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 March 31, 2002

or
[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________.

Commission File No. 33-98136

CPG PARTNERS, L.P.(Exact name of registrant as specified in its charter)

|Delaware(State or other jurisdiction
of incorporation or organization) | 22-3258100(I.R.S. Employer
Identification No.)
|---------------------------------------------------------------------- | ----------------------------------------------

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

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

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

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
|------------------------------------------ | ----

| | Condensed Consolidated Balance Sheets
     as of March 31, 2002 and December 31, 2001 | 3
| | ------------------------------------------------------------------------------------- | -

| | Condensed Consolidated Statements of Income
     for the three months ended March 31, 2002 and 2001 | 4
| | --------------------------------------------------------------------------------------------------- | -

| | Condensed Consolidated Statements of Cash Flows
     for the three months ended March 31, 2002 and 2001 | 5
| | ------------------------------------------------------------------------------------------------------- | -

| | Notes to Condensed Consolidated Financial Statements | 6
| | ---------------------------------------------------- | -

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

|Item 3. | Quantitative and Qualitative Disclosures about Market Risk | 22
|------- | ---------------------------------------------------------- | --

Part II.  Other Information

|Item 6. | Exhibits and Reports on Form 8-K | 23
|------- | -------------------------------- | --

|Signatures | 24
|---------- | --

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

`March 31,      December, 31,
                                                                                 2002               2001
                                                                            ---------------  -----------------
                                                                             (Unaudited)
Assets
Rental properties:
     Land..................................................................    $160,698            $160,458
     Depreciable property..................................................     970,971             967,448
                                                                            ---------------  -----------------
Total rental property......................................................   1,131,669           1,127,906
Accumulated depreciation...................................................    (228,983)           (217,462)
                                                                            ---------------  -----------------
Rental properties, net.....................................................     902,686             910,444
Cash and cash equivalents..................................................      19,566              24,604
Restricted cash - escrows..................................................       3,274               3,347
Investments in unconsolidated affiliates...................................      94,199              93,689
Notes receivable-related parties...........................................       2,656               3,281
Deferred costs, net........................................................      23,698              22,534
Other assets...............................................................      34,994              41,409
                                                                            ---------------  -----------------
Total assets...............................................................   $1,081,073         $1,099,308
                                                                            ===============  =================

Liabilities and partners' capital
Liabilities:
     Unsecured bank debt...................................................      $5,035              $5,035
     Unsecured notes.......................................................     373,349             373,294
     Mortgage debt.........................................................     169,870             170,209
     Construction payables.................................................       8,020               8,001
     Accounts payable and accrued expenses.................................      21,250              47,039
     Accrued distribution payable..........................................      19,084               3,851
     Other liabilities.....................................................      16,259              16,817
                                                                            ---------------  -----------------
Total liabilities..........................................................     612,867             624,246

Commitments and contingencies

Partners' capital:
General partner units outstanding, 18,874 in 2002 and 18,770 in 2001.......     355,405             362,402
Limited partners units outstanding 3,150 in 2002 and 2001..................      52,266              52,825
Preferred partners units outstanding, 1,300 in 2002 and 2001 ..............      63,315              63,315
Accumulated other comprehensive loss ......................................      (2,780)             (3,480)
                                                                            ---------------  -----------------
Total partners' capital....................................................     468,206             475,062
                                                                            ---------------  -----------------
Total liabilities and partners' capital....................................  $1,081,073          $1,099,308
                                                                            ===============  =================

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

CPG Partners, L.P.
Condensed Consolidated Statements of Income
for the Three Months Ended March 31, 2002 and 2001
(Unaudited)(In thousands, except per unit data)

`2002                2001
                                                                            -----------------   -----------------
Revenues:
   Base rent...........................................................           $38,509             $28,751
   Percentage rent.....................................................             3,073               2,771
   Expense reimbursements..............................................            12,595              10,624
   Other income........................................................             2,504               2,678
                                                                            -----------------   -----------------
Total revenues.........................................................            56,681              44,824
                                                                            -----------------   -----------------

Expenses:
   Operating and maintenance...........................................            16,204              12,118
   Depreciation and amortization.......................................            12,941              11,559
   General and administrative..........................................             1,517               1,083
   Other...............................................................             1,093                 790
                                                                            -----------------   -----------------
Total expenses.........................................................            31,755              25,550
                                                                            -----------------   -----------------

Income before unconsolidated investments and interest expense..........            24,926              19,274

Income from unconsolidated investments.................................             3,770               3,279
Loss from Chelsea Interactive..........................................            (2,700)             (1,198)
Interest expense.......................................................            (9,750)             (8,615)
                                                                            -----------------   -----------------

Net income.............................................................            16,246              12,740

Preferred unit requirement.............................................            (2,366)             (2,509)
                                                                            -----------------   -----------------
Net income available to common unitholders.............................           $13,880             $10,231
                                                                            =================   =================

Net income to common unitholders:
     General partner...................................................           $11,887             $8,506
     Limited partners..................................................             1,993               1,725
                                                                            -----------------   -----------------
Total..................................................................           $13,880             $10,231
                                                                            =================   =================

Net income per common unit:
     General partner...................................................             $0.63               $0.53
     Limited partners..................................................             $0.63               $0.53

