---

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

---

FORM 10-Q

[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 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

Indicate by check mark whether the registrant is a shell
company (as defined in Rule 12b-2 of the Exchange Act).
Yes___  No  X

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

---

CPG Partners, L.P.

Index

Part I. Financial Information

|Item 1.  Financial Statements (Unaudited) | Page
|----------------------------------------- | ----

| | Consolidated Balance Sheets
     as of September 30, 2005, and December 31, 2004 | 2
| | -------------------------------------------------------------------------------- | -

| | Consolidated Statements of Income      for the
three and nine months ended September 30, 2005, and 2004 | 3
| | ------------------------------------------------------------------------------------------------------- | -

| | Consolidated Statements of Cash Flows
     for the nine months ended September 30, 2005, and
2004 | 4
| | ------------------------------------------------------------------------------------------------- | -

| | Notes to Consolidated Financial Statements | 5
| | ------------------------------------------ | -

|Item 2.  Management's Discussion and Analysis of Financial Condition
             
and Results of Operations | 16
|------------------------------------------------------------------------------------------------------------ | --

|Item 3.  Quantitative and Qualitative Disclosures about Market Risk | 24
|------------------------------------------------------------------- | --

|Item 4.   Controls and Procedures | 24
|--------------------------------- | --

Part II. Other Information

|Item 6.  Exhibits | 25
|----------------- | --

|Signatures | 26
|---------- | --

|Officer Certifications | 27
|---------------------- | --

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

`September 30,        December 31,
                                                                                              2005                2004
                                                                                   ----------------    ----------------
                                                                                       (Unaudited)
Assets:
Rental properties:
     Land.......................................................................        $ 342,541           $   354,514
     Depreciable property.......................................................        1,995,763             1,919,605
                                                                                   ----------------    ----------------
Total rental property...........................................................        2,338,304             2,274,119
Accumulated depreciation........................................................         (442,495)             (390,783)
                                                                                   ----------------    ----------------
Rental properties, net..........................................................        1,895,809             1,883,336
Cash and cash equivalents.......................................................           18,021                33,362
Restricted cash-escrows.........................................................           28,634                27,418
Tenant accounts receivable (net of allowance for doubtful
  accounts of $2,371 in 2005 and $2,242 in 2004)................................            7,769                11,534
Deferred rent receivable........................................................           34,733                30,504
Property held for sale..........................................................                -                 3,500
Investments in and advances to unconsolidated affiliates........................          142,085               149,631
Notes receivable-related parties................................................           17,191                14,184
Deferred costs, net.............................................................           18,569                17,082
Other assets....................................................................           33,337                22,047
                                                                                   ----------------    ----------------
Total assets....................................................................      $ 2,196,148            $2,192,598
                                                                                   ================    ================

Liabilities and partners' capital:
Liabilities:
     Unsecured bank debt........................................................         $ 59,525         $      84,835
     Unsecured public notes.....................................................          672,242               721,849
     Mortgage debt..............................................................          310,120               316,354
     Notes payable-related party................................................          351,607               300,260
     Construction payables......................................................            8,082                14,654
     Accounts payable and accrued expenses......................................           78,012                59,158
     Other liabilities..........................................................           21,718                23,281
                                                                                   ----------------    ----------------
Total liabilities...............................................................        1,501,306             1,520,391
                                                                                   ----------------    ----------------

Commitments and contingencies

Partners' capital:

General partner.................................................................          115,705               528,613
Limited partners................................................................          578,921               144,343
Accumulated other comprehensive income (loss)...................................              216                  (749)
                                                                                   ----------------    ----------------
Total partners' capital.........................................................          694,842               672,207
                                                                                   ----------------    ----------------
Total liabilities and partners' capital.........................................      $ 2,196,148            $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 and Nine Months Ended September 30, 2005 and 2004(Unaudited)(In thousands)

`Three Months                   Nine Months
                                                                  Ended September 30             Ended September 30
                                                                 2005            2004             2005         2004
                                                          --------------  --------------   -------------  --------------
Revenues:
   Base rent...........................................       $ 76,162         $67,183         $221,509       $199,315
   Percentage rent.....................................          9,713           7,757           22,586         18,193
   Expense reimbursements..............................         28,387          22,967           74,072         65,297
   Other income........................................          4,243           2,510           11,427          6,818
                                                          --------------  --------------   -------------  --------------
Total revenues.........................................        118,505         100,417          329,594        289,623
                                                          --------------  --------------   -------------  --------------

