A prepositional phrase refers to the phrase which begins with a preposition and ends with the 'objects' of the prepositions that are nouns, gerund, clause or pronoun.
The pattern of the prepositional phrase follows by the object of the preposition having one or more modifiers.
Therefore, in the above sentence, the prepositional phrase is C. down the street.
'down' is a preposition followed by the modifier 'the street' as a noun.