Weighted average units outstanding:
     General partner...................................................            18,786              16,057
     Limited partners..................................................             3,150               3,257
                                                                            -----------------   -----------------
Total..................................................................            21,936              19,314

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

CPG Partners, L.P.
Condensed Consolidated Statements of Cash Flows
for the Three Months Ended March 31, 2002 and 2001
(Unaudited)(In thousands)

`2002           2001
                                                                         -------------   -------------
   Cash flows from operating activities
   Net income.......................................................       $16,246         $12,740
   Adjustments to reconcile net income to net cash
      provided by operating activities:
       Depreciation and amortization................................        12,941          11,559
       Equity-in-earnings of unconsolidated investments in
             excess of distributions................................          (348)         (1,186)
      Loss from Chelsea Interactive.................................         2,700           1,198
      Proceeds from non-compete receivable..........................         4,300           4,600
      Amortization of non-compete revenue...........................        (1,284)         (1,284)
      Additions to deferred lease costs.............................             -            (463)
      Other operating activities....................................          (222)           (115)
      Changes in assets and liabilities:
          Straight-line rent receivable.............................          (522)           (380)
              Due from affiliates...................................        (1,092)         (4,330)
              Other assets..........................................         4,541           5,884
              Deferred incentive compensation.......................       (14,401)              -
              Accounts payable and accrued expenses.................       (10,965)         (9,769)
                                                                         -------------   -------------
   Net cash provided by operating activities........................        11,894          18,454
                                                                         -------------   -------------

   Cash flows from investing activities
   Additions to rental properties...................................        (3,927)         (7,886)
   Additions to investments in unconsolidated affiliates............        (3,287)         (3,172)
   Distributions from investments in unconsolidated
        affiliates in excess of earnings............................           805           3,893
   Additions to deferred development costs..........................        (2,276)           (250)
   Payments from related parties....................................         1,113           1,426
   Loans to related parties.........................................          (488)              -
                                                                         -------------   -------------
   Net cash used in investing activities............................        (8,060)         (5,989)
                                                                         -------------   -------------

   Cash flows from financing activities
   Debt proceeds....................................................           159         157,313
   Repayment of debt................................................          (392)       (134,250)
   Net proceeds from sale of the Company's common stock.............         2,835             813
   Distributions....................................................        (4,973)         (5,025)
   Redemption of preferred stock....................................        (6,431)              -
   Additions to deferred financing costs............................           (70)         (1,536)
                                                                         -------------   -------------
   Net cash (used in) provided by financing activities..............        (8,872)         17,315
                                                                         -------------   -------------

   Net (decrease) increase in cash and cash equivalents.............        (5,038)         29,780
   Cash and cash equivalents, beginning of period...................        24,604          18,036
                                                                         -------------   -------------
   Cash and cash equivalents, end of period.........................       $19,566         $47,816
                                                                         =============   =============

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

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

1.   Organization and Basis of Presentation

CPG Partners, L.P., (the "Operating Partnership" or "OP"), which
commenced operations on November 2, 1993, specializes in owning, developing,
leasing, marketing and managing upscale and fashion-oriented manufacturers'
outlet centers (the "Premium Portfolio") and 30 centers acquired on September
25, 2001, containing approximately 4.3 million square feet of gross leaseable
area ("Other Retail Centers"), (collectively the "Properties"). As of March 31,
2002, the OP wholly or partially owned 57 centers in 28 states and Japan
containing approximately 12.6 million square feet of gross leasable area
("GLA"). The OP's Premium Portfolio included 27 properties containing 8.3
million square feet of GLA. These properties generally are located near
metropolitan areas including New York City, Los Angeles, Boston, Washington,
D.C., San Francisco, Sacramento, Cleveland, Atlanta, Dallas, Portland (Oregon),
Tokyo and Osaka, Japan. Some Premium properties are also located within 20 miles
of major tourist destinations including Palm Springs, the Napa Valley, Orlando,
and Honolulu.

The sole general partner of the OP, Chelsea Property Group, Inc.
(the "Company") is a self-administered and self-managed Real Estate Investment
Trust.

During 2000 the OP developed a technology-based e-commerce
platform through an unconsolidated affiliate, Chelsea Interactive, Inc.
("Chelsea Interactive"). This platform provides fashion and other retail brands
with their own customized direct-to-the-consumer Internet online stores,
incorporating e-commerce design, development, fulfillment and customer services.

Disclosure about fair value of financial instruments is based on
pertinent information available to management as of March 31, 2002, using
available market information and appropriate valuation methodologies. 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.

Common ownership of the OP as of March 31, 2002 was
approximately as follows:

`General Partner           85.7%           18,874,000    units
             Limited Partners          14.3%            3,150,000    units
                                     -----------     ---------------
             Total                    100.0%           22,024,000`

The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with accounting principles generally
accepted in the United States for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do
not include all of the information and notes required by accounting principles
generally accepted in the United States for complete financial statements. In
the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for fair presentation have been included.
Operating results for the three month period ended March 31, 2002 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 2002. The balance sheet at December 31, 2001 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, 2001.

In October 2001, the FASB issued Statement of Financial
Accounting Standard No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets", which addresses financial accounting and reporting for the
impairment or disposal of long-lived assets. This standard harmonizes the
accounting for impaired assets and resolves some of the implementation issues as
originally described in SFAS 121. The new standard became effective and was
adopted by the OP on January 1, 2002. The adoption of this pronouncement did not
have a material impact on the OP's results of operations or financial position.

