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

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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 March 31, 2005

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___  No  X

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

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CPG Partners, L.P.
Consolidated Balance Sheets
(In thousands)

`March 31,         December 31,
                                                                                              2005                2004
                                                                                   ----------------    ----------------
                                                                                       (Unaudited)
Assets:
Rental properties:
     Land.......................................................................        $ 342,357           $   354,514
     Depreciable property.......................................................        1,958,215             1,919,605
                                                                                   ----------------    ----------------
Total rental property...........................................................        2,300,572             2,274,119
Accumulated depreciation........................................................         (407,337)             (390,783)
                                                                                   ----------------    ----------------
Rental properties, net..........................................................        1,893,235             1,883,336
Cash and cash equivalents.......................................................           24,453                33,362
Restricted cash-escrows.........................................................           28,231                27,418
Tenant accounts receivable (net of allowance for doubtful
  accounts of $2,694 in 2005 and $2,242 in 2004)................................            1,639                11,534
Deferred rent receivable........................................................           31,696                30,504
Property held for sale..........................................................                -                 3,500
Investments in unconsolidated affiliates........................................          146,984               149,631
Notes receivable-related parties................................................           19,241                14,184
Deferred costs, net.............................................................           19,758                17,082
Other assets....................................................................           26,252                22,047
                                                                                   ----------------    ----------------
Total assets....................................................................      $ 2,191,489            $2,192,598
                                                                                   ================    ================

Liabilities and partners' capital:
Liabilities:
     Unsecured bank debt........................................................         $ 60,225         $      84,835
     Unsecured public notes.....................................................          721,982               721,849
     Mortgage debt..............................................................          314,234               316,354
     Notes payable-related party................................................          318,098               300,260
     Construction payables......................................................           11,652                14,654
     Accounts payable and accrued expenses......................................           65,660                59,158
     Other liabilities..........................................................           18,480                23,281
                                                                                   ----------------    ----------------
Total liabilities...............................................................        1,510,331             1,520,391
                                                                                   ----------------    ----------------

Commitments and contingencies

Partners' capital:
General partner units outstanding, 44,206 in 2005 and 2004......................          535,830               528,613
Limited partners' units outstanding, 8,164 in 2005 and 2004.....................          145,676               144,343
Accumulated other comprehensive loss ...........................................             (348)                 (749)
                                                                                   ----------------    ----------------
Total partners' capital.........................................................          681,158               672,207
                                                                                   ----------------    ----------------
Total liabilities and partners' capital.........................................      $ 2,191,489            $2,192,598
                                                                                   ================    ================`

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

CPG Partners, L.P.
Consolidated Statements of Income
for the Three Months Ended March 31, 2005 and 2004(Unaudited)
(In thousands, except per unit data)

`2005             2004
                                                                                 -------------    ---------------

Revenues:
   Base rent................................................................        $71,310          $65,434
   Percentage rent..........................................................          5,267            4,777
   Expense reimbursements...................................................         22,309           20,660
   Other income.............................................................          3,888            1,911
                                                                                 -------------    ---------------
Total revenues...........................................................           102,774           92,782
                                                                                 -------------    ---------------

Expenses:
   Operating and maintenance................................................         26,025           24,962
   Depreciation and amortization............................................         18,950           17,665
   General and administrative...............................................          2,941            3,590
   Other....................................................................          1,572            2,406
                                                                                 -------------    ---------------
Total expenses...........................................................            49,488           48,623
                                                                                 -------------    ---------------

Income before unconsolidated investments and interest expense............            53,286           44,159

Income from unconsolidated investments......................................          6,064            5,042
Interest expense............................................................        (20,800)         (18,650)
                                                                                 -------------    ---------------
Net income...............................................................            38,550           30,551
Preferred unit requirement..................................................              -           (2,296)
                                                                                 -------------    ---------------
Net income available to common unitholders..................................        $38,550          $28,255
                                                                                 =============    ===============

Net income to common unitholders:
     General partner........................................................        $32,540          $24,208
     Limited partners.......................................................          6,010            4,047
                                                                                 -------------    ---------------
Total.......................................................................        $38,550          $28,255
                                                                                 =============    ===============

Net income per common unit:
     General partner........................................................          $0.74            $0.55
     Limited partners.......................................................          $0.74            $0.55

Weighted average units outstanding:
     General partner........................................................         44,206           43,746
     Limited partners.......................................................          8,164            7,314
                                                                                 -------------    ---------------
Total.......................................................................         52,370           51,060`

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

CPG Partners, L.P.
Consolidated Statements of Cash Flows
for the Three Months Ended March 31, 2005 and 2004(Unaudited)
(In thousands)

