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 June 30, 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~~X or] ~~other~~QUARTERLY ~~jurisdiction~~REPORT ofPURSUANT ~~incorporation~~TO orSECTION ~~organization)~~13 ~~22-3258100~~OR 15(~~I.R.S.~~d) ~~Employer~~OF THE ~~Identification~~SECURITIES ~~No.)~~EXCHANGE ACT OF 1934

~~103~~For ~~Eisenhower~~the ~~Parkway,~~quarterly ~~Roseland,~~period ~~New~~ended ~~Jersey~~June ~~07068 (Address~~30, ~~of principal executive offices - zip code)~~2005 ~~(973) 228-6111 (Registrant's telephone number, including area code)~~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.)

105 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. Consolidated Balance Sheets (Unaudited) (In thousands)

Index
                                                                                            June 30,          December 31,
                                                                                                2005                  2004
                                                                                      -----------------   -----------------
                                                                                           (Unaudited)
Assets:
Rental properties:
     Land.......................................................................            $ 342,542          $   354,514
     Depreciable property.......................................................            1,973,780            1,919,605
                                                                                      -----------------   -----------------
Total rental property...........................................................            2,316,322            2,274,119
Accumulated depreciation........................................................             (424,995)            (390,783)
                                                                                      -----------------   -----------------
Rental properties, net..........................................................            1,891,327            1,883,336
Cash and cash equivalents.......................................................               15,752               33,362
Restricted cash-escrows.........................................................               28,023               27,418
Tenant accounts receivable (net of allowance for doubtful
  accounts of $2,225 in 2005 and $2,242 in 2004)................................                3,109               11,534
Deferred rent receivable........................................................               32,901               30,504
Property held for sale..........................................................                    -                3,500
Investments in unconsolidated affiliates........................................              142,929              149,631
Notes receivable-related parties................................................               19,479               14,184
Deferred costs, net.............................................................               19,793               17,082
Other assets....................................................................               35,032               22,047
                                                                                      -----------------   -----------------
Total assets....................................................................           $2,188,345           $2,192,598
                                                                                      =================   =================

Liabilities and partners' capital:
Liabilities:
     Unsecured bank debt.........................................................            $ 59,975        $    84,835
     Unsecured public notes......................................................             722,115            721,849
     Mortgage debt...............................................................             312,195            316,354
     Notes payable-related party.................................................             317,570            300,260
     Construction payables.......................................................               8,351             14,654
     Accounts payable and accrued expenses.......................................              74,737             59,158
     Other liabilities...........................................................              23,481             23,281
                                                                                      -----------------   -----------------
Total liabilities................................................................           1,518,424          1,520,391
                                                                                      -----------------   -----------------

Commitments and contingencies

Partners' capital:

Chelsea Property Group, Inc.....................................................              119,660              528,613
CPG Holdings, LLC...............................................................              444,148                    -
Simon Property Group, LP........................................................              104,421              144,343
Accumulated other comprehensive income (loss)...................................                1,692                 (749)
                                                                                      -----------------   -----------------
Total partners' capital.........................................................              669,921              672,207
                                                                                      -----------------   -----------------
Total liabilities and partners' capital.........................................           $2,188,345           $2,192,598
                                                                                      =================   =================

Part I. Financial Information

Item 1. Financial Statements (Unaudited) Page

Consolidated Balance Sheets as of June 30, 2004, and December 31, 2003 2

Consolidated Statements of Income for the three and six months ended June 30, 2004, and 2003 3

Consolidated Statements of Cash Flows for the six months ended June 30, 2004, and 2003 4

Notes to Consolidated Financial Statements 5

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 20

Item 3. Quantitative and Qualitative Disclosures about Market Risk 28

Item 4. Controls and Procedures 28

Part II. Other Information

Item 1. Legal Proceedings 29

Item 6. Exhibits and Reports on Form 8-K 29

Signatures 30

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

                                                                                  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. Consolidated Statements of Income for the Three and Six Months Ended June 30, ~~2004~~2005 and ~~2003~~2004 (Unaudited) (In thousands, except per unit data)

                                                                                                                             Three Months                                   Six Months
                                                                                                                             Ended June 30                               Ended June 30
                                                                                                                         2005            2004        2003                       2005         2004        2003
                                                                                                              --------    ------  --      ------------   -------------  --------------
Revenues:
   Base rent.....................................    ......       $ 74,038         $66,892    699         $ 59145,461      347       $132,536    $118,620133
   Percentage rent...............................      ......          7,606           5,708       4658           12,915        873         10,514       9,036435
   Expense reimbursements........................     ......         23,376          21,741      20670           45,434        685         42,470      38,987330
   Other income..................................      ......          3,296           2,420       1397            7,799         184          4,343       3,248308
                                                                                                              --------    ------  --      ------------   -------------  --------------
Total revenues...................................     ......        108,316          96,761      86424          211,609       089        189,863     169,891206
                                                                                                              --------    ------  --      ------------   -------------  --------------

Expenses:
   Operating and maintenance.....................     ......         26,931          25,738      24583           52,097        956         50,839      46,618545
   Depreciation and amortization.................     17......         19,938      275          17,124        810           38,224         35,754      34,407475
   General and administrative....................      ......          3,197           4,131       2            6,468         138          7,721       4,670
   Other.........................................        ......          1,848             647       2            3,444         420          3,083       4,639052
                                                                                                              --------    ------  --      ------------   -------------  --------------
Total expenses...................................     ......         51,251          48,454      46171          100,133        97738         96,397      90,334793
                                                                                                              --------    ------  --      ------------   -------------  --------------

Income before unconsolidated investments,
   interest expense, and discontinued
    operations....................................              57,065          48,307      40253          110,476        351         92,466      79,557413

Income from unconsolidated investments...........      ......          7,283           5,305       2           13,495        347         10,347       3,946
Interest expense.................................    ......        (21,125)        (19,287)             (1641,694925)             (37,937)    (33,469)
                                                                                                              --------    ------  --      ------------   -------------  --------------
Income from continuing operations................     ......         43,223          34,325      26271           81,277        773         64,876      50,034823
Income from discontinued operations..............          -         381             -         682
Gain on sale of discontinued operations..........          -       4,717             -       4,717               54                -             53
                                                                                                              --------    ------  --      ------------   -------------  --------------
Net income.......................................     ......         43,223          34,325      31           81,375        773         64,876      55,433
Preferred unit requirement.......................     ......             -           (2,296)                    -         (2,296)       (4,592)     (4,592)
                                                                                                              --------    ------  --      ------------   -------------  --------------
Net income available to common unitholders.......   ......       $ 43,223        $ 32,029             $ 2981,079      773       $ 60,284   $  50,841
                                                                                                              ========    ======  ==      ============   =============  ==============

Net income to common unitholders:
GeneralChelsea partnerProperty Group, Inc..................................           $ 28,819        $ 27,536              $24 61,705       359        $51,744     $43,118
LimitedSimon partnersProperty Group, LP.................................                6,738           4,493       4           12,374         748          8,540       
CPG Holdings, LLC......................................          7,723666               -           7,666              -
                                                                                                              --------    ------  --      ------------   -------------  --------------
Total............................................    ......       $ 43,223         $32,029               $2981,079       773        $60,284     $50,841
                                                                                                              ========    ======  ==      ============   =============  ==============

Net income per common unit:
General
Chelsea partnerProperty (includingGroup, Inc............................          $0.11 from discontinued83           $0.62            $1.55          $1.18
   operationsSimon forProperty the three and six months ended
   June 30Group, 2003)LP................................                $0.62       83           $0.59         62            $1.18      56          $1.0318
LimitedCPG partners (including $0.11 from discontinued
   operations for the three and six months ended
   June 30Holdings, 2003)LLC................................      $0.62       .....          $0.59         83               -            $1.18      $1.0364              -

Weighted average common units outstanding:
GeneralChelsea partnerProperty Group, Inc..................................              34,917          44,143      42           39,041        536         43,945      41,801
LimitedSimon partnersProperty Group, LP.................................                8,164           7,203       7            8,442         164          7,258       7
CPG Holdings,501 LLC......................................          9,289               -            4,670              -
                                                                                                              --------    ------  --      ------------   -------------  --------------
Total............................................     ......         52,370          51,346      49           52,483        370         51,203      49,302
                                                    ========    ========      ========   =========

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

CPG Partners, L.P. Consolidated Statements of Cash Flows for the Six Months Ended June 30, ~~2004~~2005 and ~~2003~~2004 (Unaudited) (In thousands)

                                                                                                                                                           2005                2004             2003
                                                                                                                                                 -------------      -   --------------
   Cash flows from operating activities

   Net income...........................................................            $  64 81,876         773             $55 64,433876
   Adjustments to reconcile net income to
   net cash 
      provided by operating activities:
           Depreciation and amortization...................................                 38,224               35,754          34,901
           Equity in earnings of unconsolidated investments
           in excess of distributions received.......................          .......       (43,695054)                       (14,240695)
     LossGain on interestsale rateof swapassets......................................               -             514
     Gain on sale of discontinued operations.........................               -                   (4,717331)                   -
     Additions to deferred leaseleasing costs...............................                   (9542,517)                           (439954)
     Other operating activities......................................                   (204)              (1,081)           (116)
     Changes in assets and liabilities:
                Straight-line rent..............................................                 (32,065653)                       (3,597065)
                Due to (from) to affiliates........................................                    (2,147)               5,111            (340)
                Other assets....................................................                    (7,096)               1,730           8,135
                Accounts payable and other liabilities..........................                    11,234                5,708             134
                                                                                                                                            --------------        --      ----------------
   Net cash provided by operating activities............................               113,229              103,384          88,668
                                                                                                                                            --------------        --     -----------------

   Cash flows from investing activities
   Additions to rental properties.......................................               (2744,856034)                     (6527,381856)
   Net proceeds from sale of center.....................................                   3,831                1,543           7,198
Additions   Reductions from (additions to) investments in 
    unconsolidated affiliates................         (21,370)        (22,451)
Payments from related parties......................        8,878              (21,370)
   Distributions from investments in unconsolidated
         affiliates in excess of earnings..................           ........        4,081                    -
   Payments from related parties                                             -                  3,192              18
   Additions to deferred development costs..............................                     (79458)                             (32179)
                                                                                                                                            --------------        ---     ----------------
   Net cash used in investing activities................................               (4427,570702)                     (8044,937570)
                                                                                                                                            --------------        ---     ----------------

   Cash flows from financing activities
   Debt proceeds........................................................                23,261              141,284               -
   Debt repaymentsrepayment......................................................              (16734,173500)                    (27167,107173)
   Net proceeds from sale of the CompanyOP's common stockunits.................                       -                7,205          53,461
   Distributions...................................................      (86,500)             (39,317)
   Loans to related parties.....         ...................................       (395,317295)        (34,632)                   -
   Additions to deferred financing costs................................                   (103)              (1,243)           (698)
                                                                                                                                            --------------        ---     ----------------
   Net cash used in financing activities................................              (59103,244137)                      (859,976244)
                                                                                                                                            --------------        ---     ----------------

   Net decrease in cash and cash equivalents............................                  (43017,610)                         (1,245430)
   Cash and cash equivalents, beginning of period.......................                 33,362               18,476          22,551
                                                                                                                                            --------------        ---     ----------------
   Cash and cash equivalents, end of period.............................           $   18 15,046         752             $21 18,306046
                                                                                                                                            ==============        ===     ==========

Supplemental information:

