prei - franklin regional retirement ()decreasedby 34 bps and 23 bps, respectively. prisa’s central...

PRISA

2010Second QuARteR RePoRt

fund review

PReI® Prudential real estate investors

PRISA SECOND QUARTER 20101

CONFIDENTIAL INFORMATION--NOT FOR FURTHER DISTRIBUTION

Objective Offer clients a core equity real estate portfolio that

generates a high proportion of its total return from

income.

Achieve a total return which exceeds the NCREIF

Fund Index - Open-End Diversified Core Equity

(NFI-ODCE).*

Strategy Integrated “Top-Down” and “Bottom-Up” approaches

are combined to drive performance.

Top-Down

• Diversificationbypropertytypeandmarket.

• Invest primarily in completed, well-leased,

income producing properties.

• Limitportfolioleverageto30%.

Bottom-Up

• Superiorpropertyselection.

• Leverage local operating partners to identify

attractive investments.

• Disciplinedapproachtodispositions.

Investment PhilosophyPortfolio Overview 2

Letter From The Portfolio Manager 3

Portfolio Results 4

Account Facts 8

Performance

Diversification

Transaction Activity

Risk Profile

Debt

Appendix 16

2nd Quarter 2010 Financial Statements 18

Contents

* Projected returns are not guaranteed and actual results may vary.

Applicable Form ADV or Forms BD are available upon request.

PRISA SECOND QUARTER 2010 2


Portfolio OverviewFinancial Highlights Client Activity

Transaction Activity

Investment Performance

GrossAssets $11,453M

NetAssets $7,288M

LeverageRatio 38.0%

EffectiveLeverageRatio 40.7%

NumberofInvestments 233

All return information provided in this report is before the deduction of management fees. See Appendix for returns after fees and descriptions of Investment Considerations, NCREIF Property Index (“NPI”), and NFI-ODCE. Returns for the indexes are based on returns published by NCREIF. Past performance is not a guarantee of future results.

ToTal ReTuRns

PRISA 7.89% -3.40% -13.10% -1.19% 4.64% 8.27%NFI-ODCE 4.32% -6.00% -11.00% -0.20% 4.90% N/ANPI 3.31% -1.48% -4.70% 3.79% 7.16% N/A

Portfolio Diversification

PROPERTy TyPE (1)

(1) Diversification is based upon the Account’s share of gross market value in properties and all debt investments. (2) NCREIF Region

gEOgRAPHIC DIvERSIFICATION (1)(2)

Retail19.4%

Storage4.7% Residential

20.6%

Hotel 3.5%

Industrial 16.8%

Office 35.0%

(JULy 1970)

10%

5%

0%

-5%

-10%

-15%

-20% 2ND QUARTER 1 yEAR 3 yEAR 5 yEAR 10 yEAR SINCE INCEPTION

INCOME APPRECIATION

-19.52%

-7.72%

0.12%

1.85%

6.04%7.98%

-11.38%

6.42% 6.53% 7.65% 8.15%

-3.01%

Current Quarter Year-To-Date

Deposits $164.8M $224.1M

Withdrawals $0.0M $0.0M

CashFlowDistributions $61.3M $61.3M

NumberofClients 277

Current Quarter Year-To-Date

Acquisitions(Net) $232.3M $336.5M

Dispositions(Net) $220.5M $310.4M



To Our Clients and Their Consultants:

Thesecondquarterof2010wasaturningpointfortheFundinseveralways.Clearly,withatotalreturnof7.89%(6.04%appreciationand1.85% income) theanticipated valuation “catchup”came to fruition.Additionally, it isgratifying to us that very signif icant progress was demonstrated with respect to the Fund’s primary strategic objectives including reducing the leverage ratio, executing on highly leveraged sales, raising new capital andmakingnewacquisitions.Atthispoint,wearehappytoreporttoyouthatwearesolidlyplayingof fense,drivenbymuch improved liquidityandstrongcapitalmarkets,underscoredbysignif icant investor interest inCorerealestate investing.

PRISA’sstrongtotalreturnwasdrivenprimarilybyreductionsincapitalizationanddiscountrates,whichdecreasedto7.25%and8.79%,respectively.Thistrendwasparticularlyevident intheCBDoff icesector,whichgenerated51%oftheFund’svaluationgainsforthequarter,validatingourcontentionthattheFund’sstrategicover-weightingtoCBDof f ice vs. suburban of f icewill lead to near-term outper formance.More good news from an allocationperspective is that theFund’s residential exposuregrew from17% to21% in the last year,whichpositions theFundwell to takeadvantageof theanticipated rentgrowth in thissector resulting from limitednewsupplyandincreasingdemand.Despitetheoutsizedappreciationthisquarter,westillfeelthatPRISAisveryattractivelypricedandanticipatemoreappreciation,albeitatamoremoderatelevel,throughoutthebalanceof2010.

TheFund’sEffectiveLeverageRatio,whichincludesalloftheFund’sdebt,evendebtassociatedwithprojectsthathavenotyetbeenacquiredbytheFund,decreasedbyover500basispointsduringthesecondquarter,drivenprimarilybythesaleofhighlyleveragedassets.Basedontheprogressmadetodate,weareanticipatingendingtheyearwithanEf fectiveLeverageRatioof36.7%,380bpslowerthantheoriginalprojectionatyearend2009,demonstrating that the Fund is being deleveraged at a more accelerated pace than we had previously projected.

Anotherareawhereweareexceedingoriginalexpectationsisinthelevelofnewclientdeposits,whichattheendofthesecondquarterstoodat$224million,comparedto$200millionthathadbeenprojectedforthefullyear.Investor interest in Core real estate remains strong and so we expect to continue to receive additional deposits overthenextseveralquarters.Theincreasedlevelofclientdepositshasenabledustopaydowndebtearly,maketwonewinvestmentsinassetsthatareexpectedtooutperforminthenear-term,andtoacceleratethetimingforbeginning to satisfy withdrawal requests.

Whilewearestillmonitoringrealestatefundamentalsandrealizethattherewillnotbeanysignif icantimprovementinrentsoroccupancyincertainsectorsuntiljobgrowthshowsrealandsustainedprogress,weareveryoptimisticaboutFundperformanceforthebalanceoftheyear.Clearly,weexpecttooutperformthe3%to8%totalreturnprojectionfor2010andfeelconfidentthatthetotalreturnshouldbeinthe10%to13%range.

Afterdeliveringbadnewsfortoomanyquarters,weareverypleasedtobedeliveringgoodnewsforthisquarterand for the balance of the year. We appreciate the support and confidence that you demonstrated during the downturninthecommercialrealestatemarketsandlookforwardtoplayingalittleof fensetogetheraswepositiontheFundforthemarketrecovery.

Sincerely,

KevinR.Smith CatherineMarcus JoannaMulfordSeniorPortfolioManager PortfolioManager AssistantPortfolioManager

Letter From The Portfolio Manager



Portfolio Results

Executive Summary

In second quar te r 2010, PRISA ( the “Account ”

or the “Fund”) generated a tota l gross return of

7.89%, comprised of 1.85% in income and 6.04%

in appreciation. The Fund’s quarterly appreciation

returnwasnegatively impactedby129basispoints

(“bps”) from debt valuation as a result of a reduction

inmarketinterestrates.

The second quar ter appreciation return of 6.04%

was driven primarily by capitalization and discount

rate compression across al l proper ty types. The

overal l por t fol io capital ization and discount rates

decreasedby34bpsand23bps,respectively.PRISA’s

Central Business District (CBD) office portfolio was the

largestcontributortothevaluationgainsthisquarter,

accounting for half of the Fund’s total appreciation.

PRISA’s non-core investments postedmore robust

valuation gains than the core assets for the second

consecutive quar ter. The non-core asset va lues

increasedby12.0%andthecoreassetvaluesincreased

by3.2%onanunleveragedbasisduringthequarter.

The most signif icant appraisal gain was posted by

Eleven Times Square, increasing in value by $89

million as a result of the execution of a 406,399 sf

leasewiththelawfirmProskauerRose.

Duringthequarter,PRISAmadesignif icantprogress

towardsits2010portfoliostrategicobjectivesrelated

to reducing leverage, identifying new acquisitions,

executing sales and attracting new investor capital.

PRISA’s leverage ratiodeclinedsubstantiallyduring

the quarter. The Fund has no outstanding borrowings

under its credit lines for the second consecutive quarter

andalsoprepaid$110millionofrecoursedebtduring

thequarter.Thisearlypaydown,inconjunctionwith

leveredassetsales,contributedsignif icantlytoward

reducingtheFund’seffectiveleverageratiofrom46.0%

atMarch31,2010to40.7%atJune30,2010.

Inthesecondquarter,PRISAinvested$232.3millionof

equity,including$126.3millionofnewinvestmentsin

theresidentialandhotelsectors,whereaboveaverage

near-term performance is expected. These property

types wi l l be the f i rst to benef i t f rom occupancy

and rental rate increases as the economy improves.

Favorabledemographic trendsand the lackof new

supply,particularlyforthemultifamilysector,should

contribute to above average rent growth for the next

few years.

2010 2010 2010 objecTive(1) cuRRenT QuaRTeR (2) YeaR-To-DaTe (2)

TotalReturn 3.00%to8.00% 7.89% 7.67%

IncomeReturn 7.50%to8.00% 1.85% 3.88%

AppreciationReturn 0.00%to-4.50% 6.04% 3.79%

CashFlowReturn 5.75%to6.25% 1.36% 2.86%

Acquisitions (Net)(3) $600M $232.3M $336.5M

Dispositions(Net) $550M $220.5M $310.4M(1) 2010 net return projections - Income: 6.35% to 6.85%; Appreciation: 0.00% to -4.50%; Total: 1.85% to 6.85%(2) Current Quarter and Year-to-Date returns are not annualized. (3) 2010 projections include pipeline and unidentified acquisitions.Note: All return information provided in this report is before deduction of management fees, unless otherwise noted. Past performance is not a guarantee of future results. See Appendix for returns after fees, descriptions of Investment Considerations, and discussion of NCREIF Property Index (“NPI”), and NFI-ODCE.



The Fund real ized net proceeds of $220.5mil l ion

f rom disposi t ions th is quar ter. On a YTD basis,

PRISA executed sales generating net proceeds of

$310.4million,representing56%oftheFund’s2010

objective.

PRISAreceived$164.8millionofdepositsthisquarter

fromnewandexistingclients.OnaYTDbasis,PRISA

accepted $224.1 mi l l ion in c l ient contr ibut ions,

exceedingitsfullyear2010targetof$200million.

Residential

Duringthesecondquarter,PRISA’sresidentialportfolio

deliveredatotalreturnof10.64%,comprisedof1.28%

inincomeand9.36%inappreciation.Appreciationin

thissectortotaled$128.8million,drivenbythelease-

up of assets in the non-core portfolio and reductions

incapitalizationanddiscountratesof26bpsand25

bps,respectively.

The residential portfolio generated same property net

investment incomeof$49.7millionYTDasof June

30, 2010, a 19.5% increase over the same period

last year. The increase in net investment income was

drivenlargelybythestabilizationoffourassetsthat

were undergoing initial lease-up during 2009 and

lower expenses at Turnberry Towers.

Occupancydecreasedto87.4%inthesecondquarter

of2010from88.9%atthesametime lastyear.The

decrease in occupancy was driven by the completion

of five newly constructed projects that are undergoing

initial lease-up.These investments total1,536units

andarecurrently40.7% leased.Theoccupancy for

thecore residential properties asof June30,2010

was94.0%.

Duringthequarter,theFundacquiredmortgagenotes

atadiscounttopartotaling$67.8millionsecuredby

two newly-completed,Class A apartment projects

comprising 541 units and an adjacent land parcel

located in Nor th Scot tsdale, AZ. The proper t ies

are completing their initial lease-up and are 87.6%

occupied as of June 30. PRISA pre-negotiated a

“friendly foreclosure” as well as the terms of a to-be-

formedjointventurewiththeGrayDevelopmentGroup,

the borrower and developer of the properties.

Theresidentialsectorrepresented20.6%ofPRISA’s

holdingsasofJune30,2010.

Hotel

PRISA’shotelinvestmentsdeliveredatotalreturnof

8.87%,comprisedof0.87%inincomeand8.00%in

appreciation.Thesector’svaluegainof$23.2million

wasdrivenmainlybytheAtriumPortfoliomezzanine

loan. The external appraiser decreased themarket

yield requirement for this investment as a result of

improvement in the hotel sector.

In the second quarter, PRISApaid $58.5mill ion to

purchase a $76.5mi l l ionmor tgage loan secured

by the San JoseMarr iot t, a 506-key, ful l serv ice

hotel located adjacent to the convention center in

downtownSanJose,CA.ThisinvestmentgivesPRISA

exposure to a high quality

asset in a sector that is

projected to outperform at

a basis which represents

a signif icant discount to

replacement cost.