Certain amounts in the 2001 financial statements have been
reclassified to conform to the 2002 presentation.

2.   Investments in Affiliates

The OP holds interests in domestic and international joint
ventures. Non-controlling investments are accounted for under the equity method.
Income from unconsolidated investments and loss from Chelsea Interactive
includes equity-in-earnings, management, advisory, license, leasing and
guarantee fees earned from these affiliates.

As of March 31, 2002, the OP's interests included a 49% interest
in F/C Acquisition Holdings, LLC ("F/C"), a 40% interest in Chelsea Japan Co.,
Ltd. ("Chelsea Japan"), a 50% interest in Orlando Premium Outlets with Simon
Property Group, Inc. ("Simon") and minority interests in outlet centers and
development projects in Europe operated by Value Retail PLC ("Value Retail").
The OP owns 100% of the non-voting preferred stock of Chelsea Interactive and
50% of the non-voting common stock representing 40% of the total common stock.

The following is a summary of investments in and amounts due
from affiliates during the three months ended March 31, 2002 (in thousands):

`Chelsea                       Chelsea
                              F/C          Japan          Simon         Interactive      Other         Total
                           ----------    -----------    ----------    -------------    ----------    -----------

Balance 12/31/01...          $36,118       $9,296         $9,723        $34,856          $3,696        $93,689
Additional
   Investment.........           -            107            -            3,005            -             3,112
Income (loss) from
   unconsolidated
    investments.......         1,543          892          1,310         (2,700)             25          1,070
Distribution
    and fees........          (1,670)        (569)          (250)           -               (50)        (2,539)
Advances (net)                  (489)         626         (1,492)           222            -            (1,133)
                           ----------    -----------    ----------    -------------    ----------    -----------
Balance 3/31/02              $35,502      $10,352         $9,291        $35,383          $3,671        $94,199
                           ==========    ===========    ==========    =============    ==========    ===========`

Notes to Condensed Consolidated Financial Statements
(Unaudited)

The OP's share of income (loss) before depreciation,
depreciation expense and income (loss) from unconsolidated investments for the
three months ended March 31, 2002 and 2001 are as follows (in thousands):

`2002                                            2001
                      ------------------------------------------------ --------------------------------------------------
                                             Income (loss)                                       Income
                  Income (loss)              from               Income (loss)                    (loss) from
                  before                     Unconsol.          before                           Unconsol.
                  Depreciation      Depr.    Investments        Depreciation        Depr.        Investments
                  -------------  ---------   --------------    ---------------     --------     --------------
F/C.............     $2,264         $721       $1,543             $2,141            $657           $1,484
Chelsea Japan...      1,291          399          892                871             253              618
Simon...........      1,833          523        1,310              1,683             570            1,113
Other...........         25            -           25                 55              -                55
                  -------------  ---------   --------------    ---------------     --------     --------------
   Total........     $5,413       $1,643       $3,770             $4,750          $1,480           $3,270
                  =============  =========   ==============    ===============     ========     ==============
Chelsea
Interactive.....    ($1,192)      $1,508     ($2,700)             ($618)            $580          ($1,198)
                  =============  =========   ==============    ===============     ========     ==============`

Condensed financial information as of March 31, 2002 and
December 31, 2001 and for the three month periods ended March 31, 2002 and 2001
for F/C, Chelsea Japan and Simon (which are included in "Retail") and Chelsea
Interactive is as follows (in thousands):

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

Property, plant and equipment (net)
     March 31, 2002............................................   $358,045         $29,574
     December 31, 2001.........................................    355,427          29,923

Total assets
     March 31, 2002............................................    428,366          34,451
     December 31, 2001.........................................    409,944          34,963

Long term debt (1)
     March 31, 2002............................................    285,826               -
     December 31, 2001.........................................    282,057               -

Total liabilities
     March 31, 2002............................................    337,934           2,135
     December 31, 2001.........................................    321,854           2,665

Net income (loss)
     March 31, 2002............................................      4,992          (3,561)
     March 31, 2001............................................      4,095          (2,695)

OP's share of net income (loss)
     March 31, 2002............................................      2,395          (2,700)
     March 31, 2001............................................      1,970          (1,198)

Fee income
     March 31, 2002............................................      1,350               -
     March 31, 2001............................................      1,245               -`

(1) Long-term debt includes $169.7 million in F/C, $59.4 million
in Simon and $56.7 million in Chelsea Japan as of March 31, 2002 and $170.5
million in F/C, $58.5 million in Simon and $53.1 million in Chelsea Japan as of
December 31, 2001.

Notes to Condensed Consolidated Financial Statements
(Unaudited)

3.   Non-Compete Agreement

The OP recognized income from its non-compete agreement with The
Mills Corporation of $1.3 million during the three months ended March 31, 2002
and 2001. Such amounts are included in other income in the accompanying
financial statements.