  Non-cash financing activities:
  Assumption of mortgage debt .......................................               -         $64,164
                                                                        ==============        =============

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

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

1. Organization and Basis of Presentation

~~Organization~~CPG Partners, L.P., a Delaware limited partnership, (the "Operating Partnership" or "OP") is owned by its sole general partner, Chelsea Property Group, Inc. (the "Company") and its limited partners, Simon Property Group, L.P., ("Simon") and CPG Holdings LLC in the following percentages:

CPG Partners, L.P., a Delaware limited partnership, (the
"Operating Partnership" or "OP") is 86% owned and managed by its sole general                                                                  Capital         Profits
partner,                                                              -------------     --------------
General Partner
                        Chelsea Property Group, Inc. (the "Company"), a self-administered and
self-managed real estate investment trust ("REIT")               50. The OP specializes
in owning, developing, leasing, marketing and managing upscale and
fashion-oriented manufacturers' outlet centers100%         1. As of June 30, 2004, the OP000%
wholly or partially-owned 60 centers in 31 states and Japan containing
approximatelyLimited 16.6 million square feet of gross leasable area ("GLA"); the OP'sPartners
portfolio                        Simon comprisedProperty 40Group, Domestic and International Outlet centers containing 13LP                   14.9011%        14.011%
million                        CPG squareHoldings, feet of GLA (the "Outlets") and 20 other centers containing
approximately 2LLC                          35.7 million square feet of GLA ("Other Retail") (collectively the
"Properties")889%        84. The OP's Outlets generated approximately 97989% and 96% of the OP's
real estate net operating income for the six months ended June 30, 2004, and                                                              -------------     --------------
2003, respectively                        Total                                     100. The Outlets generally are located near metropolitan areas
including New York City, Los Angeles, Chicago, Boston, Washington, D000%       100.C., San000%
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~~On ~~financial~~June ~~statements~~1, ~~contain~~2005, the ~~accounts of the Operating~~ ~~Partnership~~Company ~~and~~reorganized its ~~majority~~capital ~~owned~~structure, ~~subsidiaries.~~whereby ~~Such~~Chelsea ~~subsidiaries~~Property ~~represent partnerships~~Group, Inc., in ~~which~~a ~~the~~partial OPliquidation ~~has~~transferred ~~greater than~~ a ~~50%~~portion ~~ownership~~of ~~interest~~its capital and ~~the~~profit ~~ability~~interests to ~~maintain~~the ~~operational~~newly ~~control.~~formed ~~All~~limited ~~significant~~partner, ~~intercompany transactions~~CPG ~~and~~Holdings ~~accounts have been eliminated in consolidation~~LLC.

~~Common~~The ~~ownership~~OP specializes in owning, developing, leasing, marketing and managing upscale and fashion-oriented manufacturers’ outlet centers. As of June 30, 2005, the OP aswholly or partially-owned 61 centers in 30 states, Japan and Mexico containing approximately 17.3 million square feet of gross leasable area ("GLA"); the OP’s portfolio comprised 42 domestic and international outlet centers containing 14.9 million square feet of GLA (the "Outlets") and 19 other centers containing approximately 2.4 million square feet of GLA ("Other Retail") (collectively the "Properties"). The Outlets generated approximately 97% of the OP’s real estate net operating income for the six months ended June 30, 2005, and 2004. The Outlets generally are located near metropolitan areas including New York City, ~~was~~Los Angeles, ~~approximately~~Chicago, asBoston, ~~follows:~~Washington, D.C., San Francisco, Sacramento, Atlanta, Dallas, Seattle, Mexico City, Mexico and Tokyo, Osaka and Nagoya, Japan. Some Outlets are also located within 20 miles of major tourist destinations including Palm Springs, Napa Valley, Orlando, Las Vegas and Honolulu.

~~Number~~The ofconsolidated ~~units %~~financial statements contain the accounts of ~~total~~the ~~units~~Operating Partnership and its majority-~~------------------- ------------------ General~~owned ~~Partner 44,153,000 86~~subsidiaries.0% Such subsidiaries represent partnerships in which ~~Limited~~the ~~Partners 7,203,000 14.0~~OP has greater than a 50% ownership interest and the ability to maintain ~~--------------------- -------------------- Total 51,356,000 100~~operational control.0% All significant intercompany transactions and accounts have been eliminated in consolidation.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the 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 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 six months ended June 30, ~~2004~~2005, are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2004~~2005. The balance sheet at December 31, ~~2003~~2004 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 ~~Company'~~OP’s Annual Report on Form 10-K for the year ended December 31, ~~2003~~2004.

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

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

2. ~~Mergers, Acquisitions and~~ Dispositions

~~Mergers~~In March 2005, the OP sold Lakeland Factory Outlet Mall, a 319,000 square-foot center located in Lakeland, Tennessee. Net proceeds from the sale of the center were approximately $3.8 million, the net book value was $3.5 million and the OP recognized a $0.3 million gain.

On June 21, 2004, Simon Property Group, Inc. and the Company announced a merger agreement whereby Simon will acquire all of the outstanding common stock and operating partnership units of the Company in a transaction valued at approximately $3.5 billion in cash and stock. Subject to obtaining applicable consents, Simon will assume the Company's existing debt and preferred stock, totaling approximately $1.3 billion at June 30, 2004 and the Operating Partnership will redeem the outstanding Series B Cumulative Redeemable Preferred Units. The merger, subject to regulatory and shareholder approval, is anticipated to close during the fourth quarter of 2004.

According to the terms of the merger agreement, Simon will pay consideration of $66.00 per share for all of the Company's outstanding common shares and units. The consideration to the Company's common shareholders includes a payment of $36.00 per share in cash, $15.00 of Simon common stock based on a fixed conversion ratio of 0.2936 per Company common share and $15.00 of a new series of Simon convertible preferred stock. The new series of convertible preferred shares yield 6%, have a liquidation preference of $50.00 per share, and are convertible to Simon common stock at the option of the holder, upon the achievement of certain price targets for the Simon common stock.

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 convert the preferred units into common units and/or convertible preferred stock. CPG Partners, L.P., will become a wholly owned subsidiary of Simon Property Group, L.P.

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

Acquisitions

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.

Dispositions

The OP sold two non-core centers in April and May 2004: Factory Stores of America in Lake George, New York and Iowa, Louisiana. Net proceeds from the sales of the two centers were $1.6 million and the combined net book value was $2.5 million. Accordingly, the OP recognized a $0.9 million impairment loss in the first quarter 2004, which was included in other expense in the accompanying financial statements.

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

3. Investments in Affiliates

The OP holds 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.

AsAt of June 30, ~~2004~~2005, the OP'’s interests in joint ventures included a 50% interest in Las Vegas Premium Outlets ~~("Simon-Las Vegas")~~ and a 50% interest in Chicago Premium Outlets ~~("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~~Premium ~~alliance~~Outlets ~~with~~Punta ~~Sordo~~Norte ~~Madaleno y Asociados and affiliates~~ ("Chelsea Mexico"); and minority interests in various outlet centers and development projects in Europe 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, representing 40% of the total common stock, of Chelsea Interactive~~.

In March ~~2004~~2005, Chelsea Japan opened its ~~fourth~~ fifth project, the ~~187~~178,000 square-foot first phase of ~~Tosu~~Toki Premium Outlets located ~~approximately~~ 20near ~~miles south of Fukuoka~~Nagoya, Japan. Chelsea Japan owns and operates ~~three~~ four other centers: Gotemba Premium Outlets, a 390,000 square-foot property located 60 miles west of Tokyo; Rinku Premium Outlets, a ~~250~~ 321,000 square-foot property located near Osaka~~, scheduled to expand by an additional 70,000 square feet in late 2004~~; ~~and~~ Sano Premium Outlets, a 229,000 square-foot property ~~including~~ alocated ~~51,000~~about ~~square~~40 ~~foot~~miles ~~expansion~~north ~~that~~of ~~opened~~Tokyo, inand ~~July~~Tosu ~~2004.~~Premium Outlets, ~~Sano~~a is 187,000 square-foot property located 40approximately 20 miles ~~north~~south of ~~Tokyo~~ Fukuoka.

In August 2002, the OP and Simon entered into a 50/50 ~~joint~~ 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 onin August 1, 2003.

In May 2002, the OP entered into a 50/50 joint ~~venture~~ venture agreement with Sordo Madaleno y Asociados and affiliates to jointly develop Premium Outlet centers in Mexico. ~~Construction~~In onDecember 2004, the ~~230~~joint venture opened its first project; a 232,000 square-foot first phase of Premium Outlets Punta Norte, ~~Premium~~located ~~Outlets~~near ~~commenced~~Mexico inCity. ~~July 2003;~~In ~~the~~February ~~center~~2005, isthe ~~scheduled~~OP torepaid ~~open~~the inoutstanding ~~late~~balance ~~2004.~~of ~~The~~the OP180 ismillion ~~responsible for~~peso-denominated ~~financing~~credit ~~its~~facility ~~50%~~entered ~~share~~into ofby ~~project~~a ~~costs~~wholly ofowned ~~approximately~~subsidiary ~~$15.0 million. As~~ of ~~June~~ ~~30, 2004,~~ the OP ~~had contributed $12~~.2 ~~million.~~The ~~In January 2004~~revolving facility, ~~an affiliate~~guaranteed ofby the OPCompany ~~entered~~and ~~into~~OP, ais ~~180.0~~available ~~million peso-denominated credit facility~~ to fund ~~its~~the OP’s share of construction costs for ~~the~~projects ~~Punta~~in ~~Norte Premium Outlets~~Mexico. ~~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~~2005 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)

The following is a summary of investments in and amounts due from affiliates at June 30, ~~2004~~2005 (in thousands):

                                                  Chelsea                                                         Simon                Chelsea      Chelsea
                                                   Japan                                                      Ventures                 Japan          Mexico               Other        Total
                                                                                              -----------   -------------    --------       --       ------     --   -----     --------
Balance December 31, 20032004..............                     $19103,461     252       $7726,739         783        $615,212      874          $3,656    722       $107149,068631

   Additional investment...............             2,854      13,715          9,065                            -      25,634            38            135               3            176

   Income from unconsolidated
     investments........................             5           6,926       4107         7,354239              1               -           -      10         13,280347

   Distributions and fees..............                       (310,979188)            (53,153955)             -                          -              (914,132143)

   Foreign exchange....................              (189)                           -           (352)          -        (541235)           454               -            219

   Advances (net) .....................                          (4231)       (5,162981)        935                           -                      (2489)             (36,251301)
                                                                                             -----------    -----------         ---------    -      ------   ----    ------------

Balance June 30, 20042005..................           $1998,911     940       $9123,590889        $1416,925      464          $3,632    636       $130142,058929
                                                                                             ===========    ===========         =========    =      ======   ====    ============

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

3. Investments in Affiliates (continued)

The OP'’s share of income ~~(loss)~~ before depreciation, ~~depreciation~~ depreciation expense, and income ~~(loss)~~ from unconsolidated investments for the three and six months ended June 30, ~~2004~~2005 and ~~2003~~2004, is as follows (in thousands):


                                                                                                                          Three Months Ended June 30,
                               -----------------------------------------   ----------------------------------------------------------
                                                                                             2005                                               2004                                            2003
                               -----------------------------------------   ----------------------------------------------------------
                                                                                                                           Income                                                                                      Income
                                                             Income                       from              Income                                               (loss) from          Income                         from
                                                             before                                            unconsolidated      (loss)         before                                     unconsolidated
                                                             depr.                       Depr.                investments                     depr.                    Depr.               investments
                                                           -----------   ---    -----    ---   -------------   ---       ---------    ---    ---------    ---------------
   Chelsea Japan.......         $5,757           $1,675        $4,082               $4,387               $1,231         $3,156             $3,189          $694          $2,495