The hotel sector represented

3.5%ofPRISA’sholdings

asofJune30,2010.

Portfolio Results



Industrial

The Fund’s industrial portfolio produced a total return

of3.97%,comprisedof1.87%inincomeand2.10%

of appreciat ion dur ing the second quar ter 2010.

Valuation gains totaled $43.1million, largely driven

byanunrealizedgainof$17.6millioninanticipation

ofthependingsaleoftheHillwoodAlliancePortfolio,

which is expected to close in the third quarter subject

to the satisfaction of normal closing conditions. The

capitalizationanddiscountratesfortheindustrialsector

decreasedby27bpsand14bps,respectively.

The industrial portfolio reported same property YTD net

investmentincomeof$53.3million,down14.8%from

the same period last year. The decrease was primarily

theresultoftenantmove-outsanddownsizingsduring

late2009aswellaslowermarketrentalratesfornew

leases.

TheaverageoccupancyforPRISA’sindustrialportfolio

attheendofthesecondquarterdecreasedto71.8%

from82.0%atthesametimeayearago.Thedecrease

in occupancy was driven mainly by the completion

of ten newly constructed investments dur ing the

secondhalfof2009thatareundergoinginitiallease-

up. However, industrial occupancy increased from

the 68.9% reported last quarter as a result of new

leases signed and tenant expansions. Improving the

occupancy of the industrial portfolio remains a priority

for the Fund.

In the second quarter, PRISA sold 645Almanor, a

130,000sf industrial building located inSunnyvale,

CA.ThistransactionenabledPRISAtoexitavacant

and functionally obsolete project and generate an

8.57%IRRoverathir ty-twoyearholdperiod.

The industrial sector represented16.8%ofPRISA’s


Office

PRISA’sofficeportfoliooutperformedallotherproperty

typesinthesecondquarter,producingatotalreturn

of12.38%,comprisedof1.97%inincomeand10.41%

in appreciat ion. Va luat ion gains tota led $294.3

mil l ion, driven by PRISA’sCBD of f ice investments

which contributed 84% of the appreciation for the

of f ice sector. Eleven TimesSquarewas the largest

contributor to the valuation gains, primarily driven

bybothcapitalizationanddiscountratedeclinesas

a result of the execution of a lease for 37%of the

property.Overall capitalization and discount rates

for the of f ice sector declined during the quarter by

37bpsand16bps,respectively.

The of f ice portfolio’s same property net investment

incomeYTDasofJune30,2010was$146.5million,

a 0.9% increase over the same per iod last year.

International Place contributed signif icantly to this

increaseasrentforanew309,000sftenant,Eaton

Vance,commencedinthesecondhalfof2009.

Portfolio Results



Occupancy dec reased f rom 91.2% at second

quar ter 2009 to 86.7% this quar ter, due primari ly

tothecompletionofElevenTimesSquare,which is

undergoing initial lease-up.

The Fund’s largest single asset disposition this quarter

wasWashingtonHarbour,a532,601sftwo-building

office complex located in the Georgetown section of

WashingtonDC.Thissale,whichgeneratedan8.03%

IRRoverafiveyearholdingperiod,enabledPRISAto

dispose of an asset with large capital requirements and

topayof fa$106millionrecoursedebtobligation.

The of f ice sector represented 35.0% of PRISA’s


Retail

PRISA’sretailportfoliounderperformedotherproperty

typesandproducedatotalreturnof-1.96%,comprised

of2.08%inincomeand-4.03%inappreciation.

Valuationlossesforthesectortotaled$9.4millionand

were driven by more pessimistic leasing assumptions

for Vi l lage at Fairv iew, which is undergoing initia l

lease-up. PRISA’s retail portfolio excluding Village

at Fairview increased in value by 1.7% on a gross

unlevered basis dur ing the quar ter as a result of

decreasestocapitalizationanddiscountratesof11

bpsand17bps,respectively.

The retail portfolio reported same property YTD net

investment income of $72.8mil l ion, a decrease of

0.5%fromthesametimelastyearasaresultoflower

marketrentsandoccupancy. AsofJune30,2010,

occupancywas88.9%,downfrom90.6%attheend

of the second quarter a year ago.

PRISAsoldaportfolioof14highlyleveredretailcenters

totaling3.2millionsffornetproceedsof$27.1million.

ThistransactionisconsistentwithPRISA’snear-term

strategicobjectives,whichincludereducingbothits

retail exposure and leverage. This sale resulted in

the elimination of $327mill ion of debt obligations,

correspondingtoa156bpsreduction intheFund’s

leverage ratio.

Theretailsectorrepresented19.4%ofPRISA’sholdings

asofJune30,2010.

Storage

PRISA’s storage

portfolio produced

a t o t a l r e t u r n

of 3.45% in the

second quar te r,

c o m p r i s e d o f

1. 9 8% i n c ome

a n d 1. 4 6% i n

appreciation. The

$8.1millionvaluegainwasdrivenbya25bpsdecrease

inthecapitalizationrate.

The storage portfolio produced YTD same property

netinvestmentincomeof$22.2million,a2.4%decline

from the same period a year ago. The reduction to net

investmentincomeisduetoadeclineinmarketrental

rates.However,occupancyincreasedto86.1%asof

June30,2010,from83.7%lastyearatthistime.

The storage sector represented 4.7% of PRISA’s


Portfolio Results



six MonThs enDeD six MonThs enDeD

6/30/10 6/30/09PRoPeRTY TYPe ($ Millions) ($ Millions) % change

Residential $49.7 $41.6 19.5%

Industrial 53.3 62.6 -14.8%

Office 146.5 145.1 0.9%

Retail 72.8 73.2 -0.5%

Storage 22.2 22.7 -2.4%

Total Same Property Net Income(1) $344.4 $345.2 -0.9%

Portfolio-LevelActivity(2) (4.7) (14.0) 66.3%

Property-LevelAdjustments(2)(3) (84.0) (47.3) -77.7%

Total Net Investment Income $255.7 $286.2 -10.7%

(1) 100% Property Level, unleveraged. To provide a more meaningful basis for comparison between periods, net property income excludes income from properties that were purchased or sold during the comparative time periods.(2) Includes leverage costs.(3) Reflects partner’s share of income for joint venture properties as well as the effect of properties which were sold or acquired, and thus were not held in the portfolio for both periods. Also includes income relating to mortgages and other debt investments.Note: Past performance is not a guarantee of future results.

incoMe aPPReciaTion ToTal

PRoPeRTY TYPe ReTuRn ReTuRn ReTuRn

Residential 1.28% 9.36% 10.64%

Hotel 0.87% 8.00% 8.87%

Industrial 1.87% 2.10% 3.97%

Office 1.97% 10.41% 12.38%

Retail 2.08% -4.03% -1.96%

Storage 1.98% 1.46% 3.45%

(1) Leveraged returns including impact of marking debt to market.Note: Past performance is not a guarantee of future results.

Account Facts - Performance

Same Property Net Income

Quarterly Performance Returns By Property Type (1)



Appraisal Assumptions (1)

Quarterly Appreciation

june 30, 2010 MaRch 31, 2010PRoPeRTY TYPe DiRecT caP RaTe DiscounT RaTe DiRecT caP RaTe DiscounT RaTe

Residential 6.14% 8.22% 6.40% 8.47%

Hotel 9.00% 11.50% 9.11% 11.61%

Industrial 7.98% 9.38% 8.25% 9.52%

Office 7.04% 8.45% 7.41% 8.61%

Retail 8.09% 9.32% 8.20% 9.49%

Storage 8.02% 10.01% 8.27% 10.02%

ToTal 7.25% 8.79% 7.59% 9.02%

(1) Rates are weighted based on gross market value.


DebT valuaTion ToTal aPPReciaTion

% of PRoPeRTY’s PRoPeRTY aPPReciaTion iMPacT change aPPReciaTion

PRoPeRTY TYPe nav ($ Millions) ($ Millions) ($ Millions) ReTuRn

Residential 21.0% $128.8 $5.4 $134.2 9.36%

Hotel 4.8% 23.2 0.0 23.2 8.00%

Industrial 17.5% 43.1 (18.5) 24.6 2.10%

Office 36.3% 294.3 (35.6) 258.6 10.41%

Retail 12.5% (9.4) (36.6) (46.0) -4.03%

Storage 7.7% 8.1 0.0 8.1 1.46%

ToTal 100.0% $488.1 ($85.4) $402.7 6.04%



Portfolio Lease Status

Portfolio Lease Rollover

6/30/2010 LEASE STATUS 3/31/2010 LEASE STATUS 6/30/2009 LEASE STATUS

PRoPeRTY TYPe 2010(1) 2011 2012 2013 2014

Industrial 4.2% 7.8% 12.0% 11.3% 10.1%

Office 5.2% 9.8% 10.1% 8.9% 5.8%

Retail 2.7% 9.1% 9.6% 8.4% 7.6%

(1) Lease status for total portfolio weighted based on gross market value.


RESIDENTIAL HOTEL INDUSTRIAL OFFICE RETAIL STORAgE TOTAL PORTFOLIO (1)

71.8%

86.7%88.9%

86.1%83.5%

87.4%

82.0%

91.2% 90.6%

83.7%

88.8%88.9%

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

55.5%

84.0% 85.5%89.0%

91.2%88.7%

(1) Remainder of 2010.

68.9%

53.0%



Account Facts - DiversificationDiversification By Property Type (1)

Diversification By NCREIF Region (1)

PRoPeRTY TYPe accounT ncReif nfi-oDce

Residential 20.6% 24.5% 19.6%

Hotel 3.5% 1.9% 3.1%

Industrial 16.8% 14.8% 18.5%

Office 35.0% 35.0% 36.6%

Retail 19.4% 23.8% 19.8%

Storage 4.7% N/A N/A

(1) Diversification is based upon the Account’s share of gross market value in properties and all mortgage loans receivable.

ncReif Region accounT ncReif nfi-oDce

EastNorthCentral 3.6% 8.8% 8.0%

WestNorthCentral 2.5% 2.1% 2.2%

Mideast 13.0% 13.9% 14.3%

Northeast 26.6% 20.6% 19.1%

Southeast 11.6% 11.9% 11.1%

Southwest 10.9% 9.9% 7.8%

Mountain 3.0% 5.7% 5.9%

Pacific 28.8% 27.1% 31.6%

(1) Diversification is based upon the Account’s share of gross market value in properties and all mortgage loans receivable.



Account Facts - Transaction Activity

gRoss accounT’s Deal uniTs oR invesTMenT eQuiTY invesTeD coMMiTMenT funDing

PRojecT naMe locaTion sTRucTuRe sf ($ Millions) ($ Millions) DaTe DaTe

Residential Spectrum Charlotte,NC CJV 331 $48.4 $0.0 04/23/07 04/15/10AreliaJamesIslandPhaseI Jacksonville,FL CJV 270 31.8 0.0 02/21/07 04/15/10VillageatLakeLilyPhaseII Maitland,FL CJV 202 39.5 20.1 05/14/10 803 $119.7 $20.1 industRial NortheastBusinessPark WashingtonTownship,NJ WO 722,082 $48.1 $40.7 05/08/06 05/07/10 722,082 $48.1 $40.7 Retail TheVillageatFairview Fairview,TX CJV 551,309 $219.7 $0.0 01/08/07 04/05/10MarshfieldPlaza Chicago,IL WO 401,073 79.8 44.1 06/27/06 05/14/10 952,382 $299.5 $44.1 OtheR Contributions to Previously Acquired Assets(1) N/A N/A $1.1 N/a N/a $1.1 ToTal INveSTmeNT FuNdINgS $467.3 $106.0

(1) Includes $1.1 million of additional fundings for The W Boston Hotel and Condominium construction loan. Fundings to date equal $138.9 million.

Quarterly Funding Activity

gRoss accounT’s Deal uniTs oR invesTMenT eQuiTY invesTeD funDing

PRojecT naMe locaTion sTRucTuRe sf ($ Millions) ($ Millions) DaTe

Residential Gray Portfolio NorthScottsdale,AZ Mtg 541 $67.8 $67.8 06/30/10 541 $67.8 $67.8 hOtel SanJoseMarriott SanJose,CA Mtg 506 $58.5 $58.5 06/10/10 506 $58.5 $58.5 ToTal New acquISITIoNS $126.3 $126.3

Quarterly New Acquisition Activity



uniTs oR gRoss sales DebT neT PRoceeDs sale

PRojecT naMe locaTion sf PRice PaYoff(1) ($ Millions) iRR DaTe

industRial 645Almanor Sunnyvale,CA 130,000 $5.2 $0.0 $5.0 8.57% 04/29/10 130,000 $5.2 $0.0 $5.0 Office

WashingtonHarbour WashingtonDC 532,601 $244.5 $106.3 $133.2 8.03% 06/08/10 532,601 $244.5 $106.3 $133.2 Retail DDRRetailPortfolio Various 695,956 $41.8 $3.9 $32.4 0.74% 06/04/10WexfordPlaza Pittsburgh,PA 138,474 22.7 19.3 0.0 -73.09% 06/23/10HighlyLeveragedRetailPortfolio Various 3,221,499 419.5 326.7 27.1 -34.40% 06/29/10 4,055,929 $484.0 $349.9 $59.5

OtheR Adjustments for Previous Dispositions(2) N/A N/A N/A $22.7 N/a N/a N/a $22.7 ToTal SecoNd quarTer dISPoSITIoNS $733.7 $456.2 $220.5

(1) PRISA’s share.(2) Includes net proceeds from condominium sales at John Ross and Turnberry Towers $18.9M and $3.4M, respectively.

