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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 June 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

There are no outstanding
shares of Common Stock or voting securities.
CPG Partners, L.P.
Consolidated Balance Sheets
(Unaudited)(In thousands)

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

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

Commitments and contingencies

Partners' capital:

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

CPG Partners, L.P.
Consolidated Statements of Income
for the Three and Six Months Ended June 30, 2005 and 2004(Unaudited)(In thousands, except per unit data)
Three Months                    Six Months
                                                                     Ended June 30                  Ended June 30
                                                                 2005            2004             2005         2004
                                                          --------------  --------------   -------------  --------------
Revenues:
   Base rent...........................................       $ 74,038         $66,699         $145,347       $132,133
   Percentage rent.....................................          7,606           5,658           12,873         10,435
   Expense reimbursements..............................         23,376          21,670           45,685         42,330
   Other income........................................          3,296           2,397            7,184          4,308
                                                          --------------  --------------   -------------  --------------
Total revenues.........................................        108,316          96,424          211,089        189,206
                                                          --------------  --------------   -------------  --------------

Expenses:
   Operating and maintenance...........................         26,931          25,583           52,956         50,545
   Depreciation and amortization.......................         19,275          17,810           38,224         35,475
   General and administrative..........................          3,197           4,131            6,138          7,721
   Other...............................................          1,848             647            3,420          3,052
                                                          --------------  --------------   -------------  --------------
Total expenses.........................................         51,251          48,171          100,738         96,793
                                                          --------------  --------------   -------------  --------------

Income before unconsolidated investments,
interest expense, and discontinued operations..........         57,065          48,253          110,351         92,413

Income from unconsolidated investments.................          7,283           5,305           13,347         10,347
Interest expense.......................................        (21,125)        (19,287)         (41,925)       (37,937)
                                                          --------------  --------------   -------------  --------------
Income from continuing operations......................         43,223          34,271           81,773         64,823
Income from discontinued operations....................             -               54                -             53
                                                          --------------  --------------   -------------  --------------
Net income.............................................         43,223          34,325           81,773         64,876
Preferred unit requirement.............................             -           (2,296)               -         (4,592)
                                                          --------------  --------------   -------------  --------------
Net income available to common unitholders.............       $ 43,223        $ 32,029         $ 81,773       $ 60,284
                                                          ==============  ==============   =============  ==============

Net income to common unitholders:
Chelsea Property Group, Inc............................       $ 28,819        $ 27,536         $ 61,359        $51,744
Simon Property Group, LP...............................          6,738           4,493           12,748          8,540
CPG Holdings, LLC......................................          7,666               -           7,666              -
                                                          --------------  --------------   -------------  --------------
Total..................................................       $ 43,223         $32,029          $81,773        $60,284
                                                          ==============  ==============   =============  ==============

Net income per common unit:

Chelsea Property Group, Inc............................          $0.83           $0.62            $1.55          $1.18
Simon Property Group, LP...............................          $0.83           $0.62            $1.56          $1.18
CPG Holdings, LLC......................................          $0.83               -            $1.64              -

Weighted average common units outstanding:
Chelsea Property Group, Inc............................         34,917          44,143           39,536         43,945
Simon Property Group, LP...............................          8,164           7,203            8,164          7,258
CPG Holdings, LLC......................................          9,289               -            4,670              -
                                                          --------------  --------------   -------------  --------------
Total..................................................         52,370          51,346           52,370         51,203
The accompanying notes are an integral part of the financial statements.


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

2005                2004
                                                                       -------------      ---------------
   Cash flows from operating activities
   Net income......................................................     $ 81,773             $ 64,876
   Adjustments to reconcile net income to net cash
      provided by operating activities:
      Depreciation and amortization................................       38,224               35,754
      Equity in earnings of unconsolidated investments
           in excess of distributions..............................       (3,054)              (4,695)
     Gain on sale of assets........................................         (331)                   -
     Additions to deferred leasing costs...........................       (2,517)                (954)
     Other operating activities....................................         (204)              (1,081)
     Changes in assets and liabilities:
           Straight-line rent......................................       (2,653)              (3,065)
           Due (from) to affiliates..............................         (2,147)               5,111
           Other assets..........................................         (7,096)               1,730
           Accounts payable and other liabilities................         11,234                5,708
                                                                    ----------------      ----------------
   Net cash provided by operating activities.......................      113,229              103,384
                                                                    ----------------     -----------------