`2005                   2004
                                                                       ----------------        --------------
   Cash flows from operating activities
   Net income......................................................        $38,550                $30,551
   Adjustments to reconcile net income to net cash
      provided by operating activities:
      Depreciation and amortization................................         18,950                 17,816
      Equity in earnings of unconsolidated investments in
              excess of distributions..............................           (983)                (1,590)
     Gain on sale of assets........................................           (331)                     -
     Additions to deferred leasing costs...........................           (126)                  (337)
     Other operating activities....................................           (103)                  (976)
     Changes in assets and liabilities:
           Straight-line rent......................................         (1,281)                (1,364)
           Due from affiliates.....................................          3,255                  2,207
           Other assets............................................          5,758                  6,717
           Accounts payable and other liabilities..................         (6,601)                (8,923)
                                                                    ------------------------    ------------------
   Net cash provided by operating activities.......................         57,088                 44,101
                                                                    ------------------------    ------------------

   Cash flows from investing activities
   Additions to rental properties..................................        (25,011)                (8,261)
   Net proceeds from sale of center................................          3,831                      -
   Additions to investments in unconsolidated affiliates...........         (2,876)               (14,187)
   Distributions from investments in unconsolidated
         affiliates in excess of earnings..........................          2,904                    185
   Additions to deferred development costs.........................         (1,050)                  (405)
                                                                    ------------------------    ------------------
   Net cash used in investing activities...........................        (22,202)               (22,668)
                                                                    ------------------------    ------------------

   Cash flows from financing activities
   Debt proceeds...................................................         23,261                107,534
   Debt repayment..................................................        (31,917)              (129,951)
   Net proceeds from sale of the OP's common units.................              -                  5,717
   Distributions...................................................        (30,000)                (6,242)
   Loans to related parties........................................         (5,057)                     -
   Additions to deferred financing costs...........................            (82)                  (671)
                                                                    ------------------------    ------------------
   Net cash used in financing activities...........................        (43,795)               (23,613)
                                                                    ------------------------    ------------------

   Net decrease in cash and cash equivalents.......................         (8,909)                (2,180)
   Cash and cash equivalents, beginning of period..................         33,362                 18,476
                                                                    ------------------------    ------------------
   Cash and cash equivalents, end of period........................        $24,453                $16,296
                                                                    ========================    ==================`

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

CPG Partners, L.P., a Delaware limited partnership, (the
"Operating Partnership" or "OP") is 84.4% owned and managed by its sole general
partner, Chelsea Property Group, Inc. (the "Company"). In October 2004, the
Company merged with Simon Property Group, Inc. ("Simon") and became a private
real estate investment trust ("REIT") . The OP specializes in owning,
developing, leasing, marketing and managing upscale and fashion-oriented
manufacturers' outlet centers. As of March 31, 2005, the OP wholly or
partially-owned 60 centers in 30 states, Japan and Mexico containing
approximately 16.9 million square feet of gross leasable area ("GLA"); the OP's
portfolio comprised 41 Domestic and International Outlet centers containing 14.5
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 OP's Outlets generated approximately 96% and 98% of the OP's
real estate net operating income for the three months ended March 31, 2005, and
2004, respectively. The Outlets generally are located near metropolitan areas
including New York City, Los Angeles, Chicago, Boston, Washington, D.C., San
Francisco, Sacramento, Atlanta, Dallas, 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.

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

Common ownership of the OP as of March 31, 2005, was
approximately as follows:

`Number of units        % of total units
                                    --------------------      ------------------

            General Partner                   44,206,000                  84.4%
            Limited Partners                   8,164,000                  15.6%
                                    ---------------------     ------------------
            Total                             52,370,000                 100.0%`

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 three months ended March 31, 2005, are not necessarily
indicative of the results that may be expected for the year ending December 31,
2005. The balance sheet at December 31, 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 OP's Annual Report on Form 10-K for the year ended
December 31, 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.     Dispositions

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 and the net book value was $3.5 million.
Accordingly, the OP recognized a $0.3 million gain in the first quarter
2005.

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.

At March 31, 2005, the OP's interests in joint ventures included a 50% interest
in Las Vegas Premium Outlets and a 50% interest in Chicago Premium Outlets with
Simon, (collectively "Simon Ventures"); a 40% interest in Chelsea Japan Co.,
Ltd. ("Chelsea Japan"); a 50% interest in Premium Outlets Punta Norte ("Chelsea
Mexico"); and minority interests in various outlet centers and development
projects in Europe operated by Value Retail PLC ("Value Retail").