Expenses:
   Operating and maintenance...........................         32,753          26,619           85,709         77,163
   Depreciation and amortization.......................         19,274          18,078           57,498         53,553
   General and administrative..........................          3,398           5,228            9,536         12,949
   Other...............................................          1,998           1,675            5,418          4,728
                                                          --------------  --------------   -------------  --------------
Total expenses.........................................         57,423          51,600          158,161        148,393
                                                          --------------  --------------   -------------  --------------

Income before unconsolidated investments,
interest expense, and discontinued operations..........         61,082          48,817          171,433        141,230

Income from unconsolidated investments.................          6,489           7,051           19,836         17,398
Interest expense.......................................        (21,174)        (19,613)         (63,099)       (57,550)
                                                          --------------  --------------   -------------  --------------
Income from continuing operations......................         46,397          36,255          128,170        101,078
Loss from discontinued operations .....................             -             (149)               -            (95)
                                                          --------------  --------------   -------------  --------------
Net income.............................................         46,397          36,106          128,170        100,983
Preferred unit requirement.............................             -           (3,722)               -         (8,314)
                                                          --------------  --------------   -------------  --------------
Net income available to common unitholders.............       $ 46,397        $ 32,384         $128,170       $ 92,669
                                                          ==============  ==============   =============  ==============

Net income to common unitholders:
General partner........................................       $    464        $ 27,844         $ 57,604        $79,588
Limited partners.......................................         45,933           4,540           70,566         13,081
                                                          --------------  --------------   -------------  --------------
Total..................................................       $ 46,397         $32,384         $128,170        $92,669
                                                          ==============  ==============   =============  ==============`

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

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

`2005                2004
                                                                       -------------      ---------------
   Cash flows from operating activities
   Net income......................................................     $128,170             $100,983
   Adjustments to reconcile net income to net cash
      provided by operating activities:
      Depreciation and amortization................................       57,498               54,150
      Equity in earnings of unconsolidated investments
           in excess of distributions..............................       (5,019)              (3,899)
     Gain on sale of assets........................................         (331)                   -
     Additions to deferred leasing costs...........................         (396)              (1,278)
     Other ........................................................         (312)              (1,382)
     Changes in assets and liabilities:
           Straight-line rent......................................       (4,655)              (4,852)
           Due to affiliates.....................................             83                2,693
           Other assets..........................................        (11,782)               5,753
           Accounts payable and other liabilities................         14,402                3,353
                                                                    ----------------      ----------------
   Net cash provided by operating activities.......................      177,658              155,521
                                                                    ----------------     -----------------

   Cash flows from investing activities
   Additions to rental properties..................................      (68,624)            (162,868)
   Net proceeds from sale of center................................        3,831                2,087
   Reductions from (additions to) investments in and advances to
    unconsolidated affiliates......................................        3,235              (33,790)
   Distributions from investments in unconsolidated
         affiliates in excess of earnings..........................        8,270                1,474
   Payments from related parties...................................          -                  3,665
   Additions to deferred development costs.........................        (608)                 (729)
                                                                    -----------------     ----------------
   Net cash used in investing activities...........................      (53,896)            (190,161)
                                                                    -----------------     ----------------

   Cash flows from financing activities
   Debt proceeds...................................................       58,261              276,284
   Debt repayment..................................................      (87,753)            (176,420)
   Net proceeds from sale of the OP's common units.................            -                7,669
   Distributions...................................................     (106,500)             (72,633)
   Net proceeds from sale of the preferred units...................            -               64,805
   Redemption of preferred units...................................            -              (65,000)
   Loans to related parties........................................       (5,382)                   -
   Repayments from related parties.................................        2,375                    -
   Additions to deferred financing costs...........................         (104)              (1,408)
                                                                    -----------------     ----------------
   Net cash (used in) provided by financing activities.............     (139,103)              33,297
                                                                    -----------------     ----------------

   Net decrease in cash and cash equivalents.......................      (15,341)              (1,343)
   Cash and cash equivalents, beginning of period..................       33,362               18,476
                                                                    -----------------     ----------------
   Cash and cash equivalents, end of period........................     $ 18,021             $ 17,133
                                                                    =================     ================`

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 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:

`Capital         Profits
                                                        -------------     --------------
              General Partner
                  Chelsea Property Group, Inc.               50.100%         1.000%

              Limited Partners
                  Simon Property Group, LP                   14.011%        14.011%
                  CPG Holdings LLC                           35.889%        84.989%
                                                        -------------     --------------
                  Total                                     100.000%       100.000%`

On June 1, 2005, the Company reorganized its capital structure,
whereby Chelsea Property Group, Inc., in a partial liquidation transferred a
portion of its capital and profit interests to the newly formed limited partner,
CPG Holdings LLC.