   Cash flows from investing activities
   Additions to rental properties..................................      (44,034)             (27,856)
   Net proceeds from sale of center................................        3,831                1,543
   Reductions from (additions to) investments in
    unconsolidated affiliates......................................        8,878              (21,370)
   Distributions from investments in unconsolidated
         affiliates in excess of earnings..........................        4,081                    -
   Payments from related parties                                             -                  3,192
   Additions to deferred development costs.........................        (458)                  (79)
                                                                    -----------------     ----------------
   Net cash used in investing activities...........................      (27,702)             (44,570)
                                                                    -----------------     ----------------

   Cash flows from financing activities
   Debt proceeds...................................................       23,261              141,284
   Debt repayment..................................................      (34,500)            (167,173)
   Net proceeds from sale of the OP's common units.................            -                7,205
   Distributions...................................................      (86,500)             (39,317)
   Loans to related parties........................................       (5,295)                   -
   Additions to deferred financing costs...........................         (103)              (1,243)
                                                                    -----------------     ----------------
   Net cash used in financing activities...........................     (103,137)             (59,244)
                                                                    -----------------     ----------------

   Net decrease in cash and cash equivalents.......................      (17,610)                (430)
   Cash and cash equivalents, beginning of period..................       33,362               18,476
                                                                    -----------------     ----------------
   Cash and cash equivalents, end of period........................     $ 15,752             $ 18,046
                                                                    =================     ================
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. As of June 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 "Outlets") and 19
other centers containing approximately 2.4 million square feet of GLA
("Other Retail") (collectively the "Properties"). The
Outlets generated approximately 97% of the OPs real estate net operating
income for the six months ended June 30, 2005, and 2004. The Outlets generally
are located near metropolitan areas including New York City, Los Angeles,
Chicago, Boston, Washington, D.C., San Francisco, Sacramento, Atlanta, Dallas,
Seattle, Mexico City, Mexico and Tokyo, Osaka and Nagoya, Japan. Some Outlets
are also located within 20 miles of major tourist destinations including Palm
Springs, Napa Valley, Orlando, Las Vegas and Honolulu.

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.

The accompanying unaudited
condensed consolidated financial statements have been prepared in accordance
with accounting principles generally accepted in the United States for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
notes required by accounting principles generally accepted in the United States
for complete financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for fair
presentation have been included. Operating results for the six months ended June
30, 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, the net book value
was $3.5 million and the OP recognized a $0.3 million gain.

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 June 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 June 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
from affiliates at June 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...............                 -            38            135               3            176

   Income from unconsolidated investments           6,107         7,239              1               -         13,347

   Distributions and fees..............           (10,188)       (3,955)             -               -        (14,143)

   Foreign exchange....................                 -          (235)           454               -            219

   Advances (net) .....................              (231)       (5,981)             -             (89)        (6,301)
                                              -----------    -----------     ----------      ----------    ------------
Balance June 30, 2005..................           $98,940       $23,889        $16,464          $3,636       $142,929
                                              ===========    ===========     ==========      ==========    ============

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 six months ended June
30, 2005 and 2004, is as follows (in thousands):

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

   Simon Ventures......          4,266            1,040         3,226                2,797           648          2,149

   Chelsea Mexico......             99              124           (25)                   -             -              -
                             --------------    --------   ----------------       ------------    ---------    ---------------
   Total...............        $10,122           $2,839        $7,283               $7,184        $1,879         $5,305
                             ==============    ========   ================       ============    =========    ===============


Six Months Ended June 30,
                               ---------------------------------------------------------------------------------------------------
                                                2005                                               2004
                               ---------------------------------------------------------------------------------------------------
                                                                 Income                                          Income
                              Income                             from              Income                         from
                              before                         unconsolidated        before                     unconsolidated
                              depr.               Depr.       investments          depr.            Depr.      investments
                             --------------    --------   ----------------       ------------    ---------    ---------------
   Chelsea Japan.......        $10,487           $3,248       $ 7,239               $8,453        $2,460         $5,993

