributable to the Contracts. Such a charge may be made in
future years for any federal income taxes attributable to the Contracts, see
CHARGES, page 16.

DISTRIBUTION OF THE CONTRACTS

As explained in the attached prospectus for the Contracts, Pruco Securities
Corporation, an indirect, wholly-owned subsidiary of The Prudential, acts as the
principal underwriter of the Contracts. Consult that prospectus for information
about commission scales and other facts relating to sale of the Contracts.

STATE REGULATION

The Prudential is subject to regulation and supervision by the Department of
Insurance of the State of New Jersey, which periodically examines its operations
and financial condition. It is also subject to the insurance laws and
regulations of all jurisdictions in which it is authorized to do business.

The Prudential is required to submit annual statements of its operations,
including financial statements, to the insurance departments of the various
jurisdictions in which it does business to determine solvency and compliance
with local insurance laws and regulations.

In addition to the annual statements referred to above, The Prudential is
required to file with New Jersey and other jurisdictions a separate statement
with respect to the operations of all its variable contract accounts, in a form
promulgated by the National Association of Insurance Commissioners.

ADDITIONAL INFORMATION

A registration statement has been filed with the SEC under the Securities Act of
1933, relating to the offering described in this prospectus. This prospectus
does not include all of the information set forth in the registration statement.
Certain portions have been omitted pursuant to the rules and regulations of the
SEC. The omitted information may, however, be obtained from the SEC's principal
office in Washington, D.C., upon payment of a prescribed fee.

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Further information may also be obtained from The Prudential's office. The
address and telephone number are set forth on the cover of this prospectus.

EXPERTS

The financial statements of the Real Property Account and the Partnership
included in this prospectus, the per share information included on page 1 of
this prospectus, and the related financial statement schedules included
elsewhere in the registration statement have been audited by Deloitte & Touche
LLP, independent auditors, as stated in their reports appearing herein and
elsewhere in the registration statement. Such financial statements, per share
information, and financial statement schedules have been included herein and
elsewhere in the registration statement in reliance upon the reports of such
firm given upon their authority as experts in accounting and auditing. Deloitte
& Touche LLP's principal business address is Two Hilton Court, Parsippany, New
Jersey 07054-0319.

On March 12, 1996, Deloitte & Touche LLP was dismissed as the independent
accountants of Pruco Life. There have been no disagreements with Deloitte &
Touche LLP on any matter of accounting principles or practices, financial
statement disclosure or auditing scope or procedure which, if not resolved to
the satisfaction of the accountant, would have caused them to make a reference
to the matter in their reports.

LITIGATION

No litigation is pending, and no litigation is known to be contemplated by
governmental authorities, that would have an adverse material effect upon the
Real Property Account or the Partnership.

FINANCIAL STATEMENTS

Following are financial statements and independent auditors' report of the Real
Property Account, as well as financial statements and independent auditors'
report of the Partnership.

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

The following discussion covers the operations of The Prudential Variable
Contract Real Property Partnership and should be considered in conjunction with
the PER SHARE TABLE appearing on page 1 - Real Property and the financial
statements and notes thereto, commencing on page B1 - Real Property.

LIQUIDITY AND CAPITAL RESOURCES

At December 31, 1995, the Partnership's liquid assets consisting of cash and
cash equivalents and marketable securities totaled $24,755,420. This is a
decrease of $24,162,016 from liquid assets at December 31, 1994 of $48,917,436.
The decrease is due primarily to the acquisition of an apartment complex at a
total cost of $15,758,700 and two office centers at a total cost of $21,015,643
as discussed below. This was partially offset by cash received from operations
of the Partnership's properties and interest income received from short-term
investments.

The Partnership had established a $10 million annually renewable revolving line
of credit with First Fidelity Bank National Association to be drawn upon as
needed for potential liquidity needs. The line of credit had never been drawn
upon. Management did not anticipate any future needs for this credit facility
and decided to terminate the line of credit as of October 31, 1995. The
Prudential has committed to fund up to $100 million to enable the Partnership to
acquire real estate investments. Contributions to the Partnership under this
commitment are utilized for property acquisitions and returned to The Prudential
on an ongoing basis from Contract owners' net contributions. The amount of the
commitment is reduced by $10 million for every $100 million in current value net
assets of the Partnership. The amount available for future investments is
approximately $52.2 million as of December 31, 1995.

The Partnership will ordinarily invest 10-15% of its assets in cash and
short-term obligations to maintain liquidity. However, its investment policy
allows up to 30% investment in cash and short-term obligations. At December 31,
1995, 12.6% of the Partnership's assets consisted of cash and cash equivalents
and marketable securities.

During 1995, the partners withdrew $3.0 million. Withdrawals may be made during
1996 based upon the percentage of assets invested in short-term obligations and
taking into consideration anticipated cash needs of the Partnership including
potential property acquisitions and dispositions and capital expenditures. At
December 31, 1995, and currently, the Partnership has adequate liquidity.
Management anticipates that ongoing cash flow from operations will satisfy the
Partnership's needs over the next twelve months and the foreseeable future.

The Partnership acquired properties totaling $36,774,343 in 1995. The properties
acquired were an apartment complex in Raleigh, NC on June 30, 1995 at a total
cost of $15,758,700, an office building in Nashville, TN on

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October 4, 1995 for $8,385,450 and an office center in Oakbrook Terrace, IL on
December 28, 1995 for $12,630,193. These acquisitions were funded entirely by
cash held by the Partnership.

During 1995 the Partnership expended $1,050,197 in capital expenditures, of
which approximately $831,200 were for tenant alterations and leasing
commissions. Approximately $327,000 in tenant improvements and leasing
commissions was spent at the Azusa, CA warehouse related to the lease signed by
Best Buy. This is the final installment of such costs related to this tenant. At
the Morristown, NJ office center approximately $193,000 was expended, primarily
related to the lease signed by Kodak in the first quarter of 1995. Of the
$83,000 that was spent at the Pomona, CA warehouse, approximately $60,000
related to an expansion by Ashley Furniture and $23,000 related to a new tenant,
Pac Rosa Enterprises. At the Roswell, GA shopping center these tenant
improvements and leasing commissions totaled $78,000 of which approximately
$66,000 was attributable to leases signed by Capezio's ($49,000) and Accentrics
($17,000). Approximately $104,000 was expended at the Flint, MI office property
primarily related to an expansion for Olsten Kimberly ($66,500) and the lease
signed for Combs (37,500). Approximately $46,200 was expended for tenant
improvements at the Nashville office center.

Other major capital expenditures in 1995 included approximately $62,300 for
access gates at the Atlanta, GA apartments, and $32,530 for floor repairs and
sewer repair at the Bolingbrook, IL warehouse. At the Morristown Office Center,
approximately $37,000 was spent for HVAC upgrades, a new transformer and fire
sprinklers. The Farmington Hills, MI apartments spent approximately $35,000 for
an irrigation system upgrade and installation of new carpets and linoleum.
Approximately $38,000 in costs related to the foreclosure of the Flint property
in 1994 were paid in 1995.

Projected capital expenditures for 1996 total approximately $1,811,000. Of this,
approximately $1,549,000 consists of leasing commission and tenant alterations.
The largest of these is $352,000 which is budgeted for the Morristown Office
Center. The property expects to pay approximately $120,000 in costs associated
with the Spectrum Financial expansion and projections include leasing the
remaining vacancies at the property. At the Lisle, IL office building the
Partnership projects leasing commissions of $324,000 resulting from efforts to
renew the tenant prior to the November, 1997 expiration of its lease. In
addition, tenant improvements and commissions are projected at $161,966 for the
Pomona warehouse, $185,000 at the Azusa warehouse, $207,000 at the Roswell
shopping center, $140,000 at the Flint office park and $66,000 at the Unit
Distribution warehouses. The Partnership expects to expend another approximately
$47,000 on smaller leasing commissions on other various properties. Except for
the Spectrum Financial lease, all of these projected expenditures relate to
prospective leases. The actual amount of such expenditures will depend on the
number of new leases signed, the needs of the particular tenants and the timing
of lease executions.

Other major capital projects planned for 1996 include $63,000 for fencing,
entrance gates and upgrades to the exercise room at the Atlanta apartments;
$90,000 for the installation of separate water meters at the Pomona warehouse;
$35,000 for window replacements and a boiler study at Morristown; $27,000 for a
landscaping upgrade, new signage and carport roof replacement at Farmington
Hills and $38,000 to replace exterior entrance doors and landscaping upgrades at
the Flint property. Approximately $75,000 was budgeted for smaller projects
among the various properties.

The Partnership intends to exercise its option to purchase the land on which the
Pomona warehouse is located for $4,000,000. The Partnership will exercise the
option prior to its expiration in November, 1997.

The Partnership has entered into a commitment to sell the warehouse located in
Azusa, CA at an estimated sales price of $15,250,000. This transaction is
expected to be consummated in April, 1996. In addition, the Partnership has
entered into negotiations to sell the office park in Flint for an estimated
$6,300,000 in the second quarter of 1996. The proceeds of both sales may be
invested at a later date if suitable properties are identified.

RESULTS OF OPERATIONS

The following is a brief discussion of a comparison of the results of operations
for the three years ended December 31, 1995, 1994 and 1993.

1995 VS 1994

The Partnership's net investment income for 1995 was $14,720,271, an increase of
$1,872,072 (14.6%) from net investment income for 1994 of $12,848,199. The
increase was primarily the result of higher interest income from short-term
investments ($1,089,471) and net income from property operations ($1,058,039)
partially offset by lower interest income on mortgage loans ($105,694).

Income from property operations, including income from interest in properties,
was $15,081,290 for 1995. Income from interest in properties relates to the
Partnership's 50% co-investment in several warehouses (the Unit warehouses).
This is an increase of $1,058,039 (7.5%) from $14,023,251 for 1994. This was due
primarily to increased rent from properties (approximately $3,482,785). The
increase was offset by lower income from interest

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in properties due to the sale for the seven Unit warehouses in October, 1994
(approximately $1,717,000), higher real estate taxes (approximately $145,000),
property administrative expenses (approximately $399,000). and property
operating expenses (approximately $163,000).

Rent from properties for 1995 increased by $3,482,785 (21.3%) to $19,827,044
from $16,344,259 for 1994. A large portion of this was the result of properties
that were acquired during 1995. This revenue totaled approximately $1,466,000.
Revenue provided by the apartments in Raleigh was $1,111,744, the office
building in Nashville, $331,165 and the office building in Oakbrook Terrace,
$23,587. Rental income at the Flint office park increased by approximately
$662,600 in 1995. This was primarily due to the acquisition of this property
through foreclosure in July, 1994. As a result, only six months of operating
results are included in 1994 as compared to a full year in 1995. Increased
occupancy in 1995 resulted in an additional $906,000 in rental revenue for the
Azusa and Morristown buildings as well as the Partnership's two other apartment
properties. Rental income at the Bolingbrook warehouse increased about $82,000
in 1995 as a result of the expiration of a free rent period granted to the
tenant in the first quarter of 1994. Revenue at the Pomona warehouse was almost
$221,000 higher due to increased occupancy and higher expense recoveries.

These additional revenues were partially offset by the net effect of
approximately $15,000, due to lower percentage rent in 1995 from the Roswell, GA
shopping center, offset by higher rental income and expense recoveries.

Income from the Unit Warehouses decreased $1,717,021 (72.9%) from $2,355,204 for
1994 to $638,183 for 1995. The Partnership sold its investments in seven of
these warehouses in 1994. Of the four remaining warehouses, income increased by
approximately $83,000 due to higher occupancy at one of the warehouses.