The OP specializes in owning, developing, leasing, marketing and
managing upscale and fashion-oriented manufacturers outlet centers
including its trademarked Premium Outlet® Centers. As of September 30, 2005, the
OP wholly 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
Outlet Centers) and 19 other centers containing approximately 2.4
million square feet of GLA (Other Retail) (collectively the
Properties). The Outlet Centers generated approximately 97% of the
OPs real estate net operating income for the nine months ended September
30, 2005, and 2004. The Outlet Centers generally are located near metropolitan
areas including New York City, Los Angeles, Chicago, Boston, Washington, D.C.,
San Francisco, Sacramento, Atlanta, Dallas, Seattle, Mexico City, Mexico and
Tokyo, Osaka and Nagoya, Japan. Some Outlet Centers 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 corporate subsidiaries. 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 nine months ended September 30, 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 period financial statements have
been reclassified to conform to current period 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, the net book value
was $3.5 million and the OP recognized a $0.3 million gain which is included in
other income in the accompanying financial statements.

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 September 30, 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. In February 2005, the OP repaid the
outstanding balance of the 180 million peso-denominated credit facility entered
into by a wholly owned subsidiary of the OP. 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 September 30, 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 to/from affiliates at September 30, 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...............                 -           156            203               3            362

   Income from unconsolidated investments           9,263        10,515             58               -         19,836

   Distributions and fees..............           (17,532)       (5,888)           (76)              -        (23,496)

   Foreign exchange....................                 -          (798)            441              -           (357)

   Advances (net) .....................               221        (4,067)              -            (45)        (3,891)
                                              -----------    -----------     ----------      ----------    ------------

Balance September 30, 2005.............           $95,204       $26,701         $16,500         $3,680       $142,085
                                              ===========    ===========     ==========      ==========    ============`

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

3. Investments in Affiliates (continued)

The OPs share of
income before depreciation, depreciation expense and income from unconsolidated
investments for the three and nine months ended September 30, 2005 and 2004, is
as follows (in thousands):

`Three Months Ended September 30,
                               ---------------------------------------------------------------------------------------------------
                                                2005                                               2004
                               ---------------------------------------------------------------------------------------------------
                                                                 Income                                          Income
                              Income                          (loss) from          Income                         from
                              before                         unconsolidated        before                     unconsolidated
                              depr.               Depr.       investments          depr.            Depr.      investments
                             --------------    --------   ----------------       ------------    ---------    ---------------
   Chelsea Japan.......         $4,812           $1,536        $3,276               $4,224        $1,324         $2,900

   Simon Ventures......          4,208            1,052         3,156                5,126           975          4,151

   Chelsea Mexico......            181              124            57                    -             -              -
                             --------------    --------   ----------------       ------------    ---------    ---------------
   Total...............        $ 9,201           $2,712        $6,489               $9,350        $2,299         $7,051
                             ==============    ========   ================       ============    =========    ===============


                                                             Nine Months Ended September 30,
                               ---------------------------------------------------------------------------------------------------
                                                2005                                               2004
                               ---------------------------------------------------------------------------------------------------
                                                                 Income                                          Income
                              Income                             from              Income                         from
                              before                         unconsolidated        before                     unconsolidated
                              depr.               Depr.       investments          depr.            Depr.      investments
                             --------------    --------   ----------------       ------------    ---------    ---------------
   Chelsea Japan.......        $15,299           $4,784       $10,515              $12,677        $3,784         $8,893

   Simon Ventures......         12,400            3,137         9,263               10,563         2,058         8,505

   Chelsea Mexico......            362              304            58                    -             -              -
                             --------------    --------   ----------------       ------------    ---------    ---------------
   Total...............        $28,061           $8,225       $19,836              $23,240        $5,842        $17,398
                             ==============    ========   ================       ============    =========    ===============`

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

3. Investments in Affiliates (continued)

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

`September 30,        December
Balance Sheet Information:                                       2005         31, 2004
                                                        -------------    ---------------

  Property, plant and equipment (net) ...............        $374,607          $367,700

  Total assets.......................................         538,588           548,621

  Long term debt (1) ................................         157,025           195,552

  Total liabilities..................................         290,472           304,122


                                                        September 30,       September 30,
Operating Results:                                              2005                2004
                                                          --------------     ---------------