In March 2005, Chelsea Japan opened its fifth project, the 178,000 square-foot
first phase of Toki Premium Outlets located near Nagoya, Japan. Chelsea Japan
owns and operates four other centers: Gotemba Premium Outlets, a 390,000
square-foot property located 60 miles west of Tokyo; Rinku Premium Outlets, a
321,000 square-foot property located near Osaka; Sano Premium Outlets, a 229,000
square-foot property located about 40 miles north of Tokyo, and Tosu Premium
Outlets, a 187,000 square-foot property located approximately 20 miles south of
Fukuoka.

In August 2002, the OP and Simon entered into a 50/50 joint venture to develop
and operate Chicago Premium Outlets, a 438,000 square-foot single-phase Premium
Outlet center located in Aurora, Illinois, which opened in May 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 in August 2003.

In May 2002, the OP entered into a 50/50 joint venture agreement with Sordo
Madaleno y Asociados and affiliates to jointly develop Premium Outlet centers in
Mexico. In December 2004, the joint venture opened its first project; a 232,000
square-foot first phase of Premium Outlets Punta Norte, located near Mexico
City. As of March 31, 2005, the OP had contributed its 50% share or $15.8
million of total estimated development costs of $16.5 million; the balance is
expected to be paid during 2005. In February 2005, a wholly owned subsidiary of
the OP repaid the outstanding balance of its 180 million peso-denominated credit
facility. The revolving facility, guaranteed by the Company and OP, is available
to fund the OP's share of construction costs for projects in Mexico.

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 March 31, 2005 was $3.6 million.

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 March 31, 2005 (in thousands):

`Simon       Chelsea       Chelsea
                                                 Ventures         Japan        Mexico        Other        Total
                                              -----------   -------------    ----------     --------   -------------
Balance December 31, 2004..............          $103,252       $26,783        $15,874       $3,722      $149,631

   Additional investment...............                 -            50              -            -            50

   Income from unconsolidated
    investments........................             2,881         3,158             25            -         6,064

   Distributions and fees..............            (5,785)       (2,175)             -            -        (7,960)

   Foreign exchange....................                 -          (234)           (67)           -          (301)

   Advances (net) .....................               (55)         (461)            (2)          18          (500)
                                              -----------    -----------     ----------      ----------  ------------

Balance March 31, 2005.................          $100,293       $27,121        $15,830       $3,740      $146,984
                                              ===========    ===========     ==========      ==========  ============`

The OP's share of income before depreciation, depreciation
expense and income from unconsolidated investments for the three months ended
March 31, 2005 and 2004, is as follows (in thousands):

`Three Months Ended March 31,
                            -------------------------------------------------- -----------------------------------------------
                                                  2005                                              2004
                            -------------------------------------------------- -----------------------------------------------
                                                               Income                                          Income
                                  Income                        from                Income                       from
                                  before                     unconsolidated         before                   unconsolidated
                                  depr.       Depr.            investments            depr.        Depr.      investments
                                 --------    -------        ----------------     -----------    ---------   ---------------
   Chelsea Japan............      $4,731      $1,573             $3,158                $4,066        $1,229          $2,837

   Simon Ventures...........       3,926       1,045              2,881                 2,640           435           2,205

   Chelsea Mexico...........          33           8                 25                     -             -               -
                              -----------   --------        ----------------      ------------    ----------    ---------------

   Total....................      $8,690      $2,626             $6,064                $6,706        $1,664          $5,042
                              ===========   ========        ================      ============    ==========    ===============`

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

3.     Investments in Affiliates (continued)

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

`Property, plant and equipment (net)
     March 31, 2005................................................   $372,332
     December 31, 2004.............................................    367,700

Total assets
     March 31, 2005................................................    559,761
     December 31, 2004.............................................    548,621

Long term debt(1)
     March 31, 2005................................................    162,550
     December 31, 2004.............................................    195,552

Total liabilities
     March 31, 2005................................................    317,877
     December 31, 2004.............................................    304,122

Total revenues
     March 31, 2005................................................    44,874
     March 31, 2004................................................    32,293

Total expenses
     March 31, 2005................................................    37,556
     March 31, 2004................................................    25,914

Total net income
     March 31, 2005................................................    7,318
     March 31, 2004................................................    6,379

OP's share of net income
     March 31, 2005................................................    3,413
     March 31, 2004................................................    2,942

Fee income
     March 31, 2005................................................    2,651
     March 31, 2004................................................    2,100`

(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
March 31, 2005 and 2004, and the related effective interest rate, is as follows
(in thousands):