   Simon Ventures......          8,192            2,085         6,107                5,437         1,083          4,354

   Chelsea Mexico......            181              180             1                    -             -              -
                             --------------    --------   ----------------       ------------    ---------    ---------------
   Total...............        $18,860           $5,513       $13,347              $13,890        $3,543        $10,347
                             ==============    ========   ================       ============    =========    ===============
CPG Partners, L.P.
Notes to Consolidated Financial Statements(Unaudited)


3. Investments in Affiliates (continued)

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

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

  Property, plant and equipment (net) ...............        $385,354          $367,700

  Total assets.......................................         532,106           548,621

  Long term debt (1) ................................         162,550           195,552

  Total liabilities..................................         283,901           304,122


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

Total revenues
     Three months ended..............................         $53,957           $35,472
      Six months ended...............................          98,831            67,766

Total expenses
     Three months ended..............................          43,410            28,142
      Six months ended...............................          80,967            54,057

Net income
     Three months ended..............................         10,542              7,330
      Six months ended...............................         17,861             13,709

OP's share of net income
     Three months ended..............................          4,753              3,290
      Six months ended...............................          8,167              6,233

Fee income
     Three months ended..............................          2,530              2,015
      Six months ended...............................          5,180              4,114
(1) Long-term debt consists of borrowings related to Chelsea Japan.
CPG Partners, L.P.
Notes to Consolidated Financial Statements(Unaudited)

4. Debt

Unsecured Bank Debt

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

June 30,        Effective         December 31,       Effective
                                                                     2005             rate                2004             rate
                                                        ------------------    -------------    ----------------    -------------
Term loan due April 2010 (1) .......................              $59,975            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%
                                                        ------------------                     ----------------
                                                                  $59,975                              $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% (4.36% at June 30, 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 six months ended June 30, 2005 and
2004, the OP recognized interest expense of $1.0 million and $1.5 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 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 June 30, 2005 and December 31, 2004 is as follows
(in thousands):

Stated                                              June 30,       December  31,        Effective
Rate                Maturity                             2005                2004        Yield (1)
-------------      ---------                  ---------------   ------------------   --------------
8.375%             August 2005.............         $ 49,998            $ 49,982        8.44%
7.250%             October 2007............          124,923             124,906        7.39%
3.500%             March 2009..............           99,654              99,608        3.60%
8.625%             August 2009.............           49,958              49,953        8.76%
8.250%             February 2011...........          149,183             149,110        8.40%
6.875%             June 2012...............           99,906              99,897        6.90%
6.000%             January 2013............          148,493             148,393        6.18%
                                              ---------------   --------------------
                                                    $722,115            $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 June
30, 2005 and December 31, 2004, and the related interest rate and Net Book Value
("NBV") of the associated collateral as of June 30, 2005, is as follows (in
thousands):

June 30,      December  31,           Effective
Maturity                                           2005               2004                  Rate          NBV
--------                                   -----------       ---------------      -------------        ----------
 July 2008 (1) .................               $159,838            $161,546             7.26%           $246,693
 December 2012 (2) .............                 22,202              23,331             6.29%             98,636
 December 2012 (3) .............                 68,780              69,372             7.67%             72,635
 March 2013 (4) ................                 61,375              62,105             5.10%            120,578
                                            ------------          ------------                         -----------
                                              $ 312,195            $316,354                             $538,542
                                            ============          ============                         ===========

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 six months ended June 30, 2005 and
2004, the OP recognized $78,000 and $72,000, respectively, in debt discount
amortization that is included in interest expense in the accompanying financial
statements.2)
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 six months ended June 30, 2005 and
2004, the OP recognized approximately $0.1 million in debt premium amortization
that is included in interest expense in the accompanying financial statements.3)
The mortgage loan 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 six months ended June 30, 2005 and 2004, the OP recognized $0.3
million and $0.2 million, respectively, in debt premium amortization that is
included in interest expense in the accompanying financial statements.4)
The mortgage loan was assumed as part of 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 six months ended June 30, 2005 and
2004, the OP recognized approximately $0.1 million in debt premium amortization
that is included in interest expense in the accompanying financial statements.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
June 30, 2005, the OPs interest rate swap was reported at its fair value
and classified as an other liability. At June 30, 2005, there were $0.6 million
in deferred losses recorded in accumulated other comprehensive loss.