Total revenues
     Three months ended..............................        $ 46,493          $ 42,664
     Nine months ended...............................         145,324           110,429

Total expenses
     Three months ended..............................          36,942            31,696
     Nine months ended...............................         117,912            85,752

Net income
     Three months ended..............................          9,551             10,968
     Nine months ended...............................         27,412             24,677

OP's share of net income
     Three months ended..............................          4,328              5,124
     Nine months ended...............................         12,495             11,357

Fee income
     Three months ended..............................          2,161              1,927
     Nine months ended...............................          7,341              6,041`

(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
September 30, 2005 and December 31, 2004, and the related effective interest
rate, is as follows (in thousands):

`September 30,        Effective         December 31,       Effective
                                                                      2005             rate                2004             rate
                                                        -------------------    -------------    ----------------    -------------
Term loan due April 2010 (1) .......................               $59,525            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%
                                                        -------------------                     ----------------
                                                                   $59,525                              $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% (4.94% at September 30, 2005). The original terms remain
unchanged and required 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
term loan at 7.26% until January 2006. During the nine months ended September
30, 2005 and 2004, the OP recognized interest expense of $1.3 million and $2.3
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 has a three-year term and provides
funding for projects in Mexico. In February 2005, the OP repaid the outstanding
balance of the peso facility. The drawn funds bear interest at the Interbank
Interest Equilibrium Rate ("TIIE") plus 0.825% plus the bank's cost of funds
spread limited to 20% of the TIIE, with an annual facility fee on the unused
balance of 0.15% per annum. The TIIE rate spread ranges from 0.725% to 1.37%
depending on the OP's Senior Debt rating. The Company and OP guarantee the
facility.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 3) | The OP's wholly-owned equity investor in Japan, Chelsea International Operating
Corp., 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%.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Unsecured Public Notes

A summary of the terms of the unsecured publicly traded notes
outstanding at September 30, 2005 and December 31, 2004 is as follows (in
thousands):

`Stated                                         September 30,       December  31,        Effective
Rate                Maturity                           2005                2004          Yield (1)
-------------      ---------                  ---------------   ------------------   --------------
8.375%             August 2005.............         $      -            $ 49,982        8.44%
7.250%             October 2007............          124,931             124,906        7.39%
3.500%             March 2009..............           99,678              99,608        3.60%
8.625%             August 2009.............           49,961              49,953        8.76%
8.250%             February 2011...........          149,220             149,110        8.40%
6.875%             June 2012...............           99,910              99,897        6.90%
6.000%             January 2013............          148,542             148,393        6.18%
                                             -----------------    -------------------
                                                    $672,242            $721,849
                                             =================    ===================`

(1)   Including discounts on the notes.

In August 2005 the OP redeemed its $50 million 8.375% notes
through available cash of $15 million and a loan from Simon of $35 million.

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
September 30, 2005 and December 31, 2004, and the related interest rate and Net
Book Value (NBV) of the associated collateral as of September 30,
2005, is as follows (in thousands):

`September 30,      December  31,           Effective
Maturity                                           2005               2004                  Rate          NBV
--------                                   -----------       ---------------      -------------        ----------
 July 2008 (1) .................               $158,991            $161,546             7.26%           $247,495
 December 2012 (2) .............                 21,628              23,331             6.29%             98,066
 December 2012 (3) .............                 68,491              69,372             7.67%             72,403
 March 2013 (4) ................                 61,010              62,105             5.10%            116,552
                                            ------------          ------------                         -----------
                                              $ 310,120            $316,354                             $534,516
                                            ============          ============                         ===========`

|1) | The mortgage loan was consolidated as part of the 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 nine months ended September 30, 2005
and 2004, the OP recognized $117,000 and $109,000, 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 nine months ended September 30, 2005
and 2004, the OP recognized approximately $0.2 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 nine months ended September 30, 2005 and 2004, the OP recognized $0.4
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 nine months ended September 30, 2005
and 2004, the OP recognized approximately $0.2 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 September 30, 2005, the OPs interest rate
swap was reported at its fair value and classified as an other liability. At
September 30, 2005, there were $0.2 million in deferred losses recorded in
accumulated other comprehensive loss.

`Hedge Type          Notional Value        Rate       Maturity         Fair Value
        ---------------------    --------------      --------   ------------    ---------------
           Swap, Cash Flow       $64.6 million        5.7625%     1/1/2006      ($0.3 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 September 30, 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 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.