   S/CSimon Las VegasVentures......          4,266            1,040         3,226                2,147797           648          501          12,646                  -             -               -149

   S/CChelsea ChicagoMexico........            650          147            503                               99              124           (25)                   -             -                             -
                                                           ---------   -----    ---      -----   -------         ---------       -------       -----    ---------    ---------------

   Total..............         .        $10,122           $2,839        $7,283               $7,184               $1,879         $5,305             $3,189          $694          $2,495
                                                           =========   =====    ===      =====   =======         =======       ==       =====       =========

   Chelsea
   Interactive(1).....           $953       $    -         $  953            $  (905)         $  -          $ (905)
                              =========       ========      ============         =======       =======       =========


                                                            Three                                                                Six Months Ended June 30,
                               -----------------------------------------   ----------------------------------------------------------
                                                                                             2005                                               2004                                            2003
                               -----------------------------------------   ----------------------------------------------------------
                                                                                                                           Income                                                                                      Income
                                                             Income                                                    from              Income                     (loss)                          from
                                                             before                                            unconsolidated      (loss)         before                                     unconsolidated
                                                             depr.                       Depr.                investments                     depr.                    Depr.               investments
                                                           -----------   ---    -----    ---   -------------   ---       ---------    ---    ---------    ---------------
   Chelsea Japan......         .        $810,453       487           $23,460         248       $5,993           $ 57,239               $8,453        $12,293           460         $35,946993

   S/CSimon Las VegasVentures......          48,182          936          3192            2,246                 -             -085         6,107                -5,437         1,083          4,354

   S/CChelsea ChicagoMexico........                      181              180             1,255          147          1,108                                     -             -                              -
                                                           ---------   -----    ---      -----   -------         ---------       -------       -----    ---------    ---------------

   Total...............        $1318,890       860           $35,543        513       $1013,347                          $513,239890        $13,293           543        $310,946347
                                                           =========   =====    ===      =====   =======         =======       ==       =====       =========

   Chelsea
   Interactive (1)....        $   953       $    -        $   953           $(1,742)       $    -          $(1,742)
                              =========       ========      ============         =======       =======       =========

(1) included in other expenses on the accompanying consolidated statement of income

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

3. Investments in Affiliates (continued)

Condensed financial information as of June 30, ~~2004~~ 2005 and December 31, ~~2003~~2004, and for the three and six months ended June 30, ~~2004~~2005 and ~~2003~~ 2004 for Chelsea Japan, Chelsea Mexico and Simon- Ventures is as follows (in thousands):


                                                              June 30,            December
Balance Sheet Information:                                       2005             31, 2004
                                                          --------------    ---------------

  Property, plant and equipment (net)
     June 30, 2004............................................        $324385,902
     December 31354          $367, 2003........................................         288,780700

  Total assets
     June 30, 2004............................................         421532,153
     December 31106           548, 2003........................................         380,426621

  Long term debt (1)
     June 30, 2004............................................         141162,796550           195,552
     December
  Total 31, 2003liabilities........................................         129283,731901           304,122

Total liabilities
                                                                  June 30,            June 30,
Operating Results:                                              2005                2004
                                                          --------------     ---------------

Total revenues
     Three months ended............................................         232$53,289957           $35,472
     December      Six 31,months 2003ended........................................         220          98,238831            67,766

NetTotal income (loss)expenses
       Three months ended:
        June 30, 2004.........................................           7          43,330410            28,142
        June      Six 30,months 2003 ended........................................           2          80,448967            54,057

Net Sixincome
     Three months ended:
        June 30, 2004 ........................................          13         10,709542              7,330
        June      Six 30,months 2003 ended........................................           3         17,100861             13,709

OP's share of net income (loss)
       Three months ended:
        June 30, 2004 ........................................                     4,753              3,290
        June 30, 2003.........................................             979

        Six months ended:
        June 30, 2004.........................................                     8,167              6,233
        June 30, 2003.........................................           1,240

Fee income
       Three months ended:
        June 30, 2004.........................................                     2,530              2,015
        June 30, 2003.........................................           1,516

        Six months ended:
        June 30, 2004.........................................                     5,180              4,114
        June 30, 2003.........................................           2,706

(1) Long-term debt consists of borrowings related to Chelsea Japan.

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

4. Debt

Unsecured Bank Debt

A summary of the terms of the unsecured bank debt outstanding at June 30, ~~2004~~2005 and ~~December 31~~2004, ~~2003,~~ and the related effective interest rate, is as follows (in thousands):

                                                                           Effective                         Effective
                                                                                                                            June 30,        Effective         interest       December 31,       interestEffective
                                                                                                                                    2005             rate                2004             rate              2003            rate
                                                                                                               -------------   -----    ---------   ----    -----------   -----    -------------

Senior credit facility due March 2005 (1) ..........        $75,000            2.06%            $99,000          2.09%
Term loan due MarchApril 20052010 (21) .......................          5              $59,035975            27.0626%              5             $60,035          2475            7.0926%
BridgePeso loancredit facility due JulyJanuary 20042007 (32) .............                                  -                -            100                               12,000          1515           10.96%
Term loan due April 2010 (4) .......................         60,975            7.26%                  -              -
Yen credit facility due April 2005 (53) .............                             -                               11,897845            1.31%                  
                                                        -              -
Peso credit facility due January 2007 (6) ..........          8,138            8.42%                  -              -
                                                       -------------                    -                     ----------------
                                                                                                                             $16159,045                            975                              $20484,035835
                                                                                                               =============                    =====                     ================

1) ~~The~~In OPFebruary ~~maintains~~2004, athe ~~$200~~OP ~~million~~amended ~~senior~~its ~~unsecured~~mortgage ~~bank~~loan ~~line~~due ofApril ~~credit~~2010 ~~(the~~to ~~"Senior~~unencumber ~~Credit~~four ~~Facility")~~properties ~~that~~and ~~expires~~reduce onthe ~~March~~interest ~~31,~~rate ~~2005,~~from ~~and~~LIBOR isplus ~~extendible~~1.50% atto ~~the~~LIBOR ~~OP's~~plus ~~option~~1.25% ~~until~~(4.36% ~~March~~at 31June 30, ~~2006~~2005). The ~~Senior~~original ~~Credit~~terms ~~Facility~~remained ~~bears~~unchanged ~~interest~~requiring onquarterly ~~the~~principal ~~outstanding~~amortization ~~balance,~~of ~~payable~~$0.25 ~~monthly,~~million atthrough aApril ~~rate~~2005 ~~equal~~and to$0.45 ~~the~~million ~~London~~per ~~Interbank~~quarter ~~Offered~~thereafter ~~Rate~~until ~~("LIBOR")~~maturity. ~~plus~~The ~~0.95%~~OP ormaintains ~~the~~an ~~prime~~interest rate, atswap ~~the~~that ~~OP's~~effectively ~~option.~~fixes ~~The~~the ~~LIBOR~~interest rate ~~spread~~on ~~ranges~~the ~~from~~mortgage ~~0.85%~~debt toon 1the term loan at 7.5026% ~~depending~~until onJanuary 2006. During the ~~OP's~~six ~~Senior~~months ~~Debt~~ended ~~rating.~~June ~~The~~30, 2005 and 2004, the OP ~~received~~recognized ainterest ~~debt~~expense ~~rating~~of ~~upgrade~~$1.0 inmillion ~~July~~and ~~2003~~$1.5 million, ~~resulting~~respectively, inon athe ~~reduction~~hedge ofthat ~~the~~is ~~LIBOR~~included ~~rate~~in ~~spread~~interest toexpense ~~0.95%~~in ~~from~~the 1accompanying financial statements.~~05%.~~

2) ~~The~~In January 2004, a wholly-owned subsidiary of the OP entered into a 180 million peso-denominated revolving facility, which had a three-year term ~~loan~~and ~~carries~~provided funding for projects in Mexico. In February 2005, the ~~same~~OP repaid the outstanding balance of the peso facility. The drawn funds bore 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% per annum. The TIIE rate ~~and~~spread ~~maturity~~ranged asfrom 0.725% to 1.37% depending on the OP's Senior ~~Credit~~Debt ~~Facility~~rating. The Company and OP guaranteed the facility.

3) InThe ~~March~~OP's ~~2004,~~wholly-owned ~~the~~equity OPinvestor ~~repaid~~in ~~the~~Japan, ~~$100~~Chelsea ~~million~~International ~~bridge~~Operating ~~loan~~Corp., ~~due~~had ~~July~~a ~~31,~~4.0 ~~2004~~billion ~~with~~yen ~~proceeds~~line ~~received~~of ~~from~~credit ~~the~~that ~~issuance~~provided offunding ~~$100~~for ~~million~~projects ofbeing ~~unsecured~~developed ~~term~~in ~~notes~~Japan. ~~due~~On March 1531, ~~2009.~~2005, ~~The~~the ~~Bridge~~facility ~~Loan~~was ~~facility~~repaid ~~bore~~and ~~interest~~extinguished onthrough ~~the~~borrowings ~~outstanding~~from ~~balance,~~Simon. ~~payable~~See ~~monthly,~~note 11. The yen line of credit bore interest at yen LIBOR plus 01.8025%.

4)Unsecured InPublic 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.Notes

5)A ~~The~~summary ~~OP's~~of ~~wholly-owned~~the ~~equity~~terms ~~investee in Chelsea Japan Co. Ltd., has a 4.0 billion yen line~~ of ~~credit~~the ~~(approximately~~unsecured USpublicly traded ~~$36.8~~notes ~~million)~~outstanding ~~to provide funding for projects being developed in Japan. The yen line of credit bears interest~~ at ~~yen~~June ~~LIBOR plus 1.25% and matures April 1~~30, 2005. ~~This facility is guaranteed by the Company~~ and ~~the~~December ~~OP. At June 30~~31, 2004, ~~1.3~~is ~~billion~~as ~~yen~~ follows (~~approximately~~in ~~US $11.9 million~~thousands) ~~was outstanding under the loan.~~:

6) 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 
Stated                                              June 30,        December  31,        Effective
Rate                Maturity                             2005                2004)        Yield 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"1) plus 0
-------------      ---------                  ---------------   ------------------   --------------
8.825375%             August plus2005.............         $ the49,998            $ bank's cost of funds spread limited to 2049,982        8.44%
7.250%             October of the TIIE2007............          124, with an annual facility fee on the unused balance of 0923             124,906        7.1539%
3.500%             March The TIIE rate spread ranges from 02009.725.............           99,654              99,608        3.60% to 1
8.37625%             August depending on the OP's Senior Debt rating2009. This facility is guaranteed by the Company and the OP............           49,958              49,953        8.76%
8.250%             February At 2011...........          149,183             149,110        8.40%
6.875%             June 302012...............           99, 2004906              99, the outstanding balance was 93897        6.5 million pesos (approximately US $890%
6.1000%             January million)2013............          148,493             148,393        6.18%
                                              ---------------   --------------------
                                                    $722,115            $721,849
                                              ===============   ====================

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 June 30, 2004 and December 31, 2003 is as follows (in thousands):

                                                                         June 30,       December 31,         Effective
                                                                             2004               2003         Yield (1)
                                                                   ---------------   ----------------   --------------
8.375%  Notes due August 2005....................................       $  49,967           $ 49,952             8.44%
7.250%  Notes due October 2007...................................         124,890            124,874             7.39%
3.500%  Notes due March 2009(2)..................................          99,561                  -             3.60%
8.625%  Notes due August 2009....................................          49,948             49,943             8.76%
8.250%  Notes due February 2011..................................         149,037            148,963             8.40%
6.875%  Notes due June 2012......................................          99,887             99,878             6.90%
6.000%  Notes due January 2013...................................         148,293            148,193             6.18%
                                                                   ---------------   ----------------
                                                                         $721,583           $621,803
                                                                   ===============   ================

(1) Including discounts on the 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 yield 3.603% to investors. Proceeds were used to repay virtually all of the $100 million bridge loan facility due July 2004.

