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

FORM 10-Q [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended ~~September~~June 30, ~~2003~~2004 or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ~~__________~~___________ to ~~__________~~___________. Commission File No. 33-98136 CPG PARTNERS, L.P. (Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction
of incorporation or organization)

22-3258100
(I.R.S. Employer
Identification No.)

103 Eisenhower Parkway, Roseland, New Jersey 07068
(Address of principal executive offices - zip code)

(973) 228-6111
(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days Yes X No __.

Indicate by check mark whether the registrant is an accelerated filer. ~~Yes___~~ Yes No X

There are no outstanding shares of Common Stock or voting securities.

CPG Partners, L.P. ~~Index~~

Index

Part I. Financial Information

Item 1. Financial Statements (Unaudited)

Page

~~Condensed~~ Consolidated Balance Sheets as of ~~September~~June 30, ~~2003~~2004, and December 31, ~~2002~~2003 32

~~Condensed~~ Consolidated Statements of Income for the three and ~~nine~~six months ended ~~September~~June 30, ~~2003~~2004, and ~~2002~~2003 43

~~Condensed~~ Consolidated Statements of Cash Flows for the ~~nine~~six months ended ~~September~~June 30, ~~2003~~2004, and ~~2002~~2003 54

Notes to ~~Condensed~~ Consolidated Financial Statements 65

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

Item 3. Quantitative and Qualitative Disclosures about Market Risk 3128

Item 4. Controls and Procedures 3128

Part II. Other Information

Item 61. ~~Exhibits~~Legal ~~and~~Proceedings ~~Reports on Form 8-K 32~~29

~~Signatures~~Item 336. Exhibits and Reports on Form 8-K 29

~~CPG~~Signatures ~~Partners, L.P. Condensed Consolidated Balance Sheets (In thousands, except per unit data)~~30

Assets: Rental properties: Land.................................................................. Depreciable property.................................................. Total rental property...................................................... Accumulated depreciation................................................... Rental properties, net..................................................... Cash and cash equivalents.................................................. Restricted cash-escrows.................................................... Tenant accounts receivable (net of allowance for doubtful accounts of $2,231 in 2003 and $2,593 in 2002)....................... Deferred rent receivable................................................... Property held for sale..................................................... Investments in unconsolidated affiliates................................... Notes receivable-related parties........................................... Deferred costs, net........................................................ Other assets............................................................... Total assets............................................................... Liabilities and partners' capital: Liabilities: Unsecured bank debt................................................... Unsecured notes....................................................... Mortgage debt......................................................... Construction payables................................................. Accounts payable and accrued expenses................................. Accrued distribution payable.......................................... Other liabilities..................................................... Total liabilities.......................................................... Commitments and contingencies Partners~~' Capital: General partner units outstanding~~, 43,481 ~~Limited~~Consolidated ~~Preferred partner units outstanding, 1,300 Officer loan .............................................................. Accumulated~~In ~~other Total~~ ~~partners'~~per ~~data) September~~CPG 30, December 31, 2003 2002 ---------------- ---------------- (Unaudited) $ 300,559 $ 266,461 1,777,573 1,570,713 ---------------- ------------------- 2,078,132 1,837,174 (329,439) (284,239) ---------------- ------------------- 1,748,693 1,552,935 29,355 22,551 5,716 3,455 3,979 7,762 23,381 18,778 3,500 - 86,656 47,997 2,168 2,746 14,068 16,706 36,040 30,100 ---------------- ------------------- $ 1,953,556 $ 1,703,030 ================ =================== $ 183,035 $ 103,035 621,694 621,330 387,786 306,455 7,625 8,046 49,355 43,570 28,470 4,927 20,332 20,393 ---------------- ------------------- 1,298,297 1,107,756 in 2003 and 41,485 in 2002L.P.~~..... 521,768 462,127~~ ~~partners'~~Balance ~~units outstanding 7,383 in 2003 and 7,563 in 2002........ 75,317 77,094~~Sheets in 2003 and 2002 ............... 63,315 63,315 - (~~488) comprehensive loss ...................................... (5~~thousands,141) (6,774) ---------------- ------------------- re-add">except ~~capital.................................................... 655,259 595,274 ---------------- ------------------- ">liabilities~~unit ~~and partners' capital.................................... $1,953,556 $1,703,030 ================ ===================~~


                                                                                  June 30,          December 31,
                                                                                    2004                2003
                                                                                --------------   -----------------
Assets:                                                                           (Unaudited)
Rental properties:
     Land..................................................................      $   304,935            $  299,176
     Depreciable property..................................................        1,795,244             1,773,607
                                                                                --------------       ----------------
Total rental property......................................................        2,100,179             2,072,783
Accumulated depreciation...................................................         (364,074)             (332,406)
                                                                                --------------       ----------------
Rental properties, net.....................................................        1,736,105             1,740,377
Cash and cash equivalents..................................................           18,046                18,476
Restricted cash-escrows....................................................            7,089                 6,456
Tenant accounts receivable (net of allowance for doubtful
  accounts of $2,746 in 2004 and $1,615 in 2003)...........................            3,430                11,631
Deferred rent receivable...................................................           27,482                25,018
Property held for sale.....................................................            3,500                 3,500
Investments in unconsolidated affiliates...................................          130,058               107,068
Notes receivable-related parties...........................................           14,103                 2,151
Deferred costs, net........................................................           20,104                22,989
Other assets...............................................................           36,588                32,748
                                                                                --------------       ----------------
Total assets...............................................................       $1,996,505            $1,970,414
                                                                                ==============       ================

Liabilities and partners' capital:
Liabilities:
     Unsecured bank debt...................................................      $   161,045            $  204,035
     Unsecured notes.......................................................          721,583               621,803
     Mortgage debt.........................................................          320,323               385,634
     Construction payables.................................................            6,598                 7,668
     Accounts payable and accrued expenses.................................           60,948                59,738
     Accrued dividend and distribution payable.............................           31,980                 5,131
     Other liabilities.....................................................           21,158                20,871
                                                                                --------------       ----------------
Total liabilities..........................................................        1,323,635             1,304,880
                                                                                --------------       ----------------

Commitments and contingencies

Partners' capital:
     General partner units outstanding, 44,153 in 2004
       and 43,592 in 2003..................................................          532,024               524,295
     Limited partners' units outstanding, 7,203 in 2004
       and 7,356 in 2003...................................................           80,120                81,934
     Preferred partner units outstanding, 1,300 in 2004 and 2003...........           63,315                63,315
     Accumulated other comprehensive loss .................................           (2,589)               (4,010)
                                                                               ---------------       ----------------
Total partners' capital....................................................          672,870               665,534
                                                                               ---------------       ----------------
Total liabilities and partners' capital....................................       $1,996,505            $1,970,414
                                                                               ===============       ================

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

CPG Partners, L.P. ~~Condensed~~ Consolidated Statements of Income ~~for the~~ Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2003,~~2004 and ~~2002~~2003 (Unaudited) (In thousands, except per unit data)

                                                                                                                              Three Months               NineSix Months
                                                                                                                           Ended SeptemberJune 30,                      Ended SeptemberJune 30,
                                                                                                                           2004        2003          2002          2004        2003          2002
                                                                                                                 --------    ------ --      --------   --- ------------- -------------
Revenues:
   Base rent..........................................              $ 6366,850       892    $46 59,490       461      $183132,086      536    $127118,349620
   Percentage rent....................................             6,705               5,368         15708       4,831915        1210,836514       9,036
   Expense reimbursements.............................                 21,741      20,108434        16,048         59,388        42,975470      38,987
   Other income.......................................             1,919               2,980          5420       1,197799         84,171343       3,248
                                                                                                                 --------    ------ --      --------   --- ------------- -------------
Total revenues........................................            92     96,582        70761      86,886        263,502609       191189,331863     169,891
                                                                                                                 --------    ------ --      --------   --- ------------- -------------

Expenses:
   Operating and maintenance..........................                 25,738      24,664097        1950,203         71839      46,779        52,987618
   Depreciation and amortization......................            18     17,056        15938      17,002         52,880124        4235,097754      34,407
   General and administrative.........................                   4,131       2,560468         1,557          7,229         721       4,995670
   Other..............................................             1        647       2,324           985          4,353444         3,092083       4,639
                                                                                                                 --------    ------ --      --------   --- ------------- -------------
Total expenses........................................                 48,454      46,604133        3697,747        136397      90,241       103,171334
                                                                                                                 --------    ------ --      --------   --- ------------- -------------

Income before unconsolidated investments, interest
   interest expense and discontinued 
   operations...................            45,978        34,139        127,261        88,160

Income from unconsolidated investments................             3.     48,125         2307      40,032          7476        92,071         8466      79,784557
LossIncome from Chelseaunconsolidated Interactiveinvestments.........................              (677)       (3      5,790)        (305       2,419)      (495        10,266)347       3,946
Interest expense........................................             (1719,743287)          (1316,098694)             (5037,930937)          (33,691469)
Gain on sale of unconsolidated investments............                                                                     -        10,911              -        10,911
                                                             ------    --------       --------   ----- ------------- -------------
Income from continuing operations....................             30     34,683        30325      26,194         80,983277        6364,898876      50,034

Income from discontinued operations...................               (23)          331            393           815-         381             -         682
Gain on sale of discontinued operations...............               908             -          5-       4,625717             -       4,717
                                                                                                                 --------    ------ --      --------   --- ------------- -------------
Net income............................................                 34,325      31,568375        30,525         87,001        64,713876      55,433

Preferred unit requirement............................                 (2,296)            (2,297296)               (64,888592)            (64,974592)
                                                                                                                 --------    ------ --      --------   --- ------------- -------------

Net income available to common unitholders.......                  $ 32,029    $ 29,272079      $ 2860,228        284   $80  50,113       $57,739841
                                                                                                                 ========    ====== ==      ========   === ============= =============

Net income to   common unitholders:
General partner.......................................              $ 2527,006      536     $ 24,223        705       $6851,124       744     $4943,518118
Limited partners......................................                   4,266         493       4,005374         11,989         8,221540       7,723
                                                                                                                 --------    ------ --      --------   --- ------------- -------------
Total.................................................              $ 2932,272      029     $ 2829,228        079       $8060,113       284     $5750,739841
                                                                                                                 ========    ====== ==      ========   === ============= =============

Net income per common unit:
General partner (including $0.0211 and $0.12 net income
   from discontinued 
   operations for the three and
   nine six months ended
   June September 30, 2003) .............            ...................      $ 0.58      62       $   0.6459         $ 1.61        18      $ 1.3103
Limited partners (including $0.0211 and $0.12  net
   income from discontinued 
   operations for the three
    and ninesix months ended
   June September 30, 2003)..........            ......................      $ 0.58      62       $   0.6459         $ 1.61        18      $ 1.3103

Weighted average units outstanding:
General partner.......................................            43     44,304        37,950         143      42,302041        3743,799945      41,801
Limited partners......................................                   7,389         6,274          203       7,464442         67,285258       7,501
                                                                                                                 --------    ------ --      --------   --- ------------- -------------
Total                                                             50............................................     51,693        44,224         346      49,766483        4451,084203      49,302
                                                    ========    ========      ========   =========

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

CPG Partners, L.P. ~~Condensed~~ Consolidated Statements of Cash Flows ~~for~~Six ~~the Nine~~ Months Ended ~~September~~June 30, ~~2003~~2004 and ~~2002~~2003 (Unaudited) (In thousands)

                                                                                    2003                                                                               2004             20022003
                                                                                                                                                          ------------     --   -------------
Cash flows from operating activities

Net income...............................................................                $87  64,001          876         $6455,713433
Adjustments to reconcile net income to 
  net cash
    provided by operating activities:
       Depreciation and amortization..........................................          5235,981           42754          34,229901
       Equity- in- earnings of unconsolidated investments in
                 in excess of distributions received...................................          (34,047695)                   (21,148240)
       Loss from Chelsea Interactive..........................................               -           10,266
  Loss on interest rate swap..................................................               -             514                -
       Gain on sale of unconsolidated investment..............................               -          (10,911)
  Gain on sale of discontinued operations................................          (5,625)               -
  Proceeds from non-compete receivable...................................               -                      (4,300
  Amortization of non-compete revenue....................................               -           (3,852717)
       Additions to deferred lease costs......................................            (890954)                       (603439)
       Other operating activities.............................................                     (1,597             081)           (641116)
       Changes in assets and liabilities:
     Straight-line rentsrent.................................................          (53,485065)                   (23,441597)
     Due to (from) affiliates.................................................           5,111            (676340)            (806)
     Other assets........................................................          (           1,416)730           38,118135
     Deferred incentive compensation payout..............................               -          (14,401)
     Accounts payable and accruedother expensesliabilities...............................           45,969           (4,747)708             134
                                                                                                                                                        ------------     --        -------------
Net cash provided by operating activities................................         129103,923           84384          88,076668
                                                                                                                                                        ------------     --        -------------

Cash flows from investing activities
Additions to rental properties...........................................                 (16527,631856)        (13365,502381)
Net proceeds from sale of centerscenter........................................          12           1,334            6543           7,873198
Additions to investments in unconsolidated affiliates....................         (3321,954370)                 (2622,098451)
Proceeds from sale of investments in affiliates...........................              -           11,293
Additions to deferred development costs..................................            (737)            (718)
Payments from related parties.............................................          1           3,066            1,085192              18
LoansAdditions to relateddeferred partiesdevelopment costs.................................................               -             (55079)           (321)
Other investing activities...............................................                                                                                       -              337
                                                                                ------------     -        -------------
Net cash used in investing activities....................................                 (18644,922570)        (14180,280937)
                                                                                                                                                        ------------     --        -------------

Cash flows from financing activities
Debt proceeds............................................................         100141,000          233,324284               -
RepaymentDebt of debtrepayments........................................................                 (29167,906173)        (13227,400107)
Net proceeds from sale of the Company's common stock.....................           7,205          5853,360            5,089461
Distributions............................................................         (6339,953317)                 (4834,851632)
Redemption of preferred units............................................               -           (9,654)
Additions to deferred financing costs....................................            (698)          (1,215243)           (698)
                                                                                                                                                        ------------     --        -------------
Net cash providedused byin financing activities................................          63         (59,803           46244)         (8,293976)
                                                                                                                                                        ------------     --        -------------

Net increase (decrease) in cash and cash equivalents.....................           6,804          .......            (10430)         (1,911245)
Cash and cash equivalents, beginning of period...........................          18,476          22,551           24,604
                                                                                                                                                        ------------     --        -------------
Cash and cash equivalents, end of period.................................               $29   18,355          046         $1321,693306
                                                                                                                                                        ============     ==        =============
  Non-cash
Supplemental investing activitiesinformation:
     Additions to rental properties on consolidation of properties  previously
     held as investments in unconsolidated affiliates                                   -         $275,960
                                                                                ============     ============
  Non-cash   financing   activities:
       Assumption of mortgage loandebt payable on consolidation of properties
     previously held as investments in unconsolidated affiliates                        .......................................               -         $22864,026164
                                                                                                                                                        ============     ==        ==========
     Assumption of mortgage loans
     payable                                                                      $89,490                -
                                                                                ============     ============

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

CPG Partners, L.P. Notes to ~~Condensed~~ Consolidated Financial Statements (Unaudited)

1. Organization and Basis of Presentation

CPG Partners, L.P. (the “Operating Partnership” or “OP”) which commenced operations on November 2, 1993 specializes in owning, developing, leasing, marketing and managing upscale and fashion-oriented manufacturers’ outlet centers. As of September 30, 2003, the OP wholly or partially owned 61 centers in 31 states and Japan containing approximately 16.1 million square feet of gross leasable area (“GLA”). The OP’s portfolio is comprised of 30 Premium Outlet centers containing 10.3 million square feet of GLA (the “Premium Properties”) and 31 other retail centers containing approximately 5.8 million square feet of GLA (“Other Properties”) (collectively the “Properties”). The OP’s Premium Properties generated approximately 76% and 86% of the OP’s retail real estate net operating income for the nine months ended September 30, 2003, and 2002, respectively. The Premium Properties generally are located near metropolitan areas including New York City, Los Angeles, Boston, Chicago, Washington, D.C., San Francisco, Sacramento, Atlanta, Dallas, Tokyo and Osaka, Japan. Some Premium Properties are also located within 20 miles of major tourist destinations including Palm Springs, the Napa Valley, Orlando, Las Vegas and Honolulu. Organization

~~The~~CPG ~~sole~~Partners, ~~general~~L.P., ~~partner~~a inDelaware limited partnership, (the "Operating Partnership" or "OP") is 86% owned and managed by its sole general partner, Chelsea Property Group, Inc. (the “"Company”"), is a self-administered and self-managed ~~Real~~real ~~Estate Investment~~estate ~~Trust~~investment trust ("REIT"). The OP specializes in owning, developing, leasing, marketing and managing upscale and fashion-oriented manufacturers' outlet centers. As of June 30, 2004, the OP wholly or partially-owned 60 centers in 31 states and Japan containing approximately 16.6 million square feet of gross leasable area ("GLA"); the OP's portfolio comprised 40 Domestic and International Outlet centers containing 13.9 million square feet of GLA (the "Outlets") and 20 other centers containing approximately 2.7 million square feet of GLA ("Other Retail") (collectively the "Properties"). The OP's Outlets generated approximately 97% and 96% of the OP's real estate net operating income for the six months ended June 30, 2004, and 2003, respectively. The Outlets generally are located near metropolitan areas including New York City, Los Angeles, Chicago, Boston, Washington, D.C., San Francisco, Sacramento, Atlanta, Dallas, and Tokyo, Osaka and Fukuoka, Japan. Some Outlets are also located within 20 miles of major tourist destinations including Palm Springs, Napa Valley, Orlando, Las Vegas and Honolulu.

The financial statements contain the accounts of the Operating Partnership and its majority owned subsidiaries. Such subsidiaries represent partnerships in which the OP has greater than a 50% ownership interest and the ability to maintain operational control. All significant intercompany transactions and accounts have been eliminated in consolidation.

Common ownership of the OP as of ~~September~~June 30, ~~2003~~2004, was approximately as follows:

                                                                               Number of units                % of total units
                                   --------------------     ------------------
            
        General Partner               43                      44,481153,000                 8586.50%
                    Limited Partners                                     7,383203,000                 14.50%
                                                                          -------------------     --    --------------------
                    Total                         50                                51,864356,000                100.0%

The accompanying unaudited ~~condensed~~ consolidated financial ~~statements~~ statements have been prepared in accordance with accounting principles generally ~~accepted~~ accepted in the United States for interim financial information and with the ~~instructions~~ instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by accounting principles ~~generally~~ generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for fair presentation have been included. Operating results for the ~~nine-month~~six ~~period~~months ended ~~September~~June 30, ~~2003~~2004, are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2003~~2004. The balance sheet at December 31, ~~2002~~2003 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. These financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in the ~~OP’~~Company's Annual Report on Form 10-K for the year ended December 31, ~~2002~~2003.