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

7. Partners' Capital

Following is a schedule of partners' capital balances at September 30, 2005 (in
thousands):

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

      Net income...............................        57,604          70,566                     -         128,170

      Other comprehensive income:
        Foreign currency translation...........             -               -                 (458)            (458)

        Interest rate swap.....................             -               -                1,423            1,423
                                                                                                        -------------
      Total comprehensive income...............                                                             129,135
                                                                                                        -------------
      Reallocate book value....................        39,429         (39,429)                    -               -
      Partial Company liquidation..............      (449,655)        449,655                     -
      Distributions............................       (60,286)        (46,214)                    -        (106,500)
                                                 ---------------  ---------------    -----------------  --------------
      Balance September 30, 2005...............      $115,705        $578,921                $ 216          $694,842
                                                 ===============  ===============    =================  ==============`

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 Partner

Net income per partner is determined by allocating
net income to the general partner (including the general partners
preferred unit allocation) and the limited partners based on profit ownership
percentages during the respective periods presented. On June 1, 2005, the
Company, in a partial liquidation transferred approximately $449.7 million of
its capital and profit interests to the newly formed limited partner, CPG
Holdings LLC. Net income per partner of approximately $4.2 million for the
quarter ended June 30, 2005 has been reallocated from the general partner to the
limited partners to reflect the new profit ownership percentages.

10. Commitments and Contingencies

Borrowings related to Chelsea Japan for which the OP
has provided guarantees for repayment of debt as of September 30, 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)     $33.5 million    | 2.8 billion      $24.5 million         $9.8 million      2015      2.06%
       0.6 billion (1)       5.3 million    | 0.4 billion        3.6 million          1.4 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. 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.

The OP provided limited debt service guarantees to Value Retail
and affiliates, under a standby facility for loans provided to Value Retail and
affiliates to construct outlet centers in Europe. The outstanding guarantees,
which had a maximum limit of $22 million, were terminated on September 30, 2005.

At September 30, 2005, other assets include $9.2 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

In August 2005, the OP borrowed $35.0 million from Simon and
issued an unsecured promissory note due August 1, 2006. Interest is payable at
maturity at LIBOR plus 1% per annum. The borrowed funds were used to redeem a
portion of the OPs $50 million 8.375% notes that were due August 2005.

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)

11. Related Party Information (continued)

In March 2005, a wholly owned equity investor in Japan, Chelsea
International Operating Corp., entered into a 4.0 billion yen line of credit
agreement with 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. Borrowings
under the Simon credit agreement were used to repay and extinguish the 4 billion
yen bank line of credit, which provided funding for projects being developed in
Japan. The outstanding balance at September 30, 2005 totaled 1.8 billion yen
(approximately US $15.8 million).

The 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 2.0 billion yen (approximately US $17.2 million) at
September 30, 2005. The loans, which were used to fund construction costs, bear
interest ranging from yen LIBOR plus 2.0% to 3.0% (averaging 2.66% at September
30, 2005) and mature through 2015. 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 September 30, 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 $1.0 billion, which exceeds the book value by approximately $48
million. Unsecured bank debt and notes payable to related parties are carried at
an amount which reasonably approximates its fair value since it is a variable
rate instrument whose interest rate reprices frequently.

13. 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.

In June 2005, the FASB ratified its consensus in EITF issue
04-05, Determining Whether a General Partner, or the General Partners as a
Group, Controls a Limited Partnership or Similar Entity When the Limited
Partners Have Certain Rights (Issue 04-05). The effective date for Issue
04-05 is June 29, 2005 for all new or modified partnerships and January 1, 2006
for all other partnerships for the applicable provisions. The OP is in the
process of determining the impact of adoption of EITF 04-05.

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, 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.

Executive Overview

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.

The OP specializes in owning, developing, leasing, marketing and
managing upscale and fashion-oriented manufacturers outlet centers. As of
September 30, 2005, the OP wholly 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
Outlet Centers) and 19 other centers containing approximately 2.4
million square feet of GLA (Other Retail) (collectively the
Properties). The Outlet Centers generated approximately 97% of the
OPs real estate net operating income for the nine months ended September
30, 2005, and 2004. The Outlet Centers generally are located near metropolitan
areas including New York City, Los Angeles, Chicago, Boston, Washington, D.C.,
San Francisco, Sacramento, Atlanta, Dallas, Seattle, Mexico City, Mexico and
Tokyo, Osaka and Nagoya, Japan. Some Outlet Centers are also located within 20
miles of major tourist destinations including Palm Springs, Napa Valley,
Orlando, Las Vegas and Honolulu.