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

4. Debt (continued)

Mortgage Debt

A summary of the terms of the mortgage debt outstanding at June 30, ~~2004~~2005 and December 31, ~~2003~~2004, and the related interest rate and Net Book Value ("NBV") of the associated collateral as of June 30, ~~2004~~2005, is as follows (in thousands):

                                                                                           June 30,      December   31,           Effective
                                                Maturity                                           2005               2004              2003        Interest                   Rate                      NBV
                                         --------                                   ---     --------       -----        ----------      ---     ----------        ----------
 Due July 2008 (1) .............            ....               $163159,167          838            $164161,727546             7.26%                     $249246,690693
 DueDecember April2012 2010 (2) ............                   -            61,475             7.26%                 -
 Due December 2012 (3) .........22,202              2423,420            25,477331             6.29%           100             98,551636
 Due December 2012 (43) .............                 68,780              69,927            70,460372             7.67%            74             72,067635
 Due March 2013 (54) ................                 61,375              62,809            63,495105             5.10%           112            120,277578
                                                                                    ------------                ------------                         -----------
                                                                                          $320 312,323          195            $385316,634                            354                             $536538,585542
                                                                                    ============                ============                         ===========

1) The ~~F/C~~ mortgage loan was consolidated as part of the ~~August 20, 2002~~ buyout of ~~Fortress'~~a ~~51%~~partnership interest ~~in the F/C Acquisition joint venture~~. The 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 8.4% 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 less than that available to the OP in the public debt markets. Accordingly, the OP recorded a $1.2 million debt discount that is amortized over the period of the loan, which increases the effective interest rate to 7.26%. The mortgage 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 $1.2 million fixed monthly interest plus principal payment based on a 26-year amortization schedule. During the six months ended June 30, 2005 and 2004, the OP recognized $78,000 and $72,000, respectively, in debt discount amortization that is included in interest expense in the accompanying financial statements.

2) InThe ~~February~~mortgage ~~2004~~loan was assumed as part of an acquisition. The stated interest rate of 8.12% was greater than that available to the OP for comparable debt. Consequently, the OP ~~amended~~recognized a $1.9 million debt premium that is amortized over the ~~mortgage~~period of the loan, which reduces the effective interest rate to ~~unencumber~~6.29%. The mortgage loan calls for a $0.3 million fixed monthly debt service payment on a 17-year amortization schedule. During the ~~properties~~six ~~(see~~months ~~unsecured~~ended ~~bank~~June 30, 2005 and 2004, the OP recognized approximately $0.1 million in debt) premium amortization that is included in interest expense in the accompanying financial statements.

3) The mortgage loan ~~due December 2012~~ was assumed as part of an ~~August 2003~~ acquisition. The stated interest rate of 89.121% was greater than that available to the OP ~~for~~in ~~comparable~~the public debt markets. ~~Consequently~~Accordingly, the OP ~~recognized~~recorded a $16.9 million debt premium that iswill be amortized over the period of the loan, which reduces the effective interest rate to 67.2967%. The ~~mortgage~~ loan calls for afixed monthly debt service payments of $0.35 million ~~fixed~~for ~~monthly~~interest ~~debt~~plus ~~service~~principal ~~payment~~based on a 1726-year amortization schedule. The mortgage loan matures in March 2028 but can be prepaid beginning December 2012. During the six months ended June 30, 2005 and 2004, the OP recognized ~~approximately~~$0.3 million and $~~144~~0.2 million,~~000~~ respectively, in debt premium amortization that is included in interest expense in the accompanying financial statements.

4) The mortgage loan was assumed as part of aan ~~September 2001~~ acquisition. The stated interest rate of 95.185% was greater than that available to the OP infor ~~the~~comparable ~~public~~ debt ~~markets~~. Accordingly, the OP recorded a $63.94 million debt premium that will be amortized over the period of the loan, which reduces the effective interest rate to 75.6710%. The loan calls for ~~fixed~~a ~~monthly debt service payments of~~ $0.54 million ~~for~~fixed ~~interest~~monthly ~~plus~~debt ~~principal~~service ~~based~~payment on a 2625-year amortization schedule. ~~The mortgage loan matures in March 2028 but can be prepaid beginning December 2012.~~ During the six months ended June 30, ~~2004~~2005 and ~~2003~~2004, the OP recognized ~~$245,000~~approximately ~~and~~ $~~229,000~~0.1 ~~respectively,~~million in debt premium amortization that is included in interest expense in the accompanying financial statements.

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 the OP for 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.

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

5. Financial Instruments: Derivatives and Hedging

The OP ~~uses~~employs interest rate and foreign currency forwards or purchased options to hedge qualifying anticipated transactions. Gains and losses are 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.

At June 30, ~~2004~~2005, the OP'’s interest rate swap was reported at its fair value and classified as an other liability. At June 30, ~~2004~~ 2005, there were $20.86 million in deferred losses, recorded in accumulated other comprehensive loss.

Hedge Type ~~Notional~~ ~~Value Rate Maturity Fair Value --------------------- ----------------- ----------- ------------ ---------------~~ Swap, Cash Flow Notional Value $6665.0 million Rate 5.7625% Maturity 1/1/2006 Fair Value ($3.0.7 million)

The notional 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~~2005, but does not represent exposure to credit, interest rate, foreign exchange or market risk.

6. Preferred Units

In September ~~1999~~2004, the OPCompany completed a private sale of $65 million of Series C BVariable ~~Cumulative~~Rate ~~Redeemable~~ Preferred ~~Units~~Stock ("the Series C Preferred ~~Units"~~ Stock). Proceeds from the sale were used to anredeem ~~institutional~~the ~~investor~~OP’s Series B Cumulative Redeemable Preferred Units for approximately $65 million. The private ~~placement~~sale ~~took~~was ~~the~~for ~~form of 1~~2.36 million ~~Preferred~~restricted ~~Units~~shares athaving a ~~stated~~liquidation ~~value~~preference of $5025.00 ~~each~~per unit share. The ~~Preferred~~Series ~~Units~~C ~~may be~~Preferred ~~called~~Stock atwas ~~par~~redeemable at the ~~OP'~~Company’s option, ~~on or after September 2004, have no stated~~ ~~maturity or mandatory redemption~~ and ~~pay~~paid a cumulative quarterly dividend at ~~an annualized~~a rate ofequal 9to the London Interbank Offered Rate ("LIBOR") plus 1.0%. ~~The~~Pursuant ~~Preferred~~to ~~Units~~the ~~are~~Merger ~~exchangeable~~Agreement, ~~into~~on ~~Series B~~October ~~Cumulative~~13, ~~Redeemable~~2004, ~~Preferred~~the ~~Stock~~Series ofC ~~the~~Preferred ~~Company~~Stock ~~after~~was ~~ten~~fully ~~years~~redeemed.

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

7. Partners' Capital

Following is a ~~statement~~schedule of partners' capital balances at June 30, ~~2004,~~ 2005 (in thousands):

                                                                                                                                               Chelsea           Simon
                                            Property        Property             CPG                Accum.
                                                    General                                              Group,          Group,       Limited    Preferred       Holdings,          Other Comp.
                                                  Partner's     Partners'    Partner's            Income
                                                    Capital       Capital      Capital                                                            Inc.              LP             LLC        (Loss)        Income      Total
                                                                                         ------------      ------------     ------------        ---------------  -    ------------

Balance December 31, 20032004...................            $524528,295       613        $81144,934      343         $63,315               -           $ (4,010749)             $665672,534207

  Net income..................................         53       61,412        11359          12,464            -748           7,666                -        64           81,876773

Other comprehensive income/(loss): .........
       Foreign currency translation...........                          -                            -                           -             (276)         (276)            1,394            1,394
       Interest rate swap.....................                          -                            -                           -            1,697         047            1,697047
                                                                                                                                                                                                                         ------------
Total comprehensive income..................                                                                   66                                                                         84,297214
                                                                                                                                                                                                                         ------------

Common  Reallocate distributionsbook value........................        (52,913)       39,429         (839,660429)                         -                -       (61,573)                -
Preferred  Partial distributionCompany liquidation......................              (1449,668655)       (2              -         449,924)           655                -                -        (4,592)
Contributions (net of costs)   Distributions...............          7,204             -            -                -         7,204
Transfer of limited partners' interest......          1...      (60,694086)        (113,694241)                   (13,173)               -                -             -          (86,500)
                                                                                         ------------      ------------     ------------        ---------------     ------------
Balance June 30, 20042005.......................            $532119,024       660        $80104,120      421        $63444,315          148           $(21,589)     692         $672669,870921
                                                ============  ============ ============   ===============  ============

8. ~~Distribution~~Income Taxes

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.

10 9. 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~~10.~~P. Notes~~ toCommitments ~~Consolidated~~and ~~Financial Statements (Unaudited)~~Contingencies

~~11.~~Borrowings ~~Commitments~~related ~~and~~to ~~Contingencies~~Chelsea Japan for which the OP has provided guarantees for repayment of debt as of June 30, 2005, are as follows (in thousands):

Pursuant
                 Total toFacility             |                          Outstanding
       -------------------------------------| the-------------------------------------------------------------------------
                                            |                                                          Due     Interest
       Yen                 US Simon/Chelsea$ mergerEquivalent  |    Yen           US agreement,$ theEquivalent      US Operating$  Guarantee    Date      Rate
Partnership       --------------      ---------------  | is----------       ---------------      ---------------    ----      -----
       3.8 committedbillion to(1)     $34.3 redeemmillion    | its2.8 outstandingbillion      $25.1 Seriesmillion        $10.0 B Cumulativemillion      2015      2.06%
Redeemable       0.6 Preferredbillion Units(1)       5.4 formillion    | $650.4 billion        3.7 million          1.5 million      2012      1.50%

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-Ventures, the OP has committed to provide 50% of the development costs or approximately $45.0 million to Simon-Chicago. As of June 30, 2004, the OP had contributed $39.6 million for the project.

Borrowings related to Chelsea Japan for which the Company and the OP have provided guarantees for repayment of debt 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.

InCPG ~~May 2002~~Partners, ~~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~~L. ~~Construction on the 230,000 square-foot first phase of Punta~~P. ~~Norte~~Notes ~~Premium Outlets commenced in July 2003; the center is scheduled~~ to ~~open~~Consolidated ~~in late~~Financial ~~2004. The OP is responsible for financing its share of project costs or~~Statements ~~approximately~~(Unaudited) $15.0 million. As of June 30, 2004, the OP had contributed $12.2 million. In January 2004, a wholly-owned affiliate of the OP entered into a peso-denominated credit facility, which is guaranteed by the Company and the OP, to fund its share of construction costs.