`Effective                        Effective
                                                          March 31,         interest       December 31,      interest
                                                               2005             rate              2004           rate
                                                   -----------------    -------------  ----------------   ------------
Term loan due April 2010 (1) ...................            $60,225            7.26%           $60,475          7.26%
Peso credit facility due January 2007 (2) ......                  -                             12,515         10.60%
Yen credit facility due April 2005 (3) .........                  -                             11,845          1.31%
                                                   -----------------                   ----------------
                                                            $60,225                            $84,835
                                                   =================                   ================`

| | 1) | In February 2004, the OP amended its mortgage loan due April 2010 to unencumber
four properties and reduce the interest rate from LIBOR plus 1.50% to LIBOR plus
1.25% (3.94% at March 31, 2005). The original terms remained unchanged requiring
quarterly principal amortization of $0.25 million through April 2005 and $0.45
million per quarter thereafter until maturity. 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 three months ended March 31, 2005
and 2004, the OP recognized interest expense of $0.5 million and $0.8 million,
respectively, on the hedge that is included in interest expense in the
accompanying financial statements.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 2) | 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 and provided
funding for projects in Mexico. In February 2005, the 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 spread ranged from 0.725% to 1.37%
depending on the OP's Senior Debt rating. The Company and OP guaranteed the
facility.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 3) | The OP's wholly-owned equity investee in Chelsea Japan Co. Ltd. had a 4.0
billion yen line of credit that provided funding for projects being developed in
Japan. On March 31, 2005, the facility was repaid and extinguished through
borrowings from Simon. See note 11. The yen line of credit bore interest at yen
LIBOR plus 1.25%.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

4.     Debt (continued)

Unsecured Public Notes

A summary of the terms of the unsecured publicly traded notes
outstanding at March 31, 2005 and December 31, 2004 is as follows (in
thousands):

`March 31,       December  31,      Effective
                                                                             2005                2004      Yield (1)
                                                                   ---------------   -----------------     --------------
8.375%  Notes due August 2005....................................      $   49,990            $ 49,982         8.44%
7.250%  Notes due October 2007...................................         124,914             124,906         7.39%
3.500%  Notes due March 2009.....................................          99,631              99,608         3.60%
8.625%  Notes due August 2009....................................          49,956              49,953         8.76%
8.250%  Notes due February 2011..................................         149,147             149,110         8.40%
6.875%  Notes due June 2012......................................          99,901              99,897         6.90%
6.000%  Notes due January 2013...................................         148,443             148,393         6.18%
                                                                   ---------------   -----------------
                                                                         $721,982            $721,849
                                                                   ===============   =================`

(1)     Including discounts on the notes.

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 March
31, 2005 and December 31, 2004, and the related interest rate and Net Book Value
("NBV") of the associated collateral as of March 31, 2005, is as follows (in
thousands):

`March  31,        December  31,           Effective
                                                   2005                2004         Interest Rate            NBV
                                            -----------       ---------------      -------------        ---------
 Due July 2008 (1) .............               $160,669            $161,546             7.26%           $246,990
 Due December 2012 (2) .........                 22,766              23,331             6.29%             99,238
 Due December 2012 (3) .........                 69,065              69,372             7.67%             73,070
 Due March 2013 (4) ............                 61,734              62,105             5.10%            116,809
                                           ------------          ------------                        -----------
                                              $ 314,234            $316,354                             $536,107
                                           ============          ============                        ===========`

|1) | The mortgage loan was consolidated as part of the a buyout of a partnership
interest. 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 three months ended March 31, 2005 and
2004, the OP recognized $39,000 and $36,000, respectively, in debt discount
amortization that is included in interest expense in the accompanying financial
statements.
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2) | The mortgage 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 recognized a $1.9 million debt premium that is amortized
over the period of the loan, which reduces the effective interest rate to 6.29%.
The mortgage loan calls for a $0.3 million fixed monthly debt service payment on
a 17-year amortization schedule. During the three months ended March 31, 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 was assumed as part of an acquisition. The stated interest
rate of 9.1% was greater than that available to the OP in the public debt
markets. Accordingly, the OP recorded a $6.9 million debt premium that will be
amortized over the period of the loan, which reduces the effective interest rate
to 7.67%. The loan calls for fixed monthly debt service payments of $0.5 million
for interest plus principal based on a 26-year amortization schedule. The
mortgage loan matures in March 2028 but can be prepaid beginning December 2012.
During the three months ended March 31, 2005 and 2004, the OP recognized $0.1
million in debt premium amortization that is included in interest expense in the
accompanying financial statements.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4) | The mortgage loan was assumed as part of an 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 will be 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 three months ended March 31, 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.
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

5.     Financial Instruments: Derivatives and Hedging

The OP 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 March 31, 2005, the OP's interest rate swap was reported at its fair value
and classified as an other liability. At March 31, 2005, there were $1.0 million
in deferred losses recorded in accumulated other comprehensive loss.

`Hedge Type      Notional Value      Rate             Maturity         Fair Value
             ---------------------    -----------------    -----------    ------------    ---------------
                   Swap, Cash Flow       $65.3 million        5.7625%        1/1/2006      ($1.1 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 March
31, 2005, but does not represent exposure to credit, interest rate, foreign
exchange or market risk.