Certain amounts in the prior year financial statements have been reclassified to conform to current year presentation.

CPG Partners, L.P. Notes to ~~Condensed~~ Consolidated Financial Statements (Unaudited)

12. ~~Organization~~Mergers, Acquisitions and ~~Basis of Presentation (continued)~~Dispositions

In August 2001, the FASB issued Statement of Financial Accounting Standards No. 143, “Accounting for Asset Retirement Obligations” (“SFAS 143”) which was effective January 1, 2003. SFAS 143 requires the recording of the fair value of a liability for an asset retirement obligation in the period in which it is incurred. See note 3 to financial statements for discussion related to the estimated future costs to be incurred in connection with the future operations of Chelsea Interactive.Mergers

InOn ~~November~~June ~~2002~~21, ~~the~~2004, ~~FASB~~Simon ~~issued~~Property ~~Interpretation~~Group, NoInc. ~~45, Guarantor’s~~and ~~Accounting~~the ~~and~~Company announced ~~Disclosure~~a ~~Requirements~~merger ~~for~~agreement ~~Guarantees, Including~~whereby ~~Indirect~~Simon ~~Guarantees~~will ofacquire ~~Indebtedness~~all of ~~Others~~the ~~(“FIN~~outstanding ~~45”).~~common ~~FIN~~stock 45and ~~requires~~operating ~~certain~~partnership ~~guarantees~~units ~~to be recorded at fair value, instead~~ of ~~recording~~the aCompany ~~liability~~in ~~only when~~ a ~~loss is probable and reasonably~~transaction ~~estimatable,~~valued asat ~~those~~approximately ~~terms~~$3.5 ~~are~~billion ~~defined~~ in ~~FASB~~cash ~~Statement~~and Nostock. 5,Subject ~~Accounting~~to obtaining ~~for~~applicable ~~Contingencies.~~consents, ~~FIN~~Simon 45will ~~also~~assume ~~requires~~the aCompany's ~~guarantor~~existing todebt ~~make~~and ~~significant new~~preferred ~~disclosures~~stock, ~~even~~totaling ~~when~~approximately ~~the~~$1.3 ~~likelihood~~billion ofat ~~making~~June ~~any~~30, ~~payments~~2004 ~~under~~and the ~~guarantee~~Operating isPartnership ~~remote.~~will ~~The~~redeem ~~disclosure~~the ~~requirements~~outstanding ofSeries ~~FIN~~B 45Cumulative ~~are~~Redeemable ~~effective for financial~~Preferred ~~statements of interim or annual periods ending after December 15, 2002~~Units. The ~~OP adopted the disclosure provisions of FIN 45 effective December 31~~merger, ~~2002.~~subject ~~FIN 45’s~~to ~~initial~~regulatory ~~recognition~~ and ~~initial~~shareholder ~~measurement~~approval, ~~provisions are applicable~~is onanticipated ~~a prospective basis~~ to ~~guarantees~~close ~~issued~~during orthe ~~modified~~fourth ~~after~~quarter ~~December~~of ~~31, 2002~~2004.

InAccording ~~January~~to ~~2003,~~ the ~~FASB~~terms ~~issued~~of ~~Interpretation~~the ~~No.~~merger 46agreement, ~~Consolidation~~ ofSimon ~~Variable~~will ~~Interest~~pay consideration ~~Entities~~of ~~(“FIN 46”)~~$66.00 ~~FIN~~per ~~46 clarifies~~share ~~the~~for ~~application~~all of ~~existing~~the ~~accounting~~Company's ~~pronouncements~~outstanding ~~to certain~~common ~~entities~~shares inand ~~which~~units. ~~equity~~The ~~investors~~consideration doto ~~not have~~ the ~~characteristics~~Company's ofcommon ashareholders ~~controlling~~includes ~~financial~~a ~~interest~~payment orof do$36.00 ~~not~~per ~~have~~share ~~sufficient~~in ~~equity~~cash, at$15.00 ~~risk~~of ~~for~~Simon ~~the entity~~common ~~to finance its activities without additional subordinated financial~~stock ~~support~~based ~~from~~on ~~other~~a ~~parties.~~fixed ~~The~~conversion ~~provisions~~ratio of ~~FIN~~0.2936 46per ~~are~~Company ~~effective~~common ~~for~~share ~~all~~and $15.00 ~~variable~~of ~~interest~~a ~~entities~~new ~~created~~series ~~after~~of ~~January~~Simon ~~31,~~convertible ~~2003~~preferred stock. The OPnew ~~has~~series ~~not~~of ~~created~~convertible ~~any~~preferred ~~variable~~shares ~~interest~~yield ~~entities~~6%, ~~subsequent~~have toa ~~January~~liquidation ~~31,~~preference ~~2003.~~of ~~The~~$50.00 ~~provisions~~per ofshare, ~~FIN~~and 46 are ~~effective~~convertible ~~beginning~~to inSimon ~~the~~common ~~fourth~~stock ~~quarter~~at ~~for~~the ~~variable interest~~option ~~entities~~of ~~created before January 31~~the holder, ~~2003.~~upon ~~The~~the OPachievement isof ~~currently evaluating~~certain ~~whether~~price ittargets ~~has~~for ~~any~~the ~~variable~~Simon ~~interest entities~~common stock.

~~Notes~~OP common unitholders will receive consideration equally split between Simon common units and convertible preferred units with substantially the same economic terms as the Simon convertible preferred stock except that the holder will have the option to ~~Condensed~~convert ~~Consolidated~~the ~~Financial~~preferred ~~Statements~~units into common units ~~(Unaudited)~~and/or convertible preferred stock. CPG Partners, L.P., will become a wholly owned subsidiary of Simon Property Group, L.P.

2In conjunction with the merger, a class-action suit has been filed against the Company and its board of directors. ~~Acquisitions~~The Company believes that all allegations contained in the complaint are without merit and ~~Dispositions~~intends to vigorously defend the action.

Acquisitions

In ~~August~~May ~~2003~~2004, the OP ~~acquired~~exercised ~~Belz~~its ~~Factory~~option ~~Outlet~~to ~~World~~purchase ~~– Las Vegas (“Las Vegas”),~~ a ~~477~~290,000 square-foot ~~outlet~~shopping center located in ~~Las Vegas~~Carlsbad, ~~Nevada, for $104~~California.0 ~~million~~The ~~including~~OP ~~the~~expects ~~assumption of a $24.4 million~~to ~~8.12%~~complete ~~mortgage~~the ~~loan~~acquisition ~~due~~in ~~2012.~~the Asthird ~~part~~quarter of ~~the~~2004 ~~transaction,~~for ~~the~~a OPpurchase ~~also~~price ~~acquired~~which ~~Belz~~may ~~Factory~~be ~~Outlet~~less ~~World – Lakeland (“Lakeland”) (collectively~~than, ~~the”Belz~~ ~~Properties”),~~but ashould ~~319,000~~not ~~square-foot outlet center near Memphis~~exceed, ~~Tennessee, for an additional~~ $~~3.5~~104 million. ~~The Lakeland property is being marketed for sale. The OP is in the process of determining the purchase price allocation and is considering the fair value of the in-place leases, land and building.~~

In June 2003, the OP purchased The Crossings Factory Stores, a 390,000 square-foot outlet center located in Tannersville, Pennsylvania, for $111.3 million, including closing costs, and assumed a $60.7 million 5.85% mortgage loan due 2013. An additional $5.0 million will be due to the sellers upon the completion of a 21,000 square-foot expansion scheduled to open in late 2004, subject to permits. The OP is in the process of determining the purchase price allocation and is considering the fair value of the in-place leases, land and building.

Dispositions

InThe ~~September~~OP ~~2003,~~sold ~~the~~two OPnon-core ~~realized~~centers ain ~~gain~~April ofand ~~approximately~~May ~~$0.9~~2004: Factory ~~million~~Stores ~~from~~of ~~the~~America ~~sale~~in ofLake ~~one~~George, ofNew ~~its~~York ~~non-core~~and ~~properties~~Iowa, ~~the~~Louisiana. ~~former~~Net ~~Factory~~proceeds ~~Stores~~from ofthe ~~America~~sales atof ~~Mesa,~~the ~~Arizona~~two ~~(“Mesa~~centers ~~property”)~~were $1.6 ~~Revenues~~million and the combined net book ~~expenses~~value ~~connected~~was ~~with~~$2.5 ~~the~~million. ~~Mesa~~Accordingly, ~~property~~the ~~have~~OP ~~been~~recognized ~~reclassified~~a to$0.9 ~~discontinued~~million impairment ~~operations~~loss in the ~~period~~first ofquarter ~~sale~~2004, ~~and~~which ~~comparable~~was ~~periods~~included in ~~the~~other ~~accompanying~~expense in the accompanying financial statements.

InCPG ~~June 2003~~Partners, ~~the OP sold a 23,000 square-foot Premium Outlet center located in St~~L. ~~Helena, California for $7~~P.~~4 million, resulting in a gain~~ ofNotes ~~approximately $4.7 million. The center partially secured a mortgage note due April 2010 and $5.0 million of the sales proceeds were used~~ to ~~pay~~Consolidated ~~down~~Financial ~~the~~Statements mortgage loan. The aggregate revenues and net income of the sold property were $0.4 million and $0.2 million, respectively for the nine months ended September 30, 2003. Revenues and expenses related to the St. Helena property have been reclassified to discontinued operations in the period of sale and comparable periods in the accompanying financial statements. (Unaudited)

3. Investments in Affiliates

The OP holds ~~several non-controlling~~ interests in several domestic and international joint ventures. Non-controlling investments are accounted for under the equity method. Equity in earnings or losses of these affiliates, and related management, advisory, license, leasing and guarantee fees earned, are included in income from unconsolidated investments in the accompanying financial statements.

As of ~~September~~June 30, ~~2003~~2004, the OP’'s interests in joint ventures included a 4050% interest in ~~Chelsea~~Las ~~Japan~~Vegas ~~Co.,~~Premium ~~Ltd.~~Outlets (~~“Chelsea~~"Simon-Las ~~Japan”~~Vegas"), and a 50% interest in ~~two~~Chicago Premium ~~Outlet~~Outlets ~~centers~~("Simon-Chicago") with Simon Property Group, Inc. (“collectively "Simon”-Ventures"); a 40% interest in Chelsea Japan Co., Ltd. ("Chelsea Japan"); a 50% interest in a strategic alliance with Sordo Madaleno y Asociados and affiliates (“"Chelsea Mexico”")~~, minority~~; minority interests in various outlet centers and development projects in Europe ~~operated~~ operated by Value Retail PLC (“"Value Retail”"); and 100% of the non-voting preferred stock of Chelsea Interactive and 50% of the non-voting common stock ~~of Chelsea Interactive~~, representing 40% of the total common stock., of Chelsea Interactive.

~~Notes~~In March 2004, Chelsea Japan opened its fourth project, the 187,000 square-foot first phase of Tosu Premium Outlets located approximately 20 miles south of Fukuoka, Japan. Chelsea Japan owns and operates three other centers: Gotemba Premium Outlets, a 390,000 square-foot property located 60 miles west of Tokyo; Rinku Premium Outlets, a 250,000 square-foot property located near Osaka, scheduled to ~~Condensed~~expand ~~Consolidated~~by ~~Financial~~an ~~Statements~~additional 70,000 square ~~(Unaudited)~~feet in late 2004; and Sano Premium Outlets, a 229,000 square-foot property including a 51,000 square foot expansion that opened in July 2004. Sano is located 40 miles north of Tokyo.

In August 2002, the OP and Simon entered into a 50/50 joint venture to develop and operate Chicago Premium Outlets, a 438,000 square-foot single-phase Premium Outlet center located in Aurora, Illinois, near Chicago, which opened in May 2004. The OP is responsible for financing its 50% share of the development costs, which are expected to be approximately $45.0 million. Approximately $39.6 million had been contributed as of June 30, 2004.

In June 2002, the OP and Simon entered into a 50/50 joint venture to develop and operate Las Vegas Premium Outlets, a 435,000 square-foot single-phase outlet center located in Las Vegas, Nevada, which opened on August 1, 2003.

In May 2002, the OP entered into a 50/50 joint venture agreement with Sordo Madaleno y Asociados and affiliates to jointly develop Premium Outlet centers in Mexico. Construction on the 230,000 square-foot first phase of Punta Norte Premium Outlets commenced in July 2003; the center is scheduled to open in late 2004. The OP is responsible for financing its 50% share of project costs of approximately $15.0 million. As of June 30, 2004, the OP had contributed $12.2 million. In January 2004, an affiliate of the OP entered into a 180.0 million peso-denominated credit facility to fund its share of construction costs for the Punta Norte Premium Outlets. The credit facility is guaranteed by the Company and the OP.

The OP has minority interests ranging from 3% to 8% in several outlet centers and outlet development projects in Europe. The OP's total investment in Europe as of June 30, 2004 was $3.6 million.

On February 17, 2004, the OP announced a joint venture between Chelsea Interactive and a publicly traded third party, GSI Commerce, Inc. Under the terms of the agreement, Chelsea Interactive will no longer operate its e-commerce technology platform, but will retain a minority interest in GSI-Chelsea Solutions. Chelsea Interactive's largest clients have entered into service agreements with GSI-Chelsea Solutions and transitioned e-commerce activities to the GSI-Chelsea platform in May 2004. A gain of approximately $1.0 million was recognized from the wind-down of operations of Chelsea Interactive during the three months ended June 30, 2004 and is included in other expense in the accompanying financial statements.

CPG Partners, L.P.
Notes to Consolidated Financial Statements
(Unaudited)

3. Investments in Affiliates (continued)

InThe ~~March~~following 2003, Chelsea Japan opened the 180,000 square-foot first phase of Sano Premium Outlets, located 40 miles north of Tokyo. Chelsea Japan has two other centers: Gotemba Premium Outlets, located west of Tokyo, is a ~~390,000 square-foot~~summary ~~center,~~of ~~including~~investments ain ~~170,000~~and ~~square-foot~~amounts ~~expansion that opened in~~due ~~July~~from ~~2003;~~affiliates ~~Rinku~~at ~~Premium~~June ~~Outlets~~30, ~~located~~2004 ~~near Osaka, is a 250,000 square-foot center including a 70,000 square-foot expansion that opened~~ (in ~~March~~thousands): ~~2002.~~

In June 2002, the OP and 
                                                  Chelsea     Simon entered into a 50/50 joint venture to develop and         Chelsea
operate Las Vegas Premium Outlets, a 435,000 square                                                   Japan     Ventures        Mexico       Other        Total
                                                -foot single-phase outlet-------    --------       --------     -------     -------
centerBalance locatedDecember in Las Vegas31, Nevada2003..............           $19, which opened on August 1461     $77,739         $6,212      $3,656    $107,068

   Additional 2003investment. The OP is..............             2,854      13,715          9,065           -      25,634
responsible
   Income forfrom financing its 50% share of development costs, or approximatelyunconsolidated
$48    investments.0 million. As of September 30......................             5, 2003926       4,354              -           -      10,280

   Distributions theand OP had contributed $40fees..............            (3,979)     (5,153)             -           -      (9,132)

   Foreign millionexchange....................              (189)          -           (352)          -        (541)
and
   Advances capitalized(net) interest.....................            (4,162)        935              -         (24)     (3,251)
                                               -----------    -----------    ---------    -------   ----------

Balance andJune other30, costs of $32004.8 million.................           $19,911     $91,590        $14,925      $3,632    $130,058
                                               ===========    ===========    =========    =======   ===========

InCPG ~~August 2002~~Partners, the OP and Simon entered into a 50/50 joint venture to develop and operate Chicago Premium Outlets, a 438,000 square-foot single-phase outlet center located in Aurora, Illinois, scheduled to open in mid-2004L. ~~The OP is responsible for financing its 50% share of the development costs, or approximately $46~~P.~~0 million. As of September 30, 2003, the OP had contributed~~ ~~$19.4~~Notes ~~million~~to ~~and~~Consolidated ~~capitalized~~Financial ~~interest and other costs of $1.4 million.~~Statements (Unaudited)

As of September 30, 2003, the OP had incurred approximately $2.0 million of pre-development and other costs related to the formation of the Mexico joint venture.

As of September 30, 2003, the OP had minority interests ranging from 3% to 8% in several outlet centers and outlet development projects in Europe. In July 2002, the OP sold approximately 45% of its holdings in Value Retail to a third party for $11.4 million, resulting in a gain of $10.9 million which was recorded as a gain on sale of unconsolidated investment in the accompanying financial statements.

At December 31, 2002, the OP recognized an impairment loss equal to the net book value of its investment in Chelsea Interactive. The OP believes that it will not be able to recover the net book value of its investment in Chelsea Interactive through future cash flows before reaching the OP’s $60.0 million funding limit. Through September 30, 2003, the OP had funded $54.8 million and anticipates that the $5.2 million funding balance may be used to further develop the platform and/or to fund operating cash shortfalls and potential costs related to the disposal or discontinuance of the business. A $0.7 million and $2.4 million funding loss was reported for the three and nine months ended September 30, 2003, respectively. Future funding by the OP will be reported, as a loss in the period funding is required. The OP has signed a joint venture agreement with a third party to restructure Chelsea Interactive, subject to the satisfaction of certain conditions. There can be no assurance that this joint venture will be successful or that Chelsea Interactive will be able to continue as a going concern.