4.   Debt

Unsecured Bank Debt

The OP has a $160.0 million senior unsecured bank line of credit
(the "Senior Credit Facility"). The Senior Credit Facility's expiration date has
been extended through March 2004. The OP has an annual right to request a
one-year extension of the Senior Credit Facility that may be granted at the
option of the lenders. The OP has requested and the lenders are expected to
extend the Senior Credit Facility until March 30, 2005. The Senior Credit
Facility bears interest on the outstanding balance, payable monthly, at a rate
equal to the London Interbank Offered Rate ("LIBOR") plus 1.05% (3.05% at March
31, 2002) or the prime rate, at the OP's option. The LIBOR rate spread ranges
from 0.85% to 1.25% depending on the OP's Senior Debt rating. A fee on the
unused portion of the Senior Credit Facility is payable quarterly at rates
ranging from 0.15% to 0.25% depending on the balance outstanding. At March 31,
2002 the entire $160.0 million was available under the Senior Credit Facility.

The OP also has a $5.0 million term loan (the "Term Loan") that
carries the same interest rate and maturity as the Senior Credit Facility.

Unsecured Notes

A summary of the terms of the unsecured notes outstanding as of
March 31, 2002 and December 31, 2001, is as follows (in thousands):

`March 31,           December 31,          Effective
                                                            2002                  2001                Yield (1)
                                                     -------------------- ----------------------  ------------------
8.375% Unsecured Notes due August 2005.............          $49,900              $49,892              8 44%
7.25% Unsecured Notes due October 2007.............          124,817              124,809              7 29%
8.625% Unsecured Notes due August 2009.............           49,925               49,923              8 66%
8.25% Unsecured Notes due February 2011............          148,707              148,670              8.40%
                                                     -------------------- ---------------------
   Total                                                    $373,349             $373,294
                                                     ==================== =====================`

|(1) | Including discount on the notes
|--- | -------------------------------

Mortgage Debt

A summary of the terms of the mortgage debt outstanding as of
March 31, 2002 and December 31, 2001 and the related interest rate and Net Book
Value ("NBV") of the associated collateral as of March 31, 2002 are as follows
(in thousands):

`March 31,        December 31,                          Interest         NBV
                             2002              2001              Due Date          Rate
                         -------------   -----------------    ---------------   -----------   ------------
Construction Loan (1)      $29,691           $29,531            February 2003      3.29%         $46,218
Bank Mortgage Loan (2)      68,000            68,250            April 2010         7.26%          74,054
Mortgage Loan (3)           72,179            72,428            December 2012      7.67%          75,179
                         -------------   -----------------                                    ------------
                          $169,870          $170,209                                            $195,451
                         =============   =================                                    ============`

|(1) | In February 2000 Chelsea Allen entered into a $40.0 million Construction Loan
used to fund the Allen Premium Outlets project. The Construction Loan bears
interest equal to LIBOR plus 1.375% (3.29% at March 31, 2002) and is guaranteed
by the Company and the OP.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | In April 2000 Chelsea Financing entered into a $70.0 million Bank Mortgage Loan
secured by its four properties. The Bank Mortgage Loan bears interest equal to
LIBOR plus 1.50% (3.37% at March 31, 2002) or prime rate plus 1.0% and calls for
quarterly principal amortization of $ 0.3 million through April 2005 and
thereafter $0.5 million per quarter until maturity. In December 2000, the OP
entered into an interest rate swap agreement effective January 2, 2001 to hedge
against unfavorable fluctuations in LIBOR rates by fixing the interest rate at
7.26% until January 2006. As of March 31, 2002, the OP recognized interest
expense of $0.7 million on the hedge that is included in interest expense in the
accompanying financial statements.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | The Mortgage Loan was assumed as part of a September 2001 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 and 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. As of March 31 2002, the OP recognized $0.1
million in debt premium amortization that is included in interest expense in the
accompanying financial statements.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Interest and loan costs of approximately $0.7 million and $0.6
million were capitalized as development costs during the three months ended
March 31, 2002 and 2001 respectively.

5.   Financial Instruments: Derivatives and Hedging

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

At March 31, 2002 the OP's interest rate swap was reported at
its fair value and classified as an other liability of $2.3 million. As of March
31, 2002, there were $2.3 million in deferred losses, and represented in
accumulated other comprehensive loss, a partners' capital account. Within the
next twelve months, the OP expects to reclassify to earnings approximately $0.6
million of the current balance held in accumulated other comprehensive loss
related to the interest rate swap.

At March 31, 2002 the OP's forward rate contracts were
reportable at the market value as other assets of $0.01 million.

`Hedge Type      Notional Value   Rate      Maturity    Fair Value
            ----------      --------------   ----      --------    ----------

      Swap, Cash Flow         $68.0 million  5.7625%   1/1/06      ($2.3 million)
      Forward, Cash Flow    Yen 255 million  132 Yen/$ 2002 (1)    $0.01 million`

|(1) | Contract for 45 million Yen maturing April 2002 and contract
for 210 million Yen maturing June 2002.
|--- | ----------------------------------------------------------------------------------------------------

The notional value and fair value of the above hedges provide an
indication of the extent of the OP's involvement in financial derivative
instruments of March 31, 2002 but do not represent exposure to credit, interest
rate, foreign exchange or market risk.