Hedge Type
Swap, Cash Flow
Notional Value
     $65.0 million
Rate
5.7625%
Maturity
 1/1/2006
Fair Value
($0.7 million)The notional value and fair value of the above hedge provides an indication of
the extent of the OPs involvement in financial derivative instruments at
June 30, 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.

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

7. Partners' Capital

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



Chelsea           Simon
                                            Property        Property             CPG                Accum
                                              Group,          Group,       Holdings,          Other Comp.
                                                Inc.              LP             LLC        (Loss) Income      Total
                                         ------------    ------------    ------------     ----------------    ------------
Balance December 31, 2004..............     $528,613        $144,343         $     -           $ (749)        $672,207

  Net income...........................       61,359          12,748           7,666                -           81,773

Other comprehensive income:
  Foreign currency translation.........            -               -               -            1,394            1,394
  Interest rate swap...................            -               -               -            1,047            1,047
                                                                                                              ------------
Total comprehensive income.............                                                                         84,214
                                                                                                              ------------

  Reallocate book value................       39,429         (39,429)              -                -                -
  Partial Company liquidation..........     (449,655)              -         449,655                -                -
  Distributions........................      (60,086)        (13,241)        (13,173)               -          (86,500)
                                         ------------    ------------    ------------     ---------------   ------------
Balance June 30, 2005..................     $119,660        $104,421        $444,148           $1,692         $669,921

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 June 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)     $34.3 million    | 2.8 billion      $25.1 million        $10.0 million      2015      2.06%
       0.6 billion (1)       5.4 million    | 0.4 billion        3.7 million          1.5 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.

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

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

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

11. Related Party Information

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

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

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

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

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 pursuant to which it
borrowed 1.9 billion yen (approximately $16.7 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 2.0 billion
yen (approximately US $18.2 million) at June 30, 2005. The loans, which were
used to fund construction costs, bear interest at yen LIBOR plus 3.0% (3.06% at
June 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 June 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 $1.1 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 December 31, 2004 Form 10K.  Certain statements made in
this section or elsewhere in this report may be deemed "forward-looking
statements" within the meaning of the Private Securities Litigation Reform
Act of 1995. Although we believe the expectations reflected in any
forward-looking statements are based on reasonable assumptions, we can give no
assurance that our expectations will be attained, and it is possible that our
actual results may differ materially from those indicated by these
forward-looking statements due to a variety of risks and uncertainties. Those
risks and uncertainties incidental to the ownership and operation of commercial
real estate include, but are not limited to: national, international, regional
and local economic climates, competitive market forces, changes in market rental
rates, trends in the retail industry, the inability to collect rent due to the
bankruptcy or insolvency of tenants or otherwise, risks associated with
acquisitions, the impact of terrorist activities, environmental liabilities,
maintenance of the Company's REIT status, the availability of financing,
and changes in market rates of interest and fluctuations in exchange rates of
foreign currencies.  We undertake no duty or obligation to update or revise
these forward-looking statements, whether as a result of new information, future
developments, or otherwise.

Critical Accounting Policies and Estimates

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

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

Purchase Price Allocation

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

Bad Debt

The OP maintains an
allowance for doubtful accounts for estimated losses resulting from the
inability of its tenants to make required rent payments. If the financial
condition of the OPs tenants were to deteriorate, resulting in an
impairment of their ability to make payments, additional allowances may be
required. The OPs allowance for doubtful accounts included in tenant
accounts receivable totaled $2.2 million at June 30, 2005 and December 31, 2004.

Valuation of Investments

On a periodic basis,
management assesses whether there are any indicators that the value of real
estate properties, including joint venture properties, may be impaired. If the
carrying amount of the property is greater than the estimated expected future
cash flow (undiscounted and without interest charges) of the asset, impairment
has occurred. In 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 $9.2 million or 12.8%, to $81.6 million from $72.4
million for the three months ended June 30, 2005. Second quarter 2005 total
revenue was up $11.9 million or 12.3%, to $108.3 million from $96.4 million in
2004, primarily due to higher rents, an acquisition, new development and
expansions of existing centers. For the six months ended June 30, 2005, rental
revenue grew $15.6 million or 11.0%, to $158.2 million from $142.6 million in
the year earlier period. For the same six-month period total revenue rose 11.6%
or $21.9 million, to $211.1 million from $189.2 million in 2004.