The following is a summary of investments in and amounts due from affiliates at September 30, 2003 (in thousands):

                                                Chelsea          Simon            Chelsea
                                                  Japan        Ventures            Mexico          Other         Total
                                              ------------    ------------    -------------    ----------    ------------

Balance December 31, 2002                       $12,471          $31,919      $        -         $3,607        $47,997
Additional investment.....................          639           32,192           2,022             25         34,878
Income from unconsolidated investments....        6,069            1,002               -              -          7,071
Distribution and fees.....................       (3,849)          (1,131)              -              -         (4,980)
Advances (net)............................          517            1,163               -             10          1,690
                                              ------------    ------------    -------------    ----------    ------------
Balance September 30, 2003................      $15,847          $65,145          $2,022         $3,642        $86,656
                                              ============    ============    =============    ==========    ============

Notes to Condensed Consolidated Financial Statements (Unaudited)

3. Investments in Affiliates (continued)

The OP’'s share of income (loss) before depreciation, depreciation expense, and income (loss) from unconsolidated investments for the three and ~~nine~~six months ended ~~September~~June 30, ~~2003,~~2004 and ~~2002~~2003, is as follows (in thousands):

                                                     For the 
                                                            Three Months Ended SeptemberJune 30,
                                                     -----------------------------------------   ----------|-------------------------------------------------
                                                                                        2004                                            2003                          |                    2002
                                                     -----------------------------------------   ----------|--------------------------------------------------
                                                                                                                     Income        |                                                                               Income (loss)
                                                     Income                       from              Income                     (loss)                      (loss) from
                               before                   unconsolidated      |  Income (loss)                      from
                       before                             Unconsol.       |  before                           Unconsol.                unconsolidated
                      Depreciation                                          depr.        Depr.      Investments      |  Depreciation         investments           depr.        Depr.      Investments         investments
                                                    -----------   -----    ---------    --------------    | --   --------------    ----------    ----------------
   Chelsea Japan......              $34,101             $   978387       $21,123          |    231         $13,532            156             $  471      3,189          $  1694          $2,061495
F
   S/C (1)Las Vegas............          -                   -            -2,147          |     501          1,369646                  -             -               400           969-

   S/C Las VegasChicago........            1,201                 199        1,002650          |         2                 147            503                  -             2
                      -               -
                              ---------   -----    ---      ------    ------         -------       -    | ------       ----------    ---------    ----------------
  
   Total............     ..         $47,302              184       $1,177       879         $5,305             $3,125189          |    $2,903              694          $871      $  2,032495
                                                    =========   =======    =      ========    ====         =======       ===    | ====       ============    =========    ================

   Chelsea                                                                  |
   Interactive(1)........      ($677)           $      953       $    -        (         $677  953            $  (905)         |   ($1,594)             -          $2,196        ($3,790905)
                                                    =========   =======    =      ========    ====         =======       ===    | ====       ============    =========    ================


                                                     For                                                            Three the Nine Months Ended SeptemberJune 30,
                                                     -----------------------------------------   ---------|--------------------------------------------------
                                                                                        2004                                            2003                         |                      2002
                                                     -----------------------------------------   ---------|--------------------------------------------------
                                                                                                                   Income (loss)  |                                                                               Income (loss)
                                                     Income (loss)                                             from           |                 Income                      (loss)                       from
                                                     before                             Unconsol.                   unconsolidated      |   (loss) before                            Unconsol.                unconsolidated
                      Depreciation            Depr                               depr.      Investments    |   Depreciation               Depr.         investments           depr.        InvestmentsDepr.         investments
                                                    -------------------   ---------    ---------------|-   --------------    ----------    ----------------
   Chelsea Japan......               $8,340                453       $2,271       460         $65,069      |     993           $ 45,419           239        $1,303      293           $  3,116946
F
   S/C (1)Las Vegas............           -                     -            -      |       6,178            1,847                   4,331
Simon182          936          3,246                 -                                                                  |
Orlando(2).........                        -                                     -            -      |       1,833              523         1,310

   S/C Las VegasChicago......       ..          1,201                   199        255          147          1,002      |          27108                 -             -                -            27
                                                    -------------------   --------      -    -----------         ----|   ---       -------       ----    ---------    ----------------

   Total............     ..        $913,541                890       $23,470       543        $710,071      |     347            $125,457239        $1,293           $3,673      $  8,784946
                                                    ===================   ========      =    ===========         ====|   ===       =======       ====    =========    ================

   Chelsea 
   Interactive.     ($2,4191)             ....        $         953       $    -      (        $2,419)     |     (   953           $4(1,502742)       $    -          $5,764      ($101,266742)
                                                    ===================   ========      =    ===========         ====|   ===       =======       ====    =========    ================

(1) Inincluded ~~August~~in ~~2002,~~other ~~the~~expenses OPon ~~became~~ the ~~sole~~accompanying consolidated ~~owner~~statement of ~~four Premium centers by acquiring the remaining 51% undivided interest in the F/C Acquisition Holdings, LLC joint venture, and consolidated the operations and balance sheet from the buyout date.~~income

~~(2)~~CPG ~~During the three months ended March 31~~Partners, ~~2002, the OP had a 50% interest in Orlando Premium Outlets through a 50/50 joint venture with Simon~~L.P. Notes Into ~~April~~Consolidated ~~2002,~~Financial ~~the OP became the sole owner of Orlando Premium Outlets by acquiring the remaining 50% undivided ownership interest from Simon, and consolidated the operations and balance sheet from the buyout date.~~Statements (Unaudited)

Notes to Condensed Consolidated Financial Statements (Unaudited)

3. Investments in Affiliates (continued)

Condensed financial information as of ~~September~~June 30, ~~2003, and~~2004 and December 31, ~~2002~~2003, and for the three and ~~nine~~six months ended ~~September~~June 30, ~~2003,~~ 2004 and 2003 ~~2002~~ for ~~investments~~Chelsea inJapan ~~unconsolidated~~and ~~affiliates~~Simon-Ventures is as follows (in thousands):


                                                                                       Chelsea
                                                                      Retail         Interactive
                                                                  -------------     ---------------

Property, plant and equipment (net)
     SeptemberJune 30, 20032004.......................................      $252,230.....        $        -324,902
     December 31, 2002 (3)2003....................................       140....         288,057            31,409780

Total assets
     SeptemberJune 30, 20032004.......................................       327.....         421,172                 -153
     December 31, 2002 (3)2003....................................       190....         380,157            33,295426

Long term debt  (41)
     SeptemberJune 30, 20032004.......................................       114.....         141,896                 -796
     December 31, 20022003........................................        75         129,139                 -731

Total liabilities
     SeptemberJune 30, 20032004.......................................       192.....         232,566             1,549289
     December 31, 20022003........................................       119         220,886             1,548238

Net income (loss)
  Three months ended:
     September        June 30, 2004...........................................         4           7,113                 -330
     September        June 30, 20022003 (1) ..................................         ......           2,501            (3,790)448

Nine Six months ended:
     September        June 30, 20032004 ......................................         7..          13,213                 -709
     September        June 30, 20022003 (1) (2)...............................        11,549.........           (113,127)100

OP's share of net income (loss)
  Three months ended:
     September        June 30, 20032004 ......................................         1..           3,807              (677)290
     September        June 30, 2002 (1) 2003..................................         1,115            (3,790).......             979

Nine  Six months ended:
     September        June 30, 20032004.......................................         3..           6,047            (2,419)233
     September        June 30, 2002 (1) (2)2003...............................         5,374..........           (101,266)240

Fee income
  Three months ended:
     September        June 30, 20032004.......................................         1..           2,318                 -015
     September        June 30, 2002 (1) 2003.........................................           915                 -1,516

Nine  Six months ended:
     September        June 30, 20032004.......................................         ..           4,024                 -114
     September        June 30, 2002 (1) (2)2003...............................         3..........           2,383                 -706

(1) InLong-term ~~August~~debt ~~2002,~~consists ~~the OP became the sole owner~~ of ~~four~~borrowings ~~Premium~~related ~~centers~~to byChelsea ~~acquiring the remaining 51% undivided interest in the F/C Acquisition Holdings, LLC joint venture and consolidated the operations and balance sheet from the buyout date~~Japan.

~~(3) At December 31, 2002, Chelsea Interactive recorded an impairment loss equal to the carrying amount of its net assets~~4. Debt

(4) Long-term debt in 2003 and 2002 consists of borrowings related to Chelsea Japan.

Notes to Condensed Consolidated Financial Statements (Unaudited)

4. Non-Compete Agreement

The OP recognized income from its non-compete agreement with The Mills Corporation of $1.3 and $3.9 million during the three and nine months ended September 30, 2002, which is included in other income in the accompanying financial statements.

5. Debt

Unsecured Bank Debt

~~The~~A OPsummary ~~has a $200.0 million senior unsecured bank line~~ of ~~credit (~~the ~~“Senior~~terms ~~Credit Facility”) with an expiration date~~ of ~~March 31, 2005, which~~ the OPunsecured ~~has~~bank ~~the~~debt ~~right to extend until March 31, 2006. The Senior Credit Facility bears interest on the~~ outstanding ~~balance, payable monthly,~~ at a ~~rate~~June ~~equal to the London Interbank Offered Rate (“LIBOR”) plus 0.95% (2.05% at September~~ 30, ~~2003)~~2004 orand ~~the~~December ~~prime rate~~31, ~~at the OP’s option. The LIBOR rate spread ranges from 0.85% to 1.50% depending on the OP’s Senior Debt rating. The OP received a debt rating upgrade in July~~ 2003, ~~resulting~~and ~~in a reduction of~~ the ~~LIBOR~~related ~~rate~~effective ~~spread~~interest ~~to 0.95% from 1.05%. At September 30~~rate, ~~2003,~~is ~~$78.0~~as ~~million~~follows ~~was~~(in ~~outstanding~~thousands): ~~under the Senior Credit Facility.~~

The
                                                                           Effective                         Effective
                                                           June OP30,         interest       December has a one31,       interest
                                                               2004             rate              2003            rate
                                                       -year------------   --------------   ---------------   -------------

Senior $100.0credit millionfacility unsecureddue bridgeMarch loan2005 (the
“Bridge Loan Facility”1) due July 31..........        $75, 2004 and has the right to extend000            2.06%            $99,000          2.09%
theTerm loan untildue JanuaryMarch 31, 2005. The(2) .......................          5,035            2.06%              5,035          2.09%
Bridge Loanloan Facilityfacility bearsdue interestJuly on2004 the
outstanding(3) balance.............              -                -            100,000          1.96%
Term payableloan monthly,due atApril a2010 rate(4) equal to LIBOR plus 0.80% (1.91.....................         60,975            7.26%                  -              -
atYen Septembercredit 30,facility 2003).due TheApril LIBOR2005 rate(5) spread ranges from 0.70% to ............         11,897            1.3531%                  -              -
dependingPeso oncredit thefacility OP’sdue SeniorJanuary Debt2007 rating.(6) ..........          8,138            8.42%                  -              -
                                                       -------------                    ---------------
                                                           $161,045                            $204,035
                                                       =============                    ===============

1) The OP ~~also~~maintains ~~has~~ a $~~5.0~~200 million ~~term~~senior ~~loan~~unsecured ~~that~~bank ~~carries~~line of credit (the ~~same interest~~"Senior ~~rate~~Credit Facility") that expires on March 31, 2005, and ~~maturity~~is asextendible at the OP's option until March 31, 2006. The Senior Credit Facility bears interest on the outstanding balance, payable monthly, at a rate equal to the London Interbank Offered Rate ("LIBOR") plus 0.95% or the prime rate, at the OP's option. The LIBOR rate spread ranges from 0.85% to 1.50% depending on the OP's Senior Debt rating. The OP received a debt rating upgrade in July 2003, resulting in a reduction of the LIBOR rate spread to 0.95% from 1.05%.

2)	The term loan carries the same interest rate and maturity as the Senior Credit Facility.

3)	In March 2004, the OP repaid the $100 million bridge loan due July 31, 2004 with proceeds received from the issuance of $100 million of unsecured term notes due March 15, 2009. The Bridge Loan facility bore interest on the outstanding balance, payable monthly, at LIBOR plus 0.80%.

In February 2004, the OP amended its mortgage loan due April 2010 to unencumber four properties and reduce the interest rate to LIBOR plus 1.25% from LIBOR plus 1.50% (2.36% at June 30, 2004). The original terms calling for quarterly principal amortization of $0.25 million through April 2005 and $0.45 million per quarter thereafter until maturity remained unchanged. The OP maintains an interest rate swap that effectively fixes the interest rate on the mortgage debt on the term loan at 7.26% until January 2006. During the six months ended June 30, 2004 and 2003, the OP recognized interest expense of $1.5 million on the hedge that is included in interest expense in the accompanying financial statements.

The OP's wholly-owned equity investee in Chelsea Japan Co. Ltd., has a 4.0 billion yen line of credit (approximately US $36.8 million) to provide funding for projects being developed in Japan. The yen line of credit bears interest at yen LIBOR plus 1.25% and matures April 1, 2005. This facility is guaranteed by the Company and the OP. At June 30, 2004, 1.3 billion yen (approximately US $11.9 million) was outstanding under the loan.

In January 2004, a wholly-owned subsidiary of the OP entered into a 180 million peso-denominated revolving facility (US $15.7 million as of June 30, 2004) to provide funding for projects in Mexico. The peso facility has a three- year term and drawn funds bear interest at the Interbank Interest Equilibrium Rate ("TIIE") plus 0.825% plus the bank's cost of funds spread limited to 20% of the TIIE, with an annual facility fee on the unused balance of 0.15%. The TIIE rate spread ranges from 0.725% to 1.37% depending on the OP's Senior Debt rating. This facility is guaranteed by the Company and the OP. At June 30, 2004, the outstanding balance was 93.5 million pesos (approximately US $8.1 million).

CPG Partners, L.P.
Notes to Consolidated Financial Statements
(Unaudited)

4. Debt (continued)

Unsecured Notes

A summary of the terms of the unsecured notes outstanding at ~~September~~June 30, ~~2003,~~2004 and December 31, ~~2002,~~2003 is as follows (in thousands):

                                                         September                                                                         June 30,       December 31,                   Effective
                                                                                                                                          2004               2003                  2002                     Yield (1)
                                                                                                                        ---------------   ----- -----------   ----------  -------------------
8.38375%  Notes due August 2005............................         ........       $  49,945            967           $   49,922              952             8.44%
7.25250%  Notes due October 2007...........................           ........         124,866              890            124,841              874             7.39%
3.500%  Notes due March 2009(2)..................................          99,561                  -             3.60%
8.63625%  Notes due August 2009............................            ........          49,941               948             49,933              943             8.76%
8.25250%  Notes due February 2011..........................           148........         149,927              037            148,817              963             8.40%
6.88875%  Notes due June 2012..............................            ........          99,873               887             99,825              878             6.90%
6.00000%  Notes due January 2013...........................           ........         148,142              147293            148,992              193             6.18%
                                                                                                                        ---------------   ----- ---------------------
Total                                                                                                                               $621721,694             583           $621,330803
                                                                                                                        ===============   ===== =====================

(1) Including ~~discount~~discounts on the notes.

~~Notes~~(2) In March 2004, the OP completed a debt offering consisting of $100 million, 3.5% unsecured term notes due March 15, 2009, priced to ~~Condensed~~yield ~~Consolidated~~3.603% ~~Financial~~to ~~Statements (Unaudited)~~investors. Proceeds were used to repay virtually all of the $100 million bridge loan facility due July 2004.

5CPG Partners, L.P. Notes ~~Debt~~to Consolidated Financial Statements (~~continued~~Unaudited)

A4. ~~summary~~Debt ~~of the terms of the mortgage debt outstanding at September 30, 2003, and December 31, 2002, and the related interest rate and Net Book Value~~ (~~“NBV”~~continued) ~~of the associated collateral as of September 30, 2003, are as follows (in thousands):~~

~~Effective September~~Mortgage 30, December 31, Interest 2003 2002 Rate NBV ------------------- ---------------- ------------ ---------------- Due July 2008 (1).................. $165,505 $167,723 7.26% $254,020 Due April 2010 (2)................. 61,725 67,250 7.26% 67,725 Due December 2012 (3).............. 25,993 - 6.29% 106,028 Due December 2012 (4).............. 70,727 71,482 7.67% 74,817 Due March 2013 (5)................. 63,836 - 5.10% 114,091 ----------------- ------------------- ----------- $387,786 $306,455 $616,681 ================= =================== =========== Debt

~~(1)~~A ~~The~~summary ~~mortgage loan due July 2008 was consolidated as part~~ of the ~~August~~terms ~~2002 buyout~~ of ~~a joint venture partner's 51% interest in~~ the ~~F/C~~mortgage ~~Acquisition~~debt ~~joint~~outstanding ~~venture.~~at ~~The~~June 30, ~~mortgage~~2004 ~~calls~~and ~~for~~December a31, ~~$1.2~~2003, ~~million~~and ~~fixed~~the ~~monthly~~related ~~debt~~interest ~~service~~rate ~~payment~~and ~~based~~Net onBook aValue ("NBV") ~~26-year~~of ~~amortization schedule. During~~ the ~~nine~~associated ~~months~~collateral ~~ended~~as ~~September~~of June 30, ~~2003~~2004, ~~the OP recognized $101,000 in debt discount amortization that~~ is ~~included~~as infollows ~~interest expense~~ (in thousands): ~~the accompanying financial statements.~~

(2) Chelsea Financing entered into a $70.0 million mortgage loan due April 2010 originally secured by its four properties. On 
                                            June 230,      December 31,           Effective
                                                2004              2003        Interest theRate            NBV
                                         -----------     -------------        -------------     ----------
 OPDue soldJuly one2008 of(1) the encumbered properties for .............            $163,167          $164,727             7.426%          $249,690
 millionDue withApril an2010 NBV of $(2.5) million. Proceeds of $5.0 million were used to pay down the mortgage loan. The loan bears interest equal to LIBOR plus 1.50% (2........                   -            61% at September 30, 2003) or prime rate plus 1475             7.026%                 -
 andDue callsDecember for2012 quarterly(3) principal amortization of $0.........              24,420            25 million through April 2005 and thereafter $0,477             6.4529%           100,551
 millionDue perDecember quarter2012 until(4) maturity. In December 2000........              69, the OP entered into an interest rate swap agreement to hedge against unfavorable fluctuations in LIBOR rates by fixing the interest rate at 927            70,460             7.2667%            74,067
 untilDue JanuaryMarch 2006.2013 During(5) the nine months ended September 30............              62, 2003809            63, and 2002495             5.10%           112, the OP recognized interest expense of 277
                                        ------------      ------------                         -----------
                                            $2.3 million and 320,323          $2.0 million385, respectively on the hedge that is included in interest expense in the accompanying financial statements.634                            $536,585
                                        ============      ============                         ===========

(31) The F/C mortgage loan ~~due December 2012~~ was ~~assumed~~consolidated as part of anthe August ~~2003~~20, ~~acquisition~~2002 buyout of Fortress' 51% interest in the F/C Acquisition joint venture. The ~~stated~~mortgage bears interest at 6.99% per annum through July 11, 2008, (the "Optional Prepayment Date") and thereafter at a rate equal to the greater of 8.124% plus 5.0% or the Treasury Rate, as defined, plus 6.5% until the earlier of the date the mortgage is paid in full or its maturity date of July 11, 2028. The stated rate was ~~greater~~less than that available to the OP ~~for~~in ~~comparable~~the public debt markets. ~~Consequently~~Accordingly, the OP ~~recognized~~recorded a $1.92 million debt ~~premium~~discount that ~~will~~is be amortized over the period of the loan, which ~~reduces~~increases the effective interest rate to 67.2926%. The mortgage ~~loan~~may be prepaid in whole or in part at any time after the Optional Prepayment Date without a prepayment penalty. The mortgage calls for a $01.32 million fixed monthly ~~debt~~interest ~~service~~plus principal payment based on a 1726-year amortization schedule. During the six months ended June 30, 2004, the OP recognized $72,000 in debt discount amortization that is included in interest expense in the accompanying financial statements.