Administrative expenses on the statement of operations includes both those
related to property operations and the administration of the Partnership.
Property administrative expenses for 1995 were $1,575,663. This is $399,265
(33.9%) higher than the $1,176,398 for 1994. Most of the increase was the result
of the inclusion of the Flint, Raleigh and Nashville properties, (almost
$270,000), higher insurance premiums ($72,000) primarily at the two California
properties and in increase in bad debt expense ($63,000). The increase in bad
debt expense arose from the 1994 application of a security deposit to amounts
owed by that tenant which reduced 1994 bad debt expense by approximately
$33,000. Professional fees also increased approximately $45,000 in 1995 due to
the utilization of real estate tax consultants to assist with the appeal of
assessed values at several of the properties. The appeal generated significant
tax savings as noted below. Advertising and promotional expenses were lower at
several of the properties which offset the increased administrative expenses by
about $40,000.

Property operating expenses for 1995 were $1,870,183 compared to $1,707,039 for
1994, an increase of $163,144 (9.6%). The increase was primarily due to the
inclusion of approximately $217,336 in operating expenses related to the Raleigh
and Nashville properties. The Flint property had an increase of $73,600 when
comparing the full year 1995 to the last six months of 1994. In addition there
were higher repairs and maintenance at the Farmington Hills apartments of
approximately $18,500. These increases were reduced by lower expenses at the
Azusa warehouse related to the painting of building exteriors in 1994 ($88,500),
at Pomona due to lower repairs and maintenance ($24,500), and lower repairs and
maintenance, security and utilities at Roswell ($35,000).

Real estate taxes for 1995 were $1,938,090, a net increase of $145,315 (8.1%)
from $1,792,775 for 1994. Approximately $244,000 of the increases was due to the
inclusion of the Flint office buildings, where $101,000 of 1994 taxes were
reflected in 1995 activity. The acquisition of the Raleigh apartments and the
Nashville office center also contributed to this increase. At the Roswell
shopping center, real estate taxes had a net increase of $31,500. These
increases were offset by approximately $153,000 in decreases achieved as the
result of appealing the assessed values at the Azusa, Pomona, Morristown and
Farmington Hills properties. Real estate taxes at the net lease properties in
Bolingbrook and Lisle also increased nearly $22,000.

There was no interest income from mortgage loans in 1995. This was due to the
maturing of the Lincoln, NE loan in May 1994 and the 1994 default of the
mortgagor on the Flint loan. Interest income from short-term investments
increased $1,089,471 (69.3%) from $1,571,394 for 1994 to $2,660,865 for 1995.
This was the result of increased amounts invested and higher interest rates in
1995. The Partnership had retained increased cash balances in anticipation of
acquiring properties in 1995.

Administrative expenses related to the Partnership totaled $219,429 for 1995.
This is a reduction of $17,895 (7.5%) from $237,324 for 1994. The decrease
resulted primarily from lower professional fees for 1995.

The investment management fee for 1995 was $2,341,878. This is $54,062 (2.4%)
higher than the fee for 1994 of $2,287,816. The fee is computed as 1.25% of
gross daily assets. During 1995, gross assets were slightly higher than the
prior year due to cash flow retained by the Partnership and increased market
values of the real estate investments.

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MARKET VALUES OF INVESTED ASSETS: 1995 VS 1994

During 1995, the Partnership recognized an unrealized gain of $661,623 on its
real estate investments. This represents 0.5% of the investments' December 31,
1994 value. The apartments experienced the largest increase, approximately
$2,700,000. The warehouses increased by about $421,000. The office building
properties experienced an unrealized loss of approximately $1,933,000 and the
retail property, an unrealized loss of about $528,000.

The Partnership's luxury garden apartments in Raleigh had an unrealized gain of
nearly $1,441,300. The property has benefited from very strong leasing demand
(occupancy at December 31, 1995 was 95%) and is performing at a higher level
than anticipated. The Farmington Hills and Atlanta apartments experienced
unrealized gains of $626,143 (4.6% of its year-end 1994 value) and $634,165
(5.3% of its year-end 1994 value), respectively. These increases were primarily
the result of higher rental rates, occupancy and tenant retention than
previously projected for these properties.

The warehouses experienced an unrealized gain of about $421,000 during 1995. The
Pomona property had the largest unrealized gain, $684,153 (4.2% of its year-end
1994 value). This was the result of two leases that were signed which brought
the occupancy to 100%. The market values of the four Unit warehouses in which
the Partnership owns a 50% interest at the end of 1995 increased $49,134 (.9% of
their December 31, 1994 value).

The warehouse in Bolingbrook experienced an unrealized gain of $357,563 (5.1% of
the property's December 31, 1994 value). This was due to lower estimates of
operating expenditures.

The increases in the market values of these warehouses were partially offset by
a decrease of $669,928 (4.3% of the property's December 31, 1994 value) in the
market value of the Azusa warehouse. The decrease in market value was partially
attributable to less optimistic assumptions of expense growth, future rental
rates and leasing activity as current leases expire, based on the property's
competitive position in the local market.

The office buildings experienced an unrealized loss of approximately $1,933,000.
The Flint property value decreased $1,314,060 (17.1% of its December 31, 1994
value). This was caused by reduced expectations of future rental rate increases
and tenant renewals due to increased competition from new construction in the
Flint market. The Lisle office building decreased in value by $400,000 (3.3% of
the property's December 31, 1994 value) and the Morristown property also
decreased in value by $473,993 (4.8% of its December 31, 1994 value). The Lisle
property's decrease in value reflects the possibility that the current tenant,
R.R. Donnelley, may not remain in the building when their current lease expires
in 1997. This would result in downtime while a new tenant was found and
necessitate incurring additional tenant improvements and leasing commissions. It
is also likely that the rental rate on any new lease would be lower than that
currently paid by Donnelley. The decline in the value of the Morristown property
was the result of increases in the discount rates, reflecting the soft market
conditions in the local areas and the expectations that potential buyers are
requiring higher returns on such investments. The decreases in value at the
office buildings were partially offset by an increase of $254,871 at the
Nashville building. The increase represented 3% of its acquisition cost. The
rise in value reflects the expectations of continued high occupancy and the
potential for higher rental rates in the future.

The Partnership's sole retail property, King's Market Shopping Center in
Roswell, GA, experienced an unrealized loss of $527,726 (1.6% of its December
31, 1994 value). This was due to increased competition in the local market due
to the construction of a competing shopping center which is expected to exert
downward pressure on rental rates.

PROPERTY LEASING ACTIVITY

Occupancy at the Partnership's properties at December 31, 1995 is generally
higher than at December 31, 1994. The Partnership acquired two office properties
in 1995. Westpark , an office building in suburban Nashville, TN has 96,880
rentable square feet. At December 31, 1995 the property was 98.6% leased. There
is one lease expiring in 1996 for 6,257 square feet. We expect to renew this
tenant in that space. The Partnership is actively marketing the available
vacancy of 1,350 square feet. Oakbrook Terrace is located in Oakbrook, IL. The
property is 99.5% leased and there are no expirations in 1996.

Occupancy at Pomona increased from 83% at December 31, 1994 to 100% at the end
of 1995. During the second quarter of 1995, two leases were signed which brought
occupancy to 100%. Pac Rosa Enterprises signed a three year lease covering
33,400 square feet (6% of the property). The tenant took occupancy July 1, 1995.
The second was a 55,000 square foot expansion by Ashley Furniture (10% of the
property). The lease expires concurrent with their existing lease in 2003. There
are two leases which expire in 1996. Inter City Products occupies 33,300 square
feet (6% of the property) and their lease expires in January, however they will
continue to occupy the space on a month to month basis. The Partnership does not
expect them to renew and efforts are

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underway to market the space. Structural Composite's lease expires in November.
This tenant occupies 56,450 square feet (11% of the property) and we expect them
to renew although no agreement has been reached.

The Unit warehouses were 100% occupied at December 31, 1995 compared to 92% at
the end of December, 1994. The Biaggi Brothers signed a two year lease covering
90,000 square feet at one of the Unit warehouses (18% of the four buildings)
effective February 1, 1995. This brought the occupancy at the four buildings to
100%. Associated Unit Companies renewed their lease for two years at a rental
rate approximately 10% greater than that on the expiring lease. The lease covers
102,000 square feet (20% of the four Unit warehouses). The Unit warehouses have
two leases expiring in 1996 covering 198,240 square feet. The Partnership is
currently in negotiations with Angelo Brothers to exercise their option to renew
the lease in their current space of 84,000 square feet (17% of the four
warehouses). The Partnership expects this tenant to renew the lease prior to its
expiration in April, 1996. GATX's lease expires in May, 1996. Presently, they
occupy 114,240 square feet. The Partnership is discussing renewal terms with
this tenant, but we do not believe they will renew. Management is marketing the
space to others and does not expect a significant down time to re-lease the
space.

The warehouse in Bolingbrook continues to be fully occupied by Gillette under a
lease expiring in 2000.

The Morristown office building was 94.8% occupied at December 31, 1995 a slight
increase of 2% from December, 1994. During 1995, Kodak renewed its lease
covering 6,600 square feet (8% of the property). The new lease expires on
February 28, 2003. During the fourth quarter of 1994, a 2,100 square foot
expansion was executed with Smith Barney, effective January 16, 1995. The lease
expires in 1997. Chase Home Mortgage's lease expired on December 31, 1995. Their
lease was extended through March 31, 1996. The Partnership does not expect them
to renew their lease. Mutual of Omaha's lease expires in March, 1996. They
currently occupy 5,769 square feet (7% of the property). Discussions are being
held with this tenant and we do not expect them to renew their lease in 1996.
Spectrum signed a new lease and moved into a larger space that will increase
their square footage from 2,350 to 3,765 or 4% of the property. The Partnership
is also discussing expansions with other tenants in the property and actively
marketing the available space. No other leases are scheduled to expire in 1996.

The office building in Lisle continues to be fully leased to R.R. Donnelley
under a lease expiring in September 1997. The lease contains two five-year
renewal options. Discussions are being held with this tenant in an attempt to
secure an early renewal. The tenant is also evaluating alternatives at other
properties.

King's Market Shopping Center in Roswell, GA was 99% leased at December 31, 1995
as it was at the end of 1994. Two new tenants signed leases totaling 5,450
square feet (2% of the property) in 1995. Roswell Pet Supply renewed their lease
in the fourth quarter of 1995 for 4,100 square feet (2%) of the property. Four
tenant's totaling 7,864 square feet (5% of the property) expire in 1996. Two
tenants occupying 2,882 square feet (1% of the property) are expected to renew.
The Partnership is discussing potential renewal terms with the current tenants.
The Men's Wearhouse (3,982 square feet or 2% of the property) is expected to
vacate at the expiration of its lease in May, 1996. Kid's Mart vacated in
January, 1996 and will not be renewing. Parties Galore vacated in December,
1995. They had occupied 6,100 square feet (2% of the property). The Partnership
is marketing these spaces and expects to lease them in 1996. Leases covering the
major tenants at the shopping center, Home Depot, CompUSA and A&P, are not
scheduled to expire until after 2003. Marshalls, Inc., was acquired by TJX
Companies, Inc., in 1995. Marshalls' lease covers 25,000 square feet (8.4% of
the property), and expires on January 31, 1999. There is some uncertainty
regarding their continued tenancy, and TJX Companies, Inc., is currently
evaluating the Marshalls' locations to determine how these stores will fit into
their future strategy.

As of December 31, 1995, the Partnership's residential properties located in
Atlanta, GA and Farmington Hills, MI were 97% and 98% leased, respectively.
Occupancy ranged from 96% to 98% during 1995. At December 31, 1994, these
properties were 98% leased. The luxury garden apartments in Raleigh, NC were
acquired in June, 1995. This property was approximately 95% leased at December
31, 1995. Market rental rates are expected to increase slightly in 1996 in the
residential markets in which the Partnership's apartments are located. Occupancy
at these properties are expected to remain strong over the upcoming year.

1994 VS 1993

The Partnership's net investment income for 1994 was $12,848,199, an increase of
$193,568 (1.5%) from net investment income for 1993 of $12,654,631. The increase
was primarily the result of higher interest income from short-term investments
($827,470) and income from property operations ($270,620) partially offset by
lower interest income on mortgage loans ($917,598).