6.     Preferred Units

In September 2004, the Company completed a private sale of $65 million of Series
C Variable Rate Preferred Stock (the Series C Preferred Stock). Proceeds from
the sale were used to redeem the OP's Series B Cumulative Redeemable Preferred
Units for approximately $65 million. The private sale was for 2.6 million
restricted shares having a liquidation preference of $25.00 per unit share. The
Series C Preferred Stock was redeemable at the Company's option, and paid a
cumulative quarterly dividend at a rate equal to the London Interbank Offered
Rate ("LIBOR") plus 1.0%. Pursuant to the Merger Agreement, on October 13, 2004,
the Series C Preferred Stock was fully redeemed.

In September 1999, the OP completed a private sale of $65 million of Series B
Cumulative Redeemable Preferred Units ("Preferred Units") to an institutional
investor. The private placement was for 1.3 million Preferred Units at a stated
value of $50 each. The Preferred Units were called at par at the OP's option, in
September 2004. The Preferred Units had no stated maturity or mandatory
redemption and paid a cumulative quarterly dividend at an annualized rate of
9.0%. The Preferred Units were exchangeable into Series B Cumulative Redeemable
Preferred Stock of the Company after ten years.

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

7.     Partners' Capital

Following is a schedule of partner's capital balances at March 31, 2005 (in
thousands):

`General           Limited            Accum.
                                                    Partner's        Partners'         Other Comp.
                                                     Capital          Capital         (Loss) Income        Total
                                                 ---------------  ---------------     ----------------  -------------
      Balance December 31, 2004................      $528,613        $144,343                $(749)        $672,207

      Net income...............................        32,540           6,010                     -          38,550
      Other comprehensive income:
        Foreign currency translation...........             -               -                 (239)            (239)
        Interest rate swap.....................             -               -                  640              640
                                                                                                        -------------
      Total comprehensive income...............                                                              38,951
                                                                                                        -------------
      Distributions............................       (25,323)         (4,677)                    -         (30,000)
                                                 ---------------  ---------------    -----------------  --------------
      Balance March 31, 2005 ..................      $535,830        $145,676                $(348)         $681,158
                                                 ===============  ===============    =================  ==============`

8.     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.

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
outstanding during the respective periods presented.

10. Commitments and Contingencies

Borrowings related to Chelsea Japan for which the OP has provided guarantees for
repayment of debt as of March 31, 2005, are as follows (in
thousands):

`Total Facility            |                                 Outstanding
  ----------------------------------- |  ---------------------------------------------------------------------
                                      |                                                      Due     Interest
  Yen              US $ Equivalent    |      Yen       US $ Equivalent    US $  Guarantee    Date        Rate
  ----------      ----------------    |  -----------  ----------------   ----------------    -----   --------
3.8 billion (1)   $35.5 million       |  2.9 billion    $27.3 million    $10.9 million       2015      2.06%
0.6 billion (1)     5.6 million       |  0.4 billion      4.1 million      1.6 million       2012      1.50%`

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

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

10.     Commitments and Contingencies (continued)

In May 2002, the OP entered into a 50/50 joint venture agreement
with Sordo Madaleno y Asociados and affiliates to jointly develop Premium Outlet
centers in Mexico. The 232,000 square-foot first phase of Premium Outlets Punta
Norte located in Mexico City opened in December 2004. At March 31, 2005, the OP
had contributed approximately $15.8 million toward its 50% share of total
expected development costs of $16.5 million. In January 2004, a wholly- owned
subsidiary of the OP entered into a 180 million peso denominated credit
facility, which is guaranteed by the OP, to fund its share of construction
costs. The outstanding balance on the peso facility was fully repaid in February
2005.

As of March 31, 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.

At March 31, 2005, other assets include $4.5 million and accrued
expenses and other liabilities include $21.1 million related to the 2002
deferred unit incentive program, which may be paid to certain key officers in
2007.

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.

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.

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

11.     Related Party Information (continued)

In March 2005, a wholly owned equity investee in Japan, Chelsea
International Operating Corp., entered into a 4.0 billion yen line of credit
agreement with Simon pursuant to which it borrowed 1.9 billion yen
(approximately $17.3 million) from Simon and issued an unsecured promissory note
due January 2008. Interest is currently payable monthly at yen LIBOR plus 0.55%
per annum, but the interest rate may adjust depending on Simon's credit rating.
The borrowed funds were used to repay and extinguish the 4 billion yen line of
credit, which provided funding for projects being developed in Japan. The three
loans made by Simon are included in notes payable-related parties in the
accompanying financial statements.