6.   Partner's Capital

Following is a statement of partner's capital for the three
months ended March 31, 2002 (in thousands):

`General       Limited      Preferred     Accum. Other      Total
                                              Partner's     Partners'     Partner's        Comp.        Partners'
                                               Capital       Capital       Capital        Loss (1)       Capital
                                            ------------------------------------------ -----------------------------

Balance December 31, 2001.............         $362,402       $52,825       $63,315        ($3,480)      $475,062

Net income............................           12,791         3,455             -              -         16,246
Other comprehensive loss:
     Foreign currency translation.....                -             -             -            (59)           (59)
     Interest rate swap...............                -             -             -            759            759
                                                                                                      --------------
Total comprehensive loss..............                                                                     16,946
                                                                                                      --------------

Common distributions..................          (15,288)       (2,552)            -              -        (17,840)
Preferred distribution................             (904)       (1,462)            -              -         (2,366)
Contributions (net of costs)..........            2,835             -             -              -          2,835
Redemption of preferred units                                                                    -
     (net of costs)...................           (6,431)            -                                      (6,431)
                                            ------------------------------------------ -----------------------------
Balance March 31, 2002................         $355,405       $52,266       $63,315        ($2,780)      $468,206
                                            ========================================== =============================`

|(1) | At March 31, 2002, accumulated other comprehensive loss included $0.4 million
related to foreign currency translation and $2.4 million related to interest
rate swap.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------

On May 1, 2002, the Company declared a 2-for-1 stock split of
the Company's common shares. Concurrently, the OP also declared a 2-for-1 split
of the OP's Limited Partner units. The stock/unit dividend is payable May 28,
2002 to shareholders/unitholders of record on May 14, 2002.

Notes to Condensed Consolidated Financial Statements
(Unaudited)

The following condensed pro forma information assumes the
stock/unit split had occurred on January 1, 2001:

`(In thousands, except per unit amounts)                                 2002                        2001
                                                                ----------------------      --------------------
General Partner:
  Numerator
     Numerator for net income to common unitholders.....                     $11,887                    $8,506

  Denominator
     Denominator for weighted average units.............
     Weighted average units.............................            18,786                    16,057
     Increase in units due to effect of 2-for-1 unit
         split...........................................           18,786                    16,057
                                                                  -----------                 ---------
     Pro forma denominator for weighted average units
       outstanding.......................................                     37,572                    32,114

Limited Partners:
  Numerator
     Numerator for net income to common unitholders......                     $1,993                    $1,725

  Denominator
     Denominator for weighted average units..............
     Weighted average units..............................            3,150                     3,257
     Increase in units due to effect of 2-for-1
        unit split.......................................            3,150                     3,257
                                                                  -----------                 ---------
     Pro forma denominator for weighted average units
       outstanding........................................                     6,300                     6,514

Pro forma per unit amounts:
  Net income per common unit - General partner............                     $0.32                     $0.26
  Net income per common unit - Limited partners...........                     $0.31                     $0.26
  Distributions declared                                                      $0.405                     $0.39`

On February 15, 2002, the Company redeemed and retired 136,500
shares of Preferred Stock at a net price of $47 per share.

7.   Distributions

On March 14, 2002, the Board of Directors of the Company
declared a $0.81 per share dividend to unitholders of record on March 28, 2002.
The distribution, totaling $17.8 million, was paid on April 15, 2002.

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 Common 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

Orlando Premium Outlets has a $59.4 million construction
facility (maximum commitment $62.0 million) that was to mature in February 2002
and which was extended to August 2002. The loan has three additional six-month
extension options. The loan bears interest at LIBOR plus 1.30% (3.24% at March
31, 2002) and as of March 31, 2002 was 10% guaranteed by each of the OP and
Simon. Changes in debt service coverage ratio provide for a guarantee ranging
from 10% to 25% per guarantor and a LIBOR interest rate spread ranging from 130
to 150 basis points.

In October 1999, an equity investee of the OP entered into a 4
billion yen (approximately US $30.1 million) line of credit guaranteed by the
Company and the OP to fund its share of Chelsea Japan's construction costs. The
line of credit bears interest at yen LIBOR plus 1.35% (1.475% at March 31, 2002)
was originally due April 2002 and had two one-year extensions. The line has been
extended through April 2003. At March 31, 2002, 1.08 billion yen (approximately
US $8.1 million) was outstanding under the loan. In March 2000, Chelsea Japan
entered into a 3.8 billion yen (approximately US $28.6 million) loan with a
Japanese bank to fund construction costs. The loan matures in 2015 and as of
March 31, 2002 the entire facility was outstanding and bears interest at 2.20%.
On March 29, 2002, Chelsea Japan entered into a 600 million yen (approximately
US $4.5 million) loan with a Japanese bank to fund the construction of the
second phase of Rinku. The loan matures in 2015 and as of March 31, 2002 the
entire facility was outstanding and bears interest at 1.5%. Both loans are
secured by the two operating properties and are 40% guaranteed by the
OP.

The OP has agreed under a standby facility to provide up to
$22.0 million in limited debt service guarantees for loans provided to Value
Retail PLC and affiliates, to construct outlet centers in Europe. The term of
the standby facility expired in November 2001 and guarantees shall not be
outstanding for longer than five years after project completion. As of March 31,
2002, the OP had provided limited debt service guarantees of approximately $16.7
million to Value Retail PLC. In October 2001, the guarantee limit was increased
to $24.1 million until April 2002 at which time it will revert to $22.0 million.
The OP received $2.1 million collateral for this short-term increase that will
revert back to Value Retail in May 2002. Such escrow is included in restricted
cash-escrows and other liabilities in the accompanying financial
statements.