Second quarter 2005 income
from unconsolidated investments increased 37.3%, or $2.0 million, primarily from
new development of Chicago Premium Outlets in May 2004 and Toki Premium Outlets
during March 2005. For the six months ended June 30, 2005, unconsolidated income
grew by $3.0 million or 29.0%, to $13.3 million from $10.3 million in 2004.

At June 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 includes 42 Outlet centers containing 14.9 million
square feet of GLA and Other Retail includes 19 centers containing 2.4 million
square feet of GLA.

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

12 months              6 months       6 months ended
                                                          ended June 30,        ended June 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
   Sano Premium Outlets (40% owned)                                  51                     -                   51
   The Crossings Premium Outlets                                     22                     -                   22
   Other (net)                                                      (37)                  (38)                   1
                                                    --------------------      ----------------   ------------------

Total centers expanded                                              107                   (38)                 145

Centers acquired:
   Carlsbad Premium Outlets                                         288                     -                  288
                                                    --------------------      ----------------   ------------------

Total centers acquired                                              288                     -                  288

Centers sold:
   Santa Fe Premium Outlets                                        (125)                    -                 (125)
   Other Retail (1)                                                (383)                 (319)                 (64)
                                                    --------------------      ----------------   ------------------

Total centers sold                                                 (508)                 (319)                (189)

Net GLA added during the period                                     678                   202                  476

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

(1) Includes Lakeland Factory Outlet Mall and Factory
Stores of America; Hempstead.

Results of Operations

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

Net income available to
common unitholders for the three months ended June 30, 2005 was $43.2 million,
an increase of $11.2 million, or 34.9%, from $32.0 million in 2004. This
increase resulted from the acquisition, development and 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
$7.3 million or 11.0% to $74.0 million in 2005 from $66.7 million in 2004,
primarily due to acquisition and development, 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 34.4%, to $7.6 million in 2005 from $5.7 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 $1.7 million, or 7.9% to $23.4 million in 2005 from $21.7 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 improved
to 91% in 2005 from 89% in 2004.

Other income increased $0.9
million or 37.5% to $3.3 million in 2005, from $2.4 million in 2004. Improved
ancillary operating and interest income primarily drove the increase.

Operating and maintenance
expenses increased $1.3 million, or 5.3%, to $26.9 million in 2005 from $25.6
million in 2004 primarily due to higher property taxes, promotional expenses and
growth of the portfolio.

Depreciation and
amortization expense was up $1.5 million, or 8.2%, to $19.3 million in 2005 from
$17.8 million in 2004 due to increased depreciation primarily from the
acquisition and expansion of two centers in 2004.

General and administrative
expense decreased $0.9 million, or 22.6%, to $3.2 million in 2005 from $4.1
million in 2004, primarily due to lower deferred compensation expense, public
company and professional costs.

Other expenses increased
$1.2 million, or 185.6%, to $1.8 million in 2005 from $0.6 million in 2004,
substantially from Chelsea Interactives contribution to earnings of $1.0
million in 2004.

Income from unconsolidated
investments was up $2.0 million, or 37.3%, to $7.3 million in 2005 from $5.3
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 July and December 2004, respectively.

Interest expense increased
$1.8 million, or 9.5%, to $21.1 million in 2005, from $19.3 million in 2004 due
to higher debt that financed acquisitions and development.

Results of Operations (continued)

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

Net income available to
common unitholders for the six months ended June 30, 2005 was $81.8 million, an
increase of $21.5 million, or 35.6%, from $60.3 million in 2004. This increase
resulted from the development of one wholly owned center in 2005 as well as the
acquisition and expansion of two 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
$13.2 million, or 10.0% to $145.3 million, in 2005 from $132.1 million in 2004,
primarily due to the acquisition, development and expansion of centers and
higher average rents on releasing and renewals.

Percentage rents rose $2.5
million, or 23.4%, to $12.9 million in 2005 from $10.4 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 $3.4 million, or 7.9% to $45.7 million in 2005 from $42.3 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 improved
to 91% in 2005 from 88% in 2004.