Chelsea International Operating Corp. has advanced partner loans
to Chelsea Japan totaling 2.1 billion yen (approximately US $19.2 million) at
March 31, 2005. The loans, which were used to fund construction costs, bear
interest at yen LIBOR plus 3.0% (3.05% at March 31, 2005) and mature in 2005
(810 million yen), in 2014 (612 million yen) and 2015 (640 million yen). The
loans are included in notes receivable-related parties in the accompanying
financial statements.

12.     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 March 31, 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
$0.1 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 OP's annual
report on Form 10-K for the period ended December 31, 2004.
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 $2.7 million and $2.2 million at
March 31, 2005, and December 31, 2004, respectively.

Valuation of Investments

On a periodic basis, management assesses whether there are any
indicators that the value of real estate properties, including joint venture
properties, may be impaired. If the carrying amount of the property is greater
than the estimated expected future cash flow (undiscounted and without interest
charges) of the asset, impairment has occurred. In first quarter 2004, the OP
sold and recognized an impairment loss of $0.9 million on the disposition of two
non-core properties; Lake George, New York and Iowa, Louisiana, which is
reflected in other expense in the accompanying financial statements.

General Overview

From April 1, 2004 to March 31, 2005, rental revenue from
wholly-owned assets grew by $6.4 million or 9.1% to $76.6 million from $70.2
million. Total revenue during the first quarter 2005 increased by $10.0 million
or 10.8% to $102.8 million from $92.8 million in 2004, driven by higher rents,
acquisitions, new development and expansions.

Income from unconsolidated investments rose 20.3%, or $1.0
million, primarily from new development of Chicago Premium Outlets in May 2004
and Toki Premium Outlets in March 2005.

At March 31, 2005, the OP's portfolio consisted of 60 wholly or
partially owned properties containing 16.9 million square feet of GLA. The OP's
Outlets include 41 centers containing 14.5 million square feet of GLA and Other
Retail includes 19 centers containing 2.4 million square feet of GLA.

Details of the 0.6 million square feet of net GLA added since
April 1, 2004 are as follows:

`12 months         3 months           9 months
                                                                    ended            ended              ended
                                                                March 31,        March 31,       December 31,
                                                                     2005             2005               2004
                                                              -----------       ----------       ------------
    Changes in GLA (sf in 000's):

    New centers developed:
       Chicago Premium Outlets (50% owned)                            438                -               438
       Premium Outlets Punta Norte (50% owned)                        232                -               232
       Toki Premium Outlets (40% owned)                               178              178                 -
                                                              -----------       ----------       ------------

    Total new centers                                                 848              178               670

    Centers expanded:
       Rinku Premium Outlets (40% owned)                               71                -                71
       Sano Premium Outlets (40% owned)                                51                -                51
       The Crossings Premium Outlets                                   22                -                22
       Other (net)                                                   (32)              (33)                1
                                                              -----------       ----------       ------------

    Total centers expanded                                            112              (33)              145

    Centers Acquired:
       Carlsbad Premium Outlets                                       288                -               288
                                                              -----------       ----------       ------------

    Total centers acquired                                            288                -               288

    Centers Disposed:
       Santa Fe Premium Outlets                                      (125)               -              (125)
       Other Retail (1)                                              (536)            (319)             (217)
                                                              -----------       ----------       ------------

    Total centers disposed                                           (661)            (319)             (342)

    Net GLA added during the period                                   587             (174)              761

    GLA at the end of period                                       16,901           16,901            17,075`

(1)   Includes Lakeland Factory Outlet Mall and
Factory Stores of America; Lake George, Iowa and Hempstead.

Results of Operations

Comparison of the three months ended March 31, 2005 with the
three months ended March 31, 2004.

Net Income available to common unitholders was $38.6 million, an
increase of $8.0 million, or 26.2%, from $30.6 million in 2004. The increase
resulted from the acquisition and expansion of wholly-owned centers in 2004 and
higher rents from releasing and renewals. These increases to income were offset
by higher operating and maintenance, depreciation and amortization as well as
interest expense due to the growth of the portfolio.

Base rentals improved to $71.3 million, an increase of $5.9
million, or 9.0% in 2005 from $65.4 million in 2004, primarily due to the
acquisition of one center, higher average rents on releasing and renewals and
the expansion of a center in late 2004.

Percentage rents rose $0.5 million, or 10.3%, to $5.3 million in
2005 from $4.8 million in 2004, primarily from improved tenant sales.

Expense reimbursements, representing contractual recoveries from
tenants of certain common area maintenance, operating, real estate tax and
promotional and management expenses, increased $1.6 million, or 8.0% to $22.3
million in 2005 from $20.7 million in 2004, due to the recovery of operating and
maintenance costs from increased GLA. The average recovery of reimbursable
expenses for the Domestic Outlets was 90% in 2005 and 87% in 2004. The average
recovery of reimbursable expenses for the Other Retail centers improved to 38%
in 2005, compared with 32% in the previous year.