Management of the OP seeks growth in earnings and cash flows
through focusing on its core business of manufacturers outlet centers and
pursuing new development as well as strategic expansion and renovation activity
to enhance existing assets profitability and market share when management
believes the investment of additional capital meets its risk-reward criteria.
The OP seeks to selectively develop new properties in major metropolitan areas
or tourist destinations that exhibit strong population and economic growth.

The OP derives most of its liquidity from leases that generate
positive net cash flow from operations. The majority of revenue is generated
from leases with retail tenants including base minimum rents, overage and
percentage rents based on tenants sales volume and recoveries of a
significant amount of the recoverable expenditures, which consist of property
operating, real estate tax and advertising and promotional expenditures.
Bankruptcy filings by retailers are normal in the course of operations. The OP
is continually releasing vacant spaces resulting from tenant termination.
Pressures that affect consumer confidence, job growth, energy costs and income
gains can affect retail sales growth, and a continuing soft economic cycle may
impact the OPs ability to retenant property vacancies resulting from
bankruptcies.

Inflation has remained relatively low in recent years and has
had minimal impact on the operating performance of the Properties. 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.

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 $2.4 million and $2.2
million at September 30, 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

Rental revenue from wholly owned assets increased $11.0 million
or 14.6%, to $85.9 million from $74.9 million for the three months ended
September 30, 2005. Third quarter 2005 total revenue was up $18.1 million or
18.0%, to $118.5 million from $100.4 million in 2004, primarily due to higher
rents, an acquisition, new development and an expansion of an existing center.
For the nine months ended September 30, 2005, rental revenue grew $26.6 million
or 12.2%, to $244.1 million from $217.5 million in the year earlier period. For
the same nine-month period total revenue rose 13.8% or $40.0 million, to $329.6
million from $289.6 million in 2004.

Third quarter 2005 income from unconsolidated investments
decreased 8.0%, or $0.6 million, primarily from the sales of outparcels at
Chicago Premium Outlets and Las Vegas Premium Outlets in the year earlier
period. For the nine months ended September 30, 2005, unconsolidated income grew
by $2.4 million or 14.0%, to $19.8 million from $17.4 million in 2004, due to
the openings of Chicago Premium Outlets in May 2004 and Toki Premium Outlets in
March 2005 and the expansions of Sano Premium Outlets and Rinku Premium Outlets
in 2004.

At September 30, 2005, the OPs portfolio consisted of 61
wholly or partially owned properties containing 17.3 million square feet of
gross leasable area (GLA). The OPs portfolio included 42
Outlet centers containing 14.9 million square feet of GLA and Other Retail
included 19 centers containing 2.4 million square feet of GLA.

Details of the 0.4 million square feet of net GLA added since
October 1, 2004 are as follows:

`12 months ended         9 months ended       3 months ended
                                                          September 30,          September 30,          December 31,
                                                                   2005                   2005                 2004
                                                    --------------------      -----------------   ------------------
Changes in GLA (sf in 000's):

New centers developed:
   Seattle Premium Outlets                                          381                    381                    -
   Premium Outlets Punta Norte (50% owned)                          232                      -                  232
   Toki Premium Outlets (40% owned)                                 178                    178                    -
                                                    --------------------      -----------------   ------------------

Total new centers                                                   791                    559                  232

Centers expanded:
   Rinku Premium Outlets (40% owned)                                 71                      -                   71
   The Crossings Premium Outlets                                     22                      -                   22
   Other (net)                                                      (35)                  (38)                    3
                                                    --------------------      -----------------   ------------------

Total centers expanded                                               58                   (38)                   96

Centers sold:
   Santa Fe Premium Outlets                                        (125)                     -                 (125)
   Lakeland Factory Outlet Mall                                    (319)                 (319)                     -
                                                    --------------------      -----------------   ------------------

Total centers sold                                                 (444)                 (319)                 (125)

Net GLA added during the period                                     405                   202                   203

GLA at the end of period                                         17,277                17,277                17,075`

Results of Operations

Comparison of the three months ended September 30, 2005 with
the three months ended September 30, 2004.

Net income for the three months ended September 30, 2005 was
$46.4 million, an increase of $10.3 million, or 28.5%, from $36.1 million in
2004. This increase resulted from the acquisition, development or expansion of
three wholly owned centers as well as higher rents from releasing and renewals.
Higher operating and maintenance, depreciation and amortization as well as
interest expense due to the growth of the portfolio offset these increases.