Other income increased $2.9
million or 66.8% to $7.2 million in 2005, from $4.3 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 $2.4 million, or 4.8%, to $53.0 million in 2005 from $50.5
million in 2004 primarily due to the growth of the portfolio, higher property
taxes and promotional expenses.

Depreciation and
amortization expense was up $2.7 million, or 7.7%, to $38.2 million in 2005 from
$35.5 million in 2004 primarily due to increased depreciation from the
acquisition of one center in 2004.

General and administrative
expense decreased $1.6 million, or 20.5%, to $6.1 million in 2005 from $7.7
million in 2004, primarily due to lower deferred compensation expense, public
company and professional costs.

Other expenses increased
$0.3 million, or 12.1%, to $3.4 million in 2005 from $3.1 million in 2004, due
to Chelsea Interactives contribution to earnings of $1.0 million, offset
by impairment losses on two non-core centers sold in 2004.

Income from unconsolidated
investments was up $3.0 million, or 29.0%, to $13.3 million in 2005 from $10.3
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 a pad sale in 2004 at Chicago Premium
Outlets.

Interest expense increased
$4.0 million, or 10.5%, to $41.9 million in 2005, from $37.9 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 added 900,000 square
feet of GLA during 2004. As of June 30, 2005, the OP has commitments of $16.9
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.

A summary of the maturity of the OPs contractual debt (at
par) as of June 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                      $   59,975        $  1,800          $  3,600       $  3,600          $ 50,975
Notes payable-related party                 317,570         300,830            16,740              -                 -
Unsecured notes                             725,000          50,000           125,000        150,000           400,000
Mortgage debt                               303,396           7,738            17,240        158,823           119,595
                                       ------------     ------------      ------------    -----------      ------------
   Total debt                             1,405,941         360,368           162,580        312,423           570,570
Ground and operating leases                  72,651           3,050             6,365          6,203            57,033
Real estate commitments                      16,878          16,878                 -              -                 -
Deferred compensation                        28,904               -            21,104          7,800                 -
                                       ------------     ------------      ------------    -----------      ------------
Total Obligations                        $1,524,374        $380,296          $190,049       $326,426          $627,603
                                       ============     ============      ============    ===========      ============

At June 30, 2005,
expansions were underway at four domestic centers totaling 171,000 square-feet
that are scheduled to open by the end of 2005. 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 of
debt as of June 30, 2005, are as follows:

Total Facility             |                          Outstanding
       -------------------------------------| -------------------------------------------------------------------------
|                                                          Due     Interest
       Yen                 US $ Equivalent  |    Yen           US $ Equivalent      US $  Guarantee    Date      Rate
       --------------      ---------------  | ----------       ---------------      ---------------    ----      -----
       3.8 billion (1)     $34.3 million    | 2.8 billion      $25.1 million        $10.0 million      2015      2.06%
       0.6 billion (1)       5.4 million    | 0.4 billion        3.7 million          1.5 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.

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 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 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 June 30, 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. Value Retail has borrowed and
escrowed the funds necessary to payoff the loans guaranteed by the OP. The
escrow is subject to certain covenants which must be met prior to disbursement
of the escrowed funds.

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 $113.2 million and $103.4 million for the six months
ended June 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 $27.7 million in 2005 from $44.6 in 2004,
primarily due to net proceeds generated from an increase in rental property
additions offset by a decrease in partially-owned investments. Net cash used in
financing activities increased to $103.1 million from $59.2 million for the six
months ended June 30, 2005, and 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 June 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 $3.2 million annually.

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

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

                              2005       2006        2007        2008         2009     Thereafter         Total     Fair Value
                        ----------   --------   ---------   ---------   ----------   ------------   -----------   ------------
Fixed Rate Debt:           $49,998          -    $124,923    $159,838     $149,612       $549,939    $1,034,310     $1,100,291
Average Interest Rate:       8.38%          -       7.25%       6.99%        5.21%          7.05%         6.86%
Variable Rate Debt:        300,830          -           -      16,740            -      59,975(1)       377,545        377,545
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 June 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 second 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 CertificationsCPG 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 OfficerDate:  August 4, 2005