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 cost 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 1999, the OP established a $6.0 million secured loan facility
that will expire on June 2004 for the benefit of certain unitholders. Each unit
holder borrower will issue a note that is secured by OP units, bears interest at
a rate of LIBOR plus 200 basis points per annum, payable quarterly and is due by
the facility expiration date. At December 31, 2001, loans made to two
unitholders, who are also affiliates of management of the OP, totaled $3.2
million. During the three months ended March 31, 2002, the OP received a $0.5
million pay off of one loan and a $0.6 million pay down on the other loan
outstanding. On March 25, 2002, the OP advanced $0.5 million to another
unitholder. The carrying value of such loans approximated fair value at March
31, 2002.

12.   Segment Information

The OP is principally engaged in the development, ownership,
acquisition and operation of manufacturers' outlet centers and has determined
that under SFAS No.131 "Disclosures About Segments of an Enterprise and Related
Information" it has three reportable retail real estate segments: premium
domestic, other domestic and international. The OP evaluates real estate
performance and allocates resources based on Net Operating Income ("NOI")
defined as total revenue less operating and maintenance expense. The primary
sources of revenue are generated from tenant base rents, percentage rents and
reimbursement revenue. Operating expenses primarily consist of common area
maintenance, real estate taxes and promotional expenses. The retail real estate
business segments meet the quantitative threshold for determining reportable
segments.

`Unaudited                           Premium       Other
(in thousands)                          Domestic      Domestic        International       Other         Total
------------------------------------- ------------- -------------- ------------------ ------------- --------------
                                                         (1)               (2)              (3)
Total revenues
  Three months ended:
        March 31, 2002.............      $44,075         $11,229        $       -         $1,377       $56,681
        March 31, 2001.............       42,940                                -          1,884        44,824

Interest income
  Three months ended:
        March 31, 2002.............          283              24                -             93           400
        March 31, 2001.............            -               -                -            799           799

Income from unconsolidated
      investments .................
  Three months ended:
        March 31, 2002.............        2,853               -              917        (2,700)         1,070
        March 31, 2001.............        2,597               -              673        (1,198)         2,072

NOI
  Three months ended:
        March 31, 2002.............       36,586           4,930            1,703          (744)        42,475
        March 31, 2001.............       35,034               -            1,206          (441)        35,799

Fixed asset additions
  Three months ended:
        March 31, 2002.............        3,192             275                -            460         3,927
        March 31, 2001.............        7,513               -                -            373         7,886

Total assets
        March 31, 2002.............      847,885         192,911           16,122         24,155     1,081,073
        December 31, 2001..........      866,738         194,406           15,092         23,072     1,099,308`

|(1) | Approximately 25% of the GLA is occupied by and approximately 16% of annualized
revenue is derived from one tenant.
|--- | -------------------------------------------------------------------------------------------------------------------

|(2) | Principally comprised of the OP's interest in Chelsea Japan.
|--- | ------------------------------------------------------------

|(3) | Includes Corporate overhead and assets and results from Chelsea Interactive.
|--- | ----------------------------------------------------------------------------

Following is a reconciliation of net operating income to net income for the
three months ended March 31, 2002 and 2001 (in thousands):

`Three months ended
                                                                                 March 31,
                                                                              2002             2001
                                                                       ---------------   --------------
Segment NOI......................................................           $42,475          $35,799
Interest expense - consolidated..................................           (9,750)          (8,615)
Interest expense - unconsolidated investments....................             (128)            (702)
Depreciation and amortization expense - consolidated.............          (12,941)         (11,559)
Depreciation and amortization
             expense - unconsolidated investments.................          (1,643)          (1,480)
Depreciation and amortization
             expense - Chelsea Interactive.......................           (1,508)            (580)
Income tax - unconsolidated investments..........................             (259)            (123)
                                                                       ---------------   --------------
Net income.......................................................           $16,246          $12,740
                                                                       ===============   ==============`

13.   Subsequent Events

On April 1, 2002, the OP acquired Simon's 50% ownership in
Orlando Premium Outlets for $46.6 million in cash and assumed Simon's $29.7
million pro-rata share of existing mortgage debt and Simon's pro-rata guarantee
related to this loan. After the acquisition, the OP wholly owns the 430,000
square foot center located in Orlando, Florida.

On April 1, 2002, the OP acquired a 305,000 square foot center
located in Edinburgh, Indiana for $27.0 million in cash.

CPG Partners, L.P.

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

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

General Overview

From April 1, 2001 to March 31, 2002, the OP grew by increasing
rents at its operating centers, expanding two centers and acquiring 31 retail
centers. Increasing rents at operating centers resulted in base rent growth of
$1.0 million. The expansion of one wholly-owned center increased base rent by
$0.4 million. The acquisition of 31 retail centers increased base rent by $8.4
million. Income from unconsolidated investments increased by $0.5 million during
the quarter ended March 31, 2002 as a result of higher earnings, increased fees
and the opening of the expansion of Rinku Premium Outlets during March 2002.

The OP operated GLA of 12.6 million square feet at March 31,
2002 compared to 8.2 million square feet of GLA at March 31, 2001. The OP's
Premium Portfolio consisted of 27 wholly or partially owned centers containing
8.3 million and 8.2 million square feet of GLA at March 31, 2002 and 2001,
respectively. Additionally, at March 31, 2002, the OP wholly-owned 30 Other
Retail Centers containing 4.3 million square feet of GLA.