Quarterly Disposition Activity

Account Facts - Transaction Activity



PRisa’s # of shaRe of gMv % of

invesTMenT PRojecTs ($ Millions) non-coRe

Lease-up(1) 30 $1,611.3 68.5% Land 25 265.3 11.3%

Condominiums 2 $61.0 2.6% Direct Real Estate Investments 57 $1,937.6 82.4% Mezzanine & Other Loans 9 $413.5 17.6%

ToTal 66 $2,351.1 100.0%

(1) The investments in lease up are 39.4% leased as of 6/30/2010.

Non-Core Investments

Current Portfolio Composition(2) Property Type Diversification - Non Core Investments(2)

Account Facts - Risk Profile

Core80%

Hotel14%

Industrial22%

Office38%

Non-Core20%

Apartment18%

Retail8%

(2) Based on PRISA’s share of GMV.Note: The Non-Core portfolio at 3/31/10 represented 17% of PRISA’s gross market value. The value of the Non-Core portfolio increased by 12% from the previous quarter.



Account Facts - Debt (1)

Cost of Debt

Leverage Ratio(2)

Debt Diversification

all DebT

WeightedAverageCostofFixed-RateDebt 5.6%

WeightedAverageCostofFloating-RateDebt 2.5%

WeightedAverageCostofDebt 4.1%

38.0%

Near Term Debt Maturity

PortfolioLevelDebt2%

Floating53%

Fixed42%

PropertyLevelDebt98%

Effective Leverage Ratio 40.7%

(1) Includes on and off balance sheet debt, except where noted otherwise. Represents portfolio level debt, 100% of wholly-owned and Account’s share of all joint ventures.(2) Includes on balance sheet debt only.

Floating with Cap5%

2010 2011 2012 2013 2014

$1,000

$800

$600

$400

$200

$0

$ O

F D

EBT

MA

TUR

INg

($ M

ILLI

ON

S)

$569.0$783.9

% OF TOTAL DEBT 11.3% 15.5% 14.1% 19.0% 4.1%

$961.3

$204.8

$713.6



AppendixInvestment ConsiderationPRISAisacommingled,open-endedseparateaccountestablishedunderthelawsoftheStateofNewJersey,underagroupannuityinsurance contract issued through The Prudent ia l Insurance Company of America, awholly-owned subsidiary of PrudentialFinancial,Inc.,751BroadStreet,Newark,NewJersey07102.

Past performance is not indicative of future results. Forecasts of futureperformance(whetherofmarketsthataffectPRISAoroftheaccountitself),whilepresentedwithnumericalspecificity,reflectavarietyofassumptions,whichmaynotberealizedandaresubjectto significant uncertainties and contingencies. There can be no assurancethattheprojectionswillberealized,andactualresultsmay vary materially from those shown. No representation is made as to, and no responsibility is assumed for the accuracy of, theprojections.

Income (loss) projections are based on an annual budgeting process. The property budgets are based on a variety of assumptions,including: current leases not due to expire during the period in question remaining in place; a certain percentage of leases whose terms expire during the period in question being renewed or releasedatmarket ratesandterms; rentandotheramountsduebeing paid in accordance with applicable lease terms; recognition of incomeonanaccrualbasis,inaccordancewithgenerallyacceptedaccounting principles.

Projections of valuation appreciation or depreciation are based on experience and training of Prudential’s real estate professionals as tomovementinrealestatemarkettrendswithrespecttoidentifiedgeographical locations and property types. Appreciation return projections also assume that capital expenditures are made in accordance with approved budgets.

Investment results are time-weighted returns for the periods noted. Fees and other expenses are described in the individual PRISAcontracts.

PRISAisintendedtoprovideavehicleforlong-terminvestments.As comparedwith other asset classes, real estate is a relativelyilliquidinvestment.Therefore,investors’withdrawalrequestsmaynot be satisf ied for signif icant periods of t ime. Other than its generalfiduciarydutieswithrespecttoinvestors,Prudentialhasnospecificobligationtotakeanyparticularaction(suchasliquidationof investments) to satisfy withdrawal requests.

PREI’sstatementsofcurrentplansandgoalsforthePRISAportfolioarenotcommitmentsbyPREI totakeanyparticularactionswithregardtothePRISAportfolio.Noraretheypromisesthatanystatedgoalswillbemet.Manyfactorscancausechangesinplansoringoals,andPREIexpresslyreservestherighttochangeoreliminateany of its current plans or goals at any time.

There can be no guaranty that the sale of the various properties targetedforsalewilltakeplaceasprojectedorthattheoccupancylevels at the portfolio’s holdings will remain at the current high level. In addit ion, there can be no guaranty that the targetedacquisitions will be successfully achieved at projected levels within projectedperiodsoftime.Fortheseandotherreasons,therecanbe no assurance that the projected portfolio returns and cash flow returns discussed will be achieved.

PREI and certain of its affiliates engage in various activities related to investment in realestatesecurities.Forexample,PREIoranyof its affiliates may enter into financing arrangements with issuers ofrealestatesecurities,includingthemakingofloanssecuredbythe assets or by the credit of the issuer of the real estate securities and the exercise of remedies in connection with such loans. In addition,PREIoranyofitsaffiliatesmaybuyorsell,ormaydirector recommend that another person buy or sell, securities of thesamekindorclass,orfromthesameissuerasarepurchasedorsold for this or any other account under the direction of PREI or anyof itsaffiliates.Asaconsequenceof theseactivities,PREI’sabilitytopurchaseorsell,ortochosethetimingofthepurchaseorsale of real estate securities of a given issuer may be restricted by

contractorbyapplicablelaws,includingERISAorfederalsecuritieslaws.Finally,PREIoranyof itsaffiliatesmayearn feesbasedonthe performance of real estate securities held in certain accounts. Thus,potentialconflictsofinterestcouldariseinPREI’sselectionof investments,ordecision todisposeofsuch investments, thatwould not arise in the absence of a performance fee.

The NCREIF Property IndexMethodology

ThisIndexissetat100forfourthquarterof1977.Calculationsarebased on quarterly returns of individual properties before deduction of management fees. Each property’s return is weighted by its market value. Income and capital changes are also calculated.The current quarter’s return is preliminary and subject to revision in the subsequent quarter.

Universe of Properties

All properties have been acquired on behalf of tax exempt institutions and held in a fiduciary environment. As of 6/30/10 theNCREIFProperty Index consisted of 6,066 properties with netmarketvalueof$234bill ion.

The NCREIF Property Index (“NPI”) is comprised of the NCREIF ClassicPropertyIndex(unleveraged)andtheNCREIFLeveragedProperty Database. Please note that when returns are computed fortheNPI,thereturnsforthe leveredpropertiesarecomputedonade-leveredbasis,i.e.,theimpactoffinancingisexcluded.

Universe includes:

• Whollyownedandjoint-ventureinvestments.

• Existingpropertiesonly—nodevelopmentprojects.

• Onlyinvestment-grade,non-agricultural,income-producingproperties:apartments,hotels,office,retail,officeshowroom/R&D,andwarehouses.

Thedatabasefluctuatesquarterlyasparticipantsacquireproperties,as newmembers joinNCREIF, and as properties are sold. Soldproperties are removed from the Index in the quarter the sales takeplace(historicaldataremains).Eachproperty’smarketvalueisdeterminedby real estateappraisalmethodology,consistentlyapplied.

NCREIF Fund Index - Open End Diversified Core EquityMethodology

ThisIndexissetat100forfourthquarterof1977.Calculationsarebased on returns for open-end diversified core funds. The index is capitalization-weightedandisreportedgrossoffees.

Measurement is time-weighted. The current quarter’s return ispreliminary and subject to revision in the subsequent quarter.

Universe of Properties

TheNFI-ODCE,shortforNCREIFFundIndex-OpenEndDiversifiedCoreEquity, is the firstof theNCREIFFundDatabaseproductsand is an index of investment returns reporting on both a historical andcurrentbasistheresultsof28privateopen-endcommingledfundspursuingacore investmentstrategy,someofwhichhaveperformancehistoriesdatingbacktothe1970s.

FundMembershipRequirements:

• Privateopen-endfunds

• Notmorethan40%leverage

• Atleast80%ofassetsinthefivemajorpropertytypes

• Atleast95%ofassetslocatedintheU.S.

• Notmorethen70%ofassetsinoneregionoronepropertytype



Net Investment Performance (After Management Fees)

Returns are after the deduction of management fees. Past performance is not a guarantee of future results. See Appendix for descriptions of Investment Considerations for NFI-ODCE. Returns for the indexes are based on returns published by NCREIF.

Appendix

Financial Position

as of 6/30/10unauDiTeD ($ Millions)

Wholly-OwnedProperties $8,367.9NetPartnershipInterests 1,936.9MortgageandOtherLoansReceivable 499.5CashandShortTermInvestments 66.5OtherAssets 582.5

ToTal asseTs $11,453.3

MortgageLoansPayable $3,321.2PortfolioLevelDebt 100.0MinorityInterest 141.7OtherLiabilities 602.9

ToTal liabiliTies $4,165.8

NeT aSSeTS $7,287.5

financial infoRMaTion foR fee calculaTion

DeterminedCost-Asof6/30/10 $10,210.9OperatingCashFlow-6MonthsEnded6/30/10 $90.5

ToTal ReTuRns

PRISA 7.59% -4.39% -13.85% -2.02% 3.76% 7.14%NFI-ODCE 4.09% -6.80% -11.80% -1.10% 3.90% N/A

(JULy 1970)

10%

5%

0%

-5%

-10%

-15%

-20% 2ND QUARTER 1 yEAR 3 yEAR 5 yEAR 10 yEAR SINCE INCEPTION

INCOME APPRECIATION

-19.52%

-7.72%

0.12%

1.55%

6.04% 6.99%

-11.38%

5.67% 5.70% 6.77%7.02%

-3.01%



2nd Quarter 2010 Financial Statements

June 30, 2010 March 31, 2010ASSETS

REAL ESTATE INVESTMENTS - At estimated fair value:Real estate and improvements (cost: ; 06/30/2010 - $10,118,019,971; 03/31/10 - $9,662,415,154) 8,367,888,609$ 7,692,731,236$ Real estate partnerships (cost plus equity in undistributedearnings: (cost: ; 06/30/2010 - $2,787,249,935; 03/31/10 - $2,992,192,069) 1,936,910,777 1,861,494,234 Mortgage and other loans receivable, net(cost: ; 06/30/2010 - $797,137,424; 03/31/10 - $721,466,437) 499,500,114 378,612,644 Forward contracts(cost: ; 06/30/2010 - $381,620,814; 03/31/10 - $468,511,856) 350,228,972 316,349,736 Other real estate investments(cost: ; 06/30/2010 - $38,984,723; 03/31/10 - $60,620,951) 19,410,258 37,304,459

Total real estate investments 11,173,938,730 10,286,492,309

CASH AND CASH EQUIVALENTS 66,511,828 119,710,426

ACCRUED INVESTMENT INCOME (net of allowance for doubtful accounts: ; 06/30/2010 - $3,934,830; 03/31/10 - $4,007,620) 32,965,028 34,984,242

OTHER ASSETS, NET 179,929,091 190,438,251

Total assets 11,453,344,677 10,631,625,228

LIABILITIES

PORTFOLIO LEVEL DEBT - at estimated fair value 100,000,000 100,000,000 Principal balance: ; 06/30/10 - $100,000,000; 03/31/10 - $100,000,000

INVESTMENT LEVEL DEBT - at estimated fair value:

Principal balance: ; 06/30/10 - $3,345,199,573; 03/31/10 - $3,162,810,191 3,321,248,769 3,096,705,517

FORWARD CONTRACT OBLIGATIONS 381,620,814 468,511,856

ACCRUED REAL ESTATE EXPENSES AND TAXES 143,996,120 121,126,452

INTEREST RATE SWAP 6,293,282 9,992,539

OTHER LIABILITIES 71,002,249 38,198,790

Total liabilities 4,024,161,234 3,834,535,154

COMMITMENTS AND CONTINGENCIES

NET ASSETS, REPRESENTING EQUITY OF:

CONTRACT-HOLDERS 7,287,522,985 6,670,635,504

NONCONTROLLING INTEREST 141,660,458 126,454,570

TOTAL NET ASSETS 7,429,183,443$ 6,797,090,074$ -

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

PRISACONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES

(Unaudited)

June 30, 2010 March 31, 2010INVESTMENT INCOME:Revenue from real estate and improvements 199,292,361$ 195,669,242$ Equity in income of real estate partnerships 40,510,214 38,548,911 Interest and equity income on mortgage and other loans receivable 3,958,021 13,969,405 Income from other real estate investments (61,934) 455,854 Interest on short-term investments 59,790 25,378

Total investment income 243,758,452 248,668,790

INVESTMENT EXPENSES:Real estate expenses and taxes 86,502,201 85,956,834 Interest Expense 29,780,835 27,398,073

Total investment expenses 116,283,036 113,354,907

Net investment income, before fees 127,475,416 135,313,883

Less: Management fees 20,152,721 20,579,955

NET INVESTMENT INCOME 107,322,695 114,733,928

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:Net proceeds from real estate sold 384,292,973 115,231,335 Less: Cost of real estate investments sold 603,534,735 136,045,762 Gain (loss) realized from real estate investments sold (219,241,762) (20,814,427) Less: Reversal of prior periods' unrealized gain (loss) on real estate investments sold and respective consolidated investment level debt (268,627,773) (23,104,604)

Net gain (loss) recognized on real estate investments sold and respective consolidated investment level debt 49,386,011 2,290,177

Unrealized gain (loss) on investments/debt held: Change in unrealized gain (loss) on real estate investments 399,650,376 (161,938,744) Change in unrealized gain (loss) on consolidated investment level debt (42,153,867) (8,109,934) Change in unrealized gain (loss) on interest rate swaps and caps 3,699,258 3,488,280

Net unrealized gain (loss) on investments/debt held 361,195,767 (166,560,398)

NET REALIZED AND UNREALIZED GAIN (LOSS) 410,581,778 (164,270,221)

Increase (decrease) in net assets resulting from operations 517,904,473$ (49,536,293)$

Amounts attributable to noncontrolling interest: Net investment income attributable to noncontrolling interest 3,739,964 3,312,320 Net gain (loss) recognized on real estate investments sold and respective consolidated investment level debt attributable to noncontrolling interest 377,018 1,480,322 Net unrealized gain (loss) on investments/debt held attributable to the noncontrolling interest 7,554,670 (20,318,535) Net increase (decrease) in net assets resulting from operations attributable to the noncontrolling interest 11,671,652$ (15,525,893)$

Amounts attributable to contract holders: Net investment income attributable to contract holders 103,582,731 111,421,608 Net gain (loss) recognized on real estate investments sold and respective consolidated investment level debt attributable to contract holders 49,008,993 809,855 Net unrealized gain (loss) on investments/debt held attributable to contract holders 353,641,097 (146,241,863) Net increase (decrease) in net assets resulting from operations attributable to contract holders 506,232,821$ (34,010,400)$


Quarter Ended

PRISA

CONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited)

Contract-holders

Noncontrolling Interest

TotalC

ontract-holdersN

oncontrolling InterestTotal

INC

REASE (D

ECR

EASE) IN N

ET ASSETS RESU

LTING

FRO

M O

PERATIO

NS:

Net investm

ent income

103,582,731$

3,739,964$

107,322,695$

111,421,608$

3,312,320$

114,733,928$

Net realized and unrealized gain (loss) on real estate investm

ents402,650,090

7,931,688

410,581,778

(145,432,008)

(18,838,213)

(164,270,221)

Increase (decrease) in net assets resulting from operations

506,232,821

11,671,652

517,904,473

(34,010,400)

(15,525,893)

(49,536,293)

INC

REASE (D

ECR

EASE) IN N

ET ASSETS RESU

LTING

Contributions

164,790,733

4,752,027

169,542,760

59,350,000

4,234,246

63,584,246

Deem

ed contributions representing directly billed managem

ent fees7,213,210

-

7,213,210

7,365,318

-

7,365,318D

istributions-

(1,217,791)

(1,217,791)

-

(5,230,404)

(5,230,404)

Buyout of noncontrolling interest partner

-

-

-

-

7,520,849

7,520,849

Distributions to contract-holders electing to receive

"Operating C

ash Flow" (as contractually defined)

(61,349,283)

(61,349,283)

-

-

-

Increase (decrease) in net assets resulting from

capital transactions110,654,660

3,534,236

114,188,896

66,715,318

6,524,691

73,240,009

INC

REASE (D

ECR

EASE) IN N

ET ASSETS616,887,481

15,205,888

632,093,369

32,704,918

(9,001,202)

23,703,716

NET ASSETS - Beginning of period

6,670,635,504

126,454,570

6,797,090,074

6,637,930,586

135,455,772

6,773,386,358

NET ASSETS - End of period

7,287,522,985$

141,660,458$

7,429,183,443$

6,670,635,504$

126,454,570$

6,797,090,074$

The accompanying notes are an integral part of these consolidated financial statem

ents.

June 30, 2010M

arch 31, 2010Q

uarter Ended

PRISA

CO

NSO

LIDA

TED STA

TEMEN

TS OF C

HA

NG

ES IN N

ET ASSETS

(Unaudited)

June 30, 2010 March 31, 2010

CASH FLOWS FROM OPERATING ACTIVITIES:Net investment income 107,322,695$ 114,733,928$ Adjustments to reconcile net investment income to net cash flows provided by(used in) operating activities: Distributions in excess of (less than) equity in income of real estate partnerships' operations (5,261,269) (14,660,611) Distributions in excess of (less than) equity in income from mortgage and other loans receivable 3,591,870 198,030 (Increase) decrease in accrued interest included in mortgage and other loans receivable - 357,578 (Increase) decrease in accrued interest included in other real estate investments 61,345 (454,104) Directly billed management fee expense 7,213,210 7,365,318 (Increase) decrease in: Accrued investment income, net of allowance for doubtful accounts 2,019,214 2,256,857 Other assets 10,444,018 (72,585,326) Increase (decrease) in: Accrued real estate expenses and taxes 8,935,739 7,892,533 Other liabilities (7,970,317) 9,230,293 Net cash flows provided by (used in) operating activities 126,356,505 54,334,496

CASH FLOWS FROM INVESTING ACTIVITIES:Net proceeds from real estate investments sold 320,896,245 115,231,335 Acquisition of real estate and improvements (138,788,414) (764,285) Additions to real estate and improvements (57,292,908) (59,210,228) Contributions to real estate partnerships (43,635,266) (813,595) Return of investment in real estate partnerships 790,964 7,198,576 Funding of mortgage and other loans receivable (127,439,116) (2,781,748) Collection of mortgage and other loans receivable 21,973,649 45,829,674 Funding of other real estate investments (1,520,887) (9,655,936) Collection of other real estate investments - 5,782 Net cash flows provided by (used in) investing activities (25,015,733) 95,039,575

CASH FLOWS FROM FINANCING ACTIVITIES:Contributions 164,790,733 59,350,000 Distributions to contract-holders electing to receive "Operating Cash Flow" (as contractually defined) (61,349,283) - Proceeds from portfolio level debt 70,000,000 120,000,000 Principal payments on portfolio level debt (70,000,000) (205,000,000) Proceeds from investment level debt 2,489,477 11,335,358 Principal payments on investment level debt (264,004,533) (47,009,699) Contributions from noncontrolling interest partners 4,752,027 4,234,246 Distributions to noncontrolling interest partners (1,217,791) (5,230,404) Net cash flows provided by (used in) financing activities (154,539,370) (62,320,499)

NET CHANGE IN CASH AND CASH EQUIVALENTS (53,198,598) 87,053,572

CASH AND CASH EQUIVALENTS - Beginning of period 119,710,426 32,656,854

CASH AND CASH EQUIVALENTS - End of period 66,511,828$ 119,710,426$


Quarter Ended

PRISA

CONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited)


June 30, 2010Square Feet Estimated Estimated

2010 Unless Otherwise Fair FairProperty Name Ownership City, State Indicated Cost Value Cost Value

APARTMENT 3000 SAGE WO HOUSTON, TX 324 units 46,320,533$ 51,200,000$ 46,311,066$ 48,900,000$ PARCGROVE WO STAMFORD, CT 402 units 104,229,471 94,700,000 103,392,826 89,600,000 BROADSTONE AT GREAT HILLS CJV AUSTIN, TX 256 units 28,639,625 23,900,000 28,883,385 23,100,000 BROADSTONE AT PINEY POINT CJV HOUSTON, TX 246 units 25,883,260 22,300,000 25,878,437 20,300,000 BROADSTONE AT VININGS CJV ATLANTA, GA 310 units 43,133,878 34,500,000 43,030,255 33,300,000 CITY APARTMENTS @ LORING CJV MINNEAPOLIS, MN 162 units 30,919,293 36,200,000 30,844,186 34,200,000 COTTON MILL CJV NEW ORLEANS, LA 1 unit 74,790 110,000 74,790 110,000 DAKOTA SPRINGS APARTMENTS WO AUSTIN, TX 342 units 39,098,704 29,300,000 39,129,402 27,800,000 3333 WESLAYAN FC HOUSTON, TX 528 units 74,422,243 83,801,119 - (2,134,866) GANGI FC NORTH HOLYWOOD, CA N/A 35,075,223 31,100,000 35,075,223 30,600,000 GATEWAY VILLAS WO PINELLAS PARK, FL 300 units 41,323,398 31,500,000 41,314,640 29,100,000 GRAND RESERVE AT TAMPA PALMS WO TAMPA, FL 379 units 49,443,534 42,000,000 49,338,736 41,900,000 GREENWICH PLACE WO OWINGS MILLS, MD 332 units 90,900,629 57,000,000 90,889,242 54,300,000 HARBOR PARK APARTMENTS CJV RESTON, VA 190 units 29,291,834 38,500,000 29,236,715 36,000,000 HOLLYWOOD IMPERIA WO LOS ANGELES, CA 103 units 26,230,438 21,000,000 26,239,791 20,400,000 ARIELA JAMES ISLAND PHASE I CJV (1) JACKSONVILLE, FL 270 units 31,839,509 26,500,000 - (5,116,958) LOWRY PARK I WO DENVER, CO 600 units 78,748,415 78,200,000 78,524,696 75,700,000 JOHN ROSS - BLOCK 35 INVESTORS WO PORTLAND, OR N/A 8,655,846 8,228,991 29,428,035 25,800,000 LANDMARK AT ONTARIO WO ONTARIO, CA 469 units 109,524,523 71,100,000 109,505,948 68,500,000 LEFT BANK AT KINZIE STATE WO CHICAGO, IL 451 units 101,899,791 97,000,000 101,804,023 93,000,000 MARINER BAY AT ATC CJV ANNAPOLIS, MD 208 units 65,955,722 61,100,000 65,926,619 56,200,000 MILANO WO LOS ANGELES, CA 103 units 48,303,387 46,500,000 48,182,916 45,000,000 MARKET STATION FC KANSAS CITY, MS 323 units 45,196,557 43,546,708 43,416,664 39,983,282 OVERLOOK RIDGE APARTMENTS CJV BOSTON, MA 310 units 62,352,346 55,400,000 62,352,346 53,800,000 OVERLOOK RIDGE PHASE I B CJV REVERE, MA 422 units 97,521,745 71,700,000 97,520,740 69,600,000 PINEBROOK POINT APARTMENTS WO MARGATE, FL 394 units 46,125,311 42,600,000 46,019,209 39,000,000 SIGNATURE POINT APARTMENTS CJV SAN DIEGO, CA 262 units 73,135,253 80,400,000 73,117,339 75,000,000 SM AMALFI WO SANTA MONICA, CA 48 units 15,919,636 15,600,000 15,849,351 14,500,000 SM ANACAPA WO SANTA MONICA, CA 48 units 16,277,603 15,100,000 16,222,243 14,000,000 SM BIELLA WO SANTA MONICA, CA 59 units 14,827,882 17,000,000 14,804,464 15,100,000 SM CAPRI WO SANTA MONICA, CA 48 units 15,374,457 16,500,000 15,342,391 15,100,000 SM LIVORNO WO SANTA MONICA, CA 48 units 14,739,967 16,300,000 14,705,140 15,300,000 SM POSITANO WO SANTA MONICA, CA 50 units 21,292,715 22,500,000 21,272,615 20,500,000 SM REVELLO WO SANTA MONICA, CA 48 units 15,416,755 17,900,000 15,402,414 16,200,000 SM SAN REMO WO SANTA MONICA, CA 48 units 15,846,760 15,300,000 15,773,930 15,100,000 SM SORRENTO WO SANTA MONICA, CA 46 units 15,597,185 17,900,000 15,570,724 16,000,000 SM VENEZIA WO SANTA MONICA, CA 48 units 17,265,606 16,500,000 17,251,562 14,700,000 SM VERONA WO SANTA MONICA, CA 48 units 15,212,003 16,600,000 15,190,607 15,200,000 SPECTRUM CJV (1) CHARLOTTE, NC 331 units 48,377,712 37,300,000 47,108,040 37,099,044 THE ALEXAN EJV ATLANTA, GA N/A (25,743) 242,677 (20,429) 247,991 THE FILLMORE CENTER CJV SAN FRANCISCO, CA 1,114 units 237,791,769 270,000,000 237,265,199 249,000,000 THE GRAMERCY AT TOWN CENTER CJV COLUMBIA, MD 211 units 36,281,908 33,900,000 36,247,560 32,800,000 THE VILLAGES AT BALDWIN PARK CJV ORLANDO, FL 528 units 71,164,093 76,800,000 71,156,111 73,300,000 THE WHITNEY CJV BETHESDA, MD 253 units 76,157,592 89,000,000 76,103,951 80,800,000 TICINO APARTMENTS WO LOS ANGELES, CA 103 units 23,733,305 19,700,000 23,740,061 16,900,000 TIDES RESIDENTIAL WO RICHMOND, CA 200 units 39,218,268 32,755,000 39,209,282 30,200,000 AMERIGE HEIGHTS WO FULLERTON, CA 292 units 67,563,305 80,200,000 67,563,305 78,300,000 TRIANA AT WARNER CENTER CJV WOODLAND HILLS, CA 362 units 108,522,124 98,000,000 108,522,124 95,900,000 TURNBERRY TOWERS WO LAS VEGAS, NV N/A 161,931,002 52,764,777 166,556,996 57,000,000 VANGUARD CHELSEA EJV NEW YORK, NY 301 units 24,655,390 32,869,035 24,460,848 30,143,802 VILLAGE AT LAKE LILY PHASE I CJV MAITLAND, FL 253 units 52,428,434 41,500,000 52,014,413 40,000,000 VILLAGE AT LAKE LILY PHASE II CJV (1) MAITLAND, FL 202 units 39,466,104 30,500,000 - (9,630,138) ESTATES AT COUNTRYSIDE WO CLEARWATER, FL 317 units 44,757,407 22,400,000 44,643,198 22,400,000 APARTMENT TOTAL 21.3% as of 6/30/2010 2,644,038,497 2,384,518,307 2,517,393,329 2,130,102,157