(42) ~~The~~In ~~mortgage~~February loan due December 2012 was assumed as part of a September 2001 acquisition. The loan calls for a $0.5 million fixed monthly debt service payment based on a 26-year amortization schedule. During the nine months ended September 302004, ~~2003, and 2002,~~ the OP ~~recognized~~amended ~~$0.2~~the ~~million~~mortgage inloan ~~debt~~to ~~premium~~unencumber ~~amortization~~the ~~that~~properties is(see ~~included~~unsecured inbank ~~interest expense in the accompanying financial statements~~debt).

(53) The mortgage loan due ~~March~~December ~~2013~~2012 was assumed as part of aan ~~June~~August 2003 acquisition. The stated interest rate of 58.8512% was greater than that available to the OP for comparable debt. ~~Accordingly~~Consequently, the OP ~~recorded~~recognized a $31.49 million debt premium that ~~will~~is be amortized over the period of the loan, which reduces the effective interest rate to 56.1029%. The mortgage loan calls for a $0.43 million fixed monthly debt service payment on a 2517-year amortization schedule. During the six months ended June 30, 2004, the OP recognized approximately $144,000 in debt premium amortization that is included in interest expense in the accompanying financial statements.

~~Interest~~4) ~~and~~The mortgage loan ~~costs~~was assumed as part of ~~approximately~~a $September 2001 acquisition. The stated interest rate of 9.1% was greater than that available to the OP in the public debt markets.2 ~~million~~Accordingly, ~~and~~the OP recorded a $06.8 9 million ~~were~~debt ~~capitalized~~premium asthat ~~development~~will ~~costs~~be ~~during~~amortized over the ~~three~~period ~~months~~of ~~ended September~~the 30loan, ~~2003,~~which ~~and~~reduces ~~2002,~~the ~~respectively;~~effective ~~and~~interest ~~approximately~~rate $3to 7.467%. ~~million~~The ~~and~~ loan calls for fixed monthly debt service payments of $20.15 million ~~during~~for interest plus principal based on a 26-year amortization schedule. The mortgage loan matures in March 2028 but can be prepaid beginning December 2012. During the ~~nine~~six months ended ~~September~~June 30, 2004 and 2003, the OP recognized $245,000 and ~~2002~~$229, 000 respectively., in debt premium amortization that is included in interest expense in the accompanying financial statements.

~~Notes~~5) The mortgage loan due March 2013 was assumed as part of a June 2003 acquisition. The stated interest rate of 5.85% was greater than that available to ~~Condensed~~the ~~Consolidated~~OP ~~Financial~~for ~~Statements (Unaudited)~~comparable debt. Accordingly, the OP recorded a $3.4 million debt premium that is amortized over the period of the loan, which reduces the effective interest rate to 5.10%. The loan calls for a $0.4 million fixed monthly debt service payment on a 25-year amortization schedule. During the six months ended June 30, 2004, the OP recognized approximately $146,000 in debt premium amortization that is included in interest expense in the accompanying financial statements.

6.CPG ~~Financial~~Partners, ~~Instruments:~~L.P. Notes ~~Derivatives~~to ~~and~~Consolidated ~~Hedging~~Financial Statements (Unaudited)

~~The OP employs interest rate and foreign currency forwards or purchased options to hedge qualifying anticipated transactions~~5. ~~Gains~~Financial ~~and~~Instruments: ~~losses are~~Derivatives ~~deferred~~ and ~~recognized in net income in the same period that the underlying hedged transaction affects net income, expires or is otherwise terminated or assigned.~~ Hedging

AtThe ~~September 30, 2003, the~~ OP’s uses interest rate ~~swap~~and ~~was~~foreign currency ~~reported~~forwards ator ~~its~~purchased ~~fair~~options ~~value~~to ~~and~~hedge ~~classified~~qualifying asanticipated ~~other liability of $5~~transactions.~~8 million. At~~ ~~September~~Gains ~~30,~~and ~~2003,~~losses ~~there~~are ~~were~~deferred ~~$5.4~~and ~~million~~recognized in ~~deferred~~net ~~losses,~~income ~~recorded~~ in ~~accumulated~~ ~~other~~the ~~comprehensive~~same ~~loss, a parnter’s capital account. During~~period that the ~~nine~~underlying ~~months~~hedged ~~ended~~transaction ~~September~~affects ~~30,~~net ~~2003~~income, ~~the~~expires OPor ~~reclassified $0.5 million of~~is ~~other~~otherwise ~~comprehensive~~terminated ~~loss~~or ~~to other expense as a result of its $5~~assigned.~~0 million pay down of swapped mortgage debt in June 2003.~~

At June 30, 2004, the OP's interest rate swap was ~~Hedge~~reported ~~Type Notional~~at ~~Value Rate Maturity Fair~~its ~~Value~~fair value and classified as an other liability. At June 30, ~~---------- -------------- ---- -------- ---------- Swap~~2004, ~~Cash~~there ~~Flow $67.0~~were ~~million 5.7625% 1/1/06 (~~$52.8 million) in deferred losses, recorded in accumulated other comprehensive loss.

The notional value and fair value of the above hedge provides an
indication                        Hedge ofType      Notional theValue           Rate        Maturity         Fair extent of the OP’s involvement in financial derivativeValue
instruments at September 30, 2003, but does not represent exposure to credit,             ---------------------    -----------------    -----------    ------------    ---------------
interest rate                   Swap, foreignCash exchangeFlow       $66.0 or market riskmillion        5.7625%        1/1/2006      ($3.0 million)

7.The ~~Preferred~~notional ~~Units~~value and fair value of the above hedge provides an indication of the extent of the OP's involvement in financial derivative instruments at June 30, 2004, but does not represent exposure to credit, interest rate, foreign exchange or market risk.

~~In September 1999, the OP completed a private sale of $65 million of Series B Cumulative Redeemable Preferred Units (“Preferred Units”) to an institutional investor~~6. ~~The private placement took the form of 1.3 million~~ Preferred Units at a stated value of $50 each. The Preferred Units may be called at par on or after September 2004, have no stated maturity or mandatory redemption and pay a cumulative quarterly dividend at an annualized rate of 9.0%. The Preferred Units are exchangeable into Series B Cumulative Redeemable Preferred Stock of the Company after ten years.

~~Notes~~In toSeptember ~~Condensed~~1999, ~~Consolidated~~the ~~Financial~~OP ~~Statements~~completed a private sale of $65 million of Series B Cumulative Redeemable Preferred Units (~~Unaudited~~"Preferred Units") to an institutional investor. The private placement took the form of 1.3 million Preferred Units at a stated value of $50 each. The Preferred Units may be called at par at the OP's option, on or after September 2004, have no stated maturity or mandatory redemption and pay a cumulative quarterly dividend at an annualized rate of 9.0%. The Preferred Units are exchangeable into Series B Cumulative Redeemable Preferred Stock of the Company after ten years.

8CPG Partners, L.P. Notes ~~Partner’s~~to ~~Capital~~Consolidated Financial Statements (Unaudited)

~~Accum~~7. ~~Other General Limited Preferred Comp. Total~~ Partners ~~Partners~~' Partners' Officer Income Partners' Capital Capital Capital Loan (Loss) Capital ------------- ----------- ------------ ------------ ------------ -------------- Balance December 31, 2002........... $ 462,127 $ 77,094 $ 63,315 $ (488) $ (6,774) $595,274 Net income.......................... 70,626 16,375 - - - 87,001 Other comprehensive income / (loss) Foreign currency translation.... - - - - 266 266 Interest rate swap............... - - - - 1,367 1,367 -------------- Total comprehensive income.......... 88,634 -------------- Officer loan........................ - - - 488 - 488 Common distributions................ (68,652) (11,957) - - - (80,609) Preferred distributions............. (2,502) (4,386) - - - (6,888) Contributions (net of costs)........ 58,360 - - - - 58,360 Transfer of limited partners' interest.......................... 1,809 (1,809) - - - - ------------- ----------- ------------ ---------- ---------- -------------- Balance September 30, 2003.......... $ 521,768 $ 75,317 $ 63,315 $ - $(5,141) $655,259 ============= =========== ============ ========== ========== ============== Capital

9.Following ~~Distributions~~is a statement of partners' capital at June 30, 2004, (in thousands):

On
                                                                                                  Accum.
                                                    General       Limited    Preferred       Other SeptemberComp.
                                                  Partner's     Partners'    Partner's            Income
                                                    Capital       Capital      Capital            (Loss)       Total
                                                ------------  ------------ 11------------   ---------------  ------------

Balance December 31, 2003...................       $524,295       $81,934      $63,315          $(4,010)     $665,534

Net theincome..................................         53,412        11,464            -                -        64,876
Other Boardcomprehensive ofincome/(loss): Directors.........
     Foreign ofcurrency thetranslation...........              -             -            -             (276)         (276)
     Interest Companyrate declaredswap.....................              -             -            -            1,697         1,697
                                                                                                           ------------
Total acomprehensive $0income.535.................                                                                   66,297
per                                                                                                           ------------

Common unitdistributions........................        (52,913)       (8,660)           -                -       (61,573)
Preferred distribution......................         (1,668)       (2,924)           -                -        (4,592)
Contributions to(net unitholders of recordcosts) on September 30...............          7,204             -            -                -         7,204
Transfer 2003.of The
distributionlimited totalingpartners' $27interest.2.....          1,694        (1,694)           -                -             -
                                                ------------  ------------ million------------   ---------------  ------------
Balance wasJune paid on October 1430, 20032004.......................       $532,024       $80,120      $63,315          $(2,589)     $672,870
                                                ============  ============ ============   ===============  ============

108. ~~Income Taxes~~Distribution

On June 10, 2004, the Board of Directors of the Company declared a $0.60 per unit distribution to unitholders of record on June 30, 2004. The distribution totaling $30.8 million was paid on July 12, 2004.

9. Income Taxes

No provision has been made for income taxes in the accompanying consolidated financial statements since such taxes, if any, are the responsibility of the individual partners.

1110 . Net Income Per Partnership Unit

Net income per partnership unit is determined by allocating net income to the general partner (including the general partner’'s preferred unit allocation) and the limited partners based on their weighted average partnership ~~units~~ units outstanding during the respective periods presented.

CPG Partners, L.P. Notes to ~~Condensed~~ Consolidated Financial Statements (Unaudited)

1211. Commitments and Contingencies

InPursuant ~~connection~~to ~~with~~ the Simon/Chelsea ~~joint~~merger ~~ventures~~agreement, the ~~OP has~~Operating Partnership is committed to ~~provide~~redeem ~~50%~~its ofoutstanding ~~the~~Series ~~development~~B ~~costs, or approximately $48.0~~Cumulative ~~million~~Redeemable ~~for~~Preferred ~~Las~~Units ~~Vegas Premium Outlets and $46.0 million~~ for ~~Chicago Premium Outlets. As of September 30, 2003, the OP had contributed~~ $~~40.5~~65 million ~~and $19~~.4 ~~million to the Las Vegas and Chicago projects, respectively.~~

~~Borrowings~~In ~~related~~May 2004, the OP exercised its option to ~~Chelsea~~purchase ~~Japan~~a ~~for~~290,000 square ~~which~~foot ~~the~~shopping ~~Company~~center ~~and~~located in Carlsbad, California. The OP expects to complete the OPacquisition ~~have~~in ~~provided~~the ~~guarantees~~third quarter of 2004, for ~~repayment~~a ofpurchase ~~debt~~price which asmay ofbe ~~September~~less 30than, ~~2003~~but should not exceed, ~~are~~ as$104 ~~follows:~~million.

~~Total~~In ~~Facility | Outstanding~~ connection with the Simon-~~------------- | ------------ | US~~Ventures, ~~$ Due Interest Yen US~~the $OP ~~Equivalent | Yen US~~has $committed ~~Equivalent Guarantee Date Rate~~to ~~--- --------------- | --- --------------- --------- ---- -----~~ provide ~~4.0~~50% ~~billion~~of ~~(1) $35.9~~the ~~million | 0.9~~development ~~billion $~~costs ~~8.5~~or ~~million $~~approximately 8$45.50 million ~~2004 1.33%~~ 3to Simon-Chicago.8 ~~billion~~As ~~(2) 34.1~~of ~~million | 3.4~~June ~~billion~~ 30.2, ~~million 12.1~~2004, ~~million 2015 2.20%~~ the ~~0.6~~OP ~~billion~~had ~~(2) 5~~contributed $39.46 million ~~| 0.5~~ ~~billion 4.8~~for ~~million 1~~the project.9 ~~million 2012 1.50%~~

1)Borrowings ~~Facility~~related ~~entered~~to ~~into~~Chelsea byJapan anfor ~~equity~~which ~~investee~~the ofCompany and the OP ~~that~~have ~~has~~provided aguarantees ~~one-year~~for ~~extension~~repayment ~~option~~of ~~until~~debt ~~April~~as 1of June 30, ~~2005.~~2004, are as follows:

2)
        Total FacilitiesFacility              |                             Outstanding
----------------------------------  |  ---------------------------------------------------------------------
                                    |                                                         Due       Interest
  Yen              US entered$ intoEquivalent  |      Yen         US by$ ChelseaEquivalent      US Japan,$ securedGuarantee    Date         Rate
---------         ---------------   |    --------     ---------------    -----------------  ---------   --------
 by3.8 Gotembabillion and(1)    $34.9 Rinkumillion   |    3.1 andbillion  $28.3 40million       $11.3 million       2015         2.20%
 severally0.6 guaranteedbillion by(1)      5.5 themillion   |    0.5 OPbillion    4.3 million         1.7 million       2012         1.50%

In(1) ~~May~~Facilities ~~2002, the OP~~ entered into aby ~~50/50~~Chelsea ~~joint venture agreement with Sordo Madaleno y Asociados and affiliates to jointly develop Premium Outlet centers in Mexico. Construction on the 230~~Japan,~~000~~ ~~square-foot~~secured ~~first~~by ~~phase~~Gotemba ~~of Punta Norte Premium Outlets has commenced~~ and ~~the~~Rinku ~~center is scheduled to open in late 2004. The OP is currently advancing its share of project costs up to $14 million to its joint venture partners on a recourse basis until certain title~~ and ~~other~~ ~~issues~~40% ~~are~~severally ~~resolved.~~guaranteed Asby ~~of September 30, 2003,~~ the OP ~~contributed $2~~.~~0 million for the project.~~

AsIn ofMay ~~September 30~~2002, ~~2003,~~ the OP ~~had~~entered ~~provided~~into ~~limited~~a ~~debt~~50/50 joint venture agreement ~~service~~with ~~guarantees~~Sordo ofMadaleno ~~approximately~~y ~~$17.4~~Asociados ~~million~~and affiliates to ~~Value~~jointly ~~Retail~~develop ~~and~~Premium Outlet ~~affiliates,~~centers ~~under~~in aMexico. ~~standby~~Construction ~~facility~~on ~~for~~the ~~loans~~230,000 ~~provided~~square-foot tofirst ~~Value~~phase ~~Retail~~of ~~and~~Punta ~~affiliates~~Norte toPremium ~~construct~~Outlets ~~outlet~~commenced ~~centers~~in July 2003; the center is scheduled to open in late ~~Europe~~2004. The ~~standby~~OP ~~facility,~~is ~~which has~~responsible afor ~~maximum~~financing ~~limit~~its share of project costs or approximately $2215.0 million. As of June 30, ~~expired~~2004, inthe ~~November~~OP ~~2001~~had contributed $12.2 million. In January 2004, ~~and~~a ~~outstanding~~wholly-owned affiliate of the OP entered into a ~~guarantees~~peso-denominated credit facility, ~~shall~~which ~~not~~is ~~survive~~guaranteed ~~more~~by ~~than~~the ~~five~~Company ~~years~~and ~~after~~the ~~project~~OP, to ~~completion~~fund its share of construction costs.

At ~~September~~June 30, ~~2003~~2004, other assets include $811.5 million and ~~accrued~~ accrued expenses and other liabilities include $1224.80 million related to the 2002 deferred unit incentive program, which may be paid to certain key officers in 2007.

~~The~~As OPof isJune ~~not~~30, ~~presently~~2004, ~~involved~~the inOP ~~any~~had ~~material~~provided ~~litigation~~limited ~~or,~~debt service toguarantees ~~its~~of ~~knowledge,~~approximately is$14.5 ~~any~~million ~~material~~to ~~litigation~~Value ~~threatened~~Retail ~~against~~and ~~the~~affiliates, ~~OP or its~~under ~~properties,~~a ~~other~~standby ~~than~~facility ~~routine~~for ~~litigation~~loans ~~arising~~provided into ~~the~~Value ~~ordinary~~Retail ~~course~~and ofaffiliates to ~~business.~~construct ~~Management~~outlet ~~believes~~centers ~~the~~in ~~cost~~Europe. ~~incurred~~The bystandby ~~the~~facility, OPwhich ~~related~~has toa ~~any~~maximum limit of ~~its litigation~~$22.0 ~~will~~million, ~~not~~expired bein ~~material~~November 2001, and ~~have~~outstanding ~~been~~guarantees shall ~~adequately~~not ~~provided~~survive ~~for~~more inthan ~~the consolidated~~five ~~financial~~years ~~statements~~after project completion.

~~Notes~~The OP is not presently involved in any material litigation nor, to ~~Condensed~~its ~~Consolidated~~knowledge, ~~Financial~~is ~~Statements~~any material litigation threatened against the OP or its ~~(Unaudited)~~properties, other than routine litigation arising in the ordinary course of business. Management believes the costs incurred by the OP related to any of its litigation will not be material and have been adequately provided for in the consolidated financial statements.