Net GLA added since April 1, 2001 is detailed as follows:

`12 months         3 months          9 months
                                                                ended           ended             ended
                                                              March 31,        March 31,        December 31,
                                                                 2002            2002              2001
                                                           ---------------     -------------    ---------------
Changes in GLA (sf in 000's):

Centers expanded:
     Allen Premium Outlets.............................         119                 -                119
     Rinku Premium Outlet (40% owned) .................          70                70                  -
     Other.............................................          (8)               (5)                (3)
                                                           ---------------     -------------    ---------------

Total centers expanded.................................         181                65                116

Centers acquired:
     Kittery Premium Outlets II........................          21                 -                 21
     Other Retail Centers..............................       4,279                 -              4,279
                                                           ---------------     -------------    ---------------

Total centers acquired.................................       4,300                                4,300

Center sold:
     Mammoth Premium Outlets...........................         (35)                 -               (35)
                                                           ---------------     -------------    ---------------

Net GLA added during the period........................       4,446                65              4,381

GLA at end of period...................................      12,639            12,639             12,574`

Results of Operations

Comparison of the three months ended March 31, 2002 to the
three months ended March 31, 2001.

Net income increased $3.5 million, or 27.5%, to $16.2 million
for the three months ended March 31, 2002, from $12.7 million for the three
months ended March 31, 2001. This increase was primarily the result of the
acquisition of the 31 retail centers on September 25, 2001, higher rents on
releasing and renewals during 2002 and income from unconsolidated investments
partially offset by increased losses from Chelsea Interactive.

Base rentals increased $9.7 million, or 33.9%, to $38.5 million
for the three months ended March 31, 2002, from $28.8 million for the three
months ended March 31, 2001 due to the acquisition of the 31 retail centers in
September 2001, higher average rents on releasing and renewals and the expansion
of a center in late 2001.

Percentage rents increased $0.3 million, or 10.9%, to $3.1
million for the three months ended March 31, 2002, from $2.8 million for the
three months ended March 31, 2001 primarily due to the higher sales and
acquisition of the 31 retail centers in September 2001.

Expense reimbursements, representing contractual recoveries from
tenants of certain common area maintenance, operating, real estate tax,
promotional and management expenses, increased $2.0 million, or 18.6%, to $12.6
million for the three months ended March 31, 2002, from $10.6 million for the
three months ended March 31, 2001, due to the recovery of operating and
maintenance costs from increased GLA. Excluding the 31 retail centers acquired
in September 2001, the average recovery of reimbursable expenses for the Premium
Portfolio was 87% for the three months ended March 31, 2002 compared to 88% for
the three months ended March 31, 2001. The average recovery of reimbursable
expense for the Other Retail Centers was 52% for the three months ended March
31, 2002.

Other income decreased $0.2 million to $2.5 million for the
three months ended March 31, 2002, from $2.7 million for the three months ended
March 31, 2001 primarily due to decreased interest income partially offset by an
increase in ancillary operating income.

Operating and maintenance expenses increased $4.1 million, or
33.7%, to $16.2 million for the three months ended March 31, 2002, from $12.1
million for the three months ended March 31, 2001. The increase was primarily
due to costs related to increased GLA and the acquisition of the 31 new retail
centers.

Depreciation and amortization expense increased $1.3 million to
$12.9 million for the three months ended March 31, 2002, from $11.6 million for
the three months ended March 31, 2001. The increase was due to depreciation of
the acquisition of the 31 retail centers and increased GLA.

General and administrative expense increased $0.4 million to
$1.5 million for the three months ended March 31, 2002, from $1.1 million for
the three months ended March 31, 2001, primarily due to increased salaries and
headcount.

Other expenses increased $0.3 million to $1.1 million for the
three months ended March 31, 2002, from $0.8 million for the three months ended
March 31, 2001 due to ground lease expenses assumed with the acquisition of the
31 retail centers and increased bad debt and legal expenses.

Income from unconsolidated investments increased $0.5 million to
$3.8 million for the three months ended March 31, 2002, from $3.3 million for
the three months ended March 31, 2001 due to increased earnings from Orlando and
Chelsea Japan including a one time leasing fee of $0.2 million from Rinku phase
two.

The loss from Chelsea Interactive increased $1.5 million to $2.7
million for the three months ended March 31, 2002, from $1.2 million for the
three months ended March 31, 2001. The increase was due to increased payroll,
general and administrative and depreciation and amortization expense.

Interest expense increased $1.2 million to $9.8 million for the
three months ended March 31, 2002, from $8.6 million for the three months ended
March 31, 2001, due to higher debt balances from acquisitions.

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 in 2001 of $121.7
million is expected to increase with a full year of operations of the 4.4
million square feet of GLA added during 2001 and scheduled openings of
approximately 127,000 square feet of GLA in 2002. As of March 31, 2002, the OP
had adequate funding sources to complete and open all development projects,
including those of its e-commerce affiliate, Chelsea Interactive. This will be
accomplished with available cash of $19.6 million and $160 million available
under the Senior Credit Facility. The OP also has the ability to access the
public markets through its $450 million debt shelf registration and the
Company's $185 million equity shelf registration.