Income from property operations, including income from interest in properties,
was $14,023,251 for 1994. This is an increase of $270,620 (2.0%) from
$13,752,631 for 1993. This was due primarily to increased rent from properties
(approximately $533,000) and lower real estate taxes (approximately $193,000)
and property

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administrative expenses (approximately $157,000). These were partially offset by
lower income from interest in properties (approximately $546,000) and increased
property operating expenses (approximately $67,000).

Rent from properties for 1994 increased by $533,265 (3.4%) to $16,344,259 from
$15,810,994 for 1993. Higher occupancy in 1994 at the Roswell shopping center
and the Partnership's two apartment properties resulted in approximately
$430,000 in additional rental income. Percentage rent at the shopping center
also increased nearly $198,000 primarily as a result of the property now billing
tenants for such rent throughout the current year rather than in arrears.

Rental income at the Morristown office building increased by approximately
$139,000 in 1994 due to a retroactive rent adjustment for Midlantic Bank and
scheduled rent step-ups and the ending of free rent periods for various tenants.

Beginning July 1, 1994, the Partnership is receiving all of the revenue from the
property related to the foreclosed Flint mortgage loan. This amounted to
approximately $675,000 for the last six months of 1994.

These additional revenues were partially offset by lower rental income from the
Azusa warehouse (approximately $582,000) due to lower occupancy in 1994, rent no
longer received on the Denver warehouse sold in 1993 (approximately $67,000), a
lower rental rate and concessions granted to Gillette in 1994 related to their
early lease renewal (approximately $90,000) and lower recoveries of real estate
taxes at the net leased properties in Lisle and Bolingbrook (approximately
$47,000). Expense recoveries also declined by approximately $159,000 at Pomona
in 1994. This was the result of lower recoverable expenses at the property.
Revenue in 1993 included recoveries for parking lot and roof repairs for which
there were no corresponding amounts in 1994.

Income from interest in properties relates to the Partnership's 50%
co-investment in several warehouses (the Unit warehouses). Income from this
source decreased $546,273 (18.8%) from $2,901,477 for 1993 to $2,355,204 for
1994. The Partnership sold its investments in two of these warehouses in 1993
and seven warehouses in 1994. This resulted in a reduction of income of
approximately $476,000 in 1994. Lower occupancy at one of the remaining
warehouses also reduced income by approximately $75,000.

Administrative expenses on the statement of operations includes both those
related to property operations and the administration of the Partnership.
Property administrative expenses for 1994 were $1,176,398. This is $157,368
(11.8%) lower than the $1,333,766 for 1993. Most of the decrease was the result
of non-recurring expenses in 1993. In 1993, the Roswell shopping center reported
approximately $46,000 in bad debt expense related to a bankrupt tenant, Lionel
Playworld. No such charge was incurred in 1994. A casualty loss of approximately
$53,000 was also incurred at the shopping center in 1993. At the Azusa
warehouse, a tenant vacated its space in 1993, before the expiration of its
lease resulting in a bad debt expense of nearly $156,000 in 1993. No such charge
was incurred in 1994. In addition, the 1994 application of a security deposit to
amounts owed by that tenant reduced 1994 bad debt expense by approximately
$33,000.

These reductions were partially offset by an increase in insurance premiums of
nearly $63,000, primarily at the Azusa, Pomona and Roswell properties and
approximately $22,000 in higher advertising and promotional expenses at these
same properties. In addition, approximately $59,000 in administrative expenses
were incurred at the Flint property acquired through foreclosure in 1994.

Property operating expenses for 1994 were $1,707,039 compared to $1,639,828 for
1993, an increase of $67,211 (4.1%). The increase was the result of
approximately $64,000 in operating expenses related to the Flint property for
the last six months of 1994 and nearly $37,000 in higher repairs and maintenance
expenses, particularly at the Azusa warehouse related to the painting of
building exteriors. These were partially offset by a reduction of almost $34,000
due to the sale of the Denver property in 1993.

Real estate taxes for 1994 were $1,792,775, a reduction of $193,471 (9.7%) from
$1,986,246 for 1993. Approximately $110,000 of this decrease was the result of
appealing the assessed values of the Azusa, Pomona and Morristown properties.
The sale of the Denver warehouse reduced real estate taxes by approximately
$32,000. Real estate taxes at the net lease properties in Bolingbrook and Lisle
also decreased nearly $47,000. As net leased properties, the tenants absorb
almost all operating costs, so this decrease also reduced rental income as noted
above.

Interest income on the mortgage loans decreased $917,598 (89.7%) from $1,023,292
for 1993 to $105,694 for 1994. This was due to the maturing of the Lincoln, NE
loan in May 1994 and the default of the mortgagor on the Flint loan. These are
discussed further in the Liquidity and Capital Resources section.

Interest income from short-term investments increased $827,470 (111.2%) from
$743,924 for 1993 to $1,571,394 for 1994. This was the result of increased
amounts invested and higher interest rates in 1994. As noted above, the
Partnership is retaining increased cash balances in anticipation of acquiring
properties in 1995.

24 - Real Property

<PAGE>

Administrative expenses related to the Partnership totalled $237,324 for 1994.
This is a reduction of $38,202 (13.9%) from $275,526 for 1993. The decrease
resulted primarily from lower professional fees for 1994.

The investment management fee for 1994 was $2,287,816. This is $18,610 (0.8%)
higher than the fee for 1993 of $2,269,206. The fee is computed as 1.25% of
gross assets. During 1994, gross assets were slightly higher than the prior year
due to cash flow retained by the Partnership and increased market values of the
real estate investments.

Interest expense relates to the obligation under capital lease. For 1994,
interest expense was $327,000. This is $6,516 (2.0%) higher than interest
expense for 1993 of $320,484.

During 1994, the Partnership sold its 50% interest in the two Unit warehouses
located in Atlanta and the ones located in Desoto, TX; Fort Worth, TX;
Shreveport, LA; Bedford Park, IL; and Normal, IL. The proceeds, net of related
costs, were approximately $19,020,000, resulting in a realized loss of
approximately $1,237,000. Realized loss is the difference between net sales
proceeds and the cost of the properties. The Partnership had already recognized
decreases in the properties' market values in prior periods, so the net sales
proceeds actually exceeded the values at which the properties were carried on
the sale date by approximately $445,000. The proceeds from the sale are expected
to be reinvested during 1995. The Partnership still owns a 50% interest in the
four warehouses located in Jacksonville, FL. These are not currently being
marketed for sale.

MARKET VALUES OF INVESTED ASSETS: 1994 VS 1993

During 1994, the Partnership recognized an unrealized gain of $2,576,828 on its
real estate investments. Of this, $1,502,226 represents the decreases in the
market values of the Unit warehouses sold in October 1994, which had already
been reported as unrealized losses in prior years. With the sale of the
properties, these unrealized losses were reclassified as unrealized gains on the
statement of operations. These unrealized gains revert the property value back
to its historical cost, which is used to calculate the $1,237,000 realized loss
described above. The remaining $1,074,602 is the result of increases in the
current values of the investments owned by the Partnership at the end of 1994.
This represents 0.8% of the investments' December 31, 1993 value.

The office buildings experienced the largest increase, approximately $1,145,000.
The apartments increased by about $945,000. The warehouses experienced an
unrealized loss of approximately $184,000 and the retail property, an unrealized
loss of about $832,000.

The office property acquired through the foreclosure of the Flint mortgage loan
experienced the largest increase in current value, $2,423,739 (42.6% of the
investment's December 31, 1993 value). After foreclosure, the Partnership
reviewed detailed operating information on the property. Based on current market
condition and property performance, an appraisal resulted in an increase in the
estimated market value.

This increase in value was partially offset by decreases in the values of the
Lisle office building of $1,200,000 (9% of the property's December 31, 1993
value) and the Morristown property of $78,321 (0.8% of its December 31, 1993
value). The former was caused by reduced expectations that the current tenant,
R.R. Donnelley, will remain in the building when their current lease expires in
1997. This would result in downtime while a new tenant was found and necessitate
incurring additional tenant improvements and leasing commissions. It is also
likely that the rental rate on any new lease would be lower than that currently
paid by Donnelley. The decline in the value of the Morristown property was the
result of projected increases in tenant improvements and leasing commissions
which will be necessary to lease the remaining vacant space.

The Partnership's apartment complex in Atlanta had an unrealized gain of
$671,245 (6.0% of the property's December 31, 1993 value) while the Farmington
Hills apartments experienced an increase of $274,134 (2.1% of its year-end 1993
value). These increases were primarily the result of higher rental rates,
occupancy and tenant retention than previously projected for these properties.

The Partnership's sole retail property, King's Market Shopping Center in
Roswell, GA, experienced an unrealized loss of $832,405 (2.5% of its December
31, 1993 value). This was due to capital expenditures at the property during
1994 which did not result in a corresponding increase in the shopping center's
value and reduced expectations concerning future rental rates when current
leases expire.

The warehouses experienced an unrealized loss of almost $184,000 during 1994.
The Pomona property had the largest loss, $1,679,740 (9.4% of its year-end 1993
value). This change was due primarily to the increased cost of a planned roof
replacement program and an acceleration in the timing of that work. The market
values of the four Unit warehouses in which the Partnership owns a 50% interest
at the end of 1994 increased $214,364 (3.9% of their December 31, 1993 value).
This resulted from leasing the vacant space at one of the warehouses effective
February 1995 as well the improved potential for higher rental rates on new and
renewal leases on these properties.

25 - Real Property

<PAGE>

The warehouse in Bolingbrook experienced an unrealized loss of $80,303 (1.2% of
the property's December 31, 1993 value) due to capital expenditures which did
not increase the property's value.

The decreases in the market values of these warehouses were partially offset by
an increase of $1,361,890 (10.0% of the property's December 31, 1993 value) in
the market value of the Azusa warehouse. This was the result of the new lease
with Best Buy bringing the property's occupancy to 100% as well as improved
conditions in the local market.

26 - Real Property

<PAGE>

FINANCIAL STATEMENTS OF
THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY ACCOUNT

STATEMENTS OF NET ASSETS
<TABLE>
<CAPTION>

December 31,
----------------------------
1995 1994
----------- -----------
<S> <C> <C>
Investment in shares of The Prudential Variable Contract
Real Property Partnership $86,101,883 $79,136,103
=========== ===========
NET ASSETS, representing:
Equity of Contract owners $56,252,299 $51,545,161
Equity of The Prudential Insurance Company of America 29,849,584 27,590,942
----------- -----------
$86,101,883 $79,136,103
=========== ===========
</TABLE>

STATEMENTS OF OPERATIONS

Year Ended December 31,
---------------------------------------------
1995 1994 1993
---------- ---------- -----------

<S> <C> <C> <C>
INVESTMENT INCOME:

Net Investment Income from Partnership Operations $6,651,513 $5,659,786 $ 5,289,403
---------- ---------- -----------

EXPENSES:
Asset Based Charges to Contract owners (Note 3) 450,662 407,310 382,567
---------- ---------- -----------
NET INVESTMENT INCOME 6,200,851 5,252,476 4,906,836
---------- ---------- -----------
NET REALIZED AND UNREALIZED
GAIN/(LOSS) ON INVESTMENTS
Net realized loss on investments sold (Note 6) 0 (545,083) (1,029,669)
Net unrealized gain on investments 314,267 1,179,744 93,915
---------- ---------- -----------
NET REALIZED AND UNREALIZED
GAIN/(LOSS) ON INVESTMENTS IN PARTNERSHIP 314,267 634,661 (935,754)
---------- ---------- -----------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $6,515,118 $5,887,137 $ 3,971,082
========== ========== ===========
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A3 THROUGH A4.