HOTELLAKE BUENA VISTA FC ORLANDO, FL 323 units - (16,300,000) - (15,200,000) MILLER RHOADS CJV RICHMOND, VA 250 units 56,086,804 44,600,000 56,326,702 46,800,000 HOTEL TOTAL 0.3% as of 6/30/2010 323 units 56,086,804 28,300,000 56,326,702 31,600,000

INDUSTRIAL

81 COMMERCE CJV FALL RIVER, MA 600,000 22,004,225 25,300,000 22,004,225 24,800,000 645 ALMANOR WO SUNNYVALE, CA SOLD - - 8,195,468 5,200,000 1100 MILL RUN WO ALLENTOWN, PA 187,600 6,748,597 8,066,800 6,748,597 6,500,000 2600 TENTH STREET-PARDEE BLOCK EJV BERKELEY, CA 28,616 3,913,835 4,415,108 3,928,925 2,654,624 ALLIANCE/TEXAS INDUSTRIAL PORTFOLIO CJV FORT WORTH, TX 10,534,237 611,376,983 457,600,000 606,437,689 415,700,000 AMHURST LAKE - INDUSTRIAL WO WAUKEGAN, IL 1,205,138 69,752,746 52,600,000 69,523,831 52,100,000 BAKER BUILDING WO SUMNER, WA 379,760 24,928,407 20,600,000 24,928,407 20,500,000 BALTIMORE CROSSROADS AREA 8 LOT 1 FC WHITE MARSH, MD 76,800 5,929,769 5,176,103 5,929,769 4,810,121 BALTIMORE CROSSROADS AREA 8 LOT 2 PHASE II FC WHITE MARSH, MD 93,600 7,682,703 6,239,476 7,682,704 6,253,989 BELL INDUSTRIAL CENTER - BLDG 124 & 125 WO BELL, CA 139,906 19,811,641 8,600,000 19,558,943 8,200,000 BLOOMFIELD AVENUE BUSINESS PARK WO SANTA FE SPRINGS, CA 121,443 8,207,460 9,300,000 8,208,950 9,100,000 BRAKER CENTER WO AUSTIN, TX 296,646 36,493,727 29,600,000 36,337,535 28,500,000 BUENA PARK INDUSTRIAL WO BUENA PARK, CA 668,335 74,200,501 42,700,000 73,632,542 42,600,000 CROSSROADS EAST WO BOLINGBROOK, IL 371,011 13,481,056 7,600,000 13,505,785 7,600,000 DOMINGUEZ HILLS INDUSTRIAL PARK WO COMPTON, CA 1,413,695 157,005,433 103,300,000 156,749,431 103,500,000 EMERYSTATION TRIANGLE EJV EMERYVILLE, CA 38,990 6,568,055 7,045,585 6,596,627 6,609,429 GATEWAY 18 WO FORT WORTH, TX 399,000 14,735,462 9,485,294 14,268,444 12,300,000 GATEWAY 270 WO CLARKSBURG, MD 250,468 21,947,473 28,000,000 21,884,057 27,800,000 GATEWAY 52 WO FORT WORTH, TX 262,500 11,242,316 7,426,471 11,242,316 9,600,000 GATEWAY 62 WO ROANOKE, TX 402,500 17,516,915 9,191,176 17,516,915 14,200,000 GATEWAY 72 WO FORT WORTH, TX 472,500 17,035,431 11,985,294 17,035,431 15,500,000 GRAND AVENUE DISTRIBUTION CTR CJV CITY OF INDUSTRY, CA 592,971 35,576,734 35,200,000 35,576,734 34,000,000 I-20 DISTRIBUTION FC DALLAS, TX 887,810 24,442,462 20,514,295 24,279,274 20,623,006 KIES EAST WO HANOVER, MD 176,053 13,405,487 10,800,000 13,405,487 11,400,000 KIES WEST WO HANOVER, MD 313,850 19,181,690 21,300,000 19,181,690 22,500,000 LEGACY STOWE WO POWAY, CA 241,657 22,722,457 33,200,000 22,722,457 32,700,000 LEWIS BUSINESS CENTER WO VAN NUYS, CA 358,164 43,734,261 40,000,000 43,734,140 38,500,000 LEWIS BUSINESS CENTER II WO VAN NUYS, CA 98,840 11,792,853 10,700,000 11,792,853 10,500,000 LIBERTY & UNION INDUSTRIAL PARK FC TAUNTON, MA 330,444 19,903,019 15,400,000 19,903,019 16,000,000 LITTLETON DISTRIBUTION CENTER CJV LITTLETON, MA 480,000 37,802,791 29,600,000 37,775,358 29,800,000 MAIN & REDHILL I & II WO IRVINE, CA 183,892 26,160,233 28,000,000 26,045,872 27,100,000 MARSTELLAR ROCK WO HANOVER, MD 271,551 18,932,203 17,400,000 18,932,203 20,000,000 MID-COUNTY DISTRIBUTION CENTER WO SANTA FE SPRINGS, CA 525,000 40,250,712 41,500,000 40,246,157 39,500,000 MONTAGUE I&II EJV SAN JOSE, CA 173,907 12,700,205 15,401,716 12,663,813 14,918,358 MONTAGUE III EJV SAN JOSE, CA 88,450 8,721,760 10,262,568 8,666,949 9,944,863 NOKIA BUILDING EJV FORT WORTH, TX 445,870 4,518,184 6,626,366 4,695,466 5,777,206 NORTHEAST BUSINESS PARK PHASE I WO WASHINGTON TOWNSHIP, NJ 1,000,749 48,112,423 29,000,000 48,106,486 28,300,000 NORTHEAST BUSINESS PARK PHASE II WO (1) WASHINGTON TOWNSHIP, NJ 722,802 45,029,273 24,700,000 44,955,998 24,500,000 OAKMONT INDUSTRIAL PROGRAM WO VARIOUS 1,962,792 102,150,505 78,830,000 101,993,792 77,610,000 OAKMONT NATIONAL PARTNERS II WO VARIOUS 1,444,770 308,401,664 141,440,000 304,660,707 141,260,000

PRISASchedule of Real Estate Investments

(Unaudited)

June 30, 2010 March 31, 2010





(Unaudited)

June 30, 2010 March 31, 2010

PACIFIC GATEWAY CENTER WO TORRANCE, CA 1,118,819 105,906,501 100,300,000 105,817,652 101,000,000 PERRYMAN INDUSTRIAL PARK WO ABERDEEN, MD 300,000 15,527,409 15,300,000 15,527,409 15,300,000 PINEY RUN ROCK WO HANOVER, MD 300,500 22,167,178 15,900,000 22,139,182 16,500,000 PROLOGIS PARK 70 BUILDING VENTURE EJV AURORA, CO 283,666 3,739,546 3,015,588 3,751,935 3,403,206 QUIET WATERS WO DEERFIELD BEACH, FL 667,654 56,999,020 37,900,000 56,670,681 37,000,000 RACE ROAD EJV HANOVER, MD 125,400 5,580,076 3,291,126 5,569,486 3,350,673 RAINIER BUILDING WO SUMNER, WA 401,076 24,140,593 20,000,000 24,140,593 19,800,000 SUMNER ADAMS BUILDING CJV SUMNER, WA 235,879 15,332,137 12,000,000 13,697,543 9,200,000 THE SNOQUALMIE CJV SUMNER, WA 503,534 29,412,011 25,000,000 29,398,895 25,000,000 TRANSAL PARK WO MIAMI, FL 134,175 17,318,455 14,100,000 17,275,977 14,100,000 TROY HILL WO BALTIMORE, MD 1,171,711 60,869,616 77,700,000 60,329,043 73,600,000 TRUMPET BUSINESS PARK CJV ZION, IL 150,000 7,834,200 4,800,000 7,728,328 4,900,000 UNIVERSITY COMMERCE CENTER WO RANCHO DOMINGUEZ, CA 770,320 92,970,791 65,100,000 92,941,316 65,100,000 VALLEY VIEW INDUSTRIAL WO BUENA PARK, CA 255,200 24,249,060 15,900,000 24,249,060 16,400,000 VERNON DIST CENTER WO VERNON, CA 404,305 9,933,975 19,000,000 9,933,890 19,000,000 WESTPORT 20 WO FORT WORTH, TX 564,500 24,173,291 16,397,059 24,162,989 21,000,000 WESTPORT INDUSTRIAL PARK WO HOUSTON, TX 398,400 19,954,842 21,600,000 19,905,245 19,500,000 INDUSTRIAL TOTAL 17.3% as of 6/30/2010 2,530,230,352 1,931,410,025 2,524,494,270 1,893,115,475

SELF STORAGEEXTRA SPACE SELF STORAGE PORTFOLIO EJV VARIOUS 6,705,606 635,023,634 561,347,527 635,091,939 553,315,929 SELF STORAGE TOTAL 5.0% as of 6/30/2010 635,023,634 561,347,527 635,091,939 553,315,929

LANDALTOS PLAZA WO MIAMI, FL N/A 8,197,460 7,200,000 8,197,460 7,200,000 BALTIMORE CROSSROADS AREA 6 & 10 FC WHITE MARSH, MD N/A - (2,002,114) - (12,396,809) EMERYSTATION TRIANGLE II EJV EMERYVILLE, CA N/A 4,567,639 2,033,498 4,233,028 1,649,942 ARIELA JAMES ISLAND PHASE II WO JACKSONVILLE, FL N/A 13,114,293 7,300,000 14,366,811 7,300,000 RIVARA EJV NORTH HOLLYWOOD, CA N/A 5,819,103 4,605,969 5,819,103 4,605,969 NATIONAL BUSINESS PARK EJV LIVERMORE, CA N/A 1,296,170 515,183 1,296,170 611,020 PCG LAND EJV VARIOUS N/A 21,220,307 1,400,749 20,918,987 1,047,940 PRESTON GATEWAY NORTH EJV HANOVER, MD N/A 13,323,210 4,111,389 12,481,279 (2,494,495) PRESTON PERRYMAN INDUSTRIAL EJV HANOVER, MD N/A 4,555,840 3,285,927 4,541,598 3,307,130 PRIMESTOR LITTLE VILLAGE CJV CHICAGO, IL N/A 56,115,721 11,000,000 55,684,132 13,900,000 PROLOGIS INDUSTRIAL EJV AURORA, CO N/A 12,061,671 4,984,972 12,103,588 5,026,834 ST. LOUIS FORD EJV HAZELWOOD, MO N/A 1 7,400,801 1 3,213,644 SUMNER CORPORATE PARK CJV SUMNER, WA N/A 11,439,043 13,100,000 11,350,137 13,100,000 TRUMPET BUSINESS PARK - LAND EJV ZION, IL N/A 1 (2,764,712) 1 (1,324,527) VILLAGE AT FAIRVIEW PERIPHERAL LAND FC FAIRVIEW, TX N/A - (6,763,814) - - VILLAGE AT RIVERWATCH CJV AUGUSTA, GA N/A 35,549,160 13,700,000 35,193,062 13,700,000 LAND TOTAL 0.6% as of 6/30/2010 187,259,619 69,107,848 186,185,357 58,446,648