13CPG Partners, L.P. Notes ~~Related~~to ~~Party~~Consolidated ~~Information~~Financial Statements (Unaudited)

~~In 1999, the OP established a $6~~12.0 ~~million~~Related ~~secured~~Party loan facility that will expire in June 2004 for the benefit of certain unitholders. Each borrower issued a note that is secured by OP units, bears interest at a rate of LIBOR plus 200 basis points per annum payable quarterly and is due by the facility expiration date. At September 30, 2003, the $2.2 million note receivable from related parties represents a loan made to a unitholder, who is also an officer of the OP. During the three months ended September 30, 2003, the OP received $1.1 million from a unitholder in full repayment of his loan. Effective June 2002, the OP changed its policy to eliminate new loans to directors and officers. Information

In August 1997, the OP and one of the Company’'s directors entered into a Consulting Agreement pursuant to which the director agreed to perform services for the OP in connection with the development and operation of manufacturer’'s outlet centers in Japan and Hawaii. The agreement provided ~~for~~ for payments to the director of $10,000 per month and was terminated by the OP in in December 1999. During the term of the agreement and for four years after the termination, the director ~~will~~was be entitled to deferred compensation of 1% of the development costs, up to a maximum amount of $0.5 million per project, on all projects in which he was involved in Japan or Hawaii either directly or as a result of Mitsubishi and/or Nissho Iwai committing to develop such project with the OP in Japan during the previously mentioned four-year period. Fees paid under this agreement totaled $0.37 million for the ~~nine~~ ~~months~~first ~~ended~~quarter ~~September 30, 2003~~2004. These fees are included in investment in affiliates in the accompanying financial statements. The final payment under this agreement, related to the opening of Tosu Premium Outlets which was Board-approved during 2003, was paid in March 2004.

14In 1999, the OP established a $6.0 ~~Segment~~million ~~Information~~secured loan facility that expired in June 2004 for the benefit of certain unitholders. Under the loan facility, each borrower issued a note that was secured by OP units, bore interest at a rate of LIBOR plus 2.0% per annum payable quarterly and was due by the facility expiration date. In April 2004, the OP received the sole remaining outstanding principal payment of $2.2 million plus interest, thereby extinguishing the entire outstanding balance of the loan facility. Effective June 2002, the OP changed its policy to eliminate new loans to directors and officers.

The OP's iswholly-owned ~~principally~~equity ~~engaged~~investee in ~~the development~~Japan, ~~ownership,~~Chelsea ~~acquisition~~International ~~and~~Operating ~~operation~~Corp., ~~of manufacturers’ outlet centers and~~ has ~~determined~~ ~~that~~advanced ~~under~~partner ~~SFAS~~loans ~~No.131~~to ~~“Disclosures~~Chelsea ~~About Segments of an~~Japan ~~Enterprise~~totaling ~~and~~1.5 ~~Related~~billion ~~Information”~~yen it(approximately ~~has~~US ~~three~~$14.1 ~~reportable~~million) ~~retail~~at ~~real estate~~June ~~segments: Premium domestic~~30, ~~other domestic and international~~2004. The OP ~~evaluates~~loans, ~~real~~which ~~estate~~were ~~performance~~used ~~and~~to ~~allocates~~fund ~~resources~~construction ~~based~~costs, onbear ~~Net~~interest ~~Operating Income~~at ~~(“NOI”)~~yen ~~defined~~LIBOR plus as3.00% ~~total revenue less operating expenses~~(3.05% ~~The primary~~at ~~sources~~June ~~of revenue are generated from tenant base rents~~30, ~~percentage rents~~2004) and ~~reimbursement~~mature ~~revenue.~~in ~~Operating~~2005 ~~expenses~~(854 ~~primarily~~million ~~consist~~yen) ofand ~~common~~in ~~area~~2014 ~~maintenance,~~(680 ~~real~~million ~~estate taxes, promotional and general and administrative expenses~~yen). The ~~retail~~loans ~~real~~are ~~estate~~included ~~business~~in ~~segments~~notes ~~meet the quantitative~~receivable-related ~~threshold~~parties ~~for~~in ~~determining~~the ~~reportable~~accompanying ~~segments~~financial statements.

~~Notes~~13. toSegment ~~Condensed Consolidated Financial Statements (Unaudited)~~Information

14The OP is principally engaged in the development, ownership, acquisition and operation of manufacturers' outlet centers and has determined that under SFAS No.131 ~~Segment~~"Disclosures about Segments of an Enterprise and Related Information" it has three reportable real estate segments in 2004: domestic outlets, international outlets and other retail. Prior to 2004, the OP's segments consisted of premium domestic, other domestic and international centers. In 2004, the OP combined 12 centers containing 4.3 million square feet of GLA with the premium domestic segment to create a new segment called domestic outlets. These centers, which were included in the other domestic segment prior to 2004, contain many of the same tenants and characteristics of the OP's Premium Outlets. The other retail segment consists of 20 centers containing 2.7 million square feet of GLA, which contributes approximately 3% of the OP's real estate net operating income. The 2003 segment information has been adjusted to conform to the new presentation. The OP evaluates real estate performance and allocates resources based on Net Operating Income (~~continued~~"NOI") defined as total revenue less operating expenses. The primary sources of revenue are generated from tenant base rents, percentage rents and reimbursement revenue. Operating expenses primarily consist of common area maintenance, real estate taxes and promotional expenses.

~~Premium Other (in~~CPG thousands) Domestic Domestic International Other Total ---------------------------------------- -------------- ------------- ------------------ -------------- ---------------- (1) (1)(2) (3) (4) Total revenues Three months ended: September 30Partners, ~~2003~~L.P.~~....... $64,625 $27,898 $ - $ 59 $92,582~~ ~~September~~Notes ~~30,~~to ~~2002......... 58,088 11,416 - 1,382 70,886 Nine~~Consolidated ~~months~~Financial ~~ended:~~Statements September 30, 2003......... 190,775 72,465 - 262 263,502 September 30, 2002......... 152,886 34,323 - 4,122 191,331 Interest income Three months ended: September 30, 2003......... 254 40 - 9 303 September 30, 2002......... 252 76 - 105 433 Nine months ended: September 30, 2003......... 761 54 - 102 917 September 30, 2002......... 792 140 - 276 1,208 Income (~~loss~~Unaudited) from unconsolidated investments Three months ended: September 30, 2003......... 1,002 - 2,123 (677) 2,448 September 30, 2002......... 971 - 1,061 (3,790) (1,758) Nine months ended: September 30, 2003......... 1,002 - 6,069 (2,419) 4,652 September 30, 2002......... 5,643 - 3,141 (10,266) (1,482) NOI Three months ended: September 30, 2003......... 48,293 18,989 4,143 (2,723) 68,702 September 30, 2002......... 45,488 10,127 2,064 (6,323) 51,356 Nine months ended: September 30, 2003......... 140,298 48,717 10,659 (9,598) 190,076 September 30, 2002......... 122,527 20,777 5,915 (8,589) 140,630 Fixed asset additions Nine months ended: September 30, 2003......... 11,752 153,144 - 942 165,838 September 30, 2002......... 103,520 28,550 - 1,432 133,502 Total assets September 30, 2003......... 1,241,914 661,109 21,501 29,032 1,953,556 December 31, 2002.......... 1,262,190 394,984 16,077 29,779 1,703,030

~~(1) Excludes revenue for St~~13. ~~Helena~~Segment ~~and~~Information ~~Mesa properties, which were sold in June and September 2003, respectively.~~(continued)

~~(2)~~The ~~Approximately~~real ~~15%~~estate ~~and~~business ~~25%~~segments ofmeet the ~~GLA~~quantitative threshold isfor ~~occupied~~determining byreportable ~~and~~segments: ~~approximately 9% and 13% of annualized base rent is derived from one tenant during the 2003 and 2002 periods, respectively.~~



For the months ended:                  Domestic         International     Other
(in thousands)                         Outlets             Outlets        Retail         Other       Total
                                     -------------     ---------------   -----------  -----------  -------------
                                                              (3)          (4)           (5)
Total Principallyrevenues comprised(1)
Three ofmonths theended:
    June Company's30, interest2004..................     $91,939            $  -            $4,583        $239        $96,761
    June in30, Chelsea2003 Japan(2)..............      82,467               -             4,647        (505)        86,609
Six months ended:
    June 30, 2004..................     180,186               -             9,195         482        189,863
    June 30, 2003 (2)..............     160,372               -             9,286         233        169,891

Interest income
Three months ended:
     June 30, 2004.................         238              99                14          38            389
     June 30, 2003 ................         252               -                10          61            323
Six months ended:
     June 30, 2004.................         496             168                14          70            748
     June 30, 2003 ................         507               -                14          93            614

Income (loss) from
unconsolidated  investments
Three months ended:
     June 30, 2004.................       2,149           3,156                 -         953          6,258
     June 30, 2003.................           -           2,495                 -        (905)         1,590
Six months ended:
     June 30, 2004.................       4,354           5,993                 -         953         11,300
     June 30, 2003.................           -           3,946                 -      (1,742)         2,204

NOI (loss) (1)
Three months ended:
     June 30, 2004.................      69,621           5,822             2,462      (3,041)        74,864
     June 30, 2003.................      58,514           4,102             2,545      (3,074)        62,087
Six months ended:
     June 30, 2004.................     136,055           9,536             3,901      (4,752)       144,740
     June 30, 2003.................     115,421           6,516             4,965      (5,528)       121,374

Fixed asset additions (deletions)
Six months ended:
     June 30, 2004.................      27,366               -           (2,396)        1,820        26,790
     June 30, 2003.................      67,567               -               568          661        68,796

Total assets
          June 30, 2004............   1,804,883          31,626            67,512       92,484     1,996,505
    December 31, 2003..............   1,816,442          29,306            67,820       56,846     1,970,414

(41) ~~Includes~~Approximately ~~corporate~~72.3% ~~overhead~~and ~~assets~~78.2% of the OP's total revenues and ~~results~~approximately ~~from~~76.3% ~~Chelsea~~and ~~Interactive~~80.3% of the OP's real estate NOI were generated by the OP's Premium Outlets during the three months ending June 30, 2004 and 2003, respectively. Approximately 72.5% and 78.1% of the OP's total revenues and approximately 76.9% and 80.5% of the OP's real estate NOI were generated by the OP's Premium Outlets during the six months ending June 30, 2004 and 2003, respectively.

~~Notes~~(2) toExcludes ~~Condensed~~revenue ~~Consolidated~~for ~~Financial~~St. ~~Statements (Unaudited)~~Helena, Mesa and American Tin Cannery properties, which are classified as discontinued operations.

~~14.~~(3) ~~Segment~~Principally ~~Information~~comprised ~~(continued)~~of the OP's interests in Japan and Mexico.

~~Following~~(4) isApproximately a34.0% ~~reconciliation~~and 28.8% of ~~net~~the ~~operating~~GLA ~~income~~is tooccupied ~~net income~~by ~~for~~and ~~the~~approximately ~~three~~23.6% and ~~nine~~18.3% ~~months~~of ~~ended~~annual ~~September~~base ~~30,~~rent ~~2003,~~is derived from one tenant during the 2004 and ~~2002~~2003 ~~(in thousands):~~periods, respectively.

Three Months Nine Months Ended Ended September 30, September 30, 2003 2002 2003 2002 -------------------------- --------------------------- Segment NOI............................................... $68,702 $51,356 $190,076 $140,630 Interest expense - consolidated........................... (~~17,743~~5) ~~(13,098) (50,930) (33,691) Interest~~ ~~expense~~Includes -corporate ~~unconsolidated~~overhead ~~investments............. (268) (146) (601) (413) Depreciation~~assets and ~~amortization~~results ~~expense~~from - consolidated...... (18,080) (15,045) (52,981) (42,229) Depreciation and amortization expense - unconsolidated investments................... (1,177) (871) (2,470) (3,673) Depreciation and amortization expense - Chelsea Interactive.......................... - (2,196) - (5,764) Income tax - unconsolidated investments................... (774) (386) (1,718) (1,058) Gain on sale of discontinued operations................... (908) - 5,625 - Gain on sale of unconsolidated investment................. - 10,911 - 10,911 -------------- ----------- --------------- ----------- Net income................................................ $31,568 $30,525 $87,001 $64,713 ============== =========== =============== ===========

~~15.~~CPG ~~Fair~~Partners, ~~Value~~L.P. Notes ofto Consolidated Financial ~~Instruments~~Statements (Unaudited)

13. Segment Information (continued)

Following is a reconciliation of net operating income to net income for the three and six months ended June 30, 2004 and 2003, (in thousands):

                                                                     Three Months Ended             Six Months Ended
                                                                          June 30,                      June 30,

                                                                      2004          2003          2004          2003
                                                                --------------------------  ---------------------------
Segment NOI..................................................      $74,864       $62,087      $144,740      $121,374
Interest expense - consolidated..............................      (19,287)      (16,553)      (37,937)      (33,187)
Interest expense - unconsolidated investments................         (351)         (189)         (658)         (333)
Depreciation expense - consolidated..........................      (17,938)      (17,269)      (35,754)      (34,901)
Depreciation expense - unconsolidated investments............       (1,879)         (694)       (3,543)       (1,293)
Income tax - unconsolidated investments......................       (1,084)         (724)       (1,972)         (944)
Gain on sale of discontinued operations......................            -         4,717             -         4,717
                                                                ------------ -------------  --------------  -------------
Net income...................................................      $34,325       $31,375       $64,876      $ 55,433
                                                                ============ =============  ==============  =============

14. Fair Value of Financial Instruments

The following disclosures of estimated fair value were determined by management, using available market information and appropriate valuation methodologies. Considerable judgment is necessary to interpret market data and develop estimated fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the OP could realize on disposition of the financial instruments. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

~~Cash~~Disclosure ~~equivalents,~~about ~~accounts~~fair ~~receivable,~~value ~~accounts~~of ~~payable,~~financial ~~and revolving~~instruments ~~credit~~is ~~facilities~~based ~~balances~~on pertinent ~~reasonably~~information ~~approximate~~available ~~their fair values due~~ to ~~the~~management ~~short~~as ~~maturities~~ of ~~these~~June ~~items~~30, 2004. ~~Mortgage debt and the unsecured~~Although ~~notes~~management ~~payable~~is ~~have~~not anaware ~~estimated~~of ~~fair~~any ~~value~~factors ~~based~~that onwould ~~discounted~~significantly ~~cash~~affect ~~flow models~~the ofreasonable ~~approximately~~fair ~~$1.1~~value ~~billion~~amounts, ~~which~~such ~~exceeds~~amounts ~~the~~have ~~book~~not ~~value~~been ~~by $100 million.~~comprehensively ~~Unsecured~~revalued ~~bank~~for ~~debt~~purposes isof ~~carried~~these atfinancial anstatements ~~amount,~~since ~~which~~such ~~reasonably~~date ~~approximates~~and ~~its~~current estimates of fair value ~~since~~may itdiffer issignificantly afrom ~~variable~~the ~~rate~~amounts ~~instrument whose interest rate reprices~~presented ~~frequently~~herein.

~~Disclosure~~Cash ~~about~~equivalents, ~~fair~~accounts ~~value~~receivable, ofaccounts ~~financial~~payable, ~~instruments~~and revolving iscredit ~~based~~facilities ~~on pertinent~~balances ~~information~~reasonably ~~available~~approximate their fair values due to ~~management~~the asshort maturities of ~~September~~these ~~30, 2003~~items. ~~Although~~Mortgage debt and the unsecured ~~management~~notes ispayable ~~not~~have ~~aware~~an ofestimated ~~any~~fair ~~factors~~value ~~that~~based ~~would~~on ~~significantly~~discounted ~~affect~~cash ~~the~~flow models ~~reasonable~~of ~~fair~~approximately ~~value~~$1.1 ~~amounts~~billion, ~~such~~which ~~amounts~~exceeds ~~have~~the ~~not~~book ~~been~~value ~~comprehensively revalued~~by ~~for~~$62.6 ~~purposes~~million. Unsecured ofbank ~~these~~debt ~~financial~~is ~~statements~~carried ~~since~~at ~~such~~an ~~date~~amount ~~and~~which ~~current estimates~~reasonably ofapproximates its fair value ~~may~~since ~~differ~~it ~~significantly~~is ~~from~~a ~~the~~variable ~~amounts~~rate ~~presented~~instrument whose interest rate reprices ~~herein~~frequently.

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

The following discussion should be read in connection with the accompanying unaudited ~~condensed~~ consolidated financial statements and notes thereto. These financial statements include all adjustments, which in the opinion of management are necessary to reflect a fair statement of results for all interim periods presented, and all such adjustments are of a normal recurring nature.

General Overview

From October 1, 2002 to September 30, 2003, the OP grew by increasing rents at its operating centers, acquiring nine retail centers, developing two new joint venture centers and expanding two wholly-owned centers and one joint venture center. For the nine months ended September 30, 2003, base rents increased $55.7 million comprised of $5.0 million of growth from existing centers and $50.7 million from acquisitions and new development since October 1, 2002. The OP released or renewed approximately 1.3 million square feet of Premium Property GLA during the twelve months ended September 30, 2003, for which initial contractual cash rents under new leases were 13% higher than expiring leases. Investments in unconsolidated affiliates decreased $1.7 million for the nine months ended September 30, 2003. The decrease was due to the purchase and consolidation of partners’ interests in five centers during 2002 offset by earnings contributed largely from the expansion of one joint venture center and the opening of two new joint venture centers including one-time fees earned in 2003.

The OP operated GLA of 16.1 million square feet at September 30, 2003 and 12.5 million square feet at September 30, 2002. The OP’s Premium Properties portfolio consists of 30 wholly or partially-owned centers containing 10.3 million square feet of GLA at September 30, 2003, and 27 wholly or partially-owned centers containing 8.4 million square feet of GLA at September 30, 2002. The OP’s Other Properties consist of 31 wholly or partially owned centers containing 5.8 million square feet of GLA at September 30, 2003, and 27 wholly or partially owned centers containing 4.1 million square feet of GLA at September 30, 2002. Since October 1, 2002, the OP has added 3.6 million square feet (“sf”) of net GLA and details are as follows:

Net GLA added since October 1, 2002 is detailed as follows:

                                                               12 months              9 months               3 months
                                                                  ended                 ended                  ended
                                                                September 30,        September 30,          December 31,
                                                                  2003                   2003                   2002
                                                         -----------------------  --------------------  ------------------
Changes in GLA (sf in 000's):

New centers developed:
     Las Vegas Premium Outlets (50% owned) ............            435                    435                     -
     Sano Premium Outlets (40% owned) .................            180                    180                     -
                                                         -----------------------  --------------------  -------------------
                                                                   615                    615                     -

Centers expanded:
     Gotemba Premium Outlets (40% owned)...............            170                    170                     -
    Desert Hills Premium Outlets.......................             23                      -                    23
    Liberty Village Premium Outlets....................             23                      -                    23
    Other..............................................           (36)                   (28)                   (8)
                                                         -----------------------  --------------------  -------------------

Total centers expanded.................................            180                    142                    38

Centers acquired:
    Belz Factory Outlet World - Las Vegas..............            477                    477                     -
    Factory Outlet Village Osage Beach ................            391                      -                   391
    The Crossings Factory Stores.......................            390                    390                     -
    St. Augustine Outlet Center........................            329                      -                   329
    Belz Factory Outlet World - Lakeland (1) ..........            319                    319                     -
    Outlets at Albertville.............................            305                      -                   305
    Factory Merchants Branson..........................            300                      -                   300
    Jackson Outlet Village.............................            292                      -                   292
    Johnson Creek Outlet Center........................            278                      -                   278
                                                         -----------------------  --------------------  -------------------
Total centers acquired.................................          3,081                  1,186                 1,895

Centers sold:
    St. Helena Premium Outlets.........................           (23)                   (23)                     -
    Other Properties (2)...............................          (231)                  (167)                  (64)
                                                         -----------------------  --------------------  -------------------

Total centers sold.....................................          (254)                  (190)                  (64)

Net GLA added during the period........................          3,622                  1,753                 1,869

GLA at end of period...................................         16,139                 16,139                14,386

(1) Acquired Lakeland in August 2003 in conjunction with the Las Vegas property. The Lakeland property is being marketed for sale.