A1 - Real Property

<PAGE>

FINANCIAL STATEMENTS OF
THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY ACCOUNT

STATEMENTS OF CHANGES IN NET ASSETS

Year Ended December 31,
----------------------------------------------
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
OPERATIONS:

Net investment income $ 6,200,851 $ 5,252,476 $ 4,906,836

Net Realized and Unrealized
Gain/(Loss) on Investments in Partnership 314,267 634,661 (935,754)
----------- ----------- -----------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS 6,515,118 5,887,137 3,971,082
----------- ----------- -----------
CAPITAL TRANSACTIONS:

Net Contributions by Contract owners 588,074 1,195,248 3,927

Net (Withdrawals)/Contributions by The Prudential
Insurance Company of America (137,412) (3,787,938) 378,640
----------- ----------- -----------
NET INCREASE/(DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL TRANSACTIONS 450,662 (2,592,690) 382,567
----------- ----------- -----------
TOTAL INCREASE IN NET ASSETS $ 6,965,780 $ 3,294,447 $ 4,353,649

NET ASSETS:
Beginning of year $79,136,103 $75,841,656 $71,488,007
----------- ----------- -----------
End of year $86,101,883 $79,136,103 $75,841,656
=========== =========== ===========
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A3 THROUGH A4.

A2 - Real Property

<PAGE>

NOTES TO THE FINANCIAL STATEMENTS OF
THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY ACCOUNT
FOR YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993

NOTE 1: GENERAL

The Prudential Variable Contract Real Property Account (the "Real Property
Account") was established on November 20, 1986 by resolution of the Board of
Directors of The Prudential Insurance Company of America ("The Prudential"), as
a separate investment account pursuant to New Jersey law. The assets of the Real
Property Account are segregated from The Prudential's other assets. The Real
Property Account is used to fund benefits under certain variable life insurance
and variable annuity contracts issued by The Prudential. On April 29, 1988, The
Prudential contributed $100,000 to commence operations of the Real Property
Account.

The assets of the Real Property Account are invested in The Prudential Variable
Contract Real Property Partnership (the "Partnership"). The Partnership is a
general partnership organized under New Jersey law on April 29, 1988, through
agreement among The Prudential, Pruco Life Insurance Company, and Pruco Life
Insurance Company of New Jersey to provide a means for assets allocated to the
real property option under certain variable life insurance and variable annuity
contracts issued by the respective companies to be invested in a commingled
pool. On April 29, 1988, the Real Property Account initially contributed
$100,000 to 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 financial statements are prepared on a current value basis due to
the fact that the unit values under Contracts participating in the
Partnership are determined using the current value basis of investments
(see General Note to the Partnership financials).

B. INVESTMENT IN PARTNERSHIP INTEREST

The investment in the Partnership is based on the Real Property
Account's proportionate interest of the Partnership's current value, as
discussed in Note 1 to the Partnership's financial statements. At
December 31, 1995 and 1994 the Real Property Account's interest in the
Partnership, based on current value equity was 45.4% or 5,465,515
shares and 44.6% or 5,465,515 shares, respectively.

C. INCOME RECOGNITION

The Real Property Account recognizes its proportionate share of the
Partnership's net investment income on a daily basis, as consistent
with the Partnership Agreement. The Net Gain/Loss on Investment in
Partnership reflected on the Statements of Operations represents the
Real Property Account's proportionate share of the Net Gain/(Loss) on
Investments recognized by the Partnership.

A3 - Real Property

<PAGE>

NOTE 3: ASSET BASED CHARGES

Mortality risk and expense risk charges and charges for administration are
applied daily against the net assets representing equity of Contract owners
investing in the Real Property Account, at an effective annual rate as shown
below for each of The Prudential's separate accounts investing in the Real
Property Account:

- -------------------------------------------------------------------------------
Variable Appreciable Account
- Contracts with face amounts of less than $100,000 0.90%
- Contracts with face amounts of $100,000 or more 0.60%
Individual Variable Contract Account 1.20%
- -------------------------------------------------------------------------------

NOTE 4: TAXES

Income and capital gains and losses of the Partnership are attributed, for
federal income tax purposes, to the Partners in the Partnership, including The
Prudential, in respect of the Real Property Account. The operations of the Real
Property Account form a part of, and are taxed with, the operations of The
Prudential. Under the Internal Revenue Code, all ordinary income and capital
gains allocated to the Contract owners are not taxable to The Prudential. As a
result, the net asset values of the Real Property Account are not affected by
federal income taxes on the ordinary income and capital gains and losses
attributable to the Real Property Account.

NOTE 5: COMMITMENT FROM PARTNER

On January 9, 1990, The Prudential committed to fund up to $100 million to
enable the Partnership to take advantage of opportunities to acquire attractive
real property investments whose cost is greater than the Partnership's available
cash. Contributions to the Partnership under this commitment are utilized for
property acquisitions and returned to Prudential on an ongoing basis from
Contract owners' net contributions. Also, the amount of the commitment is
reduced by $10 million for every $100 million in current value net assets of the
Partnership. The amount available under this commitment as of December 31, 1995
is approximately $52.2 million.

NOTE 6: NET REALIZED LOSS ON INVESTMENT

The Net Realized Loss on Investment reflected on the Statement of Operations
represents the Real Property Account's proportionate share of the loss realized
by the Partnership upon the sale of certain properties. For further information,
please refer to Note 8 of the Partnership's December 31, 1995 financial
statements.

A4 - Real Property

<PAGE>

INDEPENDENT AUDITORS' REPORT
- ----------------------------
To the Contract Owners of The Prudential
Variable Contract Real Property Account
Newark, New Jersey

We have audited the accompanying statements of net assets of The Prudential
Variable Contract Real Property Account ("Real Property Account") as of December
31, 1995 and 1994, and the related statements of operations and changes in net
assets for each of the three years in the period ended December 31, 1995. These
financial statements are the responsibility of the Real Property Account's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. 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 amount and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material
respects, the financial position of The Prudential Variable Contract Real
Property Account as of December 31, 1995 and 1994, and the results of its
operations and the changes in net assets for each of the three years in the
period ended December 31, 1995 in conformity with generally accepted accounting
principles.

Investment in shares of The Prudential Variable Contract Real Property
Partnership is stated at current value at December 31, 1995 and 1994, as
discussed in Note 2 to the financial statements. Determination of current value
involves subjective judgment because the actual market value of such shares can
be determined only by negotiation between the parties in a sales transaction.

March 1, 1996

A5 - Real Property

<PAGE>

FINANCIAL STATEMENTS OF
THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

STATEMENTS OF ASSETS AND LIABILITIES

DECEMBER 31,
---------------------------
1995 1994
------------ ------------
ASSETS:

Properties at current value
(cost $191,981,608 and $154,157,068
respectively) (Note 1) $164,695,033 $126,258,004
Interest in properties at current value
(cost $6,133,157 and $6,108,742
respectively) (Note 1) 5,800,000 5,726,451
Cash and cash equivalents 14,223,265 33,093,237
Marketable securities 10,532,155 15,824,199
Other assets and accounts receivable
(net of allowance for uncollectible
amounts of $18,896 and $128,336 respectively) 1,743,305 2,218,095
------------ ------------
Total Assets $196,993,758 $183,119,986
============ ============

LIABILITIES AND PARTNERS' EQUITY:

Obligation under capital lease (Note 2) $ 3,882,421 $ 3,804,836
Accounts payable and accrued expenses 2,142,614 805,066
Due to affiliates (Note 5) 682,795 624,206
Other liabilities 664,069 645,913
------------ ------------
Total liabilities 7,371,899 5,880,021
------------ ------------
Partners' Equity 189,621,859 177,239,965
------------ ------------
Total Liabilities and Partners' Equity $196,993,758 $183,119,986
============ ============
Number of shares outstanding at end of period 12,036,684 12,241,034
============ ============
Share Value at end of period $ 15.75 $ 14.48
============ ============

SEE NOTES TO FINANCIAL STATEMENTS ON PAGES B-8 THROUGH B-12.

B1 - Real Property

<PAGE>

FINANCIAL STATEMENTS OF
THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

STATEMENTS OF OPERATIONS

YEAR ENDED DECEMBER 31,
------------------------------------------
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
INVESTMENT INCOME:

Rent from properties $19,827,044 $16,344,259 $15,810,994
Income from interest in properties 638,183 2,355,204 2,901,477
Interest on mortgage loans 0 105,694 1,023,292
Interest from short-term investments 2,660,865 1,571,394 743,924
----------- ----------- -----------
23,126,092 20,376,551 20,479,687
----------- ----------- -----------
EXPENSES:

Investment management fee (Note 5) 2,341,878 2,287,816 2,269,206
Real estate tax expense 1,938,090 1,792,775 1,986,246
Administrative expenses 1,795,092 1,413,722 1,609,292
Operating expenses 1,870,183 1,707,039 1,639,828
Interest expense 460,578 327,000 320,484
----------- ----------- -----------
8,405,821 7,528,352 7,825,056
----------- ----------- -----------
NET INVESTMENT INCOME 14,720,271 12,848,199 12,654,631
----------- ----------- -----------

NET REALIZED AND UNREALIZED
GAIN/(LOSS) ON INVESTMENTS:

Net realized loss
on investments (Note 8) 0 (1,237,385) (2,463,431)
Net unrealized gain
on investments 661,623 2,576,828 223,714
----------- ----------- -----------
NET REALIZED AND UNREALIZED
GAIN/(LOSS) ON INVESTMENTS 661,623 1,339,443 (2,239,717)
----------- ----------- -----------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $15,381,894 $14,187,642 $10,414,914
=========== =========== ===========

</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS ON PAGES B-8 THROUGH B-12.

B2 - Real Property

<PAGE>

FINANCIAL STATEMENTS OF
THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

STATEMENTS OF CHANGES IN NET ASSETS

YEAR ENDED DECEMBER 31,
----------------------------------------------
1995 1994 1993
------------ ------------ ------------
OPERATIONS:
<S> <C> <C> <C>
Net Investment Income $ 14,720,271 $ 12,848,199 $ 12,654,631
Net Realized and Unrealized
Gain/(Loss) on Investments 661,623 1,339,443 (2,239,717)
------------ ------------ ------------

NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS 15,381,894 14,187,642 10,414,914
------------ ------------ ------------

CAPITAL TRANSACTIONS:

Withdrawals by partners
(204,350, 790,390, and 1,157,814
shares respectively) (3,000,000) (11,000,000) (15,000,000)
------------ ------------ ------------
NET DECREASE IN NET ASSETS RESULTING
FROM CAPITAL TRANSACTIONS (3,000,000) (11,000,000) (15,000,000)
------------ ------------ ------------
TOTAL INCREASE/(DECREASE)
IN NET ASSETS 12,381,894 3,187,642 (4,585,086)

NET ASSETS:

Beginning of Period 177,239,965 174,052,323 178,637,409
------------ ------------ ------------
End of Period $189,621,859 $177,239,965 $174,052,323
============ ============ ============
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS ON PAGES B-8 THROUGH B-12.

B3 - Real Property

<PAGE>

FINANCIAL STATEMENTS OF
THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

STATEMENTS OF CASH FLOWS

YEAR ENDED DECEMBER 31,
--------------------------------------------
1995 1994 1993
------------ ------------ ------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net increase in net assets resulting from operations $ 15,381,894 $ 14,187,642 $ 10,414,914
Adjustments to reconcile net increase/(decrease) in net assets
resulting from operations to net cash from
operating activities:
Net unrealized gain on investments (661,623) (2,576,828) (223,714)
Net realized loss on investments 0 1,237,385 2,463,431
Changes in assets and liabilities:
Decrease/(Increase) in other assets and accounts receivable 474,790 (727,821) 115,982
Decrease/(Increase) in marketable securities 5,292,044 (13,845,191) (1,979,008)
Increase in obligation under capital lease 77,585 6,271 5,743
Increase in accounts payable
and accrued expenses 1,337,548 75,876 99,524
Increase/(Decrease) in due to affiliates 58,589 (70,438) (19,529)
Increase/(Decrease) in other liabilities 18,156 165,049 (9,006)
------------ ------------ ------------

Net cash from operating activities 21,978,983 (1,548,055) 10,868,337
------------ ------------ ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of properties (36,774,343) 0 0
Capital improvements on real estate owned (1,050,197) (1,161,224) (1,044,906)
Capital improvements on interest in properties (24,415) (12,087) (34,237)
Principal repayments received on mortgage loans 0 3,947,528 202,959
Proceeds from sale of investments 0 19,014,842 4,726,705
------------ ------------ ------------

Net cash from investing activities (37,848,955) 21,789,059 3,850,521
------------ ------------ ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Withdrawals by Partners (3,000,000) (11,000,000) (15,000,000)
------------ ------------ ------------

Net cash from financing activities (3,000,000) (11,000,000) (15,000,000)
------------ ------------ ------------

Net (decrease)/increase in cash and cash equivalents (18,869,972) 9,241,004 (281,142)

CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR 33,093,237 23,852,233 24,133,375
------------ ------------ ------------
CASH AND CASH EQUIVALENTS - END OF YEAR $ 14,223,265 $ 33,093,237 $ 23,852,233
============ ============ ============
SUPPLEMENTAL SCHEDULE
OF NONCASH INVESTING ACTIVITIES:
Foreclosure on mortgage loan (Note 9) $ 0 $ 5,276,262 $ 0
============ ============ ============
SUPPLEMENTAL INFORMATION:
Interest paid $ 376,450 $ 250,000 $ 250,000
============ ============ ============
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS ON PAGES B-8 THROUGH B-12.