OFFICE 11 TIMES SQUARE CJV NEW YORK, NY 1,109,080 856,125,159 592,151,041 819,010,211 463,038,312 95 GREENE STREET CJV JERSEY CITY, NJ 300,000 82,143,332 70,000,000 82,143,332 68,000,000 100 NORTH TAMPA CJV TAMPA, FL 552,080 159,505,092 113,000,000 159,427,745 113,000,000 100 PARK AVENUE EJV NEW YORK, NY 881,543 82,201,702 169,832,138 80,610,599 148,873,082 120 N LASALLE WO CHICAGO, IL 383,446 93,593,770 69,100,000 93,360,316 66,900,000 1200 MAIN STREET WO IRVINE, CA 20,054 6,156,363 3,700,000 6,125,662 3,900,000 1440 BROADWAY EJV NEW YORK, NY 747,576 181,399,457 80,275,071 179,149,640 61,540,764 1800 M STREET WO WASHINGTON, DC 547,618 166,381,812 205,000,000 166,233,433 198,000,000 2020 MAIN STREET WO IRVINE, CA 268,838 77,183,276 60,200,000 77,054,930 57,900,000 2600 TENTH STREET EJV BERKELEY, CA 127,361 34,044,487 17,129,906 33,910,959 17,022,182 AMHURST LAKE - OFFICE WO WAUKEGAN, IL 165,769 21,928,221 19,000,000 21,661,130 19,300,000 BAY COLONY (1) WO WALTHAM, MA 984,894 201,098,572 206,000,000 - - BOSTON MARKET WO GOLDEN, CO 151,119 23,979,857 13,400,000 23,959,857 13,000,000 CAMPUS POINT TECHNOLOGY CENTER EJV SAN DEIGO, CA 450,114 63,146,503 42,137,634 62,159,019 32,343,029 CARLSBAD PACIFICA CENTER I - III WO CARLSBAD, CA 129,997 34,090,640 25,100,000 34,024,827 24,900,000 DEMOCRACY CENTER WO BETHESDA, MD 684,001 293,014,100 171,000,000 291,654,714 167,000,000 EMERY STATION EAST EJV EMERYVILLE, CA 251,569 46,872,773 46,905,670 46,794,314 47,446,312 EMERY STATION I EJV EMERYVILLE, CA 270,667 23,527,547 33,060,649 22,952,137 35,967,251 EMERY STATION II EJV EMERYVILLE, CA 167,668 39,793,378 42,213,649 39,978,679 40,708,894 EXECUTIVE PLAZA WO BETHESDA, MD 331,254 109,736,172 75,100,000 109,700,776 72,600,000 GLENDALE PLAZA OFFICE CA WO GLENDALE, CA 532,815 217,523,270 119,000,000 216,618,496 119,000,000 HARBOR GARAGE EJV BOSTON, MA N/A 69,971,842 31,948,919 69,688,263 25,569,162 HERITAGE COMMONS II WO FORT WORTH, TX 114,710 17,257,067 10,514,706 17,252,379 13,500,000 HERITAGE SQUARE EJV EMERYVILLE, CA 94,480 14,659,148 16,548,484 15,010,411 14,923,303 INTERNATIONAL PLACE CJV BOSTON, MA 1,833,225 765,294,601 810,000,000 763,724,254 752,000,000 MARKET PLACE TOWER WO SEATTLE, WA 194,687 50,278,816 50,200,000 49,619,043 46,500,000 ONE MONTGOMERY TOWER EJV SAN FRANCISCO, CA 666,068 162,425,534 119,094,199 160,631,062 105,716,769 PETSMART WO PHOENIX, AZ 365,672 59,400,238 76,500,000 59,400,238 75,700,000 PLAZA I & II WO CARLSBAD, CA 89,034 20,997,039 13,600,000 20,852,293 13,900,000 PONCE DE LEON WO CORAL GABLES, FL 348,045 166,661,519 115,000,000 166,646,326 111,000,000 PRESBYTERIAN MEDICAL CENTER EJV CHARLOTTE, NC 68,697 8,189,206 5,730,540 8,074,618 5,398,956 ROCKY POINT WO TAMPA, FL 498,486 93,751,434 84,100,000 93,714,949 80,200,000 SUNSET EJV SEATTLE, WA 306,563 24,395,157 23,064,491 23,918,976 22,763,928 WARREN CORPORATE CENTER CJV WARREN, NJ 817,972 184,738,844 221,000,000 184,738,844 215,000,000 WASHINGTON HARBOUR WO WASHINGTON, DC SOLD - - 245,224,927 217,000,000 WATERFRONT CORPORATE CENTER CJV HOBOKEN, NJ 529,917 99,176,936 156,000,000 99,176,936 148,000,000 WESTSIDE PLAZA I WO MIAMI, FL 153,365 19,639,365 21,000,000 19,320,650 21,500,000 WESTSIDE PLAZA II WO MIAMI, FL 104,747 16,437,273 14,600,000 16,437,273 14,200,000 WESTSIDE PLAZA III WO MIAMI, FL 105,234 16,661,685 14,200,000 16,655,695 13,800,000 OFFICE TOTAL 35.4% as of 6/30/2010 4,603,381,187 3,956,407,097 4,596,617,913 3,667,111,944

RETAIL CP VENTURE SIX LLC EJV VARIOUS N/A 32,346,195 33,304,072 32,346,248 33,304,124 CP VENTURE TWO EJV VARIOUS N/A (285,914) (466,410) (328,723) (509,219) CROCKER GALLERIA EJV SAN FRANCISCO, CA 87,618 29,950,405 10,436,843 29,876,415 9,960,159 DANADA WO WHEATON, IL 316,281 45,845,022 47,800,000 45,533,636 47,500,000 DARWIN SQUARE WO PORT ST LUCIE, FL 128,408 24,850,620 18,800,000 24,136,859 18,800,000 DDR RETAIL PORTFOLIO (2) EJV VARIOUS 225,512 21,402,239 14,346,834 90,256,615 50,021,619 DESERT CROSSING WO PALM DESERT, CA 399,101 84,600,732 52,000,000 84,587,336 52,000,000 FLORENCE MARKET PLACE CJV BELL GARDENS, CA 159,831 20,965,175 17,100,000 20,933,493 14,800,000 GATEWAY CROSSING WO ORLANDO, FL 79,991 17,310,492 12,600,000 17,302,818 9,100,000 GREENBRIER MARKETCENTER EJV CHESAPEAKE, VA 376,355 50,880,107 61,017,450 49,680,085 59,893,871 GREENWAY COMMONS CJV HOUSTON, TX 248,424 55,886,411 56,500,000 55,702,057 54,500,000 HALVORSEN WO VARIOUS, FL 98,010 10,085,945 12,100,000 10,059,179 11,400,000 LAS PALMAS CJV LOS ANGELES, CA 27,876 10,295,945 6,500,000 10,280,443 6,300,000 LEGACY VILLAGE DRIVE EJV PLANO, TX 138,154 7,733,640 6,906,143 7,812,238 6,535,345 LOS ALTOS MARKETCENTER EJV LONG BEACH, CA 156,860 31,526,458 31,105,218 31,165,613 30,953,963 LOS JARDINES CJV LOS ANGELES, CA 77,953 22,460,626 15,300,000 22,460,626 15,500,000 MARSHFIELD PLAZA WO (1) CHICAGO, IL 401,073 79,797,497 59,300,000 72,574,881 57,664,250 MISSION HILLS PLAZA CJV MISSION HILLS, CA 138,816 29,349,917 17,350,000 29,349,917 17,350,000 NORTH POINT MARKETCENTER EJV ALPHARETTA, GA 352,467 55,879,840 56,348,582 54,873,898 46,723,032 PACOIMA RETAIL CENTER CJV PACOIMA, CA 209,000 42,687,700 36,500,000 42,006,016 33,462,925





(Unaudited)

June 30, 2010 March 31, 2010

PAROLE HOLDINGS CJV ANNAPOLIS, MD 402,409 257,421,534 217,000,000 250,845,030 211,000,000 PEMBROKE CROSSING WO PEMBROKE PINES, FL 289,463 58,668,011 36,600,000 57,694,182 36,400,000 PK 1 HOLDINGS (2) EJV VARIOUS 2,823,732 460,434,731 109,726,764 601,621,781 88,880,979 PRIMA VISTA CROSSING WO PORT ST. LUCIE, FL 81,883 15,356,853 12,500,000 15,337,748 12,400,000 PRK HOLDINGS IV (2) EJV VARIOUS 2,887,188 288,304,383 128,351,220 295,628,519 144,480,089 PUBLIX AT GOLF COVE WO PORT CHARLOTTE , FL 65,795 7,158,182 7,200,000 7,158,182 7,200,000 SHOPPES AT ARBOR LAKES WO MAPLE GROVE, MN 372,836 116,222,517 93,800,000 116,214,528 93,400,000 THE AVENUE EAST COBB EJV MARIETTA, GA 230,396 55,360,721 28,223,341 55,169,772 28,078,494 THE AVENUE PEACHTREE CITY EJV PEACHTREE CITY, GA 183,188 51,376,443 38,088,765 51,396,999 38,119,499 THE AVENUE VIERA EJV VIERA, FL 331,989 77,638,661 50,013,584 77,308,545 49,941,299 THE AVENUE WEST COBB EJV MARIETTA, GA 256,997 78,640,214 54,664,490 78,505,043 53,912,925 THE BOULEVARD CJV ST. LOUIS, MO 121,500 74,875,769 59,700,000 74,732,273 57,600,000 THE VILLAGE AT ALLEN FC ALLEN, TX 927,415 168,968,841 169,517,198 167,586,288 162,988,483 THE VILLAGE AT FAIRVIEW CJV (1) FAIRVIEW, TX 551,309 219,678,521 136,892,000 - (39,693,670) VIERA MARKET CENTER EJV VIERA, FL 177,557 27,196,194 16,811,460 27,201,029 16,914,886 RETAIL TOTAL 15.4% as of 6/30/2010 2,630,870,627 1,723,937,554 2,607,009,569 1,536,883,053

MORTGAGE AND OTHER LOANS RECEIVABLE100 WALL STREET Loan NEW YORK, NY N/A 54,368,904 - 54,368,904 - BAY COLONY (2) Loan WALTHAM, MA EJV - - 67,382,948 50,364,696 GRAY PORTFOLIO Loan NORTH SCOTTSDALE, AZ N/A 67,820,000 67,820,000 - - HAWTHORNE PLAZA Loan SAN FRANCISCO, CA N/A 48,995,000 2,000,000 48,995,000 1,000,000 MEF REALTY Loan VARIOUS N/A 29,348,286 - 29,348,286 - NATIONAL BUSINESS PARK Loan NORTH HOLLYWOOD, CA N/A 3,188,895 3,188,895 3,188,895 3,188,895 PACOIMA RETAIL CENTER Loan PACOIMA, CA N/A 23,727,027 23,727,027 23,697,841 23,697,841 PARK PLACE Loan MIAMI, FL N/A 23,000,000 22,400,000 23,000,000 21,800,000 SAN JOSE MARRIOTT Loan SAN JOSE, CA N/A 58,530,852 58,530,852 - - THE ATRIUM PORTFOLIO Loan VARIOUS N/A 250,329,861 194,029,860 250,395,833 177,795,833 THE W BOSTON HOTEL Loan BOSTON, MA N/A 116,890,003 85,329,703 138,314,784 96,965,379 TURNBERRY CORPORATE LOAN Loan VARIOUS N/A 80,164,820 1,700,000 82,773,946 3,800,000 W BOSTON HOTEL MORTGAGE LOAN (3) Loan BOSTON, MA N/A 40,773,776 40,773,776 - - MORTGAGE AND OTHER LOANS RECEIVABLE TOTAL 4.5% as of 6/30/2010 797,137,424 499,500,113 721,466,437 378,612,644

OTHER REAL ESTATE INVESTMENTSBLOCK B SOUTH WATERFRONT DVLPMNT NR NR HOBOKEN, NJ N/A 8,849,799 4,323,096 8,557,466 4,353,977 EMERY STATION EAST NR EMERYVILLE, CA N/A 4,500,000 4,500,000 4,500,000 4,500,000 FULLERTON NR FULLERTON, CA N/A 4,514,088 800,000 4,514,088 800,000 HARBOR GARAGE NR BOSTON, MA N/A 7,487,162 7,487,163 7,324,902 7,324,902 JSM CONSTRUCTION LOAN NR SANTA MONICA, CA N/A - - 2,601,439 - RIVARA NR NORTH HOLLYWOOD, CA N/A 4,761,185 - 4,761,185 - NORTHEAST BUSINESS PARK NR WASHINGTON TOWNSHIP, NJ N/A - - 350,685 - PRESTON GATEWAY NORTH NR HANOVER, MD N/A 574,449 - 422,035 - PRESTON PERRYMAN INDUSTRIAL NR HANOVER, MD N/A 233,654 - 233,653 - PRIMESTOR DEVELOPMENT NR BEVERLY HILLS, CA N/A 807,041 - 807,041 - PRIMESTOR MARSHFIELD PLAZA NR CHICAGO, IL N/A - - 5,815,259 - RACE ROAD NR HANOVER, MD N/A 407,618 - 407,618 - VILLAGE AT FAIRVIEW EQUITY LOAN NR FAIRVIEW, TX N/A - - 14,283,914 14,283,914 VILLAGE AT FAIRVIEW WHOLE FOODS NR FAIRVIEW, TX N/A 6,849,727 2,300,000 6,041,666 6,041,666 OTHER REAL ESTATE INVESTMENTS TOTAL 0.2% as of 6/30/2010 38,984,723 19,410,259 60,620,951 37,304,459

TOTAL REAL ESTATE INVESTMENTS 100% 14,123,012,867$ 11,173,938,730$ 13,905,206,467$ 10,286,492,309$

WO - Wholly Owned InvestmentCJV - Consolidated Joint VentureEJV - Joint Venture Investment accounted for under the equity method NR - Note ReceivableFC- Forward Contracts(1) Conversion of ownership during the period presented(2) Partial sales occurred(3) Prior to 6/30/10 PRISA previously reported this asset as a contingent liability. As of 6/30/10 this became an obligation of the Fund and an actual balance sheet liability. Funding occurred on 7/21/10 and the obligation was satisfied.