Other income increased $2.0 million or 103.5% to $3.9 million in
2005, from $1.9 million in 2004. The increase was primarily driven by improved
ancillary operating income, interest income and a sale of a non-core property in
2005.

Operating and maintenance expenses increased $1.0 million, or
4.3%, to $26.0 million in 2005 from $25.0 million in 2004 primarily due to
increased property taxes and promotional expenses.

Depreciation and amortization expense was up $1.3 million, or
7.3%, to $19.0 million in 2005 from $17.7 million in 2004 due to increased
depreciation from the acquisition of one center and the expansion of one Premium
Outlet center.

General and administrative expense decreased $0.7 million, or
18.1%, to $2.9 million in 2005 from $3.6 million in 2004, primarily due to lower
public company and professional costs.

Other expenses decreased $0.8 million, or 34.7%, to $1.6 million
in 2005 from $2.4 million in 2004 due to impairment losses on two non-core
centers sold in 2004.

Income from unconsolidated investments was up $1.0 million, or
20.3%, to $6.0 million in 2005 from $5.0 million in 2004 due to the opening of
Chicago Premium Outlets in May 2004 as well as the openings of Tosu Premium
Outlets in March 2004 and Toki Premium Outlets in March 2005, offset by a pad
sale in 2004 at Chicago Premium Outlets.

Interest expense increased $2.1 million, or 11.5%, to $20.8
million in 2005, from $18.7 million in 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, 2004 of $182.2 million is expected to increase in 2005 with
scheduled new openings of approximately 730,000 square feet of GLA as well as a
full year of operations from the development, acquisition and expansion of five
joint venture centers and two wholly-owned centers, which contributed 900,000
square feet of GLA during 2004. As of March 31, 2005, the OP has a commitment of
$4.8 million for active domestic development projects. The OP has adequate
funding sources to complete these projects from available cash, loans from Simon
and secured construction financing. In conjunction with the Simon/Chelsea
merger, the OP has access to capital funding through Simon's $2.0 billion 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 development projects.

On March 31, 2005, the OP's wholly-owned equity investee in
Chelsea Japan repaid and extinguished its 4 billion yen credit facility, which
was scheduled to expire on April 1, 2005 through borrowings from Simon. The OP's
wholly-owned equity investee entered a 4 billion yen credit facility with Simon
which will be funded through Simon's yen denominated facility, expiring January
2008. Interest is currently at yen LIBOR plus 0.55% per annum, but the interest
rate may adjust depending on Simon's credit rating.

A summary of the maturity of the OP's contractual debt (at par)
as of March 31, 2005, is as follows (in thousands):

`More
                                                          Less than           2 to 3           4 to 5            than
                                           Total               1 Year          Years            Years         5 Years
                                         ---------      --------------   ------------     ------------      ---------
  Unsecured bank debt                     $ 60,225            $ 1,800        $ 3,600          $ 3,600       $  51,225
  Notes payable-related party              318,098            300,830         17,268                -               -
  Unsecured notes                          725,000             50,000        125,000          150,000         400,000
  Mortgage debt                            305,201              7,596         16,921          159,706         120,978
                                     -------------      --------------   ------------     ------------      ---------
     Total debt                          1,408,524            360,226        162,789          313,306         572,203
  Ground and operating leases               73,377              2,978          6,368            6,253          57,778
  Real estate commitments                    4,849              4,849              -                -               -
  Deferred compensation                     21,104                  -         21,104                -               -
                                     -------------      --------------   ------------     ------------      ---------
  Total Obligations                     $1,507,854           $368,053       $190,261         $319,559        $629,981
                                     =============      ==============   ============     ============      =========`

At March 31, 2005, construction underway for domestic
development includes the first-phase of Seattle Premium Outlets, a 381,000
square-foot center located near Seattle, Washington, scheduled to open in May
2005 and expansions at four other centers totaling 171,000 square-feet scheduled
to open in 2005. Other projects in various stages of development are expected to
open in 2006 and beyond. All current development activity is fully financed
either through project specific secured construction financing, the peso
denominated line of credit, available cash or through the Simon credit facility.
The OP will seek to obtain permanent financing once the projects are completed
and income has been stabilized.