B4 - Real Property

<PAGE>

THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP
SCHEDULE OF INVESTMENTS

December 31, 1995 December 31, 1994
- --------------------------------------------------------------------------------------------------------------------
INVESTMENT IN PROPERTIES (PERCENT OF NET ASSETS) 86.9% 71.2%
Current Current
Location Description Cost Value Cost Value
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Azusa, CA Warehouse $ 18,546,247 $ 15,083,725 $ 18,219,245 $ 15,426,651
Lisle, IL Office Building 17,524,421 11,600,000 17,524,421 12,000,000
Atlanta, GA Garden Apartments 15,371,495 12,600,000 15,309,193 11,903,533
Pomona, CA (a) Warehouse 23,205,172 17,127,292 23,115,589 16,353,556
Roswell, GA Retail Shopping Center 31,688,912 32,055,216 31,605,970 32,500,000
Morristown, NJ Office Building 18,664,969 9,572,688 18,443,689 9,825,401
Bolingbrook, IL Warehouse 8,948,028 7,400,000 8,915,498 7,009,907
Farmington Hills, MI Garden Apartments 13,594,950 14,200,000 13,560,049 13,538,956
Flint, MI Office Building 7,616,842 6,539,368 7,463,414 7,700,000
Raleigh, NC Garden Apartments 15,758,699 17,200,000 0 0
Nashville, TN Office Building 8,431,680 8,686,551 0 0
Oakbrook Terrace, IL Office Complex 12,630,193 12,630,193 0 0
------------ ------------ ------------ ------------
$191,981,608 $164,695,033 $154,157,068 $126,258,004
============ ============ ============ ============
</TABLE>

- -----------------

(a) Includes land under capital lease of $3,412,636 representing the present
value of minimum future lease payments at the inception of the lease.

INVESTMENT IN INTEREST IN PROPERTIES (PERCENT OF NET ASSETS) 3.1% 3.2%
Current Current
Location Description Cost Value Cost Value
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Jacksonville, FL Warehouse/Distribution 1,317,453 1,225,000 1,304,979 1,150,000
Jacksonville, FL Warehouse/Distribution 1,002,448 975,000 1,002,448 1,000,000
Jacksonville, FL Warehouse/Distribution 1,442,894 1,300,000 1,442,894 1,375,000
Jacksonville, FL Warehouse/Distribution 2,370,362 2,300,000 2,358,421 2,201,451
---------- ---------- ---------- ----------
$6,133,157 $5,800,000 $6,108,742 $5,726,451
========== ========== ========== ==========

CASH AND CASH EQUIVALENTS (PERCENT OF NET ASSETS) 7.5% 18.7%
(see pages B-6 and B-7 for detail) Face Current Face Current
Description Amount Value Amount Value
- ------------------------------------------------------------------------------------------------------------------
Commercial Paper and Cash $14,282,697 $14,223,265 $33,456,969 $33,093,237
=========== =========== =========== ===========

MARKETABLE SECURITIES (PERCENT OF NET ASSETS) 5.6% 8.9%
(see pages B-6 and B-7 for detail) Face Current Face Current
Description Amount Value Amount Value
- ------------------------------------------------------------------------------------------------------------------
Marketable Securities $ 10,480,000 $ 10,532,155 $16,100,000 $ 15,824,199
============ ============ =========== ============

OTHER ASSETS (3.1%) (2.0%)
(net of liabilities) $ (5,628,594) $ (3,661,926)
------------ ------------
TOTAL NET ASSETS $189,621,859 $177,239,965
============ ============
</TABLE>

B5 - Real Property
(Continued)

<PAGE>

THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

SCHEDULE OF INVESTMENTS

DECEMBER 31, 1995
-------------------------
CASH AND CASH EQUIVALENTS (PERCENT OF NET ASSETS) 7.5%
FACE CURRENT
DESCRIPTION AMOUNT VALUE
- ----------------------------------------------------------------------------------------
<S> <C> <C>
Commercial Paper (with stated rate and maturity date)

Morgan Stanley Group, Inc., 6.10%, January 2, 1996 $ 1,146,000 $ 1,146,000
Engelhard Corp., 6.25%, January 3, 1996 1,038,000 1,038,000
Finova Capital Corp., 5.95%, January 4, 1996 800,000 792,198
Philip Morris Companies Inc., 5.80%, January 5, 1996 505,000 504,430
Gannett Co. Inc., 5.85%, January 9, 1996 1,700,000 1,696,409
Hanson Finance, 5.80%, January 12, 1996 354,000 352,175

Riverwoods Funding Corp., 5.78%, January 12, 1996 1,189,000 1,183,273
Finova Capital Corp., 5.97%, January 16, 1996 780,000 771,980
Smith Barney Inc., 5.79%, January 18, 1996 1,628,000 1,618,836
Fleet Financial Group, 5.75%, January 30, 1996 1,700,000 1,689,139
Countrywide Funding Corp., 5.82%, February 14, 1996 1,500,000 1,488,128
----------- -----------
TOTAL COMMERCIAL PAPER 12,340,000 12,280,568

TOTAL CASH 1,942,697 1,942,697
----------- -----------
TOTAL CASH AND CASH EQUIVALENTS $14,282,697 $14,223,265
=========== ===========

<CAPTION>
MARKETABLE SECURITIES (PERCENT OF NET ASSETS) 5.6%
FACE CURRENT
DESCRIPTION AMOUNT VALUE
- ----------------------------------------------------------------------------------------
<S> <C> <C>
Commercial Paper (with stated rate and maturity date)

Associates Corp. of North America, 8.75%, February 1, 1996 $ 410,000 $ 416,810
General Motors Acceptance Corp., 8.75%, February 1, 1996 650,000 658,860
General Motors Acceptance Corp., 8.95%, February 5, 1996 350,000 356,370
General Motors Acceptance Corp., 4.75%, February 14, 1996 430,000 426,212
General Motors Acceptance Corp., 6.01%, February 22, 1996 240,000 240,057
Household Finance Corp., 5.75%, April 19, 1996 2,000,000 1,996,520
Ford Motor Credit Corp., 6.24%, April 22, 1996 500,000 500,658
Society National Bank Cleveland, 6.00%, April 25, 1996 150,000 149,295
International Lease Finance Corp., 5.00%, May 28, 1996 1,000,000 992,120
Transamerica Financial Corp., 8.55%, June 15, 1996 400,000 409,284
John Deere Capital Corp., 6.16%, July 22, 1996 1,000,000 1,002,267
Sears Roebuck Acceptance Corp., 8.55%, August 1, 1996 1,000,000 1,039,335
Key Bank of New York, N.A., 5.43%, September 6, 1996 1,000,000 999,210
Bank One Columbus, 5.56%, September 12, 1996 1,000,000 999,297
Associates Corp. of North America, 4.48%, October 15, 1996 350,000 345,860
----------- -----------
Total Commercial Paper $10,480,000 $10,532,155
=========== ===========

</TABLE>

B6 - Real Property
(CONTINUED)

<PAGE>

THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

SCHEDULE OF INVESTMENTS

DECEMBER 31, 1994
-------------------------
CASH AND CASH EQUIVALENTS (PERCENT OF NET ASSETS) 18.7%
Face Current
DESCRIPTION Amount Value
- -------------------------------------------------------------------------------------
Commercial Paper (with stated rate and maturity date)
<S> <C> <C>
Chemical Bank, 6.25%, January 3, 1995 $ 90,000 $ 90,000
Amoco Corp., 5.754%, January 3, 1995 2,104,000 2,102,656
Pacificorp, 6.125%, January 12, 1995 2,000,000 1,991,867
Gateway Fuel Corp., 5.571%, January 17, 1995 1,925,000 1,900,590
Norwest Financial Inc., 5.499%, January 17, 1995 1,660,000 1,636,007
Greyhound Financial Corp., 6.215%, January 18, 1995 1,944,000 1,932,987
PHH Corp Note, 5.928%, January 19, 1995 2,400,000 2,388,593

Merrill Lynch & Company Inc., 6.056%, January 25, 1995 706,000 699,528
Associates Corp. of North Am., 5.828%, January 30, 1995 2,300,000 2,277,144
Duracell Inc., 6.310%, January 30, 1995 2,396,000 2,373,122
Ford Motor Credit Corp., 5.841%, February 1, 1995 2,300,000 2,275,997
Goldman Sachs Group, 5 .705%, February 2, 1995 1,685,000 1,654,071
Sears Roebuck Acceptance Corp., 6.120%, February 7, 1995 1,000,000 988,572

Morgan Stanley Group Inc., 6.363%, March 1, 1995 1,000,000 985,370
Beneficial Corp, 6.349%, March 14, 1995 2,400,000 2,362,500
John Deere Capital Corp., 6.349%, March 14, 1995 2,400,000 2,362,500
American General Financial Corp., 6.350%, March 15, 1995 2,400,000 2,362,084
Toronto Dominion Holdings, 6.318%, March 15, 1995 2,400,000 2,362,680
----------- -----------
TOTAL COMMERCIAL PAPER 33,110,000 32,746,268

TOTAL CASH 346,969 346,969
----------- -----------
TOTAL CASH AND CASH EQUIVALENTS $33,456,969 $33,093,237
=========== ===========

MARKETABLE SECURITIES (PERCENT OF NET ASSETS) 8.9%
Face Current
DESCRIPTION Amount Value
- -------------------------------------------------------------------------------------
Commercial Paper (with stated rate and maturity date)

Bankers Trust NY Corp, 5.250%, January 16, 1995 $ 1,400,000 $ 1,401,680
Republic National Bank of NY, 4.300%, March 8, 1995 1,000,000 998,546
Golden Peanut Co., 6.455%, April 5, 1995 2,000,000 1,958,218
General Electric Capital Corp, 6.592%, April 18, 1995 2,400,000 2,348,400
PNC Bank N.A., 5.820%, April 21, 1995 1,400,000 1,398,775

Nationsbank North Carolina, 5.400%, May 19, 1995 1,500,000 1,511,807
Corporate Receivables Corp., 6.760%, May 23, 1995 2,400,000 2,332,548
Province of Quebec, 6.887%, June 1, 1995 2,000,000 1,937,005
Bank of America NT & SA, 6.783%, June 5, 1995 2,000,000 1,937,220
----------- -----------
Total Commercial Paper $16,100,000 $15,824,199
=========== ===========
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS ON PAGES B8 THROUGH B12.