PRISA NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2010 and March 31, 2010 (Unaudited)

NOTE 1: Summary of Significant Accounting Policies The consolidated financial statements included herein have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and that are applicable to real estate investment companies. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three months ended June 30, 2010 and March 31, 2010 are not necessarily indicative of the results that may be expected for the year ended December 31, 2010. For further information, refer to the consolidated financial statements and notes thereto included in PRISA’s annual audited consolidated financial statements for the year ended December 31, 2009. PRISA has evaluated subsequent events through August 6, 2010, the date these financial statements were available to be issued. NOTE 2: Disclosure of Supplemental Cash Flow and Non-Cash Investing and Financing Activity Cash paid for interest during the three-month period ended June 30, 2010 and March 31, 2010, respectively, was $21.1 million and $28.5 million. NOTE 3: Fair Value Measurements Valuation Methods: Real estate investments and debt are valued in accordance with the FASB guidance on fair value measurements and disclosures, which defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value of real estate investments are estimated based on the conventional approaches to value, all of which require the exercise of subjective judgment. The three approaches are: (1) current cost of reproducing the real estate less deterioration and functional and economic obsolescence; (2) discounting a series of income streams and reversion at a specific yield or by directly capitalizing a single year income estimate by an appropriate factor; and (3) value indicated by recent sales of comparable real estate in the market. In the reconciliation of these three approaches, one method, or a combination of methods, is used to come up with estimated fair value of real estate investments. Debt is valued based on the amount at which PRISA would pay to transfer the debt at the reporting date taking into consideration the effect of nonperformance risk, including PRISA’s own credit risk. The fair value of debt is determined using the discounted cash flow method, which applies certain key assumptions including the contractual terms of the contract, market interest rates, interest spreads, credit risk, liquidity and other factors. PRISA records interest rate swaps and caps at fair value which is determined using discounted cash flow models. The models' key assumptions include the contractual terms of the contract, along with significant observable inputs, including interest rates, liquidity, credit spreads and other factors including our own nonperformance risk as well as that of our counterparties. These derivatives are traded in the over-the-counter (OTC) market and are classified within Level 2 in the fair value hierarchy. OTC derivatives classified within Level 2 are valued using models generally accepted in the financial services industry that use actively quoted or observable market input values from external market data providers, non-binding broker-dealer quotations, third-party pricing vendors and/or recent trading activity.



NOTE 3: Fair Value Measurements (continued) Valuation Methods: (continued) Fair Value Option: The FASB guidance on fair value option provides a one-time irrevocable option to fair value eligible assets and liabilities and requires both qualitative and quantitative disclosures to those for which an election is made. Fair Value Measurements: The FASB guidance on fair value measurements and disclosures’ guidance establishes a fair value measurement framework, provides a single definition of fair value and requires expanded disclosure summarizing fair value measurements. This guidance provides a three-level hierarchy based on the inputs used in the valuation process. The level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement. The levels of the fair value hierarchy are as follows: Level 1 – Fair value is based on unadjusted quoted prices in active markets that are accessible to the entity for identical assets or liabilities. These generally provide the most reliable evidence and should be used to measure fair value whenever available. Level 2 – Fair value is based on inputs, other than Level 1 inputs, that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability through corroboration with observable market data. Level 3 – Fair value is based on significant unobservable inputs for the asset or liability. These inputs reflect the entity’s own assumptions about the assumptions about how market participants would price the asset or liability.



NOTE 3: Fair Value Measurements (continued) For items classified as Level 3, a reconciliation of the beginning and ending balances, as shown in table 3 and 4, is also required. Tables 1 and 2 below summarize the assets and liabilities measured at fair value on a recurring basis and their respective position in the fair value hierarchy. Table 1

Assets:Cost at

6/30/2010Amounts measured

at fair value 6/30/2010

Quoted prices in active markets for identical assets

(Level 1)

Significant other observable inputs

(Level 2)

Significant unobservable

inputs (Level 3)

Real estate and improvements 10,118,020$ 8,367,889$ - - 8,367,889$ Real estate partnerships 2,787,250 1,936,911 - - 1,936,911 Mortgage and other loans receivable 797,137 499,500 - - 499,500 Forward contracts 381,621 350,229 - - 350,229 Other real estate investments 38,985 19,410 - - 19,410

Total 14,123,013$ 11,173,939$ - - 11,173,939$

Assets:Cost at

3/31/2010Amounts measured

at fair value 3/31/2010

Quoted prices in active markets for identical assets

(Level 1)


(Level 2)


inputs (Level 3)

Real estate and improvements 9,662,415$ 7,692,731$ - - 7,692,731$ Real estate partnerships 2,992,192 1,861,494 - - 1,861,494 Mortgage and other loans receivable 721,466 378,613 - - 378,613 Forward contracts 468,512 316,350 - - 316,350 Other real estate investments 60,621 37,304 - - 37,304

Total 13,905,206$ 10,286,492$ - - 10,286,492$

(in 000s)Fair value measurements at June 30, 2010 using

(in 000s)Fair value measurements at March 31, 2010 using



NOTE 3: Fair Value Measurements (continued) Table 2

Liabilities:Cost at

6/30/2010

Amounts measured at

fair value 6/30/2010

Quoted prices in active markets for identical liabilities

(Level 1)


(Level 2)


inputs (Level 3)

Portfolio level debt 100,000$ 100,000$ -$ -$ 100,000$ Investment level debt 3,345,200 3,321,249 - - 3,321,249 Interest rate swaps and cap - 6,293 - 6,293 -

Total 3,445,200$ 3,427,542$ -$ 6,293$ 3,421,249$

Liabilities:Cost at

3/31/2010

Amounts measured at

fair value 3/31/2010

Quoted prices in active markets for identical liabilities

(Level 1)


(Level 2)


inputs (Level 3)

Portfolio level debt 100,000$ 100,000$ - - 100,000$ Investment level debt 3,162,810 3,096,706 - - 3,096,706 Interest rate swaps and cap - 9,993 - 9,993 -

Total 3,262,810$ 3,206,699$ - 9,993$ 3,196,706$

Fair value measurements at March 31, 2010 using

(in 000s)Fair value measurements at June 30, 2010 using

(in 000s)



NOTE 3: Fair Value Measurements (continued) Tables 3 and 4 below present a reconciliation of the beginning and ending balances for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the quarters ended June 30, 2010 and March 31, 2010. Table 3

(in 000s)

Real estate and improvements

Real estate partnerships

Mortgage and other loans receivable Forward contracts

Other real estate investments Total

Beginning balance @ 01/01/10 7,522,771$ 1,808,550$ 435,790$ 295,506$ 32,431$ 10,095,048$

Net gains (losses) realized/unrealizedincluded in earnings (or changes in net assets) (254,303) 93,334 (13,573) 19,371 (4,478) (159,649)

Equity income(losses)/interest income - 38,549 13,969 - 454 52,972 Acquisitions/issuances/contributions 532,473 6,385 2,782 1,473 9,656 552,769 Dispositions/settlements/distributions (115,202) (36,687) (60,355) - (759) (213,003) Conversions 6,992 (48,637) - - (41,645) Ending balance @ 03/31/2010 7,692,731$ 1,861,494$ 378,613$ 316,350$ 37,304$ 10,286,492$

Unrealized gains (losses) for the period relating to Level 3 assets that were still held at the reporting date (256,676)$ 93,417$ (13,573)$ 19,371$ (4,478)$ (161,938)$

Real estate and improvements

Real estate partnerships

Mortgage and other loans receivable Forward contracts

Other real estate investments Total

Beginning balance @ 04/01/10 7,692,731$ 1,861,494$ 378,613$ 316,350$ 37,304$ 10,286,492$

Net gains (losses) realized/unrealizedincluded in earnings (or changes in net assets) 206,183 80,604 40,338 120,770 1,141 449,036

Equity income(losses)/interest income - 40,510 3,958 - (62) 44,406 Acquisitions/issuances/contributions 674,479 42,844 168,215 - 1,521 887,059 Dispositions/settlements/distributions (267,604) (88,541) (29,524) - - (385,669) Conversions 62,100 - (62,100) (86,891) (20,494) (107,385) Ending balance @ 06/30/2010 8,367,889$ 1,936,911$ 499,500$ 350,229$ 19,410$ 11,173,939$

Unrealized gains (losses) for the period relating to Level 3 assets that were still held at the reporting date 182,520$ 64,420$ 28,198$ 120,770$ 3,742$ 399,650$

Fair Value Measurements Using Significant Unobservable Inputs

(Level 3)



NOTE 3: Fair Value Measurements (continued) Table 4

Portfolio level debt

Investment level debt Total

Beginning balance @ 01/01/10 185,000$ 2,679,485$ 2,864,485$

Net gains (losses) realized/unrealized included in earnings (or changes in net assets) - 8,110 8,110 Acquisitions/issuances 120,000 18,299 138,299 Dispositions/settlements (205,000) (47,010) (252,010) Conversions - 437,822 437,822 Ending balance @ 3/31/2010 100,000$ 3,096,706$ 3,196,706$

Unrealized gains (losses) for the period relating toLevel 3 liabilities that were still held at the reporting date -$ 8,110$ 8,110$

Beginning balance @ 04/01/10 100,000$ 3,096,706$ 3,196,706$

Net gains (losses) realized/unrealized included in earnings (or changes in net assets) - 42,154 42,154 Acquisitions/issuances 70,000 463,198 533,198 Dispositions/settlements (70,000) (280,809) (350,809) Ending balance @ 6/30/2010 100,000$ 3,321,249$ 3,421,249$

Unrealized gains (losses) for the period relating to

Level 3 liabilities that were still held at the reporting date -$ 42,154$ 42,154$

Fair value measurements using significant unobservable inputs

(Level 3)

(in 000s)

NOTE 4: Interest Rate Swaps Certain of the Fund’s equity joint ventures, consolidated joint ventures and wholly owned entities entered into interest rate swap transactions with unrelated major financial institutions. The Fund uses interest rate swaps (“Swaps”) in order to reduce the effect of interest rate fluctuations or interest rate risk of certain real estate investments’ interest expense on variable rate debt. The Fund has recorded the fair values of the interest rate swaps in “Real estate partnerships” for equity joint ventures, “Interest Rate Swaps” for consolidated joint ventures and wholly owned entities, and “Forward contracts” for forward contracts arrangements for which the underlying project has achieved substantial completion, on the Consolidated Statements of Assets and Liabilities. The resulting unrealized gain (loss) on the equity ventures and forward contracts is included in the Consolidated Statements of Operations in “Change in unrealized gain (loss) on real estate investments”. The resulting unrealized gain (loss) on consolidated



NOTE 4: Interest Rate Swaps (continued) joint ventures and wholly owned entities is included in the Consolidated Statements of Operations in “Change in unrealized gain (loss) on interest rate swaps” and “Amounts attributable to noncontrolling interest.” The Fund’s swaps are collateralized by the portfolio assets attributable to the loan. NOTE 5: Portfolio Level Debt Portfolio level debt includes notes payable and the line of credit as summarized below (in 000’s):