Base rentals improved by $9.0 million or 13.4% to $76.2 million
in 2005 from $67.2 million in 2004, primarily due to acquisition and development
activity, higher average rents on releasing and renewals as well as the
expansion of a center in late 2004.

Percentage rents rose $1.9 million, or 25.2%, to $9.7 million in
2005 from $7.8 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 $5.4 million, or 23.6% to $28.4
million in 2005 from $23.0 million in 2004, due to the recovery of operating and
maintenance costs from increased GLA and higher real estate taxes. The average
recovery of reimbursable expenses for the Domestic Outlet Centers improved to
90% in 2005 from 88% in 2004.

Other income increased $1.7 million or 69.0% to $4.2 million in
2005, from $2.5 million in 2004. Improved ancillary operating income and
interest income primarily drove the increase.

Operating and maintenance expenses increased $6.2 million, or
23.0%, to $32.8 million in 2005 from $26.6 million in 2004 primarily due to
higher property taxes, promotional expenses and growth of the portfolio.

Depreciation and amortization expense was up $1.2 million, or
6.6%, to $19.3 million in 2005 from $18.1 million in 2004 primarily due to a
center acquisition and 2 center expansions during 2004.

General and administrative expense decreased $1.8 million, or
35.0%, to $3.4 million in 2005 from $5.2 million in 2004, primarily due to lower
deferred compensation expense, public company and professional costs.

Other expenses increased $0.3 million, or 19.3%, to $2.0 million
in 2005 from $1.7 million in 2004, substantially from higher ground rent and
legal expenses, partially offset by a $0.9 million settlement payment on a
shareholder lawsuit in 2004.

Income from unconsolidated investments decreased $0.6 million,
or 8.0%, to $6.5 million in 2005 from $7.1 million in 2004, primarily due to
outparcel sales in 2004 at Chicago and Las Vegas Premium Outlets, partially
offset by the opening of Toki Premium Outlets in March 2005 and the expansion of
Rinku Premium Outlets in December 2004.

Interest expense increased $1.6 million, or 8.0%, to $21.2
million in 2005, from $19.6 million in 2004 due to higher debt that financed
acquisitions and development.

Results of Operations (continued)

Comparison of the nine months ended September 30, 2005 with
the nine months ended September 30, 2004.

Net income for the nine months ended September 30, 2005 was
$128.2 million, an increase of $27.2 million, or 26.9%, from $101.0 million in
2004. This increase resulted from the development of one wholly owned center in
2005 as well as the acquisition and expansion of four wholly owned centers in
2004, higher rents from releasing and renewals, offset by higher operating and
maintenance, depreciation and amortization as well as interest expense due to
the growth of the portfolio.

Base rentals improved by $22.2 million, or 11.1% to $221.5
million, in 2005 from $199.3 million in 2004, primarily due to the acquisition,
development and expansion of centers and higher average rents on releasing and
renewals.

Percentage rents rose $4.4 million, or 24.1%, to $22.6 million
in 2005 from $18.2 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 $8.8 million, or 13.4% to $74.1
million in 2005 from $65.3 million in 2004, due to the recovery of operating and
maintenance costs from increased GLA and higher real estate taxes. The average
recovery of reimbursable expenses for the Domestic Outlet Centers improved to
90% in 2005 from 88% in 2004.

Other income increased $4.6 million or 67.6% to $11.4 million in
2005, from $6.8 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 $8.5 million, or
11.1%, to $85.7 million in 2005 from $77.2 million in 2004 primarily due to the
growth of the portfolio, higher property taxes and promotional expenses.

Depreciation and amortization expense was up $3.9 million, or
7.4%, to $57.5 million in 2005 from $53.6 million in 2004 primarily due to
increased depreciation from the acquisition of one center in 2004 and the
development of one wholly owned center in 2005.

General and administrative expense decreased $3.4 million, or
26.4%, to $9.5 million in 2005 from $12.9 million in 2004, primarily due to
lower deferred compensation expense, public company and professional costs.

Other expenses increased $0.7 million, or 14.6%, to $5.4 million
in 2005 from $4.7 million in 2004, primarily from higher ground rent and legal
expenses, partially offset by impairment losses on two non-core centers sold in
2004 as well as a $0.9 million settlement payment on a shareholder lawsuit in
2004.