B7 - Real Property

<PAGE>

NOTES TO FINANCIAL STATEMENTS OF
THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP
FOR YEARS ENDED DECEMBER 31, 1995, 1994, 1993

GENERAL

On April 29, 1988, The Prudential Variable Contract Real Property Partnership
(the "Partnership"), a general partnership organized under New Jersey law, was
formed through an agreement among The Prudential Insurance Company of America
("The Prudential"), Pruco Life Insurance Company ("Pruco Life"), and Pruco Life
Insurance Company of New Jersey ("Pruco Life of New Jersey"). The Partnership
was established as a means by which assets allocated to the real estate
investment option under certain variable life insurance and variable annuity
contracts issued by the respective companies could be invested in a commingled
pool. The partners in the Partnership are The Prudential Insurance Company of
America, Pruco Life Insurance Company and Pruco Life Insurance Company of New
Jersey.

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.

The Partnership's investments are valued on a daily basis, consistent with the
Partnership Agreement. On each day during which the New York Stock Exchange is
open for business, the net assets of the Partnership are valued using the
current value of its investments as described in Notes 1A and 1B below, plus an
estimate of net income from operations reduced by any liabilities of the
Partnership.

The periodic adjustments to property and mortgage loan values described in Notes
1A and 1B below and the corrections of previous estimates of net income are made
on a prospective basis. There can be no assurance that all such adjustments and
estimates will be made timely.

Shares of the Partnership are sold to The Prudential Variable Contract Real
Property Account, Pruco Life Variable Contract Real Property Account, and Pruco
Life of New Jersey Variable Contract Real Property Account, (the "Real Property
Accounts") at the current share value of the Partnership's net assets. Share
value is calculated by dividing the current value of net assets of the
Partnership as determined below by the number of shares outstanding. A Contract
owner participates in the Partnership through interests in the Real Property
Accounts.

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A: REAL ESTATE OWNED AND INTEREST IN PROPERTIES - The Partnership's
investments in real estate owned and interests in properties are
initially valued at their purchase price. Thereafter, current values
are based upon appraisal reports prepared by independent real estate
appraisers (members of the Appraisal Institute or an equivalent
organization) which are ordinarily obtained on an annual basis. The
real estate valuations are reviewed internally at least every three
months and adjusted if there has been any significant changes and
circumstances related to the real estate since the most recent
independent appraisal.

The Chief Appraiser of the Prudential Comptroller's Department
Valuation Unit (Valuation Unit) is responsible to assure that the
valuation process provides independent and accurate current value
estimates. In the interest of maintaining and monitoring the
independence and the accuracy of the appraisal process, the
Comptroller of The Prudential has appointed a third party firm to act
as the Appraisal Management Firm. The Appraisal Management Firm, among
other responsibilities, approves the selection and scheduling of
external appraisals; develops a standard package of information to be
supplied to the appraisers; reviews and provides comments on all
external appraisals and a sample of internal appraisals; assists in
developing policy and procedures and

B8 - Real Property

<PAGE>

assists in the evaluation of the performance and competency of
external appraisers. The real estate valuations are reviewed quarterly
by the Valuation Unit and adjusted if there has been any significant
changes related to the property since the most recent independent
appraisal.

The purpose of an appraisal is to estimate the current value of real estate as
of a specific date. Current 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 to fair sale, with the buyer and seller each acting
prudently, knowledgeably, and for self interest, and assuming that neither is
under undue duress. This estimate of current value generally is a correlation of
three approaches, all of which require the exercise of subjective judgement. The
three approaches are: (1) current cost of reproducing real estate less
deterioration and functional and economic obsolescence; (2) discounting of a
series of income streams and reversion at a specified yield or by directly
capitalizing a single - year income estimate by an appropriate factor; and (3)
value indicated by recent sales of comparable real estate in the market. In the
reconciliation of these three approaches, the one most heavily relied upon is
the one generally recognized for the type of real estate in the market.

B: REVENUE RECOGNITION - Rent from properties consists of all amounts
earned under tenant operating leases including base rent, recoveries
of real estate taxes and other expenses and charges for miscellaneous
services provided to tenants. Revenue from leases which provide for
scheduled rent increases is recognized as billed.

C: CASH EQUIVALENTS - The Partnership considers all highly liquid
investments with an original maturity of three months or less when
purchased to be cash equivalents. Cash equivalents are carried at
market value.

D: MARKETABLE SECURITIES - Marketable securities are highly liquid
investments with maturities of more than three months when purchased
and are carried at market value.

E: FEDERAL INCOME TAXES - The Partnership is not a taxable entity under
the provisions of the Internal Revenue Code. The income and capital
gains and losses of the Partnership are attributed, for federal income
tax purposes, to the Partners in the Partnership. The Partnership may
be subject to state and local taxes in jurisdictions in which it
operates.

The bases of the Partnership's assets and liabilities for federal
income tax purposes are the same as the amounts reported on the
statements of assets and liabilities except for the investment in
properties. The tax basis of the properties is $193,288,982 at
December 31, 1995 and $148,001,027 at December 31, 1994.

F: BASIS OF ACCOUNTING - The financial statements are prepared on a
current value basis due to the fact that the unit values under
Contracts participating in the Partnership are determined using the
current value basis of investments (see General Note).

G: MANAGEMENT USE OF ESTIMATES IN THE FINANCIAL STATEMENTS - The
preparation of financial statements in conformity with generally
accepted accounting principles 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.

B9 - Real Property

<PAGE>

NOTE 2: OBLIGATION UNDER CAPITAL LEASE

The Partnership maintains an interest in a leasehold estate consisting of six
one-story industrial warehouse buildings located in Pomona, CA. In conjunction
with this interest, the Partnership assumed assignment of a ground lease
agreement which expires in November 2078, with no renewal options. The annual
ground lease payments after November 1994, and for each 10 year increment
thereafter, are subject to increase 50% of the increase in the Consumer Price
Index during the previous period . In 1995, the annual ground lease payment
increased $126,450 to $376,450. The ground lease contains a purchase option
exercisable from November 1994 to November 1997 at a fixed price of $4,000,000.
The Partnership intends to exercise its option to purchase the Ground Lease
prior to its expiration. Future minimum ground lease payments under capital
lease at December 31, 1995 are as follows:

1996 $ 376,450
Thereafter 4,062,742
---------
Total minimum ground lease payments 4,439,192
Less amount representing interest 556,771
---------
Present value of minimum ground lease payments $3,882,421
==========

NOTE 3: INVESTMENT IN MORTGAGE LOANS

At December 31, 1993, the Partnership had an investment in two mortgage loans
with a current value totaling $9,223,791 with interest rates of 8.875% and 9%.
Both loans were scheduled to mature in 1994. The Partnership received a final
payment in May 1994 of $3,543,892 which satisfied the terms of the loan on the
property in Lincoln, NE. On July 1, 1994, the Partnership foreclosed on the
Flint, MI mortgage loan under a voluntary conveyance of the property by the
mortgagor. The Partnership took title to the property at the expiration of the
redemption period on January 3, 1995. The property is reported as investment in
property in the December 31, 1995 financial statements and is carried at its
current value.

NOTE 4: LEASING ACTIVITY

The Partnership leases space to tenants under various operating lease
agreements. These agreements, without giving effect to renewal options, have
expiration dates ranging from 1995 to 2009. At December 31, 1995, future minimum
base rental income under non-cancelable operating leases by year, and in the
aggregate are shown below. Although these are non-cancelable leases, there is no
assurance that all amounts will be received.

YEAR ENDING
DECEMBER 31,
------------
1996 $14,170,889
1997 11,474,949
1998 8,926,646
1999 7,766,592
2000 6,837,373
Thereafter 19,199,780
-----------
Total $68,376,229
===========

B10 - Real Property

<PAGE>

NOTE 5: TRANSACTIONS WITH AFFILIATES

Pursuant to an investment management agreement, The Prudential charges the
Partnership a daily investment management fee at an annual rate of 1.25% of the
average daily gross asset valuation of the Partnership. For the years ended
December 31, 1995, 1994 and 1993 management fees incurred by the Partnership
were $2,341,878, $2,287,816, and $2,269,206, respectively.

The Partnership also reimburses The Prudential for certain administrative
services rendered by The Prudential. The amounts incurred for the years ended
December 31, 1995, 1994 and 1993 were $123,919; $95,015; and $119,467,
respectively and are classified as administrative expenses in the statements of
operations.

The Partnership owns a 50% interest in four warehouse/distribution buildings in
Jacksonville, Florida (the Unit warehouses). The remaining 50% interest is
owned by The Prudential and one of its subsidiaries. At December 31, 1995 ,
these properties had total assets of $10,316,275 and liabilities of $33,802. For
the year ended December 31, 1995 the Unit warehouses had revenues of $1,601,012
and expenses of $715,797.

The Partnership has contracted with PREMISYS Real Estate Services, Inc.
(PREMISYS), an affiliate of The Prudential, to provide property management
services at the Unit warehouses, through August 1995 at the Bolingbrook, IL
warehouse, through October 1994 at the Atlanta, GA; Desoto, TX; Fort Worth, TX;
Shreveport, LA; Bedford Park, IL; and Normal, IL warehouses, and through August
1993 at the Pomona and Azuza warehouses. The property management fees earned by
PREMISYS for the years ended December 31, 1995, 1994, and 1993 were $31,360,
$92,382, and $89,684, respectively.

NOTE 6: LINE OF CREDIT

The Partnership had established a $10 million annually renewable unsecured
revolving line of credit with First Fidelity Bank, N.A., which could have been
drawn upon as needed for potential liquidity needs. The annual cost of
maintaining the line of credit was 0.1875% of the total line of credit. Since no
drawdowns had occurred and management did not anticipate the need to draw upon
this resource in the future, the line of credit was discontinued as of October
31, 1995.

NOTE 7: COMMITMENT FROM PARTNER

On January 9, 1990, The Prudential committed to fund up to $100 million to
enable the Partnership to take advantage of opportunities to acquire attractive
real property investments whose cost is greater than the Partnership's then
available cash. Contributions to the Partnership under this commitment are
utilized for property acquisitions and returned to Prudential on an ongoing
basis from Contract owners' net contributions. Also, the amount of the
commitment is reduced by $10 million for every $100 million in current value net
assets of the Partnership. The amount available under this commitment for
property purchases as of December 31, 1995 is approximately $52.2 million.

NOTE 8: NET REALIZED LOSS ON INVESTMENTS

On October 7, 1994, the Partnership sold its 50% ownership interest in the two
warehouse/distribution buildings located in Atlanta, GA and the ones located in
Desoto, TX; Fort Worth, TX; Shreveport, LA; Bedford Park, IL; and Normal, IL.
The net proceeds on the sale were $19,014,872 resulting in a realized loss of
$1,237,385.

B11 - Real Property

<PAGE>

On August 9, 1993, the Partnership sold its Denver, CO warehouse facility. The
proceeds, net of related costs, amounted to approximately $2,561,000. The sale
of the warehouse resulted in a realized loss of approximately $1,451,000.

On September 2, 1993, the Partnership sold one of the Jacksonville, FL
warehouse/distribution buildings in which the Partnership owned a 50% interest.
The proceeds, net of related costs, amounted to approximately $1,380,000,
resulting in a realized loss of approximately $220,000.

On October 29, 1993, the Partnership sold its interest in the Unit warehouse
located in Hightstown, NJ. The proceeds, net of related costs, were
approximately $786,000, resulting in a realized loss of approximately $792,000.

NOTE 9: FORECLOSURE ON MORTGAGE LOAN

On July 1, 1994, the Partnership foreclosed on the Flint, MI mortgage loan under
a voluntary conveyance of the property by the mortgagor. The Partnership took
title to the property at the expiration of the redemption period on January 2,
1995.

B12 - Real Property

<PAGE>

INDEPENDENT AUDITORS' REPORT

To the Partners of
The Prudential Variable Contract Real Property Partnership
Newark, New Jersey

We have audited the accompanying statements of assets and liabilities including
the schedules of investments, of The Prudential Variable Contract Real Property
Partnership as of December 31, 1995 and 1994, and the related statements of
operations, changes in net assets, and cash flows for each of the three years in
the period ended December 31, 1995 (collectively referred to as the financial
statements) and the per share data and ratios appearing on page 1 of the
prospectus for each of the five years in the period ended December 31, 1995.
These financial statements and the per share data and ratios are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements and the per share data and ratios based
on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. 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. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such financial statements and per share data and ratios present
fairly, in all material respects, the financial position of The Prudential
Variable Contract Real Property Partnership as of December 31, 1995 and 1994,
and the results of its operations and its cash flows for each of the three years
in the period ended December 31, 1995 and the per share data and ratios for each
of the five years in the period ended December 31, 1995, in conformity with
generally accepted accounting principles.