~~At June 30, 2004, other assets include $11~~10.5 ~~million~~Commitments and ~~accrued expenses~~Contingencies ~~and other liabilities include $24.0 million related to the 2002 deferred unit incentive program, which may be paid to certain key officers in 2007.~~ (continued)

AsIn ofMay ~~June 30~~2002, ~~2004,~~ the OP ~~had~~entered into ~~provided~~a ~~limited~~50/50 ~~debt~~joint ~~service guarantees~~venture ofagreement ~~approximately~~with ~~$14.5~~Sordo ~~million~~Madaleno y Asociados and affiliates to ~~Value~~jointly ~~Retail~~develop ~~and~~Premium ~~affiliates,~~Outlet ~~under a~~centers ~~standby~~in ~~facility~~Mexico. ~~for~~In ~~loans~~January ~~provided~~2004, a towholly-owned ~~Value~~subsidiary ~~Retail~~of ~~and~~the ~~affiliates~~OP ~~to construct~~entered ~~outlet~~into ~~centers~~a in180 ~~Europe.~~million ~~The~~peso ~~standby~~denominated credit facility, which ~~has~~is aguaranteed ~~maximum limit~~by ofthe ~~$22.0 million~~OP, ~~expired~~to infund ~~November~~its ~~2001,~~share ~~and~~of construction costs. The outstanding ~~guarantees shall~~balance ~~not~~on ~~survive~~the ~~more~~peso ~~than~~facility ~~five~~was ~~years~~fully repaid ~~after~~in ~~project~~February ~~completion~~2005.

As of June 30, 2005, the OP had provided limited debt service guarantees of approximately $12.7 million to Value Retail and affiliates, under a standby facility for loans provided to Value Retail and affiliates to construct outlet centers in Europe. The standby facility, which had a maximum limit of $22.0 million, expired in November 2001, and outstanding guarantees, shall not survive more than five years after project completion. The outstanding guarantees expire on or before September 30, 2005. Value Retail has borrowed and escrowed the funds necessary to payoff the loans guaranteed by the OP. The escrow is subject to certain covenants which must be met prior to disbursement of the escrowed funds.

At June 30, 2005, other assets include $10.5 million and accrued expenses and other liabilities include $28.9 million related to the 2002 and 2005 deferred unit incentive programs, which may be paid to certain key officers in 2007 and 2010, respectively.

The OP is not presently involved in any material litigation nor, to its knowledge, is any material litigation threatened against the OP or its 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.

11. Related Party Information

Pursuant to the merger with Simon in 2004, the Company purchased two annuity contracts in consideration of the non-competition covenants of its CEO and a President totaling $21.5 million. These contracts are included in restricted cash-escrows in the accompanying financial statements.

In October 2004, the OP borrowed $235.3 million from Simon and issued an unsecured promissory note due August 1, 2005. Interest is payable at maturity at LIBOR plus 1% per annum. The borrowed funds were used primarily to repay the OP’s senior unsecured line of credit, the $5 million term loan, and the $100 million term loan. In August 2005, accrued interest was paid and the note was extended for one year through August 1, 2006.

Also in October 2004, the OP borrowed $65.0 million from Simon and issued an unsecured promissory note due December 31, 2004. In January 2005, accrued and unpaid interest of $0.6 million was added to the principal balance and the note was extended until August 1, 2005. Interest is payable at maturity at LIBOR plus 1% per annum. The borrowed funds were used to redeem the Series C Preferred Stock prior to the merger closing on October 14, 2004. In August 2005, accrued interest was paid and the note was extended for one year through August 1, 2006.

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

1211. Related Party Information (continued)

In ~~August~~March ~~1997~~2005, ~~the OP and one of the Company's directors entered into~~ a ~~Consulting~~wholly ~~Agreement pursuant to which the director agreed to~~owned ~~perform~~equity ~~services~~investor ~~for the OP~~ in ~~connection~~Japan, ~~with~~Chelsea ~~the~~International ~~development~~Operating ~~and operation of manufacturer's outlet centers in Japan and Hawaii~~Corp., ~~The~~entered ~~agreement~~into ~~provided for~~a ~~payments~~4.0 tobillion ~~the~~yen ~~director~~line of ~~$10,000~~credit ~~per~~agreement ~~month~~with ~~and~~Simon ~~was~~pursuant ~~terminated~~to bywhich ~~the OP in~~it ~~December~~borrowed ~~1999~~1.9 ~~During~~billion ~~the~~yen ~~term~~(approximately of$16.7 ~~the~~million) ~~agreement~~from Simon and ~~for~~issued ~~four years after the~~an ~~termination,~~unsecured ~~the~~promissory ~~director~~note ~~was~~due ~~entitled~~January to2008. ~~deferred~~Interest ~~compensation~~is ofcurrently ~~1% of the~~payable ~~development~~monthly ~~costs,~~at upyen toLIBOR aplus ~~maximum amount of $~~0.555% ~~million~~ per ~~project~~annum, onbut ~~all projects~~the ininterest ~~which~~rate hemay ~~was~~adjust depending ~~involved~~on inSimon’s ~~Japan~~credit orrating. ~~Hawaii~~The ~~either~~borrowed ~~directly~~funds orwere asused ~~a result~~to ~~of Mitsubishi~~ repay and~~/or~~ ~~Nissho~~extinguish ~~Iwai committing to develop such project with~~ the OP4 inbillion ~~Japan~~yen ~~during~~line ~~the~~of ~~previously~~credit, ~~mentioned~~which ~~four-year~~provided ~~period.~~funding ~~Fees paid~~for ~~under~~projects ~~this~~being ~~agreement~~developed ~~totaled~~in $0Japan.7 ~~million~~The ~~for~~three ~~the~~loans ~~first~~made ~~quarter~~by ~~2004.~~Simon ~~These fees~~ are included in notes ~~investment~~payable-related inparties ~~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.~~

InChelsea ~~1999,~~International Operating ~~the~~Corp. OPhas ~~established~~advanced apartner ~~$6.0~~loans ~~million~~to ~~secured~~Chelsea ~~loan~~Japan ~~facility that~~totaling ~~expired~~2.0 inbillion yen ~~June~~(approximately ~~2004~~US ~~for~~$18.2 ~~the~~million) ~~benefit~~at ofJune ~~certain~~30, ~~unitholders~~2005. ~~Under~~The ~~the loan facility~~loans, ~~each~~which ~~borrower~~were used ~~issued~~to afund ~~note~~construction ~~that was secured by OP units~~costs, ~~bore~~ bear interest at ayen ~~rate of~~ LIBOR plus 23.0% ~~per~~(3.06% ~~annum~~at June ~~payable~~30, ~~quarterly~~2005) and ~~was~~mature ~~due~~through ~~by the facility expiration date~~2015. InThe ~~April~~loans ~~2004,~~are ~~the~~included OPin ~~received the sole remaining~~notes ~~outstanding~~receivable-related ~~principal~~parties ~~payment~~in ~~of $2.2 million plus interest, thereby extinguishing~~ the ~~entire~~accompanying ~~outstanding~~financial ~~balance of the loan facility~~statements. ~~Effective June 2002, the OP changed its policy to eliminate new loans to directors and officers.~~

~~The OP's wholly-owned equity investee in Japan, Chelsea International Operating Corp~~12., ~~has~~Fair ~~advanced~~Value ~~partner~~of ~~loans~~Financial to Chelsea Japan totaling 1.5 billion yen (approximately US $14.1 million) at June 30, 2004. The loans, which were used to fund construction costs, bear interest at yen LIBOR plus 3.00% (3.05% at June 30, 2004) and mature in 2005 (854 million yen) and in 2014 (680 million yen). The loans are included in notes receivable-related parties in the accompanying financial statements. Instruments

13. Segment Information

The OP is principally engaged in the development, ownership, acquisition and operation of manufacturers' outlet centers and has determined that under SFAS No.131 "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 ("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.

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

13. Segment Information (continued)

The real estate business segments meet the quantitative threshold for determining reportable segments:

For the months ended:                  Domestic         International     Other
(in thousands)                         Outlets             Outlets        Retail         Other       Total
                                     -------------     ---------------   -----------  -----------  -------------
                                                              (3)          (4)           (5)
Total revenues (1)
Three months ended:
    June 30, 2004..................     $91,939            $  -            $4,583        $239        $96,761
    June 30, 2003 (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

(1) Approximately 72.3% and 78.2% of the OP's total revenues and approximately 76.3% and 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.

(2) Excludes revenue for St. Helena, Mesa and American Tin Cannery properties, which are classified as discontinued operations.

(3) Principally comprised of the OP's interests in Japan and Mexico.

(4) Approximately 34.0% and 28.8% of the GLA is occupied by and approximately 23.6% and 18.3% of annual base rent is derived from one tenant during the 2004 and 2003 periods, respectively.

(5) Includes corporate overhead assets and results from Chelsea Interactive.

CPG Partners, L.P. Notes to Consolidated Financial 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.

Disclosure about fair value of financial instruments is based on pertinent information available to management as of June 30, ~~2004~~2005. Although management is not aware of any factors that would significantly affect the reasonable fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since such date and current estimates of fair value may differ significantly from the amounts presented herein.

Cash equivalents, accounts receivable, accounts payable, and revolving credit facilities balances reasonably approximate their fair values due to the short maturities of these items. Mortgage debt and the unsecured notes payable have an estimated fair value based on discounted cash flow models of approximately $1.1 billion, which exceeds the book value by approximately $620.61 ~~million~~billion. Unsecured bank debt is carried at an amount which reasonably approximates its fair value since it is a variable rate instrument whose interest rate reprices 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. You should read the following discussion in conjunction with the financial statements and notes thereto that are included in the December 31, 2004 Form 10K. Certain statements made in this section or elsewhere in this report may be deemed "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Although we believe the expectations reflected in any forward-looking statements are based on reasonable assumptions, we can give no assurance that our expectations will be attained, and it is possible that our actual results may differ materially from those indicated by these forward-looking statements due to a variety of risks and uncertainties. Those risks and uncertainties incidental to the ownership and operation of commercial real estate include, but are not limited to: national, international, regional and local economic climates, competitive market forces, changes in market rental rates, trends in the retail industry, the inability to collect rent due to the bankruptcy or insolvency of tenants or otherwise, risks associated with acquisitions, the impact of terrorist activities, environmental liabilities, maintenance of the Company's REIT status, the availability of financing, and changes in market rates of interest and fluctuations in exchange rates of foreign currencies. We undertake no duty or obligation to update or revise these forward-looking statements, whether as a result of new information, future developments, or otherwise.

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 have been prepared in accordance with accounting principles generally 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 experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are 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 $2.72 million ~~and $1.6 million~~ at June 30, ~~2004,~~2005 and December 31, ~~2003, respectively~~2004.

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. In ~~March~~first quarter 2004, the OP sold and recognized an impairment loss of $0.9 million on the ~~anticipated~~ disposition of two non-core ~~assets.~~properties; ~~The~~Lake ~~loss~~George, New ~~from~~York ~~impairment~~and Iowa, Louisiana, which is reflected in other expense in the accompanying financial statements ~~for the period ended June 30, 2004~~.