6/30/10 Total Credit Facility

Commitment

6/30/10 Estimated Fair

Value

6/30/10 Principal Balance

Outstanding3/31/10 Estimated

Fair Value Interest RateMaturity

Date Terms 1

Wells Fargo Revolving Credit 410,000$ -$ -$ -$ Libor + 3.25% 2010 I, RMetlife Term Loan 100,000 100,000 100,000 100,000 5.34% 2011 I, RMetlife Revolving Credit 200,000 - - - Libor + 3.65% 2011 I, RTotal portfolio level debt 710,000$ 100,000$ 100,000$ 100,000$

1 Loan Terms PP = Prepayment penalties applicable to loan, I = Interest only, R = Recourse debt

On March 30, 2009, PRISA signed an amendment with Metlife to amend the maximum limits for the Outstanding Indebtedness Ratio, as defined and the Secured Debt Leverage Ratio, as defined. These limits were amended from 35% and 30% to 50% and 45%, respectively. On September 11, 2009, PRISA signed another amendment with Metlife to amend the maximum limits for the Secured Debt Leverage Ratio, as defined from 45% to 50%. As of June 30, 2010 and March 31, 2010, the Outstanding Indebtedness Ratio was 38.2% and 41.7% respectively and the Secured Debt Leverage Ratio was 38.2% and 41.7%, respectively. As of June 30, 2010, PRISA's interest is LIBOR plus 365 basis points depending on the Outstanding Indebtedness Ratio and the annual facility fee is 25 basis points per year for the unused portion. The interest rate of the Metlife Term Loan remains at 5.3%. As of June 30, 2010, seven wholly-owned properties, with an estimated fair value of $704.8 million, remain in the collateral pool. On June 30, 2009, PRISA signed a third amendment with Wells Fargo (previously Wachovia) to permanently amend the maximum limits for the Outstanding Indebtedness Ratio, as defined, and the Secured Debt Leverage Ratio, as defined. These limits were amended from 35% and 30% to 50% and 45%, respectively. As of June 30, 2010 and March 31, 2010, under the Wells Fargo credit line, the Outstanding Indebtedness Ratio was 38.2% and 41.7%, respectively, and the Secured Debt Leverage Ratio was 37.4% and 40.8%, respectively. PRISA's interest rate is LIBOR plus 325 basis points and the annual facility fee ranges from 30-40 basis points depending on the Outstanding Indebtedness Ratio. As of June 30, 2010, twelve wholly-owned properties, with an estimated fair value of $629.8 million, remain in the collateral pool.



NOTE 6: Management Fee On a quarterly basis, the Prudential Insurance Company of America (“Prudential”), a wholly owned subsidiary of Prudential Financial Inc. (“PFI”), charges a fee based on the individual contract-holder’s share (as contractually defined) of the “Determined Cost of PRISA Assets”, “Operating Cash Flow”, and “Cash and Cash Equivalents”. These management fee variables for the quarters ended June 30, 2010 and March 31, 2010 are as follows:

June 30, 2010 March 31, 2010"Determined Cost of PRISA Assets" 10,210,905,446$ 10,172,282,751$

"Operating Cash Flow" 90,519,951 98,365,869 "Cash and Cash Equivalents" - 60,402,713

Management fees are collected by cancellation of PRISA units or by direct payment to Prudential at the contract-holders’ discretion. For the three months ended June 30, 2010 and March 31, 2010, fees paid directly to Prudential totaled $7,213,210 and $7,365,318, respectively. Such fees are reflected as non-cash contributions and management fees expense in the accompanying financial statements. The aggregate management fees deducted from the account and directly billed for the three months ended June 30, 2010 and March 31, 2010 were $20,152,721 and $20,579,955, respectively. NOTE 7: Forward Contract and Purchase Commitment Obligations Forward Contract Obligations: At June 30, 2010, PRISA had the following forward contract obligations:

ForwardContract Expected

Obligation Acquisition(in 000's) Date Status

Market Station 45,197 July 2010 substantially completeThe Village at Allen 168,969 July 2010 waivedBaltimore Crossroads Area 8 Bldg 1 5,930 August 2010 waivedBaltimore Crossroads Area 8 Bldg 2 7,683 August 2010 waivedLiberty & Union Industrial Park 19,903 August 2010 substantially complete3333 Weslayan 74,422 August 2010 substantially completeGangi Apartments 35,075 September 2010 substantially completeI-20 Distribution 24,442 May 2011 waived

381,621$

Purchase Commitments: Prudential (on behalf of PRISA) has entered into purchase commitments which include commitments to purchase real estate, invest in future real estate partnerships, and/or fund additional expenditures on



NOTE 7: Forward Contract and Purchase Commitment Obligations (continued) Purchase Commitments: (continued) previously acquired real estate investments. Certain purchases of real estate are contingent on a developer building the real estate according to plans and specifications outlined in the pre-sale agreement or the property achieving a certain level of leasing. Management anticipates approximately $239.4 million of these purchase commitments will become payable in 2010. As of June 30, 2010, PRISA had the following outstanding purchase commitments:

CommitmentsProperty Type (in 000's)

Retail 222,965$ Industrial 139,324 Office 100,000 Hotel 56,052 Residential 48,655

Total 566,996$

NOTE 8: Commitments and Contingencies PRISA’s contract states that contract-holder withdrawal requests will be scheduled for payment on the next valuation date which is at least three months after receipt of a written request for withdrawal (last business day of quarter end). As of June 30, 2010, PRISA had received approximately $1,055.5 million of withdrawal requests, which, in accordance with PRISA’s contract provisions, would be scheduled for payment on future valuation dates at management’s discretion based on cash available to meet withdrawal requests. In the event that total withdrawal requests exceed the total cash available to honor such requests, available cash will be pro-rated among those contract-holders eligible for withdrawals. There were various legal actions relating to the properties in PRISA in the ordinary course of business. In the opinion of Prudential’s management, the outcome of such matters will not have a material effect on PRISA’s financial condition or results of operations. Prudential (on behalf of PRISA) has entered into guarantees of approximately $460.3 million related to loans on certain equity partnerships. Prudential may issue these guarantees to obtain financing agreements and/or preferred terms related to its investments. These guarantees include mortgage, construction and land loans and may cover payments of principal and/or interest. These guarantees have fixed termination dates and become liabilities of Prudential in the event the borrower is unable to meet the obligations specified in the guarantee agreement. Prudential may also be liable under certain of these guarantees in the event of fraud, misappropriation, environmental liabilities, and certain other matters involving the borrower. PRISA would be liable to Prudential for any losses it incurs as a result of these guarantees.



NOTE 9: Risks A. Valuation Risk Recent disruptions in the global capital, credit and real estate markets have led to, among other things, a decline in the volume of transaction activity, in the fair value of many real estate and real estate related investments, and a contraction in short-term and long-term debt and equity funding sources. The decline in liquidity and pricesof real estate and real estate related investments, as well as the availability of observable transaction data and inputs, may have made it more difficult to determine the fair value of such investments. As a result, these estimated fair values may vary significantly from the prices at which the real estate investments would be sold, since market prices of real estate investments can only be determined by negotiation between a willing buyer and seller. These differences could be material to the financial statements. Although the estimated fair values represent subjective estimates, management believes that these estimated fair values are reasonable approximations of market prices and the aggregate estimated value of investments in real estate is fairly presented as of June 30, 2010 and March 31, 2010. B. Financing, Covenant, and Repayment Risks In the normal course of business, PRISA enters into loan agreements with certain lenders to finance its real estate investment transactions. Unfavorable economic conditions could increase related borrowing costs, limit access to the capital markets or result in a decision by lenders not to extend credit to PRISA. There is no guarantee that PRISA’s borrowing arrangements or ability to obtain leverage will continue to be available, or if available, will be available on terms and conditions acceptable to PRISA. Further, these loan agreements contain, among other conditions, events of default and various covenants and representations. In the normal course of business, PRISA may be in the process of renegotiating terms for loans outstanding. At June 30, 2010, PRISA had no outstanding matured loans. A decline in market value of PRISA’s assets may have also particular adverse consequences in instances where PRISA borrowed money based on the fair value of specific assets. A decrease in market value of these assets may result in the lender requiring PRISA to post additional collateral or otherwise repay these loans. In the event PRISA’s current portfolio and investment obligations are not refinanced or extended when they become due and/or PRISA is required to repay such borrowings and obligations, management anticipates that the repayment of these obligations, as well as PRISA’s forward contract and purchase commitments, will be provided by operating cash flow, deposits from clients, new debt refinancing, and real estate investment sales. If PRISA is required to sell investments quickly in order to meet such obligations and commitments, then the Fund may realize less than the value at which it previously recorded those investments. . NOTE 10: Other Related Party Transactions At June 30, 2010 and March 31, 2010, the Prudential Merged Retirement Plan owned units valued at $37,230,638 and $35,098,245, respectively, of PRISA’s net assets. At June 30, 2010 and March 31, 2010, Prudential Retirement Real Estate Fund (“PRREF”) owned units valued at $59,903,012 and $47,458,057, respectively, of PRISA’s net assets. PRREF, Prudential Retirement Real Estate Fund, is an open-end commingled real estate fund that is structured as an insurance company separate account -of the Prudential Retirement Insurance and Annuity Company, and is managed by PREI ®.



NOTE 11: Unit Values and Units Outstanding The unit value and units outstanding for the contract-holders at June 30, 2010 and March 31, 2010 are as follows:

June 30, 2010 March 31, 2010

Unit value 23,885.87$ 22,138.88$

Units outstanding 305,097.42 301,308.49



NOTE 12: Financial Highlights

June 30, 2010 March 31, 2010

Per Share(Unit) Operating Performance:

Net Asset Value attributable to contract holders, beginning of period $ 22,138.88 $ 22,183.76

Income from Investment Operations:

Investment income attributable to contract holders, before management fee 410.66 441.14

Net realized and unrealized gain (loss) on investments attributable to contract holders 1,336.33 (486.02)

Total from investment operations, before management fees 1,746.99 (44.88)

Management fee (66.88) (68.78)

Total from investment operations attributable to contract holders 1,680.11 (113.66)

Deemed contributions and cancellation of units for management fee 66.88 68.78

Net Asset Value attributable to contract holders, end of period $ 23,885.87 $ 22,138.88

Total return, before management fee (a): 7.89% -0.20%

Ratios/Supplemental Data:

Ratios to average net assets for the period ended (b):

Total Portfolio Level Expenses 0.36% 0.31%

Net investment Income, attributable to contract holders, before fees 1.85% 1.99%

Net investment Income, attributable to contract holders, after fees 1.55% 1.68%

(a) Total return, before management fees is calculated by geometrically linking quarterly returns which are calculated using the formula below:

Investment Income before Management Fees + Net Realized and Unrealized Gains/Losses Beg. Net Asset Value + Time Weighted Contributions - Time Weighted Distributions

(b) Average net assets are based on beginning of quarter net assets.



Prudential Real Estate InvestorsParsippany, New Jersey

KevinR.Smith,ManagingDirector,PRISASeniorPortfolioManager 973-683-1730

CatherineMarcus,ManagingDirector,PRISAPortfolioManager 973-683-1601

JoannaMulford,Principal,PRISAAssistantPortfolioManager 973-683-1743

LesLockwood,ManagingDirector,GlobalRealEstateMarketing 973-683-1713

EllenKendall,ManagingDirector,GlobalProductDevelopmentandClientServices 973-683-1696

JamesMurphy,Principal,MarketingandClientServices 973-683-1716

KevinP.Smith,Principal,MarketingandClientServices 973-683-1658

PeterGreen,Principal,MarketingandClientServices 973-734-1496

WilliamAnderson,Principal,PRISAAssetManagement 973-683-1614

ScottDalrymple,VicePresident,PRISAAssetManagementNortheast 973-734-1488

MeghanMurray,Director,PRISAPortfolioManagement 973-734-1461

EricSabol,ClientServiceRepresentative,MarketingandClientServices 973-683-1776

San Francisco

MarkOczkus,Principal,MarketingandClientServices 415-291-5019

KeyshaBailey,VicePresident,PRISAAssetManagementWest 415-291-5067

NicoleStagnaro,Director,PRISAAssetManagementWest 415-291-5036

Atlanta

ThomasSmith,VicePresident,PRISAAssetManagement 770-395-8655

MarthaE.Burrows,Director,PRISAAssetManagement 770-481-3561

Chicago

LawrenceFrank,Principal,PRISAAssetManagement 312-861-4811

MarkVandeHey,VicePresident,PRISAAssetManagementMidwest 312-861-4829

MichaelMcMains,Director,PRISAAssetManagementMidwest 312-228-6555

Prudential Real Estate Investors8 Campus Drive

Parsippany, NJ 07054

prei - franklin regional retirement ()decreasedby 34 bps and 23 bps, respectively. prisa’s central...

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