Investments in properties and interest in properties are stated at current value
at December 31, 1995 and 1994, as discussed in Note 1 to the financial
statements. Determination of current value involves subjective judgment because
the actual market value of real estate can be determined only by negotiation
between the parties in a sales transaction.

Deloitte & Touche LLP
Parsippany, New Jersey
March 1, 1996

B13 - Real Property

<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS
<PAGE>

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Prudential Directors' and Officers' Liability and Corporation Reimbursement
Insurance Program, purchased by The Prudential from Aetna Casualty & Surety
Company, CNA Insurance Companies, Lloyds of London, Great American Insurance
Company, Reliance Insurance Company, Corporate Officers & Directors Assurance
Ltd., A.C.E. Insurance Company, Ltd., XL Insurance Company, Ltd., and
Zurich-American Insurance Company, provides reimbursement for "Loss" (as defined
in the policies) which the Company pays as indemnification to its directors or
officers resulting from any claim for any actual or alleged act, error,
misstatement, misleading statement, omission, or breach of duty by persons in
the discharge of their duties in their capacities as directors or officers of
The Prudential, any of its subsidiaries, or certain investment companies
affiliated with The Prudential. Coverage is also provided to the individual
directors or officers for such Loss, for which they shall not be indemnified.
Loss essentially is the legal liability on claims against a director or officer,
including adjudicated damages, settlements and reasonable and necessary legal
fees and expenses incurred in defense of adjudicatory proceedings and appeals
therefrom. Loss does not include punitive or exemplary damages or the multiplied
portion of any multiplied damage award, criminal or civil fines or penalties
imposed by law, taxes or wages, or matters which are uninsurable under the law
pursuant to which the policies are construed.

There are a number of exclusions from coverage. Among the matters excluded are
Losses arising as the result of (1) claims brought about or contributed to by
the criminal or fraudulent acts or omissions or the willful violation of any law
by a director or officer, (2) claims based on or attributable to directors or
officers gaining personal profit or advantage to which they were not legally
entitled, and (3) claims arising from actual or alleged performance of, or
failure to perform, services as, or in any capacity similar to, an investment
adviser, investment banker, underwriter, broker or dealer, as those terms are
defined in the Securities Act of 1933, the Securities Exchange Act of 1934, the
Investment Advisers Act of 1940, the Investment Company Act of 1940, any rules
or regulations thereunder, or any similar federal, state or local statute, rule
or regulation.

The limit of coverage under the Program for both individual and corporate
reimbursement coverage is $150,000,000. The retention for corporate
reimbursement coverage is $10,000,000 per loss.

The relevant provisions of New Jersey law permitting or requiring
indemnification, New Jersey being the state of organization of The Prudential,
can be found in Section 14A:3-5 of the New Jersey Statutes Annotated. The text
of The Prudential's by-law 26, which relates to indemnification of officers and
directors, is incorporated by reference to Exhibit 3B to this Registration
Statement.

Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions or otherwise, the Registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

ITEM 15. NOT APPLICABLE

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Exhibits

(1A) Distribution Agreement between Pruco Securities Corporation and The
Prudential Insurance Company of America with respect to the Prudential
Individual Variable Contract Account.

Incorporated by reference to Registrant's Form S-1, Registration Statement No.
33-20083, filed February 10, 1988.

(1B) Distribution Agreement between Pruco Securities Corporation and The
Prudential Insurance Company of America with respect to The Prudential Variable
Appreciable Account.

Incorporated by reference to Post-Effective Amendment No. 4 to Form S-6,
Registration Statement No. 33-20000, filed March 2, 1990, on behalf of The
Prudential Variable Appreciable Account.

II-1

<PAGE>

(3A) Charter of The Prudential Insurance Company of America, as amended February
26, 1989.

Incorporated by reference to Form S-6, Registration Statement No. 33-61079,
filed July 17, 1995, on behalf of The Prudential Variable Appreciable Account.

(3B) By-Laws of The Prudential Insurance Company of America, as amended August
8, 1995.

Incorporated by reference to Post-Effective Amendment No. 1 to Form S-6,
Registration No. 33-61079, filed April 25, 1996, on behalf of The Prudential
Variable Appreciable Account.

(3C) Resolution of the Board of Directors establishing The Prudential Variable
Contract Real Property Account.

Incorporated by reference to Registrant's Form S-1, Registration Statement No.
33-20083, filed February 10, 1988.

(4A)(i) Revised Individual Variable Annuity Contract.

Incorporated by reference to Post-Effective Amendment No. 8 to Form N-4,
Registration Statement No. 2-80897, filed October 23, 1986, on behalf of The
Prudential Individual Variable Contract Account.

(4A)(ii) Discovery Plus Contract.

Incorporated by reference to Form N-4, Registration Statement No. 33-25434,
filed November 8, 1988, on behalf of The Prudential Individual Variable Contract
Account.

(4B)(i) Variable Appreciable Life Insurance Contract with fixed death benefit.

Incorporated by reference to Pre-Effective Amendment No. 1 to Form S-6,
Registration Statement No. 33-20000, filed June 15, 1988, on behalf of The
Prudential Variable Appreciable Account.

(4B)(ii) Variable Appreciable Life Insurance Contract with variable death
benefit.

Incorporated by reference to Pre-Effective Amendment No. 1 to Form S-6,
Registration Statement No. 33-20000, filed June 15, 1988, on behalf of The
Prudential Variable Appreciable Account.

(4C)(i) Custom VAL Life Insurance Contract with fixed death benefit.

Incorporated by reference to Form S-6, Registration Statement No. 33-25372,
filed November 4, 1988, on behalf of The Prudential Variable Appreciable
Account.

(4C)(ii) Custom VAL Life Insurance Contract with variable death benefit.

Incorporated by reference to Form S-6, Registration Statement No. 33-25372,
filed November 4, 1988, on behalf of The Prudential Variable Appreciable
Account.

(5) Opinion and Consent of Clifford E. Kirsch, Esq., as to the legality of the
securities being registered.

Filed herewith.

(10A) Investment Management Agreement between The Prudential Insurance Company
of America and The Prudential Variable Contract Real Property Partnership.

Incorporated by reference to Pre-Effective Amendment No. 1 to Registrant's Form
S-1, Registration Statement No. 33-20083, filed May 2, 1988.

II-2

<PAGE>

(10B) Service Agreement between The Prudential Insurance Company of America and
The Prudential Investment Corporation.

Incorporated by reference to Form S-1, Registration Statement No. 33-8698, filed
September 12, 1986, on behalf of The Prudential Real Property Account of Pruco
Life Insurance Company.

(10C) Partnership Agreement of The Prudential Variable Contract Real Property
Partnership.

Incorporated by reference to Pre-Effective Amendment No. 1 to Registrant's Form
S-1, Registration Statement No. 33-20083, filed May 2, 1988.

(22) Subsidiaries of The Prudential and short descriptions of each.

Incorporated by reference to Post-Effective Amendment No. 28 to Form N-1A,
Registration Statement No. 2-80896, filed February 1, 1995, on behalf of The
Prudential Series Fund, Inc.

(23) Written consent of Deloitte & Touche LLP, independent auditors.

Filed herewith.

(24B) Written consent of Clifford E. Kirsch, Esq.

Incorporated by reference to Exhibit (5) hereto.

(25A) Powers of Attorney: F. Agnew, F. Becker, W. Boeschenstein, L. Carter, Jr.,
J. Cullen, C. Davis, R. Enrico, A. Gilmour, W. Gray, III, J. Hanson, C. Horner,
A. Jacobson, G. Keith, Jr., B. Malkiel, J. Opel, A. Ryan, C. Sitter, D. Staheli,
R. Thomson, P. Vagelos, S. Van Ness, P. Volcker, J. Williams.

Incorporated by reference to Post-Effective Amendment No. 15 to Form S-6,
Registration Statement No. 33-20000, filed May 1, 1995, on behalf of The
Prudential Variable Appreciable Account.

(25B) Power of Attorney: M. Grier

Incorporated by reference to Form S-6, Registration Statement No. 33-61079,
filed July 17, 1995, on behalf of The Prudential Variable Appreciable Account.

(27) Financial Data Schedules

Filed herewith.

(b) Financial Statement Schedules

Schedule III-Real Estate Owned by The Prudential Variable Contract Real Property
Partnership.

Filed herewith.

Schedule IV-Mortgage Loans on Real Estate for The Prudential Variable Contract
Real Property Partnership.

Not Applicable.

ITEM 17. UNDERTAKINGS

Subject to the terms and conditions of Section 15(d) of the Securities Exchange
Act of 1934, the undersigned Registrant hereby undertakes to file with the
Securities and Exchange Commission such supplementary and periodic information,
documents and reports as may be prescribed by any rule or regulation of the
Commission heretofore or hereafter duly adopted pursuant to authority conferred
in that Section.

The undersigned Registrant hereby undertakes (a) to file any prospectuses
required by Section 10(a) (3) of the Securities Act of 1933 as Post-Effective
Amendments to this Registration Statement, (b) that for the purposes of
determining any liability under the 1933 Act, each such Post-Effective Amendment
may be deemed to be a new Registration Statement relating to the securities
offered therein and the offering of such securities at that time may be deemed
to be in the initial bona fide offering thereof, (c) to reflect in the
prospectus any facts or events after the effective date of the registration
statement (or the most recent Post-Effective Amendment thereof) which,
individually or in the aggregate, represent a fundamental change in the
information set forth in the registration statement, (d) to include any material
information with respect to the plan of distribution not previously disclosed in
the registration statement or any material change to such information in the
registration statement, (e) to remove from registration by means of a
Post-Effective Amendment any of the securities being registered which remain
unsold at such time as the offering of such securities may be terminated.

II-3

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, The Prudential
Insurance Company of America has duly caused this Post-Effective Amendment No. 8
to the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Newark, State of New Jersey on the 4th
day of April, 1996.

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

In Respect of

THE PRUDENTIAL
VARIABLE CONTRACT REAL PROPERTY ACCOUNT

By: /s/ ESTHER H. MILNES
--------------------------------
Esther H. Milnes
Vice President

Pursuant to the requirements of the Securities Act of 1933, this Post-Effective
Amendment No. 8 to the Registration Statement has been signed below by the
following Directors and Officers of The Prudential Insurance Company of America
in the capacities indicated on this 4th day of April, 1996.

SIGNATURE AND TITLE

/s/ *
- ----------------------------------
Arthur F. Ryan
Chairman of the Board, President,
and Chief Executive Officer

/s/ *
- ----------------------------------
Garnett L. Keith, Jr.
Vice Chairman and Director

/s/ *
- ----------------------------------
Mark B. Grier
Principal Financial Officer

/s/ *
- ----------------------------------
Franklin E. Agnew *By: /s/ THOMAS C. CASTANO
Director ---------------------
Thomas C. Castano
(Attorney-in-Fact)

/s/ *
- ----------------------------------
Frederic K. Becker
Director

/s/ *
- ----------------------------------
William W. Boeschenstein
Director

/s/ *
- ----------------------------------
Lisle C. Carter, Jr.
Director

/s/ *
- ----------------------------------
James G. Cullen
Director

/s/ *
- ----------------------------------
Carolyne K. Davis
Director

/s/ *
- ----------------------------------
Roger A. Enrico
Director

II-4

<PAGE>

/s/ *
- ----------------------------------
Allan D. Gilmour
Director

/s/ *
- ----------------------------------
William H. Gray, III
Director

/s/ *
- ----------------------------------
Jon F. Hanson
Director

/s/ *
- ----------------------------------
Constance J. Horner
Director

/s/ *
- ----------------------------------
Allen F. Jacobson
Director

/s/ *
- ---------------------------------- *By: /s/ THOMAS C. CASTANO
Burton G. Malkiel -----------------
Director Thomas C. Castano
(Attorney-in-Fact)
/s/ *
- ----------------------------------
John R. Opel
Director

- ----------------------------------
Charles R. Sitter
Director

- ----------------------------------
Donald L. Staheli
Director

/s/ *
- ----------------------------------
Richard M. Thomson
Director

/s/ *
- ----------------------------------
P. Roy Vagelos, M.D.
Director

/s/ *
- ----------------------------------
Stanley C. Van Ness
Director

/s/ *
- ----------------------------------
Paul A. Volcker
Director

/s/ *
- ----------------------------------
Joseph H. Williams
Director

II-5

<PAGE>

EXHIBIT INDEX
<S> <C> <C>
(a)(5) Opinion and Consent of Clifford E. Kirsch, Esq. as to the legality of Page II-7
the securities being registered.