(2) Consists of Factory Stores of America at Mineral Wells, Texas and Factory Stores of America at Mesa, Arizona.

Results of Operations

Comparison of the three months ended September 30, 2003 to the three months ended September 30, 2002.

Income from continuing operations was $30.7 million, representing an increase of $0.5 million or 1.6% for the three months ended September 30, 2003, from $30.2 million for the three months ended September 2002. The increase was driven by the acquisitions of six centers in 2002 and three centers in 2003, the buyout of ownership interest in four centers in 2002, higher rents from releasing and renewals, and a decrease in the loss from Chelsea Interactive, largely offset by a gain of $10.9 million, which reflects the sale of a portion of the OP’s interest in Value Retail during July 2002 and partially due to increases in general and administrative, interest and other expenses.

Base rentals increased $17.4 million, or 37.3%, to $63.9 million for the three months ended September 30, 2003, from $46.5 million for the three months ended September 30, 2002, due to the acquisitions of nine centers, the buyout of partnership interest in four centers, higher average rents on releasing and renewals, and the expansion of two wholly-owned centers in late 2002.

Percentage rents rose $1.3 million, or 24.9%, to $6.7 million for the three months ended September 30, 2003, from $5.4 million for the three months ended September 30, 2002, primarily due to improved tenant sales, the acquisition of nine retail centers and the buyout of ownership interest in four centers in 2002.

Expense reimbursements, representing contractual recoveries from tenants of certain common area maintenance, operating, real estate tax and promotional and management expenses, increased $4.1 million, or 25.3% from $16.0 million for the three months ended September 30, 2002 to $20.1 million for three months ended September 30, 2003, due to the recovery of operating and maintenance costs from increased GLA. The average recovery of reimbursable expenses for the Premium Properties was 85.9% for the three months ended September 30, 2003 compared with 89.9% for the same period in 2002. The average recovery of reimbursable expenses for the Other Retail centers for the three months ended September 30, 2003 was 70.6%, compared with 57.7% for the three months ended September 30, 2002. The increase in average recovery from Other Retail centers was a result of the better recovery of expense reimbursement at centers acquired in 2002.

Other income decreased $1.1 million or 35.6% to $1.9 million for the three months ended September 30, 2003, from $3.0 million for the comparable period in 2002. The decrease was primarily due to the expiration of the non-compete agreement which included income recognition of $1.3 million in 2002, and decreased interest income from lower interest rates, partially offset by increased ancillary operating income from acquisitions of the nine centers, and the buyout of partner’s interest in four centers.

Operating and maintenance expenses increased $5.5 million, or 28.4%, from $19.2 million for the three months ended September 30, 2002 to $24.7 million for the three months ended September 30, 2003, primarily due to costs related to increased GLA.

Depreciation and amortization expense was up $3.1 million, or an increase of 20.4%, from $15.0 million for the three months ended September 30, 2002 to $18.1 million for the three months ended September 30, 2003. The increase reflects additional expense incurred from the acquisitions of the nine centers and the buyouts of ownership interests during the second half of 2002.

General and administrative expense grew $1.0 million, or 64.4%, to $2.6 million for the three months ended September 30, 2003, from $1.6 million for the corresponding period in 2002, primarily due to increased cost for corporate governance, salaries and professional fees.

Other expenses increased $0.3 million, or 34.4%, from $1.0 million for the three months ended September 30, 2002 to $1.3 million for the three months ended September 30, 2003, due to increased reserve for bad debt and legal fees.

Income from unconsolidated investments was up $1.1 million or 53.8%, to $3.1 million for the three months ended September 30, 2003, from $2.0 million for the three months ended September 30, 2002, mainly due to higher earnings and management fees resulting from the openings of Sano and Las Vegas Premium Outlets and the expansion of Gotemba Premium Outlets, partially offset by the buyout of partners’ interests in 2002.

The loss from Chelsea Interactive decreased $3.1 million, or 82.1%, to $0.7 million for the three months ended September 30, 2003, from a loss of $3.8 million for the three months ended September 30, 2002, due to the write-off of the OP’s investment at December 31, 2002. The loss for the three months ended September 30, 2003 represents funding to Chelsea Interactive.

Gain on sale of unconsolidated investments of $10.9 million for the three months ended September 30, 2002 reflects the sale of a portion of the OP’s interest in Value Retail.

Interest expense increased $4.6 million, or 35.5%, to $17.7 million for the three months ended September 30, 2003, from $13.1 million for the three months ended September 30, 2002 due to higher debt that financed acquisitions and buyouts of partners’ interests.

Gain on sale of discontinued operations of $0.9 million for the three months ended September 30, 2003, reflects the sale of an other retail center in September 2003.

Results of Operations

Comparison of the nine months ended September 30, 2003 to the nine months ended September 30, 2002.

Income from continuing operations was $81.0 million, representing an increase of $17.1 million, or 26.7% for the nine months ended September 30, 2003, from $63.9 for the nine months ended September 2002. The increase was the result of the acquisitions of seven centers in 2002 and three centers in 2003, the expansion of two wholly-owned centers in late 2002, the buyout of ownership interests of five centers in 2002, higher rents from releasing and renewals, and reduced loss from Chelsea Interactive, partially offset by the sale of a portion of the OP’s interest in Value Retail, as well as increases in general and administrative, interest and other expenses.

Base rentals increased $55.7 million, or 43.8%, to $183.1 million for the nine months ended September 30, 2003, compared with $127.4 million for the nine months ended September 30, 2002, due to the acquisitions of ten centers, the buyout of partnership interests in five centers, the expansion of two wholly-owned centers and higher average rents from releasing and renewals.

Percentage rents grew $3.0 million, or 23.3 %, to $15.8 million for the nine months ended September 30, 2003, from $12.8 million for the nine months ended September 30, 2002, primarily due to the acquisitions of ten retail centers, the buyout of ownership interests in five centers during 2002 and improved tenant sales.

Expense reimbursements, representing contractual recoveries from tenants of certain common area maintenance, operating, real estate tax and promotional and management expenses, increased $16.4 million, or 38.2%, to $59.4 million for the nine months ended September 30, 2003, from $43.0 million for the nine months ended September 30, 2002, due to the recovery of operating and maintenance costs from increased GLA. The average recovery of reimbursable expenses for the Premium Properties was 87.8% for the nine months ended September 30, 2003 compared with 88.4% for the corresponding period in 2002. The average recovery of reimbursable expenses for the Other Retail centers was 69.8% for the nine months ended September 30, 2003, compared with 55.1% for the nine months ended September 30, 2002. The increase in average recovery from Other Retail centers was a result of better recovery of expense reimbursements at centers acquired in 2002 and 2003.

Other income decreased $3.0 million or 36.4% to $5.2 million for the nine months ended September 30, 2003, from $8.2 million for the nine months ended September 30, 2002. The decrease was mainly due to the expiration of the non-compete agreement which included income recognition of $3.9 million in 2002 and a decrease in interest income from lower interest rates, partially offset by an increase in ancillary operating income and a gain from an outparcel sale in 2003.

Operating and maintenance expenses rose $18.8 million, representing an increase of 35.5%, from $53.0 million for the nine months ended September 30, 2002 compared to $71.8 million for the nine months ended September 30, 2003, primarily due to costs related to increased GLA.

Depreciation and amortization expense was up $10.8 million, or 25.6%, to $52.9 million for the nine months September 30, 2003, from $42.1 million for the nine months September 30, 2002. The additional expense is attributed to increased GLA.

General and administrative expense increased $2.2 million, or 44.7%, from $5.0 million for the nine months ended September 30, 2002 to $7.2 million for the nine months ended September 30, 2003, primarily due to increases in deferred unit incentive program accrual, salaries, corporate governance and professional fees.

Other expenses increased $1.3 million or 40.8% to $4.4 million for the nine months ended September 30, 2003, from $3.1 million for the same nine-month period last year. The increase was due to a non-cash charge of $0.5 million on an interest rate swap resulting from the pay down of a hedged mortgage loan in June 2003 related to the sale of St. Helena Premium Outlets, and increased reserve for bad debt and center rent expense.

Income from unconsolidated investments fell $1.7 million, or 19.5%, to $7.1 million for the nine months ended September 30, 2003, from $8.8 million for the nine months ended September 30, 2002, principally due to the buyouts of partners’ interests in five centers which were previously held as unconsolidated investments, partially offset by the expansion of Gotemba Premium Outlets and the opening of Sano and Las Vegas Premium Outlets, which generated higher earnings and management fees, including one-time fees of $1.1 million from Chelsea Japan.

The loss from Chelsea Interactive declined $7.9 million, or 76.4%, to $2.4 million for the nine months ended September 30, 2003, from a loss of $10.3 million for the nine months ended September 30, 2002, due to the write-off of the OP’s investment at December 31, 2002. The loss for the nine months ended September 30, 2003 represents funding to Chelsea Interactive.

Gain on sale of unconsolidated investment of $10.9 million for the nine months ended September 30, 2002 reflects the sale of a portion of the OP’s interests in Value Retail.

Interest expense grew $17.2 million, or 51.2%, to $50.9 million for the nine months ended September 30, 2003, from $33.7 million for the nine months ended September 30, 2002, due to higher debt that financed acquisitions and buyouts of partners’ interests.

Income from discontinued operations of $0.4 million for the nine months ended September 30, 2003 and gain on sale of discontinued operations of $5.6 million for the nine months ended September 30, 2003, relates to the sale of St. Helena Premium Outlets located in Napa Valley, California and Factory Stores of America located in Mesa, Arizona, sold in June and September 2003, respectively.

Liquidity and Capital Resources

The OP believes it has adequate financial resources to fund operating expenses, distributions, and planned development, construction and acquisition activities over the short term, which is less than 12 months and the long term, which is 12 months or more. Operating cash flow for the year ended December 31, 2002, of $128.2 million is expected to increase with a full year of operations from the five joint venture buyout centers and the 1.8 million square feet of GLA added during 2002 as well as the opening of approximately 800,000 square feet of new joint venture GLA in 2003 and recent acquisition activity. The OP has adequate funding sources to complete and open all current development projects from available cash, credit facilities and secured construction financing. The OP also has access to the public markets through its $800 million debt and the Company's $750 million equity shelf registration for funding or refinancing requirements.

Operating cash flow is expected to provide sufficient funds for distributions in accordance with REIT federal income tax requirements. In addition, the OP anticipates retaining sufficient operating cash to fund re-tenanting and lease renewal tenant improvement costs, as well as capital expenditures to maintain the quality of its centers, meet funding requirements of Chelsea Interactive and partially fund development projects.

Common distributions declared and recorded in 2003 were $80.6 million, or $1.605 per unit. The OP’s dividend payout ratio as a percentage of net income before minority interest, gain or loss on sale or writedown of assets and depreciation and amortization (reduced by amortization of deferred financing costs, depreciation of non-real estate assets and preferred distributions (“FFO”)) was 64.7%. The OP’s senior unsecured bank line of credit (“Senior Credit Facility”) limits aggregate distributions to the lesser of (i) 90% of FFO on an annual basis or (ii) 100% of FFO for any two consecutive quarters.

The OP’s $200.0 million Senior Credit Facility expires in March 2005 (unless extended until March 2006), bears interest on the outstanding balance at an annual rate equal to the London Interbank Offered Rate (“LIBOR”) plus 0.95% (2.05% at September 30, 2003) or the prime rate, at the OP’s option, and has an annual facility fee of 0.125%. The LIBOR rate spread ranges from 0.85% to 1.50% depending on the OP’s Senior Debt rating. The OP received a debt rating upgrade in July 2003, resulting in a reduction of the LIBOR rate spread to 0.95% from 1.05%. At September 30, 2003, $78.0 million was outstanding under the Senior Credit Facility.

During 2003, the OP completed two acquisition transactions valued at approximately $219.0 million. On June 12, 2003, the OP purchased The Crossings Factory Stores, a 390,000 square-foot outlet center located in Tannersville, Pennsylvania, for $111.3 million, including closing costs and the assumption of a $60.7 million 5.85% mortgage loan due 2013. In conjunction with The Crossings Factory Stores acquisition, the OP completed an offering of 1.2 million shares of common stock at a price of $42.10 per share on June 18, 2003. Net proceeds after expenses of $49.4 million were used to fund substantially the entire cash portion of the acquisition.

On August 1, 2003, the OP acquired Belz Factory Outlet World – Las Vegas, a 477,000 square-foot outlet center in Las Vegas, Nevada, for $104.0 million including the assumption of a $24.4 million 8.12% mortgage loan due 2012. As part of the transaction, the OP also acquired Belz Factory Outlet World – Lakeland, a 319,000 square-foot outlet center near Memphis, Tennessee for an additional $3.5 million. The Lakeland property is being marketed for sale. The approximately $84.0 million cash portion of the overall transaction was financed with a $100.0 million one-year term loan facility at an annual interest rate of LIBOR plus 0.80% that is due on July 31, 2004 and extendible for six months until January 31, 2005 at the OP’s option. The LIBOR rate spread ranges from 0.70% to 1.35% depending on the OP’s Senior Debt rating. Surplus proceeds from the financing of approximately $16.0 million were used for general corporate purposes.

A summary of the maturity of the OP’s contractual debt obligations (at par) as of September 30, 2003, is as follows (in thousands):

                                           Less than           1 to 3           4 to 5        After 5
                           Total           One Year            Years             Years         Years
                        -------------    --------------    ---------------    -----------   -------------
Unsecured bank debt        $ 183,035          $100,000            $83,035          $   -          $    -
Unsecured notes              625,000                 -             50,000        125,000         450,000
Mortgage debt                377,356             2,170             17,086        171,154         186,946
                        -------------    --------------    ---------------    -----------   -------------
   Total                 $ 1,185,391          $102,170           $150,121       $296,154        $636,946
                        =============    ==============    ===============    ===========   =============

Development activity as of September 30, 2003 includes domestic and international projects totaling 1.0 million square-feet. Domestically, projects include the single-phase 438,000 square-foot Chicago Premium Outlets scheduled to open in mid 2004; the 124,000 square-foot expansion of Albertville scheduled to be fully open by spring 2004. Internationally, projects underway include the 185,000 square-foot first phase of Tosu Premium Outlets near Fukuoka, Japan, scheduled to open in March 2004; and the 230,000 square-foot first phase of Punta Norte Premium Outlets in Mexico City scheduled to open in late 2004. The Chicago project is a 50/50 joint venture with Simon. The Tosu project is a development of Chelsea Japan Co., Ltd., the OP’s 40%-owned Japanese joint venture. The Punta Norte project is a development of the OP’s 50% owned Mexican joint venture. Other projects in various stages of development are expected to open in 2004 and beyond. There can be no assurance that these projects will be completed or opened, or that there will not be delays in opening or completion. All current development activity is fully financed either through project specific secured construction financing, the yen denominated line of credit, available cash or through the Senior Credit Facility. The OP will seek to obtain permanent financing once the projects are completed and income has been stabilized.

In connection with the Simon joint ventures, the OP has committed to provide 50% of the development costs, which are expected to be approximately $48.0 million for Las Vegas Premium Outlets and $46.0 million for Chicago Premium Outlets. As of September 30, 2003, the OP had contributed $40.5 million and $19.4 million to the Las Vegas and Chicago projects, respectively.

The OP has an agreement with Mitsubishi Estate Co., Ltd. and Nissho Iwai Corporation to jointly develop, own and operate premium outlet centers in Japan under the joint venture Chelsea Japan. Borrowings related to Chelsea Japan for which the Company and the OP have provided guarantees as of September 30, 2003, are as follows:

            Total Facility          |                        Outstanding
            --------------          |                        ------------
                                    |                                    US $             Due    Interest
      Yen         US $ Equivalent   |     Yen        US $ Equivalent    Guarantee         Date    Rate
      ---         ---------------   |     ---        ---------------    ---------         ----    -----
 4.0 billion (1)    $35.9 million   |   0.9 billion   $ 8.5 million     $ 8.5 million      2004     1.33%
 3.8 billion (2)     34.1 million   |   3.4 billion    30.2 million      12.1 million      2015     2.20%
 0.6 billion (2)      5.4 million   |   0.5 billion     4.8 million       1.9 million      2012     1.50%

1) Facility entered into by an equity investee of the OP that has a one-year extension option until April 1, 2005.

2) Facilities entered into by Chelsea Japan, secured by Gotemba and Rinku and 40% severally guaranteed by the OP.

In May 2002, the OP entered into a 50/50 joint venture agreement with Sordo Madaleno y Asociados and affiliates to jointly develop Premium Outlet centers in Mexico. Construction on the 230,000 square-foot first phase of Punta Norte Premium Outlets has commenced and the center is scheduled to open in late 2004. The OP is currently advancing its share of project costs up to $14 million to its joint venture partners on a recourse basis until certain title and other issues are resolved. As of September 30, 2003, the OP contributed $2.0 million for the project.

At December 31, 2002, the OP recognized an impairment loss equal to the net book value of its investment in Chelsea Interactive. The OP believes that it will not be able to recover the net book value of its investment in Chelsea Interactive through future cash flows before reaching the OP’s $60.0 million funding limit. Through September 30, 2003, the OP had funded $54.8 million and anticipates that the $5.2 million funding balance may be used to further develop the platform and to finance operating cash shortfalls and potential costs related to the disposal or discontinuance of the business. A $0.7 million and $2.4 million funding loss was reported for the three and nine months ended September 30, 2003, respectively. Future funding by the OP will be reported as a loss in the period funding is required. The OP has signed an agreement with a third party to restructure Chelsea Interactive, subject to the satisfaction of certain conditions. There can be no assurance that this joint venture will be successful or that Chelsea Interactive will be able to continue as a going concern.