General Overview

~~From~~Rental ~~July~~revenue 1,from ~~2003~~wholly owned toassets ~~June 30, 2004, rental revenue~~ increased $159.42 million or 12.18%, ~~from~~to ~~wholly-owned~~$81.6 ~~properties~~million tofrom $~~143~~72.1 4 million for the three months ended June 30, 2005. Second quarter ~~rental~~2005 total revenue ~~grew~~was up $811.29 million or 12.83%, to $72108.63 million ~~compared~~from to$96.4 million in ~~the~~2004, ~~prior~~primarily ~~year.~~due ~~Since~~to ~~July~~higher 1rents, ~~2003~~an acquisition, ~~the~~new OPdevelopment ~~acquired~~and expansions ~~two~~of existing centers. ~~and~~For ~~expanded~~the ~~one wholly-owned~~six ~~center,~~months ~~which~~ended ~~increased~~June ~~total~~30, 2005, rental revenue togrew $9615.86 million, upor 11.70% ~~from~~, ~~second~~to ~~quarter 2003~~$158.2 ~~Total~~million ~~revenue~~from ~~for the first six months in 2004 was~~ $~~189~~142.96 million, ~~representing an increase of 11.8% from~~ in the year- earlier period. ~~Sustainable~~ ~~growth~~For ~~was~~the ~~supplemented~~same ~~through~~six-month ~~the~~period ~~joint~~total ~~venture~~revenue ~~development~~rose ~~of two~~11.6% ~~new~~or ~~Premium~~$21.9 ~~Outlets~~million, into ~~2004~~$211.1 ~~and~~million ~~the~~from ~~expansion~~$189.2 ofmillion ~~one Premium Outlet center~~ in ~~2003~~ 2004.

~~Income~~Second quarter 2005 income from unconsolidated investments ~~for~~increased ~~the three and six months ending June 30, 2004, contributed approximately 11~~37.3% ~~to NOI compared with 7% and 5%~~, ~~respectively~~or ~~in 2003~~$2.0 ~~Chelsea~~million, ~~Japan~~primarily ~~opened~~from new ~~its~~development ~~fourth~~of ~~project,~~Chicago ~~Tosu~~ Premium Outlets in ~~March~~May 2004 and ~~expanded~~Toki ~~Gotemba~~ Premium Outlets ~~in July 2003,~~ ~~both~~during ~~40%~~March ~~owned~~2005. ~~Las~~For ~~Vegas~~the ~~Premium~~six ~~Outlets~~months ~~and~~ended ~~Chicago~~June ~~Premium~~30, ~~Outlets~~2005, ~~both~~unconsolidated ~~50%~~income ~~owned~~grew by $3.0 million or 29.0%, ~~opened~~to in$13.3 ~~August~~million ~~2003~~from ~~and~~$10.3 ~~May~~million ~~2004,~~in ~~respectively~~2004.

At June 30, ~~2004~~2005, the OP'’s portfolio consisted of 6061 wholly or partially owned properties containing 1617.63 million square feet of ~~GLA.~~gross Inleasable ~~2004, the~~area ~~OP changed its reportable segments~~("GLA"). The ~~As of June 30, 2004, the~~ OP'’s ~~Outlets include~~portfolio 40includes 42 Outlet centers containing 1314.9 million square feet of GLA and Other Retail includes 2019 centers containing 2.74 million square feet of GLA.

Details of the ~~1.7 million~~ 700,000 square feet of net GLA added since July 1, ~~2003~~2004 are as follows:


                                                                                                                    12 months                        6 months                     6 months ended
                                                          ended             ended                 ended
                                                   June 30,        ended 2004     June 30, 2004              December 31, 2003
                                                                                                                      2005                 2005                 2004
                                                    -------------     -------      ------     ----------   ------------------
Changes in GLA (sf in 000's):

New centers developed:
  Chicago   Seattle Premium Outlets (50% owned) ........          438                 438                                                            381                   381                    -
  Las Vegas    Premium Outlets Punta Norte (50% owned) ......          435                                             232                     -                435                  232
  Tosu   Toki Premium Outlets (40% owned)............          187                 187                                                   178                   178                    -
                                                                                                      ---------          -----------              ----------------   ------------------
  
Total new centers. .........................        1,060                 625                435                                                   791                   559                  232

Centers expanded:
  Gotemba   Rinku Premium Outlets (40% owned) ........          170                                                    71                     -                170                   71
  Albertville   Sano Premium Outlets.................          125 (40% owned)                                  51                     -                   51
   The Crossings Premium Outlets                                     22                     -                125                   22
     Other (net) ................................                                                                 (837)                  -                 (838)                   1
                                                                                                      ---------          -----------              ----------------   ------------------

Total centers expanded. ......................          287                                              107                   -                287(38)                 145

Centers acquired:
  Las   Carlsbad VegasPremium Outlet Center.....................          477                   Outlets                                         288                     -                477                  288
  Lakeland Factory Outlet Mall (1) ...........          319                                                                       -                319
                                                  ---------          ----------      -        ---------------   ------------------

Total centers acquired .......................          796                                                                 288                     -                796                  288

Centers disposedsold:
  American   Santa TinFe Cannery Premium Outlets                                         (2125)....         (135)                                      -                                (135125)
     Other Retail (31) ............................                                                         (319383)                                (152319)                               (16764)
                                                                                                      ---------          -----------              ----------------   ------------------

Total centers disposed: ......................         sold                                                 (454508)                                (152319)                              (302189)

Net GLA added during the period...............        1,689                 473              1,216                                     678                   202                  476

GLA at the end of period .....................       16                                         17,600              16277                17,600             16277               17,127075

(1) ~~Acquired~~Includes Lakeland Factory Outlet Mall inand ~~August~~Factory Stores ~~2003~~of inAmerica; ~~conjunction with the Las Vegas Outlet Center~~Hempstead. ~~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~~2005 with the three months ended June 30, ~~2003~~2004.

~~Income~~Net ~~from~~income ~~continuing~~available ~~operations~~to common unitholders for the three months ended June 30, 2005 was $3443.32 million, an increase of $811.02 million, or 3034.69%, from $2632.30 million in ~~2003~~2004. ~~The~~ This increase ~~was~~resulted ~~primarily the~~from ~~result of~~ the acquisition, development and expansion of ~~six centers in 2003~~three ~~and~~wholly ~~development~~owned ~~of two~~ centers inas ~~2004,~~well as higher rents from releasing and renewals. Higher operating and ~~contribution~~maintenance, todepreciation ~~earnings~~and ~~from~~amortization ~~Chelsea~~as ~~Interactive,~~well ~~partially~~as ~~offset by~~interest ~~increases~~expense indue ~~general~~to ~~and~~the ~~administrative,~~growth ~~interest~~of ~~and~~the ~~other~~portfolio ~~expenses~~offset these increases.

Base rentals improved to by $667.93 million, anor ~~increase~~11.0% ofto $774.4 0 million orin ~~12.5%~~2005 from $5966.57 million in ~~2003~~2004, primarily due to ~~the~~ acquisition ~~of three~~and ~~centers in 2003~~development, higher average rents on releasing and renewals ~~and~~as well as the expansion of ~~one~~a ~~wholly-owned~~ center in late ~~2003~~2004.

Percentage rents rose $01.8 9 million, or 1634.14%, to $5.7.6 million in ~~2004,~~ 2005 from $45.97 million in ~~the previous year~~2004, primarily from ~~greater~~improved tenant ~~sales~~ ~~and acquisitions during 2003~~sales.

Expense reimbursements, representing contractual recoveries from tenants of certain common area maintenance, operating, real estate tax, and promotional and management expenses, increased $1.37 million, or 67.49%, to $2123.7 4 million in 2005 from $2021.47 million in ~~2003~~ 2004, due to the recovery of operating and maintenance costs from increased GLA. The average recovery of reimbursable expenses for the Domestic Outlets ~~was~~improved to ~~89.3~~91% in ~~2004~~2005 ~~compared~~from ~~with~~ 89.2% in ~~the earlier period~~2004.

Other income increased $0.6 9 million or 3437.5% to $23.43 million in 2005, from $12.84 million in ~~2003,~~2004. ~~primarily due to improved~~ Improved ancillary operating ~~income~~ and interest income ~~from~~primarily ~~higher~~drove ~~rates~~the ~~in 2004, partially offset by a $0~~increase.~~3 million~~ ~~gain on an outparcel sale in 2003.~~

Operating and maintenance expenses increased $1.63 million, or 6 5.83%, to $2526.79 million in 2005 from $2425.1 6 million in ~~2003.~~2004 ~~The increase was~~ primarily due to ~~costs~~higher ~~related~~property totaxes, ~~increased~~promotional ~~GLA~~expenses and growth of the portfolio.

Depreciation and amortization expense was up $01.85 million, or 4. 8.2%, to $1719.93 million ~~from~~in 2005 from $17.18 million in ~~2003~~2004 due to increased depreciation primarily from the acquisition ~~of three centers~~ and ~~the~~ expansion of ~~one~~two ~~wholly-owned center~~centers in ~~2003~~2004.

General and administrative expense ~~grew~~decreased $10.69 million, or 6722.46%, to $43.12 million in 2005 from $24.5 1 million in ~~2003~~2004, primarily due to ~~increases~~lower in deferred compensation, ~~corporate governance~~expense, ~~professional~~public company and ~~legal~~professional ~~fees~~costs.

Other expenses ~~decreased~~ increased $1.82 million, or 73185.56%, to $01.68 million in ~~2004~~2005 from $20.46 million in ~~the previous year. The decrease in expenses was~~2004, ~~primarily~~substantially from Chelsea Interactive'’s contribution to earnings of $1.0 ~~million in~~ ~~2004 compared with a $0.9~~ million ~~loss~~ in ~~2003~~2004.

Income from unconsolidated investments was up $2.80 million, or ~~112~~ 37.63%, to $57.3 million in 2005 from $2.5 .3 million in ~~2003,~~2004 due to ~~higher earnings from Chelsea Japan resulting from~~ the ~~opening~~openings of ~~one~~Chicago ~~center~~Premium Outlets in ~~2003,~~May ~~and~~2004 ~~the opening~~and ofToki ~~Las Vegas~~ Premium Outlets in ~~2003~~March as2005 ~~well~~and as the ~~opening~~expansions of ~~Chicago~~Sano Premium Outlets and Rinku Premium Outlets in ~~May~~July and December 2004, respectively.

Interest expense increased $21.68 million, or 159.5%, to $1921.3 1 million in 2005, from $1619.73 million in ~~2003,~~2004 due to higher debt that financed acquisitions and development.

Results of Operations (continued)

Comparison of the six months ended June 30, ~~2004~~2005 with the six months ended June 30, ~~2003~~2004.

~~Income~~Net ~~from~~income ~~continuing~~available ~~operations~~to common unitholders for the six months ended June 30, 2005 was $6481.98 million, ~~representing~~ an increase of $1421.95 million, or 2935.76%, from $5060.03 million in ~~2003~~2004. ~~The~~ This increase resulted ~~was~~from ~~primarily~~ the ~~result~~development of ~~the~~one ~~acquisition,~~wholly ~~development~~owned ~~and expansion~~center ofin ~~six~~2005 ~~centers~~as inwell ~~2003~~as the acquisition and ~~development~~expansion of two wholly owned centers in 2004, higher rents from releasing and renewals ~~and contribution to earnings from Chelsea Interactive~~, ~~partially~~ offset by ~~increases~~higher inoperating ~~general~~ and ~~administrative~~maintenance, ~~interest~~ depreciation and ~~other~~amortization ~~expenses~~as well as interest expense due to the growth of the portfolio.