(a)(23) Written consent of Deloitte & Touche LLP, independent auditors. Page II-8

(b) Financial Statement Schedules Page II-9

Schedule III-Real Estate Owned by The Prudential Variable Contract
Real Property Partnership.

(27.1) Financial Data Schedule for The Prudential Real Property Account. Page II-11

(27.2) Financial Data Schedule for The Prudential Real Property Page II-12
Partnership.
</TABLE>

II-6

Exhibit 5

April 4, 1996

The Prudential Insurance Company
of America
Prudential Plaza
Newark, New Jersey 07102-3777

Gentlemen:

In my capacity as Chief Counsel, Variable Products, Law Department of The
Prudential Insurance Company of America, I have reviewed the establishment of
The Prudential Variable Contract Real Property Account (the "Account") on
November 25, 1986 by the Finance Committee of the Board of Directors of The
Prudential Insurance Company of America ("The Prudential") as a separate account
for assets applicable to certain variable life insurance contracts and variable
annuity contracts, pursuant to the provisions of Section 17B:28-7 of the Revised
Statutes of New Jersey. I was responsible for the oversight of the preparation
and review of the Registration Statement on Form S-1, as amended, filed by The
Prudential with the Securities and Exchange Commission (Registration No.
33-20083) under the Securities Act of 1933 for the registration of the Account.

I am of the following opinion:

(1) The Prudential was duly organized under the laws of New Jersey and is
a validly existing corporation.

(2) The Account has been duly created and is validly existing as a
separate account pursuant to the aforesaid provisions of New Jersey
law.

(3) The portion of the assets held in the Account equal to the reserves
and other liabilities for variable benefits under the variable life
insurance contracts and variable annuity contracts is not chargeable
with liabilities arising out of any other business The Prudential may
conduct.

(4) The variable life insurance contracts and variable annuity contracts
are legal and binding obligations of The Prudential in accordance with
their terms.

In arriving at the foregoing opinion, I have made such examination of law and
examined such records and other documents as I judged to be necessary or
appropriate.

I hereby consent to the filing of this opinion as an exhibit to the Registration
Statement.

Very truly yours,

Clifford E. Kirsch

II-7

EXHIBIT (a)(23)

INDEPENDENT AUDITORS' CONSENT

We consent to (a) the use in this Post-Effective Amendment No. 8 on Form S-1 to
the Registration Statement No. 33-20083 of The Prudential Variable Contract Real
Property Account of our report dated March 1, 1996, relating to the financial
statements of The Prudential Variable Contract Real Property Account, and of our
report dated March 1, 1996, relating to the financial statements of The
Prudential Variable Contract Real Property Partnership appearing in the
Prospectus, which is part of such Registration Statement, (b) the use in Part II
of this Registration Statement of our report dated March 1, 1996, relating to
the financial statement schedules listed in Item 16(b), and (c) the reference to
us under the heading "Experts" in such Prospectus.

Deloitte & Touche LLP
Parsippany, New Jersey
April 4, 1996

II-8

THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP
SCHEDULE III - REAL ESTATE OWNED: PROPERTIES
DECEMBER 31, 1995
----------------------------------------------------------

Initial Costs to Partnership Costs
-------------------------------------------------------- Capitalized
Buildings & Subsequent to
Description Encumbrances Land Improvements Acquisition
- ----------------------------------------------------------------------------------------------
Properties:
<S> <C> <C> <C> <C>
Warehouse
Azusa, CA None $ 6,638,694 $ 10,741,233 $1,166,320 (b)

Office Building
Lisle, IL None 1,780,000 15,743,881 540

Garden Apartments
Atlanta, GA None 3,631,212 11,168,904 571,379 (e)

Warehouse
Pomona, CA None 3,412,636 (d) 19,0921,210 701,326

Retail Shopping Center
Roswell, GA None 9,454,622 21,513,677 720,613

Office Building
Morristown, NJ None 2,868,660 12,958,451 2,837,858

Office/Warehouse
Bolingbrook, IL None 1,373,199 7,302,518 272,311

Garden Apartments
Farmington Hills, MI None 1,550,000 11,744,571 300,379

Office Park
Flint, MI None 1,119,512 6,343,902 153,428

Garden Apartments
Raleigh, NC None 1,623,146 14,135,553 0

Office Building
Williamson County, TN None 1,797,000 6,588,451 46,229

Office Park
Oakbrook Terrace, IL None 1,313,310 11,316,883 0
---- ----------- ------------ ----------
$0 $36,561,991 $148,649,234 $6,770,383
==== =========== ============ ==========

Gross Amount at Which
Carried at Close of Period
----------------------------------------------------------------------------------
Buildings & Year of Date
Land Improvements Total (a)(b)(c) Construction Acquired
- ---------------------------------------------------------------------------------------------------------------
Properties:

Warehouse
Azusa, CA $ 6,478,884 $ 12,067,363 $ 18,546,247 1986 Apr., 1988

Office Building
Lisle, IL 1,780,000 15,744,421 17,524,421 1985 Sep., 1987

Garden Apartments
Atlanta, GA 3,631,212 11,740,283 15,371,495 1987 Oct., 1987

Warehouse
Pomona, CA 3,412,636 19,792,536 23,205,172 1984 Apr., 1988

Retail Shopping Center
Roswell, GA 9,462,951 22,225,961 31,688,912 1988 Jan., 1989

Office Building
Morristown, NJ 2,868,660 15,796,309 18,664,969 1981 Aug., 1988

Office/Warehouse
Bolingbrook, IL 1,373,199 7,574,829 8,948,028 1989 Feb., 1990

Garden Apartments
Farmington Hills, MI 1,583,320 12,011,630 13,594,950 1988 Jan., 1990

Office Park
Flint, MI 1,119,512 6,497,330 7,616,842 1986 Jan., 1995

Garden Apartments
Raleigh, NC 1,623,146 14,135,553 15,758,699 1995 June, 1995

Office Building
Williamson County, TN 1,797,000 6,634,680 8,431,680 1982 Oct., 1995

Office Park
Oakbrook Terrace, IL 1,313,310 11,316,883 12,630,193 1988 Dec., 1995
----------- ------------ ------------
$36,443,830 $155,537,778 $191,981,608
=========== ============ ============

(a) Balance at December 31, 1994, 1993, 1992, respectively $154,157,068 $145,532,430 $148,499,390
Additions:
Acquisition 36,774,343 7,463,414 0
Improvements, etc. 1,050,197 1,161,224 1,044,906
Deletions: ------------ ------------ ------------
Sale 0 0 (4,011,866)
------------ ------------ ------------
Balance at December 31, 1995, 1994, 1993, respectively $191,981,608 $154,157,068 $145,532,430
============ ============ ============

(b) Net of payments received from seller under guarantees of occupancy rates
and operating income of $(421,663).

(d) Represents land under capital lease.

(e) Net of $1,000,000 settlement received from lawsuit.

</TABLE>

II-9

<PAGE>

THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP
SCHEDULE III - REAL ESTATE OWNED: INTEREST IN PROPERTIES
DECEMBER 31, 1995
----------------------------------------------------------

Initial Costs to Partnership Costs
-------------------------------------------------------- Capitalized
Buildings & Subsequent to
Description Encumbrances Land Improvements Acquisition
- ----------------------------------------------------------------------------------------------
Interest in Properties:
<S> <C> <C> <C> <C>
Warehouse/Distribution
Jacksonville, FL None $ 231,119 $1,073,849 $12,485

Warehouse/Distribution
Jacksonville, FL None 176,256 818,935 7,257

Warehouse/Distribution
Jacksonville, FL None 255,545 1,187,335 14

Warehouse/Distribution
Jacksonville, FL None 415,548 1,930,761 24,053
----- ---------- ---------- -------
$0 $1,078,468 $5,010,880 $43,809
===== ========== ========== =======

Gross Amount at Which
Carried at Close of Period
----------------------------------------------------------------------------------
Buildings & Year of Date
Land Improvements Total (a)(b) Construction Acquired
- ---------------------------------------------------------------------------------------------------------------
Interest in Properties:

Warehouse/Distribution
Jacksonville, FL $ 231,119 $1,086,334 $1,317,453 1988 Jan., 1990

Warehouse/Distribution
Jacksonville, FL 176,256 826,192 1,002,448 1986 Jan., 1990

Warehouse/Distribution
Jacksonville, FL 255,545 1,187,349 1,442,894 1982 Jan., 1990

Warehouse/Distribution
Jacksonville, FL 415,548 1,954,814 2,370,362 1979 Jan., 1990
---------- ---------- ----------
$1,078,468 $5,054,689 $6,133,157
========== ========== ==========

(a) Balance at December 31, 1994, 1993, 1992, respectively $6,108,742 $26,348,882 $29,492,913
Additions:
Improvements 24,415 12,087 34,237
Deletions:
Sales (20,252,227) (3,178,268)
---------- ----------- -----------
Balance at December 31, 1995, 1994, 1993, respectively $6,133,157 $ 6,108,742 $26,348,882
========== =========== ===========

</TABLE>

(b) Balance of real estate owned on a tax basis at December 31, 1995 is
$6,133,157.

II-10

<ARTICLE> 6
<LEGEND>
Exhibit 27.1

FINANCIAL DATA SCHEDULE
Article 6 of Regulation S-X
The Prudential Variable Contract Real Property Account
</LEGEND>

<SERIES>
<NAME> PRUDENTIAL RPA SEPARATE ACCOUNT
<NUMBER> 001

<CAPTION>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 0
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 0
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 5,465,515
<SHARES-COMMON-PRIOR> 5,465,515
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 86,101,883
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 450,662
<NET-INVESTMENT-INCOME> 6,200,851
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 314,267
<NET-CHANGE-FROM-OPS> 6,515,118
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 6,965,780
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<LEGEND>
Exhibit 27.2

FINANCIAL DATA SCHEDULE
Article 6 of Regulation S-X
The Prudential Variable Contract Real Property Partnership
</LEGEND>

<SERIES>
<NAME> PRUDENTIAL RPA PARTNERSHIP
<NUMBER> 002

<CAPTION>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 198,114,765
<INVESTMENTS-AT-VALUE> 170,495,033
<RECEIVABLES> 1,743,305
<ASSETS-OTHER> 24,755,420
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 196,993,758
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 7,371,899
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 12,036,684
<SHARES-COMMON-PRIOR> 12,241,034
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 189,621,859
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 2,660,865
<OTHER-INCOME> 20,465,227
<EXPENSES-NET> 8,405,821
<NET-INVESTMENT-INCOME> 14,720,271
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 661,623
<NET-CHANGE-FROM-OPS> 15,381,894
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 204,350
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 12,381,894
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2,341,878
<INTEREST-EXPENSE> 460,578
<GROSS-EXPENSE> 8,405,821
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 14.48
<PER-SHARE-NII> 1.22
<PER-SHARE-GAIN-APPREC> .06
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 15.75
<EXPENSE-RATIO> .05
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>