The OP has minority interests ranging from 3% to 8% in several outlet centers and outlet development projects in Europe operated by Value Retail. The OP’s total investment in Europe as of September 30, 2003, was $3.6 million. The OP has also provided $17.4 million in limited debt service guarantees under a standby facility for loans arranged by Value Retail to construct outlet centers in Europe. The standby facility for new guarantees, which has a maximum of $22.0 million, expired in November 2001 and outstanding guarantees shall not survive more than five years after project completion.

To achieve planned growth and favorable returns in both the short and long-term, the OP’s financing strategy is to maintain a strong, flexible financial position by: (i) maintaining a conservative level of leverage; (ii) extending and sequencing debt maturity dates; (iii) managing exposure to floating interest rates; and (iv) maintaining liquidity. Management believes these strategies will continue to enable the OP to access a broad array of capital sources, including bank or institutional borrowings and secured and unsecured debt and equity offerings, subject to market conditions.

Net cash provided by operating activities was $129.9 million and $84.1 million for the nine months ended September 30, 2003, and 2002, respectively. The increase was primarily due to increased operating cash flow generated on the growth of the OP’s GLA and decreased losses from Chelsea Interactive and the payout of the deferred incentive compensation in March 2002 and the receipt in January 2002 of the final non-compete installment. Net cash used in investing activities increased to $186.9 million from $141.3 for the nine months ended September 30, 2003, and 2002, respectively, primarily as a result of an increase in joint venture and wholly- owned property acquisition activity. Net cash provided by financing activities increased to $63.8 million from $46.3 million for the nine months ended September 30, 2003, and 2002, respectively. The increase was primarily a result of common stock issuance in 2003 and preferred stock redemptions in 2002 offset by increased distributions in 2003 and lower debt activity.

Funds from Operations

Management believes that funds from operations (“FFO”) should be considered in conjunction with net income, as presented in the statements of income included elsewhere herein, to facilitate a clearer understanding of the operating results of the OP. The White Paper on Funds from Operations approved by the Board of Governors of NAREIT in October 1999 defines FFO as net income (loss) (computed in accordance with GAAP), excluding gains (or losses) from debt restructuring and sales of properties, plus real estate related depreciation and amortization and after adjustments for unconsolidated partnerships and joint ventures. The OP believes that FFO is helpful to investors as a measure of the performance of an equity REIT because, along with cash flow from operating activities, financing activities and investing activities, it provides investors with an indication of the ability of the OP to incur and service debt, to make capital expenditures and to fund other cash needs. The OP computes FFO in accordance with the current standards established by NAREIT, which may not be comparable with FFO reported by other REITS that do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently from the OP. FFO does not represent cash generated from operating activities in accordance with GAAP and should not be considered as an alternative to net income (determined in accordance with GAAP) as an indication of the OP’s financial performance or to cash flow from operating activities (determined in accordance with GAAP) as a measure of the OP’s liquidity, nor is it indicative of funds available to fund the OP’s cash needs, including its ability to make cash distributions.

                                                                  Three Months Ended              Nine Months Ended
                                                                     September 30,                   September 30,
 (In thousands, except per unit data):                              2003         2002           2003             2002
                                                           -----------------   -----------  ---------------  ---------------

Net income to common unitholders.......................          $29,272       $28,228       $ 80,113           $57,739
Add (deduct):
Depreciation and amortization - wholly owned...........           18,080        15,045         52,981            42,229
Depreciation and amortization - joint ventures.........            1,177           871          2,470             3,673
Amortization of deferred financing costs and
    depreciation of non-rental real estate assets......             (600)         (573)        (1,783)           (1,741)
Gain on sale of discontinued operations................             (908)            -         (5,625)                -
Gain on sale of unconsolidated investment..............                -       (10,911)             -           (10,911)
                                                           -----------------   -----------  ------------     ---------------
FFO.................................................             $47,021       $32,660      $ 128,156           $90,989
                                                           =================   ===========  ============     ===============
Average units outstanding .............................           50,693        44,224         49,766            44,084
Distributions declared per unit........................           $0.535        $0.485         $1.605            $1.375

Recent Accounting Pronouncements

In November 2002, the FASB issued Interpretation No. 45, Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others (“FIN 45”). FIN 45 requires certain guarantees to be recorded at fair value, instead of recording a liability only when a loss is probable and reasonably estimatable, as those terms are defined in FASB Statement No. 5, Accounting for Contingencies. FIN 45 also requires a guarantor to make significant new disclosures, even when the likelihood of making any payments under the guarantee is remote. The disclosure requirements of FIN 45 are effective for financial statements of interim or annual periods ending after December 15, 2002. The OP adopted the disclosure provisions of FIN 45 effective December 31, 2002. FIN 45’s initial recognition and initial measurement provisions are applicable on a prospective basis to guarantees issued or modified after December 31, 2002.

In January of 2003, the FASB issued Interpretation No. 46, Consolidation of Variable Interest Entities (“FIN 46”). FIN 46 clarifies the application of existing accounting pronouncements to certain entities in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. The provisions of FIN 46 will be immediately effective for all variable interests in variable interest entities created after January 31, 2003. The OP has not created any variable interest entities subsequent to January 31, 2003. The provisions of FIN 46 are effective beginning in the fourth quarter for variable interest entities created before January 31, 2003. The OP is currently evaluating whether it has any variable interest entities.

Critical Accounting Policies and Estimates

The OP’'s discussion and analysis of its financial condition and results of operations are based upon the OP’'s consolidated financial statements ~~which~~ which have been prepared in accordance with accounting principles generally ~~accepted~~ accepted in the United States. The preparation of these financial statements requires the OP to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. The OP bases its estimates on ~~historical~~ historical experience and on various other assumptions that are believed to be ~~reasonable~~ reasonable under the circumstances, the results of which form the basis for ~~making~~ making judgments about the carrying values of assets and liabilities that are ~~not~~ not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

The OP believes the following critical accounting policies affect its more significant judgments and estimates used in the preparation of its consolidated financial statements.

Purchase Price Allocation

The OP allocates the purchase price of real estate to land, building, and tenant improvements and if determined to be material, intangibles, such as the value of above, below and at market leases and origination cost associated with in-place leases. The OP depreciates the amount allocated to building and other intangible assets over their estimated useful lives, which generally range from five to forty years. The values of the above and below market leases are amortized and recorded as either an increase (in the case of below market leases) or a decrease (in the case of above market leases) to rental income over the remaining term of the associated lease. The values associated with in-place leases are amortized over the term of the lease. If a tenant vacates its space prior to the contractual termination of the lease and no rental payments are being made on the lease, any unamortized balance of the related intangible will be written off. The tenant improvements and origination costs are amortized as an expense over the remaining life of the lease (or charged against earnings if the lease is terminated prior to contractual expiration date). The OP assesses fair value based on estimated cash flow projections that utilize appropriate discount and capitalization rates and available market information. Estimates of future cash flows are based on a number of factors including the historical operating results, known trends and market/economic conditions that may affect the property.

Bad Debt

The OP maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its tenants to make required rent payments. If the financial condition of the OP’'s tenants were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. The OP’'s allowance for doubtful accounts included in tenant accounts receivable totaled $2.27 million and $21.6 million at June ~~September~~ 30, ~~2003~~2004, and December 31, ~~2002~~2003, respectively.

Valuation of Investments

On a periodic basis, management assesses whether there are any indicators that the value of real estate properties, including joint venture properties, may be impaired. If the carrying amount of the property is greater than the estimated expected future cash flow (undiscounted and without interest charges) of the asset, impairment has occurred. ~~The~~In OPMarch ~~will~~2004, ~~then~~the ~~record~~OP recognized an impairment loss ~~equal to the difference between the carrying amount and the fair value~~ of ~~the asset~~$0. ~~The~~9 OPmillion ~~does~~on ~~not believe that~~ the ~~value~~anticipated ofdisposition ~~any~~ of ~~its rental properties was~~two ~~impaired~~non-core ~~at September 30, 2003~~assets. The OPloss ~~currently~~from ~~believes~~impairment ~~that~~is itreflected ~~will~~in ~~not~~other ~~be able~~expense ~~to recover the net book value of its investment~~ in ~~Chelsea Interactive through future cash flows unless Chelsea Interactive is able to achieve positive cash flow before reaching~~ the ~~$60.0 million funding limit. Due to current market~~ ~~conditions~~accompanying ~~and~~financial ~~the~~statements ~~costs~~for ~~of operating~~ the ~~platform, future funding by the OP will be reported as a loss in the~~ period ~~funding~~ended ~~occurs.~~June ~~As of September~~ 30, ~~2003,~~ ~~$54~~2004.8 ~~million had been funded and $0.7 million and $2.4 million has been reported as a loss for the three and nine month periods then ended.~~

General Overview

From July 1, 2003 to June 30, 2004, rental revenue increased $15.4 million or 12.1% from wholly-owned properties to $143.1 million. Second quarter rental revenue grew $8.2 million or 12.8% to $72.6 million compared to the prior year. Since July 1, 2003, the OP acquired two centers and expanded one wholly-owned center, which increased total revenue to $96.8 million, up 11.7% from second quarter 2003. Total revenue for the first six months in 2004 was $189.9 million, representing an increase of 11.8% from the year-earlier period. Sustainable growth was supplemented through the joint venture development of two new Premium Outlets in 2004 and the expansion of one Premium Outlet center in 2003.

Income from unconsolidated investments for the three and six months ending June 30, 2004, contributed approximately 11% to NOI compared with 7% and 5%, respectively in 2003. Chelsea Japan opened its fourth project, Tosu Premium Outlets in March 2004 and expanded Gotemba Premium Outlets in July 2003, both 40% owned. Las Vegas Premium Outlets and Chicago Premium Outlets, both 50% owned, opened in August 2003 and May 2004, respectively.

At June 30, 2004, the OP's portfolio consisted of 60 wholly or partially owned properties containing 16.6 million square feet of GLA. In 2004, the OP changed its reportable segments. As of June 30, 2004, the OP's Outlets include 40 centers containing 13.9 million square feet of GLA and Other Retail includes 20 centers containing 2.7 million square feet of GLA.

Details of the 1.7 million square feet of net GLA added since July 1, 2003 are as follows:



                                                      12 months          6 months              6 months
                                                          ended             ended                 ended
                                                  June 30, 2004     June 30, 2004     December 31, 2003
                                                  -------------     -------------     -----------------
Changes in GLA (sf in 000's):
New centers developed:
  Chicago Premium Outlets (50% owned) ........          438                 438                  -
  Las Vegas Premium Outlets (50% owned) ......          435                   -                435
  Tosu Premium Outlets (40% owned)............          187                 187                  -
                                                  ---------          -----------        ------------
  Total new centers. .........................        1,060                 625                435

Centers expanded:
  Gotemba Premium Outlets (40% owned) ........          170                   -                170
  Albertville Premium Outlets.................          125                   -                125
  Other (net) ................................           (8)                  -                 (8)
                                                  ---------          -----------        ------------
Total centers expanded. ......................          287                   -                287
Centers acquired:
  Las Vegas Outlet Center.....................          477                   -                477
  Lakeland Factory Outlet Mall (1) ...........          319                   -                319
                                                  ---------          -----------        ------------
Total centers acquired .......................          796                   -                796

Centers disposed:
  American Tin Cannery Premium Outlets (2)....         (135)                  -               (135)
  Other Retail(3) ............................         (319)               (152)              (167)
                                                  ---------          -----------        ------------
Total centers disposed: ......................         (454)               (152)              (302)
Net GLA added during the period...............        1,689                 473              1,216
GLA at the end of period .....................       16,600              16,600             16,127

1)	Acquired Lakeland Factory Outlet Mall in August 2003 in conjunction with the Las Vegas Outlet Center. The Lakeland property is held for sale.

2)	In January 2004, the OP terminated its long-term lease agreement, expiring December 2004.

3)	Consists of properties sold at Factory Stores of America: Iowa, Louisiana; Lake George, New York; and Mesa, Arizona.

Results of Operations

Comparison of the three months ended June 30, 2004 with the three months ended June 30, 2003.

Income from continuing operations was $34.3 million, an increase of $8.0 million, or 30.6% from $26.3 million in 2003. The increase was primarily the result of the acquisition, development and expansion of six centers in 2003 and development of two centers in 2004, higher rents from releasing and renewals and contribution to earnings from Chelsea Interactive, partially offset by increases in general and administrative, interest and other expenses.

Base rentals improved to $66.9 million, an increase of $7.4 million or 12.5% from $59.5 million in 2003, primarily due to the acquisition of three centers in 2003, higher average rents on releasing and renewals and the expansion of one wholly-owned center in late 2003.

Percentage rents rose $0.8 million or 16.1% to $5.7 million in 2004, from $4.9 million in the previous year, primarily from greater tenant sales and acquisitions during 2003.

Expense reimbursements, representing contractual recoveries from tenants of certain common area maintenance, operating, real estate tax, promotional and management expenses, increased $1.3 million, or 6.4%, to $21.7 million from $20.4 million in 2003, due to the recovery of operating and maintenance costs from increased GLA. The average recovery of reimbursable expenses for the Domestic Outlets was 89.3% in 2004 compared with 89.2% in the earlier period.

Other income increased $0.6 million or 34.5% to $2.4 million from $1.8 million in 2003, primarily due to improved ancillary operating income and interest income from higher rates in 2004, partially offset by a $0.3 million gain on an outparcel sale in 2003.

Operating and maintenance expenses increased $1.6 million or 6.8% to $25.7 million from $24.1 million in 2003. The increase was primarily due to costs related to increased GLA.

Depreciation and amortization expense was up $0.8 million or 4.8% to $17.9 million from $17.1 million in 2003 due to increased depreciation from the acquisition of three centers and the expansion of one wholly-owned center in 2003.

General and administrative expense grew $1.6 million or 67.4% to $4.1 million from $2.5 million in 2003, primarily due to increases in compensation, corporate governance, professional and legal fees.

Other expenses decreased $1.8 million or 73.5% to $0.6 million in 2004 from $2.4 million in the previous year. The decrease in expenses was primarily from Chelsea Interactive's contribution to earnings of $1.0 million in 2004 compared with a $0.9 million loss in 2003.

Income from unconsolidated investments was up $2.8 million, or 112.6%, to $5.3 million from $2.5 million in 2003, due to higher earnings from Chelsea Japan resulting from the opening of one center in 2003, and the opening of Las Vegas Premium Outlets in 2003 as well as the opening of Chicago Premium Outlets in May 2004.

Interest expense increased $2.6 million or 15.5% to $19.3 million from $16.7 million in 2003, due to higher debt that financed acquisitions and development.

Results of Operations (continued)

Comparison of the six months ended June 30, 2004 with the six months ended June 30, 2003.

Income from continuing operations was $64.9 million, representing an increase of $14.9 million, or 29.7% from $50.0 million in 2003. The increase was primarily the result of the acquisition, development and expansion of six centers in 2003 and development of two centers in 2004, higher rents from releasing and renewals and contribution to earnings from Chelsea Interactive, partially offset by increases in general and administrative, interest and other expenses due to the growth of the portfolio.

Base rentals were $132.5 million, an increase of $13.9 million, or 11.7% from $118.6 million in 2003, primarily due to the acquisition of three centers in 2003, higher average rents on releasing and renewals and the expansion of one wholly-owned center in late 2003.

Percentage rents rose $1.5 million or 16.4% to $10.5 million in 2004, from $9.0 million in the previous year, primarily from improved tenant sales and acquisitions during 2003.

Expense reimbursements, representing contractual recoveries from tenants of certain common area maintenance, operating, real estate tax, promotional and management expenses, increased $3.5 million, or 8.9%, to $42.5 million from $39.0 million in 2003, due to the recovery of operating and maintenance costs from increased GLA. The average recovery of reimbursable expenses for the Domestic Outlets was 88.3% in 2004 compared with 88.2% in the earlier period.

Other income increased $1.1 million or 33.7% to $4.3 million from $3.2 million in 2003, primarily due to an increase in ancillary operating income and interest income from higher rates in 2004, partially offset by a gain on an outparcel sale in 2003.

Operating and maintenance expenses increased $4.2 million, or 9.1%, to $50.8 million from $46.6 million in 2003. The increase was primarily due to costs related to increased GLA.

Depreciation and amortization expense was up $1.4 million or 3.9% to $35.8 million from $34.4 million in 2003 due to increased depreciation from the acquisition of three centers and the expansion of one center in late 2003.

General and administrative expense grew $3.0 million or 65.3% to $7.7 million from $4.7 million in 2003, primarily due to increases in compensation, employee benefits and corporate governance, professional and legal fees.

Other expenses decreased $1.5 million or 33.6% to $3.1 million in 2004 from $4.6 million in the previous year. The decrease in expenses was primarily from Chelsea Interactive's contribution to earnings of $1.0 million in 2004 compared with a $1.7 million loss in 2003, partially offset by the impairment loss on two non-core centers sold in 2004.

Income from unconsolidated investments was up $6.4 million, or 162.2%, to $10.3 million from $3.9 million in 2003, chiefly due to higher earnings from Chelsea Japan, resulting from the opening of two new centers and the expansion of one center and the opening of Las Vegas Premium Outlets in 2003 and Chicago Premium Outlets in May 2004. Chicago Premium Outlets also had an out parcel sale in the first quarter of 2004.

Interest expense increased $4.4 million or 13.3% to $37.9 million from $33.5 million in 2003, due to higher debt that financed acquisitions and development.

Liquidity and Capital Resources

The OP believes it has adequate financial resources to fund operating expenses, distributions, and planned development, construction and acquisition activities over the short term, which is less than 12 months and the long term, which is 12 months or more. Operating cash flow for the year ended December 31, 2003 of $181.6 million is expected to increase with a full year of operations from the development, acquisition and expansion of three joint venture centers and four wholly owned centers, which contributed 2.1 million square feet of GLA during 2003 as well as scheduled openings of approximately 975,000 square feet of new joint venture GLA in 2004. The OP has adequate funding sources to complete and open all current development projects from available cash, credit facilities and secured construction financing. The OP also has access to the public markets through its remaining $700 million debt and the Company's $750 million equity shelf registrations.

Common distributions declared and recorded in 2004 were $61.6 million, or $1.20 per unit. The OP's distribution payout ratio as a percentage of net income before gain or loss on sale of assets and depreciation and amortization (reduced by amortization of deferred financing costs, depreciation of non-real estate assets and preferred distribution ("FFO")) was 63%. The OP's senior unsecured bank line of credit ("Senior Credit Facility") limits aggregate distributions to the lesser of (i) 90% of FFO on an annual basis or (ii) 100% of FFO for any two consecutive quarters.