Base rentals ~~were~~improved by $~~132~~13.52 million, anor ~~increase~~10.0% ofto $13145.93 million, or ~~11.7%~~in 2005 from $~~118~~132.61 million in ~~2003~~2004, primarily due to the acquisition, ofdevelopment ~~three centers~~and inexpansion ~~2003,~~of centers and higher average rents on releasing and renewals ~~and the expansion of one wholly-owned center in late 2003~~.

Percentage rents rose $12.5 million, or 1623.4%, to $1012.59 million in ~~2004,~~ 2005 from $910.04 million in ~~the previous year~~2004, primarily from improved tenant ~~sales~~ ~~and acquisitions during 2003~~sales.

Expense reimbursements, representing contractual recoveries from tenants of certain common area maintenance, operating, real estate tax, and promotional and management expenses, increased $3.54 million, or 87.9%, to $4245.5 7 million in 2005 from $3942.03 million in ~~2003~~ 2004, due to the recovery of operating and maintenance costs from increased GLA. The average recovery of reimbursable expenses for the Domestic Outlets ~~was~~improved to ~~88.3~~91% in ~~2004~~2005 ~~compared~~from ~~with~~ 88.2% in ~~the earlier period~~2004.

Other income increased $12.1 9 million or 3366.78% to $47.32 million in 2005, from $34.23 million in ~~2003,~~2004. ~~primarily~~The increase ~~due~~was toprimarily andriven ~~increase~~by inimproved ancillary operating income, ~~and~~ interest income ~~from~~and ~~higher~~a ~~rates~~sale inof ~~2004, partially offset by~~ a ~~gain on~~non-core anproperty ~~outparcel sale~~ in ~~2003~~2005.

Operating and maintenance expenses increased $4.2.4 million, or 9 4.18%, to $5053.80 million in 2005 from $4650.6 5 million in ~~2003.~~2004 ~~The increase was~~ primarily due to ~~costs~~the ~~related~~growth toof ~~increased~~the ~~GLA~~portfolio, higher property taxes and promotional expenses.

Depreciation and amortization expense was up $12.47 million, or 3 7.97%, to $3538.82 million ~~from~~in 2005 from $3435.45 million in ~~2003~~2004 primarily due to increased depreciation from the acquisition of ~~three centers and the expansion of~~ one center in ~~late 2003~~2004.

General and administrative expense ~~grew~~decreased $31.06 million, or 6520.35%, to $76.71 million in 2005 from $47.7 million in ~~2003~~2004, primarily due to ~~increases~~lower in deferred compensation expense, ~~employee~~public company ~~benefits~~ and ~~corporate governance,~~ professional ~~and legal fees~~costs.

Other expenses ~~decreased~~ increased $10.53 million, or 3312.61%, to $3.14 million in ~~2004~~2005 from $43.61 million in ~~the~~2004, ~~previous year. The decrease in expenses was~~due ~~primarily~~to ~~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~~losses on two non-core centers sold in 2004.

Income from unconsolidated investments was up $63.40 million, or ~~162~~ 29.20%, to $1013.3 million in 2005 from $310.9 3 million in ~~2003,~~2004 ~~chiefly~~ due to ~~higher earnings~~the ~~from~~openings ~~Chelsea~~of ~~Japan,~~Chicago ~~resulting~~Premium ~~from~~Outlets ~~the~~in ~~opening~~May of2004 ~~two new centers~~ and ~~the~~Toki ~~expansion~~Premium ofOutlets ~~one~~in ~~center~~March ~~and~~2005, the ~~opening~~expansions of ~~Las~~Sano ~~Vegas~~ Premium Outlets ~~in 2003~~ and Rinku ~~Chicago~~ Premium Outlets in ~~May~~ 2004., ~~Chicago~~offset ~~Premium~~by ~~Outlets~~a ~~also~~pad ~~had an out parcel~~ sale in ~~the~~2004 ~~first~~at ~~quarter~~Chicago ~~of 2004~~Premium Outlets.

Interest expense increased $4.40 million, or 1310.35%, to $3741.9 million in 2005, from $3337.59 million in ~~2003,~~2004 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~~2004 of $~~181~~182.62 million is expected to increase in 2005 with scheduled anew openings of approximately 730,000 square feet of GLA as well as a full year of operations from the development, acquisition and expansion of ~~three joint~~five joint venture centers and ~~four~~two wholly -owned centers, which ~~contributed~~added ~~2.1~~900,000 ~~million~~ square feet of GLA during ~~2003~~2004. asAs ~~well~~of asJune ~~scheduled~~30, ~~openings~~2005, ofthe ~~approximately 975,000~~OP ~~square~~has ~~feet~~commitments of ~~new~~$16.9 million ~~joint~~for ~~venture~~active ~~GLA~~domestic indevelopment ~~2004~~projects. The OP has adequate ~~funding~~ funding sources to complete ~~and~~these ~~open all current development~~ projects from available cash, ~~credit~~loans ~~facilities~~from ~~and~~Simon and secured construction financing. ~~The~~In ~~OP also~~conjunction ~~has~~with ~~access~~the toSimon/Chelsea merger, the ~~public~~OP ~~markets~~has ~~through~~access ~~its~~to ~~remaining~~capital ~~$700~~funding ~~million~~through ~~debt and the Company'~~Simon’s $~~750~~2.0 ~~million~~billion ~~equity shelf registrations~~credit facility.

Operating cash flow is expected to provide sufficient funds for distributions in accordance with the Company’s 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 and partially ~~fund~~ fund development projects.

~~Common~~On ~~distributions~~March ~~declared~~31, ~~and~~2005, ~~recorded~~the inOP’s ~~2004~~wholly-owned ~~were~~equity ~~$61.6~~investee in ~~million,~~Chelsea orJapan ~~$1.20~~repaid ~~per~~and ~~unit.~~extinguished ~~The~~its ~~OP's~~4 ~~distribution~~billion ~~payout~~yen ~~ratio~~credit asfacility, ~~a percentage~~which ofwas ~~net~~scheduled ~~income~~to ~~before~~expire ~~gain~~on orApril ~~loss~~1, on2005, ~~sale~~through ofborrowings ~~assets~~from ~~and~~Simon. ~~depreciation and~~The ~~amortization~~OP’s ~~(reduced~~wholly-owned byequity ~~amortization~~investee ofentered ~~deferred~~into ~~financing~~a ~~costs,~~4 ~~depreciation of~~billion ~~non-real~~yen ~~estate~~credit facility ~~assets~~with ~~and~~Simon ~~preferred~~expiring ~~distribution~~January ~~("FFO"))~~2008 ~~was~~which ~~63%.~~will ~~The~~be ~~OP's~~funded through ~~senior~~Simon’s ~~unsecured~~yen ~~bank~~denominated ~~line~~facility, ofalso ~~credit~~expiring ~~("Senior~~January ~~Credit~~2008. ~~Facility")~~Interest ~~limits aggregate~~is ~~distributions~~payable tomonthly ~~the~~and ~~lesser~~is ofcurrently ~~(i)~~at ~~90%~~yen ofLIBOR ~~FFO~~plus on0.55% anper ~~annual~~annum, ~~basis~~but orthe interest ~~(ii)~~rate ~~100%~~may ~~of FFO~~adjust ~~for~~depending ~~any~~on ~~two~~Simon’s ~~consecutive~~credit ~~quarters~~rating.

~~The~~A ~~OP's~~summary ~~$200~~of ~~million Senior Credit Facility expires in March 2005 (unless extended until March 2006), bears interest on~~ the ~~outstanding balance~~maturity atof ~~an annual rate equal to~~ the ~~London~~OP’s ~~Interbank~~contractual ~~Offered~~debt ~~Rate~~ (~~"LIBOR") plus 0.95% (2.06%~~ at ~~June 30, 2004~~ par) oras ~~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~~2005, ~~$75.0~~is ~~million was~~as ~~outstanding~~follows ~~under~~(in ~~the~~thousands): ~~Senior Credit Facility.~~

In
                                                          Less Marchthan            2 2004,to the3        4 OPto issued5          More $100than
                                             Total           1 million 3.Year             Years          Years           5% unsecured notesYears
due                                          ---------     ------------      ------------    -----------      ------------
Unsecured Marchbank 15debt                      $   59,975        $  1,800          $  3,600       $  3,600          $ 2009.50,975
Notes Thepayable-related party                 317,570         300,830            16,740              -                 -
Unsecured notes                             725,000          50,000           125,000        150,000           400,000
Mortgage weredebt                               303,396           7,738            17,240        158,823           119,595
                                       ------------     ------------      ------------    -----------      ------------
   Total priceddebt                             1,405,941         360,368           162,580        312,423           570,570
Ground atand 99.534%operating ofleases                  72,651           3,050             6,365          6,203            57,033
Real parestate valuecommitments                      16,878          16,878                 -              -                 -
Deferred to yieldcompensation                        28,904               -            21,104          7,800                 -
3.603%                                       ------------     ------------      ------------    -----------      ------------
Total to investors. Proceeds were used to repay borrowings under a Obligations                        $100 million1,524,374        $380,296          $190,049       $326,426          $627,603
bridge loan due July 2004.                                        ============     ============      ============    ===========      ============

AAt ~~summary~~June of30, 2005, expansions were underway at four domestic centers totaling 171,000 square-feet that are scheduled to open by the ~~maturity~~end of ~~the~~2005. ~~OP's~~The ~~contractual~~381,000 ~~debt~~square-foot first ~~obligations~~phase ~~(at~~of ~~par)~~Seattle asPremium Outlets located near Seattle, Washington opened in May 2005. Other projects in various stages of ~~June~~development 30are expected to open in 2006 and beyond. All current development activity is fully financed either through project specific secured construction financing, ~~2004~~the peso denominated line of credit, isavailable ascash ~~follows~~or ~~(in~~through ~~thousands):~~the Simon credit facility.

                                                                                                           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)

AtThe ~~June~~OP ~~30,~~has ~~2004,~~an ~~construction for international and domestic~~agreement ~~development~~with ~~included~~Mitsubishi ~~projects~~Estate ~~totaling 0~~Co.9, ~~million square feet of GLA~~Ltd. ~~Internationally,~~ ~~projects~~and ~~include~~Sojitz ~~the~~Corporation ~~230,000~~(formerly ~~square-foot~~known ~~first phase of Punta~~as ~~Norte~~Nissho ~~Premium~~Iwai ~~Outlets~~Corporation) ~~in Mexico City scheduled~~ to ~~open~~jointly indevelop, ~~late~~own ~~2004~~ and ~~the expansion~~operate ofPremium ~~two~~ Outlet centers in Japan: ~~51,000~~under ~~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~~joint ~~square-foot~~venture ~~first~~Chelsea ~~phase of Toki Premium Outlets, located near Nagoya,~~ Japan~~, is scheduled to be completed by spring 2005~~. ~~The~~Borrowings ~~Punta~~related ~~Norte~~to ~~project~~Chelsea isJapan afor ~~development~~which of the OP's ~~50%~~has ~~owned~~provided ~~Mexican~~guarantees ~~joint~~for ~~venture.~~debt ~~The~~repayment ~~Sano,~~of ~~Rinku~~debt ~~and~~as ~~Toki projects are developments~~ of ~~the~~June ~~OP's 40% owned Japanese joint venture. Domestically~~30, ~~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~~as ~~and~~follows: ~~income has been stabilized.~~

Pursuant
                 Total toFacility             |                          Outstanding
       -------------------------------------| the-------------------------------------------------------------------------
                                            |                                                          Due     Interest
       Yen                 US Simon/Chelsea$ mergerEquivalent  |    Yen           US agreement,$ theEquivalent      US Operating$  Guarantee    Date      Rate
Partnership       --------------      ---------------  | is----------       ---------------      ---------------    ----      -----
       3.8 committedbillion to(1)     $34.3 redeemmillion    | its2.8 Seriesbillion      $25.1 Bmillion        $10.0 Cumulativemillion      2015      2.06%
       0.6 Redeemablebillion Preferred
Units(1)       5.4 formillion    | $650.4 billion        3.7 million          1.5 million      2012      1.50%

InThe ~~May 2004, the~~ OP ~~exercised~~has ~~its~~a ~~option~~50/50 tojoint venture ~~purchase~~agreement awith ~~290,000 square~~Sordo ~~foot~~Madaleno ~~shopping~~y ~~center~~Asociados ~~located~~and inaffiliates ~~Carlsbad~~to jointly develop, ~~California.~~own ~~The~~and OPoperate ~~expects~~Premium ~~to complete~~Outlet ~~the~~centers ~~acquisition~~ in ~~the~~Mexico. ~~third~~In ~~quarter~~December of 2004, ~~for~~the first adevelopment ~~purchase~~project ~~price which~~opened, ~~may~~the be232,000 ~~less~~square-foot ~~than,~~first ~~but~~phase ~~should~~of ~~not~~Premium Outlets ~~exceed~~Punta Norte, ~~$104~~located ~~million~~near Mexico City.