Liquidity and Capital Resources (continued)

The OP has an agreement with Mitsubishi Estate Co., Ltd. and
Sojitz Corporation (formerly known as Nissho Iwai Corporation) to jointly
develop, own and operate Premium Outlet centers in Japan under the joint venture
Chelsea Japan. Borrowings related to Chelsea Japan for which the OP has provided
guarantees for repayment of debt as of March 31, 2005, are as follows:

`Total Facility            |                                 Outstanding
  ----------------------------------- |  ---------------------------------------------------------------------
                                      |                                                      Due     Interest
  Yen              US $ Equivalent    |      Yen       US $ Equivalent    US $  Guarantee    Date        Rate
  ----------      ----------------    |  -----------  ----------------   ----------------    -----   --------
3.8 billion (1)   $35.5 million       |  2.9 billion    $27.3 million    $10.9 million       2015      2.06%
0.6 billion (1)     5.6 million       |  0.4 billion      4.1 million      1.6 million       2012      1.50%`

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 December 2004, the first development project opened, the
232,000 square-foot first phase of Premium Outlets Punta Norte, located near
Mexico City. The OP contributed its 50% share or $15.8 million of development
costs through March 31, 2005.

In January 2004, a wholly-owned subsidiary of the OP entered
into a 180.0 million peso revolving facility to provide funding for Mexican
development projects. In February 2005, the OP repaid the entire outstanding
balance. The peso facility had a three-year term; interest was payable on the
drawn funds at The Interbank Interest Equilibrium Rate ("TIIE") plus 0. 825%
plus the bank's cost of funds spread limited to 20% of the TIIE and has an
annual facility fee of 0.15% per annum on the unused balance. The TIIE rate
spread ranged from 0.725% to 1.37% depending on the OP's Senior Debt rating.

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 March 31, 2005, was $3.6
million. The OP has also provided $12.7 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
expired in November 2001; outstanding guarantees expire no more than five years
after project completion. The existing outstanding guarantees expire in
September 2005.

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. As a result
of the OP's merger with Simon, the OP has access to capital under Simon's $2.0
billion credit facility.

Net cash provided by operating activities was $57.1 million and
$44.1 million for the three months ended March 31, 2005, and 2004, respectively.
The increase in operating cash flow was generated from the growth of the OP's
GLA. Net cash used in investing activities decreased to $22.2 million in 2005
from $22.7 in 2004, primarily due to net proceeds generated from a sale of a
non-core property offset by an increase in rental property additions. Net cash
used in financing activities increased to $43.8 million from $23.6 million for
the three months ended March 31, 2005, and 2004, respectively. The increase was
primarily due to the timing of partner distribution payments.

Recent Accounting Pronouncements

In January 2003, the FASB issued Interpretation No. 46, "Consolidation of
Variable Interest Entities" ("FIN 46"). FIN 46 clarifies the application of
existing accounting pronouncements to certain entities in which equity investors
do not have the characteristics of a controlling financial interest or do not
have sufficient equity at risk for the entity to finance its activities without
additional subordinated financial support from other parties. The provisions of
FIN 46 will be immediately effective for all variable interests in variable
interest entities created after January 31, 2003. The OP has not created any
variable interest entities subsequent to January 31, 2003. In December 2003,
FASB issued a revision to Interpretation 46 ("FIN 46-R") to clarify the
provisions of FIN 46. The application of FIN 46-R is effective for public
companies, other than small business issuers, after March 15, 2004. The
application of FIN 46-R did not have a significant impact on the OP's financial
statements.

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 March 31, 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 $3.2 million
annually.

Following is a summary of the OP's debt obligations at March 31,
2005 (in thousands):

`Expected Maturity Date
                         -----------------------------------------------------------------------------------------------------
                              2005      2006        2007       2008        2009      Thereafter          Total   Fair Value
                         ---------   -------   ---------   ---------  ----------   ------------    -----------   ------------
Fixed Rate Debt:           $49,990         -   $124,914    $160,669    $149,587       $551,056      $1,036,216   $1,092,350
Average Interest Rate:       8.38%         -       7.25%       6.99%       5.21%          7.05%           6.86%
Variable Rate Debt:        300,830         -          -      17,268           -         60,225 (1)     378,323      378,323
Average Interest Rate:       3.79%         -          -        1.31%          -           2.90%           3.54%`

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

Item 4.     Controls and Procedures

Our 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 March 31, 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.

There have been no changes in the internal controls over
financial reporting or in other factors that have materially affected, or are
reasonably likely to materially affect these internal controls over financial
reporting in the first quarter of 2005.

Part II.     Other Information

Item 6.     Exhibits and Reports on Form 8-K

|(a) | Exhibit No.
31.1
31.2
32.1
32.2 | Description
Section 302 Certifications
Section 302 Certifications
Section 906 Certifications
Section 906 Certifications
|--- | ------------------------------- | -----------------------------------------------------------------------------------------------------------------------

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, L.P.
By: /s/ Michael J. Clarke
       Michael J. Clarke
       Executive Vice President &
       Chief Financial Officer
| | --------------------------------------------------------------------------------------------------------------------------------------

Date:  May 4, 2005