The OP's $200 million Senior Credit Facility expires in March 2005 (unless extended until March 2006), bears interest on the outstanding balance at an annual rate equal to the London Interbank Offered Rate ("LIBOR") plus 0.95% (2.06% at June 30, 2004) or the prime rate, at the OP's option and has an annual facility fee of 0.125%. The LIBOR rate spread ranges from 0.85% to 1.50% depending on the OP's Senior Debt rating. At June 30, 2004, $75.0 million was outstanding under the Senior Credit Facility.

In March 2004, the OP issued $100 million 3.5% unsecured notes due March 15, 2009. The notes were priced at 99.534% of par value to yield 3.603% to investors. Proceeds were used to repay borrowings under a $100 million bridge loan due July 2004.

A summary of the maturity of the OP's contractual debt obligations (at par) as of June 30, 2004, is as follows (in thousands):


                                                                                                           More
                                                  Less than           2 to 3            4 to 5             than
                                     Total           1 Year            Years             Years          5 Years
                              -------------     ------------     ------------     -------------    -------------
Unsecured bank debt               $ 161,045         $81,235          $23,636           $ 3,600          $52,574
Unsecured notes                     725,000               -           50,000           225,000          450,000
Mortgage debt                       310,586           7,041           15,728           161,897          125,920
                              -------------     ------------     ------------     -------------    -------------
   Total debt                     1,196,631          88,276           89,364           390,497          628,494
Ground  and operating leases         23,326           1,777            2,147             1,603           17,799
Real estate commitments             166,168         166,168                -                 -                -
Deferred compensation                24,000               -           24,000                 -                -
                              -------------     ------------     ------------     -------------    -------------
Total obligations                $1,410,125        $256,221         $115,511          $392,100         $646,293
                              =============     ============     ============     =============    =============

Liquidity and Capital Resources (continued)

At June 30, 2004, construction for international and domestic development included projects totaling 0.9 million square feet of GLA. Internationally, projects include the 230,000 square-foot first phase of Punta Norte Premium Outlets in Mexico City scheduled to open in late 2004 and the expansion of two centers in Japan: 51,000 square feet at Sano Premium Outlets in July 2004 and 70,000 square feet at Rinku Premium Outlets in December 2004. In addition, the 178,000 square-foot first phase of Toki Premium Outlets, located near Nagoya, Japan, is scheduled to be completed by spring 2005. The Punta Norte project is a development of the OP's 50% owned Mexican joint venture. The Sano, Rinku and Toki projects are developments of the OP's 40% owned Japanese joint venture. Domestically, the 380,000 square-foot Seattle Premium Outlets, located near Seattle, Washington, commenced construction in 2004 and is scheduled to open in spring 2005. Other projects in various stages of development are expected to commence construction in 2005 and open in 2006 and beyond. There can be no assurance that these projects will be completed or opened, or that there will not be delays in opening or completion. All current development activity is fully financed either through project specific secured construction financing, the yen denominated line of credit, the peso denominated line of credit, available cash or through the Senior Credit Facility. The OP will seek to obtain permanent financing once the projects are completed and income has been stabilized.

Pursuant to the Simon/Chelsea merger agreement, the Operating Partnership is committed to redeem its Series B Cumulative Redeemable Preferred Units for $65 million.

In May 2004, the OP exercised its option to purchase a 290,000 square foot shopping center located in Carlsbad, California. The OP expects to complete the acquisition in the third quarter of 2004, for a purchase price which may be less than, but should not exceed, $104 million.

In connection with the Simon joint venture, the OP has committed to provide 50% of the development costs, or approximately $45.0 million for Chicago Premium Outlets. As of June 30, 2004, the OP had contributed $39.6 million to the Chicago project.

The OP has an agreement with Mitsubishi Estate Co., Ltd. and Nissho Iwai Corporation to jointly develop, own and operate Premium Outlet centers in Japan under the joint venture Chelsea Japan. Borrowings related to Chelsea Japan for which the Company and the OP have provided guarantees as of June 30, 2004, are as follows:


        Total Facility              |                             Outstanding
----------------------------------  |  ---------------------------------------------------------------------
                                    |                                                         Due       Interest
  Yen              US $ Equivalent  |      Yen         US $ Equivalent      US $ Guarantee    Date         Rate
---------         ---------------   |    --------     ---------------    -----------------  ---------   --------
 3.8 billion (1)    $34.9 million   |    3.1 billion  $28.3 million       $11.3 million       2015         2.20%
 0.6 billion (1)      5.5 million   |    0.5 billion    4.3 million         1.7 million       2012         1.50%

(1)	Facilities entered into by Chelsea Japan, secured by Gotemba and Rinku and 40% severally guaranteed by the OP.

The Company along with the OP has a 50/50 joint venture agreement with Sordo Madaleno y Asociados and affiliates to jointly develop, own and operate Premium Outlet centers in Mexico. In July 2003, the first development project broke ground, the 230,000 square-foot first phase of Punta Norte Premium Outlets, located near Mexico City which is scheduled to open in late 2004. The OP is responsible for financing its 50% share of project costs or approximately $15.0 million. As of June 30, 2004, the OP had contributed $12.2 million.

In January 2004, a wholly-owned subsidiary of the OP entered into a 180 million peso-dominated revolving facility (US $15.7 million as of June 30, 2004) to provide funding for projects in Mexico. The peso facility has a three- year term and the drawn funds bear interest at the Interbank Interest Equilibrium Rate ("TIIE") plus 0.825% plus the bank's cost of funds spread limited to 20% of the TIIE, with an annual facility fee of 0.15% on the unused balance. The TIIE with rate spread ranges from 0.725% to 1.37% depending on the OP's Senior Debt rating. This facility is guaranteed by the Company and the OP. At June 30, 2004, the outstanding balance was 93.5 million pesos (approximately US $8.1 million).

Liquidity and Capital Resources (continued)

On February 17, 2004, the OP announced a joint venture between Chelsea Interactive and a publicly traded third party, GSI Commerce, Inc. ("GSI-Chelsea Solutions"). Under the terms of the agreement, Chelsea Interactive will no longer operate its e-commerce technology platform, but will retain a minority interest in GSI-Chelsea Solutions. Chelsea Interactive's largest clients have entered into service agreements with GSI-Chelsea Solutions and transitioned the e-commerce activities to the GSI-Chelsea platform in the second quarter of 2004.

The OP has minority interests ranging from 3% to 8% in several outlet centers and outlet development projects in Europe operated by Value Retail. The OP's total investment in Europe as of June 30, 2004, was $3.6 million. The OP has also provided $14.5 million in limited debt service guarantees under a standby facility for loans arranged by Value Retail to construct outlet centers in Europe. The standby facility for new guarantees, which has a maximum of $22.0 million, expired in November 2001 and outstanding guarantees shall not survive more than five years after project completion.

To achieve planned growth and favorable returns in both the short and long-term, the OP's financing strategy is to maintain a strong, flexible financial position by: (i) maintaining a conservative level of leverage; (ii) extending and sequencing debt maturity dates; (iii) managing exposure to floating interest rates; and (iv) maintaining liquidity. Management believes that these strategies will continue to enable the OP to access a broad array of capital sources, including bank or institutional borrowings and secured and unsecured debt and equity offerings, subject to market conditions.

Net cash provided by operating activities was $103.4 million and $88.7 million for the six months ended June 30, 2004, and 2003, respectively. The increase was primarily due to increased operating cash flow generated from the growth of the OP's GLA. Net cash used in investing activities decreased to $44.6 million in 2004 from $80.9 million in 2003 due to the acquisition activity in 2003, partially offset by an increase in proceeds from the sale of a center. Net cash used in financing activities increased to $59.2 million from $9.0 million for the six months ended June 30, 2004, and 2003, respectively. The increase was primarily the result of increased borrowings and debt repayments in 2004.

Funds from Operations

Management believes that funds from operations ("FFO") should be considered in conjunction with net income, as presented in the statements of operations included elsewhere herein, to facilitate a clearer understanding of the operating results of the OP. The White Paper on Funds from Operations approved by the Board of Governors of NAREIT in October 1999 defines FFO as net income (loss) (computed in accordance with GAAP), excluding gains (or losses) from debt restructuring and sales of properties, plus real estate related depreciation and amortization and after adjustments for unconsolidated partnerships and joint ventures. Management considers FFO to be a key measure of its operating performance that is not specifically defined by accounting principles generally accepted in the United States ("GAAP"). The OP believes that FFO is helpful to investors because it is a widely recognized measure of the performance of equity REITs and provides a relevant basis for comparison among REITs. Management of the OP also uses FFO internally to measure the operating performance of the OP's portfolio.

FFO does not represent cash generated from operating activities in accordance with GAAP and should not be considered as an alternative to net income (determined in accordance with GAAP) as an indication of the OP's financial performance or to cash flow from operating activities (determined in accordance with GAAP) as a measure of the OP's liquidity, or is it indicative of funds available to fund the OP's cash needs, including its ability to make cash distributions.


Funds from Operations (continued)
                                                                                 Three Months Ended
                                                                                      June 30,
                                                                          2004                   2003
  (In thousands, except per unit data):                         $             Per unit         $          Per unit
                                                              ---------------------------    ------------------------
  Net income..............................................      $34,325         $0.67           $31,375      $0.63
    Preferred distribution................................       (2,296)        (0.05)           (2,296)     (0.04)
                                                              ------------  -------------    -----------  -----------
  Net income available to unitholders.....................       32,029          0.62            29,079       0.59
    Depreciation and amortization-wholly-owned............       17,938          0.35            17,269       0.35
    Depreciation and amortization-joint ventures..........        1,879          0.04               694       0.01
     Amortization of deferred financing costs and
        depreciation of non-rental real estate assets.....         (685)        (0.01)             (583)     (0.01)
    Net gain on sale of assets............................            -             -            (4,717)     (0.10)
                                                              ------------  -------------    -----------  -----------
 FFO available to common unitholders......................      $51,161         $1.00           $41,742      $0.84
                                                              ============  =============    ===========  ===========

  Weighted average units outstanding:
  General partner                                               44,143                           42,041
  Limited partners                                               7,203                            7,442
                                                              -----------                    -----------
  Total                                                         51,346                           49,483
                                                              ===========                    ===========


                                                                                 Six Months Ended
                                                                                     June 30,
                                                                          2004                   2003
  (In thousands, except per unit data):                         $             Per unit         $          Per unit
                                                              ---------------------------    ------------------------
  Net income..............................................      $64,876         $1.27           $55,433      $1.12
    Preferred distribution................................       (4,592)        (0.09)           (4,592)     (0.09)
                                                              ------------  -------------    -----------  -----------
  Net income available to unitholders.....................       60,284          1.18            50,841       1.03
    Depreciation and amortization-wholly-owned............       35,754          0.70            34,901       0.71
    Depreciation and amortization-joint ventures..........        3,543          0.07             1,293       0.03
     Amortization of deferred financing costs and
        depreciation of non-rental real estate assets.....       (1,365)        (0.03)           (1,183)     (0.02)
    Net gain on sale of assets............................            -             -            (4,717)     (0.10)
                                                              ------------  -------------    -----------  -----------
 FFO available to common unitholders......................      $98,216         $1.92           $81,135     $1.65
                                                              ============  =============    ===========  ===========

  Weighted average units outstanding:
  General partner                                                43,945                          41,801
  Limited partners                                                7,258                           7,501
                                                              -----------                    -----------
  Total                                                          51,203                          49,302
                                                              ===========                    ===========

Economic Conditions

Substantially all leases contain provisions, including escalations of base rents and percentage rentals calculated on gross sales, to mitigate the impact of inflation. Inflationary increases in common area maintenance and real estate tax expenses are substantially reimbursed by tenants. Virtually all tenants have met their lease obligations and the OP continues to attract and retain quality tenants. The OP intends to reduce operating and leasing risks by continually improving its tenant mix, rental rates and lease terms and by pursuing contracts with creditworthy upscale and national brand-name tenants.

Virtually all tenants have met their lease obligations and the OP continues to attract and retain quality tenants. The OP intends to reduce operating and leasing risks by continually improving its tenant mix, rental rates and lease terms and by pursuing contracts with creditworthy upscale and national brand-name tenants.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

The OP is exposed to changes in interest rates primarily from its floating rate debt arrangements. In December 2000, the OP implemented a policy to protect against interest rate and foreign exchange risk. The OP’'s primary strategy is to protect against ~~this~~these ~~risk~~risks by using derivative transactions as appropriate to minimize the variability that floating rate interest and foreign currency fluctuations could have on cash flow. In December 2000, a wholly- owned subsidiary of the OP entered into an interest rate swap agreement effective January 2, 2001 with a financial institution for a notional amount of $69.3 million amortizing to $64.1 million to hedge against unfavorable fluctuations in the LIBOR rates of ~~its~~one ~~secured~~of ~~mortgage~~its ~~loan~~term ~~facility~~loans. The hedge ~~effectively~~ effectively produces a fixed rate of 7.2625% on the notional amount until January 1, 2006.

At ~~September~~June 30, ~~2003~~2004, a hypothetical 100 basis point adverse ~~move~~ move (increase) in US Treasury and LIBOR rates applied to unhedged debt would adversely affect the OP’'s annual interest cost by approximately $1.~~8 million~~0 million annually.

Following is a summary of the OP’'s debt obligations at ~~September~~ June 30, 2004 ~~2003,~~ (in thousands):

                                                                                                                        Expected Maturity Date
                        -------------------------------- -------------------------------------------------------------- -------

                              2005      2006        2007         2008         2009     Thereafter        Total   Fair Value
                        ----------   -------    ---------    ----

                               2004       2005    2006      2007        2008       Thereafter     Total      Fair Value
                               ----       -   ---    ----      ---  -        ----       -------  ---     -----      ---    -----------
Fixed Rate Debt:                       $    -     $49,945   967         -             $124,866    890     $165163,505    166     $607149,439     509      $947554,755     373    $1,061041,755905   $1,104,531

Average Interest Rate:            -             8.38%            -                    7.25%               6.99%       7        5.1821%                  7.2205%         6.86%

Variable Rate Debt:         100        91,000      83,035   932         -               -        8,138           -      61            -         60,725975(1)    161,045      244161,760        244,760045

Average Interest Rate:              1.9179%       2         -        8.0542%   -               -           -                    -          2.8236%                  2.1944%

(1)	Subject to an interest rate swap, which effectively produces a fixed rate of 7.2625% until January 1, 2006.

Item 4. Controls and Procedures

The Company's chief executive officer and chief financial ~~officer~~ officer evaluated the effectiveness of our disclosure controls and procedures (as defined in rule 13a-~~14(c)~~14c under the Securities Exchange Act of 1934, as amended) as of ~~September~~June 30, ~~2003~~2004 and, based on that evaluation, concluded that, as of of the end of the period covered by this report, we had sufficient controls and procedures for recording, processing, summarizing and reporting information that is required to be disclosed in our reports under the Securities Exchange Act of 1934, as amended, within the time periods specified in the SEC’'s rules and forms.

During the ~~quarter~~six months ended ~~September~~June 30, ~~2003~~2004, there have not been any significant changes to our internal controls including any corrective actions with regard to significant deficiencies and material weaknesses or other factors that could significantly affect these controls.

CPG Partners, L.P.

Part II. Other Information

Item 1. Legal Proceedings

On June 24, 2004, a lawsuit was filed in the Court of Chancery in Essex County, New Jersey seeking to enjoin the merger. The complaint, which was brought by a purported stockholder of the Company, names the Company and each of the members of its board of directors as defendants.

The complaint alleges that the defendants have violated fiduciary duties of care, loyalty, candor and independence owed to the public stockholders of the Company. The plaintiff seeks, among other things, class action certification, a declaration that the merger agreement is unenforceable, a preliminary and permanent injunction against the defendants from proceeding with or closing the merger unless and until the Company implements a procedure that is free from conflicts of interest and an award of attorneys' fees and costs of suit.

The Company believes that all allegations contained in the complaint are without merit and intends to vigorously defend the action.

Item 6. Exhibits and Reports on Form 8-K

(a)             Exhibit No.                    Description

(a)           31.1                  Section 32302 Description Certifications
              31.2                  Section 302 Certifications

              32.1                  Section 906 Certifications
              32.2                  Section 906 Certifications

(b)  Current Report on Form 8K reporting under Items 5 and 7 on an event that
     occurred June 20, 2004.

CPG Partners, L.P.

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.

CPG ~~PARTNERS~~Partners, L.P. By: /s/ Michael J. Clarke Michael J. Clarke Chief Financial Officer ~~Date: November 12, 2003~~

Date: August 11, 2004

CERTIFICATION

I, David C. Bloom, Chief Executive Officer of Chelsea Property Group, Inc., the sole general partner of CPG Partners, L.P., (the "OP"), certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of the OP;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Intentionally Omitted

(c)

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to material affect, the registrant's internal control over financial reporting; and

5.	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 11, 2004

/s/ David C. Bloom
David C. Bloom
Chief Executive Officer

CERTIFICATION

I, Michael J. Clarke, Chief Financial Officer of Chelsea Property Group, Inc., the sole general partner of CPG Partners, L.P., (the "OP"), certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of the OP;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a)

(b)

Intentionally Omitted

(c)

(d)

5.	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 11, 2004

/s/ Michael J. Clarke
Michael J. Clarke
Chief Financial Officer

CERTIFICATION

I, David C. Bloom, Chief Executive Officer of Chelsea Property Group, Inc., the sole general partner of CPG Partners, L.P., (the "OP"), pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, do hereby certify as follows:

1.	The quarterly report on Form 10-Q of the OP for the period ended June 30, 2004 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.	The information contained in such Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the OP.

IN WITNESS WHEREOF, I have executed this Certification this 11th day of August, 2004.

/s/ David C. Bloom
David C. Bloom
Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to, CPG Partners, L.P., and will be retained by CPG Partners, L.P., and furnished to the Securities and Exchange Commission or its staff upon request.

CERTIFICATION

I, Michael J. Clarke, Chief Financial Officer of Chelsea Property Group, Inc., the sole general partner of CPG Partners, L.P., (the "OP"), pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, do hereby certify as follows:

1.	The quarterly report on Form 10-Q of the OP for the period ended June 30, 2004 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.	The information contained in such Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the OP.

IN WITNESS WHEREOF, I have executed this Certification this 11th day of August, 2004.

/s/ Michael J. Clarke
Michael J. Clarke
Chief Financial Officer

Filing Compare · CPG PARTNERS LP