In ~~connection~~January ~~with~~2004, ~~the~~a wholly-owned ~~Simon~~subsidiary ~~joint~~of ~~venture,~~ the OP ~~has~~entered ~~committed~~into a 180.0 million peso revolving facility to provide ~~50%~~funding offor ~~the~~Mexican development ~~costs~~projects. In February 2005, the orOP ~~approximately~~repaid ~~$45~~the entire outstanding balance.0 ~~million~~The ~~for~~peso facility has a three-year ~~Chicago~~term; ~~Premium~~interest ~~Outlets~~was payable on the drawn funds at The Interbank Interest Equilibrium Rate ("TIIE") plus 0. As825% plus the bank’s cost of funds ~~June~~spread ~~30,~~limited ~~2004,~~to 20% of the OPTIIE ~~had~~and ~~contributed~~has ~~$39~~an annual facility fee of 0.615% ~~million~~per annum on the unused balance. The TIIE rate spread ranges from 0.725% to 1.37% depending on the ~~Chicago~~OP’s ~~project~~Senior Debt rating.

The OP has anminority interests ~~agreement~~ranging ~~with~~from ~~Mitsubishi~~3% ~~Estate~~to Co8% 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, ~~Ltd~~2005, was $3.6 ~~and~~million. The OP has also provided $12.7 ~~Nissho~~million ~~Iwai~~in ~~Corporation~~limited todebt ~~jointly~~service ~~develop,~~guarantees ~~own~~under ~~and~~a ~~operate~~standby ~~Premium~~facility ~~Outlet~~for loans arranged by Value Retail to construct outlet centers in ~~Japan~~Europe. ~~under~~The ~~the~~standby facility ~~joint~~for ~~venture~~new ~~Chelsea~~guarantees ~~Japan~~expired in November 2001; outstanding guarantees expire no more than five years after project completion. ~~Borrowings~~The ~~related~~existing outstanding toguarantees expire in September 2005. Value Retail has borrowed and ~~Chelsea~~escrowed ~~Japan~~the ~~for~~funds ~~which~~necessary to payoff the ~~Company~~loans ~~and~~guaranteed by the OP. ~~have~~The escrow ~~provided~~is ~~guarantees~~subject asto ~~of June~~certain ~~30,~~covenants ~~2004,~~which ~~are~~must asbe ~~follows:~~met prior to disbursement of the escrowed funds.

~~Total~~To ~~Facility | Outstanding~~achieve planned growth and favorable returns in both the short and long-~~--------------------------------- | ---------------------------------------------------------------------~~term, the OP’s financing ~~| Due Interest Yen US~~strategy $is ~~Equivalent | Yen US~~to $maintain ~~Equivalent US~~a $strong, ~~Guarantee Date Rate~~flexible financial position by: (i) ~~--------- --------------- | -------- --------------- ----------------- --------- --------~~ maintaining ~~3.8~~a ~~billion~~conservative level of leverage; (1ii) ~~$34.9~~ ~~million | 3.1~~extending ~~billion $28.3~~and ~~million $11.3~~sequencing ~~million 2015 2.20%~~debt maturity ~~0.6~~dates; ~~billion~~(iii) managing exposure to floating interest rates; and (1iv) 5 maintaining liquidity.5 ~~million | 0~~As a result of the OP’s merger with Simon, the OP has access to capital under Simon’s $2.50 billion ~~4.3~~ ~~million 1.7~~credit ~~million 2012 1~~facility.~~50%~~

~~(1)~~Net ~~Facilities~~cash ~~entered~~provided ~~into~~ by operating ~~Chelsea~~activities ~~Japan~~was $113.2 million and $103.4 million for the six months ended June 30, ~~secured~~2005, and 2004, respectively. The increase in operating cash flow was primarily generated from the growth of the OP’s GLA. Net cash used in investing activities decreased to $27.7 million in 2005 from $44.6 in 2004, primarily due to net proceeds generated from an increase in rental property additions offset by ~~Gotemba~~a ~~and~~decrease ~~Rinku~~in partially-owned investments. Net cash used in financing activities increased to $103.1 million from $59.2 million for the six months ended June 30, 2005, and ~~40%~~2004, ~~severally~~respectively. ~~guaranteed~~The byincrease was primarily due to the OPtiming of partner distribution payments.

~~The~~Recent ~~Company~~Accounting 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. Pronouncements

In January ~~2004~~2003, athe ~~wholly-owned~~FASB ~~subsidiary~~issued ofInterpretation ~~the~~No. OP46, ~~entered~~"Consolidation of ~~into~~Variable aInterest ~~180~~Entities" ~~million~~("FIN ~~peso-dominated~~46"). ~~revolving~~FIN ~~facility~~46 ~~(US~~clarifies ~~$15.7~~the ~~million~~application as of ~~June~~existing ~~30,~~accounting ~~2004)~~pronouncements to ~~provide~~certain ~~funding~~entities ~~for~~in ~~projects~~which inequity ~~Mexico.~~investors do ~~The~~not ~~peso~~have ~~facility~~the ~~has a~~characteristics ~~three-~~of ~~year~~a ~~term~~controlling ~~and~~financial ~~the~~interest ~~drawn~~or ~~funds~~do ~~bear~~not have ~~interest~~sufficient equity at risk for the ~~Interbank~~entity ~~Interest~~to finance its activities without ~~Equilibrium~~additional ~~Rate~~subordinated ~~("TIIE")~~financial ~~plus~~support ~~0.825%~~from ~~plus~~other ~~the~~parties. ~~bank's~~The ~~cost~~provisions of FIN ~~funds~~46 ~~spread limited~~will tobe ~~20%~~immediately ofeffective ~~the~~for ~~TIIE,~~all ~~with~~variable aninterests ~~annual~~in ~~facility~~variable interest ~~fee~~entities ofcreated ~~0.15%~~after onJanuary ~~the~~31, ~~unused balance~~2003. The ~~TIIE~~OP ~~with~~has ~~rate~~not ~~spread~~created ~~ranges~~any variable ~~from~~interest ~~0.725%~~entities subsequent to 1January 31, 2003.~~37%~~ ~~depending~~In onDecember 2003, FASB issued a revision to Interpretation 46 ("FIN 46-R") to clarify the ~~OP's~~provisions ~~Senior~~of ~~Debt~~FIN ~~rating~~46. ~~This~~The ~~facility~~application of FIN 46-R is ~~guaranteed~~effective byfor ~~the~~public companies, ~~Company~~other ~~and~~than ~~the~~small ~~OP. At~~business ~~June~~issuers, 30after March 15, 2004,. ~~the~~The application ~~outstanding~~of ~~balance~~FIN ~~was~~46-R ~~93.5~~did ~~million~~not ~~pesos~~have ~~(approximately US~~a ~~$8.1~~significant ~~million).~~impact on the OP’s financial statements.

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.

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 these 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 one of its term loans. The hedge effectively produces a fixed rate of 7.2625% on the notional amount until January 1, 2006.

At June 30, ~~2004~~2005, a hypothetical 100 basis point adverse move (increase) in US Treasury and LIBOR rates applied to unhedged debt would adversely affect the OP'’s annual interest cost by approximately $13.02 million annually.

Following is a summary of the OP'’s debt obligations at June 30, ~~2004~~ 2005 (in thousands):

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

                              2005             2006        2007                 2008         2009     Thereafter                 Total        Fair Value
                        ----------   -------    -   --------    -   ---------   ----------     ------------     -----------       ------------
Fixed Rate Debt:                     $49,967         998          -         $124,890     923    $163159,166838     $149,509      612       $554549,373939    $1,041034,905   310     $1,104100,531291
Average Interest Rate:             8.38%                   -               7.25%               6.99%        5.21%          7.05%         6.86%

Variable Rate Debt:        91300,932         830          -        8,138           -      16,740            -         60      59,975(1)    161       377,045      161545        377,045545
Average Interest Rate:      1       3.79%                   -        8.42%           -       1.31%            -          2.3690%          2         3.4454%

(1) Includes ~~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~~Our ~~Company's~~ chief executive officer and chief financial officer evaluated the effectiveness of our disclosure controls and procedures (as defined in rule 13a-14c under the Securities Exchange Act of 1934, as amended) as of June 30, ~~2004~~2005 and, based on that evaluation, concluded that, as 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~~There ~~the~~have ~~six~~been ~~months~~no ~~ended~~changes in ~~June~~the ~~30,~~internal ~~2004,~~controls ~~there~~over ~~have~~financial ~~not~~reporting ~~been any~~or ~~significant~~in ~~changes~~other tofactors ~~our~~that ~~internal~~have materially ~~controls~~affected, ~~including~~or ~~any~~are ~~corrective actions~~reasonably ~~with~~likely ~~regard~~ to ~~significant~~materially ~~deficiencies~~affect ~~and~~these internal ~~material~~controls ~~weaknesses~~over orfinancial ~~other factors~~reporting ~~that~~in ~~could~~the ~~significantly~~second ~~affect~~quarter ~~these~~of ~~controls~~2005.

Part II. Other Information

Item 16. ~~Legal Proceedings~~ Exhibits

OnExhibit ~~June~~No. ~~24,~~31.1 ~~2004,~~31.2 a32.1 ~~lawsuit was filed in the Court of Chancery in Essex County, New Jersey seeking to enjoin the merger~~32.2 ~~The~~Description ~~complaint,~~Section ~~which was~~302 ~~brought~~Certifications bySection a302 ~~purported~~Certifications ~~stockholder~~Section of906 ~~the~~Certifications ~~Company,~~Section ~~names~~906 ~~the Company and each of the members of its board of directors as defendants.~~ Certifications

~~The~~CPG ~~complaint alleges that the defendants have violated fiduciary duties of care~~PARTNERS, ~~loyalty, candor and independence owed to the public stockholders of the Company~~L. 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 suitP.

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

            Exhibit No.                   Description

(a)           31.1                  Section 302 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 Executive Vice President & Chief Financial Officer

Date: August 114, ~~2004~~2005

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;

(b) Intentionally Omitted

(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

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