Income from unconsolidated investments was up $2.4 million, or
14.0%, to $19.8 million in 2005 from $17.4 million in 2004, due to the openings
of Chicago Premium Outlets in May 2004 and Toki Premium Outlets in March 2005,
the expansions of Sano Premium Outlets and Rinku Premium Outlets in 2004, offset
by outparcel sales in 2004 at Chicago and Las Vegas Premium Outlets.

Interest expense increased $5.5 million, or 9.6%, to $63.1
million in 2005, from $57.6 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. As of September 30, 2005,
the OP has commitments of $11.6 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 into a 4 billion yen credit
facility with Simon expiring January 2008, which will be funded through
Simons yen denominated facility also expiring January 2008. Interest is
payable monthly and is currently at yen LIBOR plus 0.55% per annum, but the
interest rate may adjust depending on Simons credit rating.

In August 2005 the OP redeemed its $50 million 8.375% unsecured
public notes with $15 million of available cash and a $35 million loan from
Simon.

A summary of the maturity of the OPs contractual debt (at
par) as of September 30, 2005, is as follows (in thousands):

`Less than            2 to 3        4 to 5          More than
                                             Total           1 Year             Years          Years           5 Years
                                          ---------     ------------      ------------    -----------      ------------
Unsecured bank debt                      $   59,525        $  1,800          $  3,600       $  3,600          $ 50,525
Notes payable-related party                 351,607         335,831            15,776              -                 -
Unsecured notes                             675,000               -           125,000        150,000           400,000
Mortgage debt                               301,557           7,757           164,524         10,343           118,933
                                       ------------     ------------      ------------    -----------      ------------
   Total debt                             1,387,689         345,388           308,900        163,943           569,458
Ground and operating leases                  71,924           3,122             6,363          6,152            56,287
Development commitments                      11,568          11,568                 -              -                 -
Deferred compensation                        28,904               -            21,104          7,800                 -
                                       ------------     ------------      ------------    -----------      ------------
Total Obligations                        $1,500,085        $360,078          $336,367       $177,895          $625,745
                                       ============     ============      ============    ===========      ============`

At September 30, 2005, expansions were underway at five domestic
centers totaling approximately 195,000 square-feet that are scheduled to open in
2005 and 2006. The 381,000 square-foot first phase of Seattle Premium Outlets
located near Seattle, Washington opened in May 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.

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 debt repayment as of September 30, 2005, are as follows:

`Total Facility             |                          Outstanding
       -------------------------------------| -------------------------------------------------------------------------
                                            |                                                          Due     Interest
       Yen                 US $ Equivalent  |    Yen           US $ Equivalent      US $  Guarantee    Date      Rate
       --------------      ---------------  | ----------       ---------------      ---------------    ----      -----
       3.8 billion (1)     $33.5 million    | 2.8 billion      $24.5 million         $9.8 million      2015      2.06%
       0.6 billion (1)       5.3 million    | 0.4 billion        3.6 million          1.4 million      2012      1.50%`

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

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.

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 has a three-year term; interest is 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 ranges 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 September 30, 2005, was
$3.6 million. The OP had also provided limited debt service guarantees under a
standby facility for loans arranged by Value Retail to construct outlet centers
in Europe. The outstanding guarantees were terminated 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 $177.7 million and
$155.5 million for the nine months ended September 30, 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 $53.9 million in 2005 from $190.2 in 2004, primarily due to decreased
acquisition activity in 2005. Net cash used in financing activities increased to
$139.1 million from net cash provided by financing activities of $33.3 million
for the nine months ended September 30, 2005, and 2004, respectively. The
increase was primarily due to the timing of partner distribution payments and
decreased borrowings.

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 and foreign exchange rates primarily from
its fees received from international joint ventures. 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. The OP did not have any foreign exchange hedge contracts at
September 30, 2005.

At September 30, 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 $3.5
million annually.

Following is a summary of the OPs debt obligations at
September 30, 2005 (in thousands):

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

                              2005       2006        2007        2008         2009     Thereafter         Total     Fair Value
                        ----------   --------   ---------   ---------   ----------   ------------   -----------   ------------
Fixed Rate Debt:           $     -          -    $124,931    $158,991     $149,639       $548,801      $982,362     $1,030,549
Average Interest Rate:           -          -       7.25%       6.99%        5.21%          7.05%         6.78%

Variable Rate Debt:              -    335,831           -      15,776            -      59,525(1)       411,132        411,132
Average Interest Rate:           -      4.76%           -       0.60%            -          4.94%         4.62%`

(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 September 30, 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 third quarter of 2005.

Part II.  Other Information

Item 6.
Exhibits

| | 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: November 3, 2005