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

Common distributions declared and recorded during the three
months ended March 31, 2002 were $17.8 million, or $0.81 per unit. The OP's
dividend payout ratio as a percentage of net income before depreciation and
amortization (exclusive of amortization of deferred financing costs ("FFO")) was
63.9% for the three months ended March 31, 2002. The Senior Credit Facility
limits aggregate dividends and distributions to the lesser of (i) 90% of FFO on
an annual basis or (ii) 100% of FFO for any two consecutive quarters.

The OP has a $160 million senior unsecured bank line of credit
(the "Senior Credit Facility") and has an annual right to request a one-year
extension that may be granted at the option of the lenders. The Senior Credit
Facility was extended until March 30, 2004. The OP has requested and the lenders
are expected to extend the Senior Credit Facility until March 30, 2005. The
Senior Credit Facility bears interest on the outstanding balance, payable
monthly, at a rate equal to the London Interbank Offered Rate ("LIBOR") plus
1.05% (3.05% at March 31, 2002) or the prime rate, at the OP's option. The LIBOR
rate spread ranges from 0.85% to 1.25% depending on the OP's Senior Debt rating.
A fee on the unused portion of the Senior Credit Facility is payable quarterly
at rates ranging from 0.15% to 0.25% depending on the balance outstanding. At
March 31, 2002, the entire $160 million of the Senior Credit Facility was
available.

On April 1, 2002, the OP acquired a 305,000 square foot center
located in Edinburgh, Indiana for $27.0 million in cash. The center is located
40 miles south of downtown Indianapolis and was 98% leased at the acquisition
date. The OP funded the transaction from available cash and the Senior Credit
Facility.

Also on April 1, 2002, the OP became the 100% owner of the
Orlando Premium Outlets by acquiring Simon's 50% ownership interest for $46.6
million in cash and the assumption of $29.7 million of existing mortgage debt.
The cash portion of the transaction was funded by borrowing from the Senior
Credit Facility. Following these transactions, the OP had borrowings of $63.0
million outstanding and $97.0 million available on its Senior Credit Facility.

In February 2002 the Company redeemed and retired 136,500 shares
of 8.375% Series A Cumulative Redeemable Preferred Stock at $47 per share using
available cash of $6.4 million.

Development activity for real estate operations as of March 31,
2002 includes additional phases of three existing centers, totaling 57,000
square feet scheduled to open in mid-2002. The OP is also in the predevelopment
stage of domestic projects outside Las Vegas, NV scheduled to open in the fall
of 2003; followed by Chicago, IL and Seattle, WA scheduled to open in 2004; and
an international project north of Tokyo in Sano scheduled to open in mid-2003.
These projects are under development and there can be no assurance that they
will be completed or opened, or that there will not be delays in opening or
completion. All current development activity will be financed either through
project specific secured construction financing, the yen denominated line of
credit, available cash or through the Senior Credit Facility. The OP will seek
to obtain permanent financing once the projects are completed and income has
been stabilized.

The OP has minority interests ranging from 5% to 15% in several
outlet centers and outlet development projects in Europe. Five outlet centers,
containing approximately 900,000 square feet of GLA, including Bicester Village
outside of London, England, La Roca OP Stores outside of Barcelona, Spain, Las
Rozas Village outside Madrid, Spain, La Vallee near Disneyland Paris and
Maasmechelen Village in Belgium are currently open and operated by Value Retail
PLC and its affiliates. There was additional new center developments planned and
one new European project is under construction and expected to open in Spring
2003. The OP's total investment in Europe as of March 31, 2002 was $3.7 million.
The OP has also agreed to provide up to $24.1 million in limited debt service
guarantees under a standby facility for loans arranged by Value Retail PLC, to
construct outlet centers in Europe. The term of the standby facility for new
guarantees expired in November 2001 and these guarantees shall not be
outstanding for longer than five years after project completion. In October 2001
the guarantee was increased to $24.1 million from $22.0 million until April
2002. The OP received $2.1 million in restricted cash collateral for this
short-term increase, which will revert back to Value Retail in May 2002.

Orlando Premium Outlets has a $59.4 million construction
facility (maximum commitment $62.0 million) that was to mature in February 2002
and which was extended to August 2002. The loan has three additional six-month
extension options. The loan bears interest at LIBOR plus 1.30% (3.24% at March
31, 2002) and as of March 31, 2002 was 10% guaranteed by each of the OP and
Simon. Changes in debt service coverage ratio provide for a guarantee ranging
from 10% to 25% per guarantor and a LIBOR interest rate spread ranging from 130
to 150 basis points. As of April 1, 2002, concurrent with the OP's acquisition
of Simon's 50% interest in Orlando Premium Outlets, the OP guarantees 10% of
this loan.

In June 1999, the OP entered into an agreement with Mitsubishi
Estate Co., Ltd. and Nissho Iwai Corporation to jointly develop, own and operate
premium outlet centers in Japan. The joint venture is known as Chelsea Japan
Co., Ltd. ("Chelsea Japan"). In conjunction with the agreement, the OP
contributed $1.7 million in equity. In addition, an equity investee of the OP
entered into a 4 billion yen (approximately US $30.1 million) line of credit
guaranteed by the Company and OP to fund its share of construction costs. The
line of credit bears interest at yen LIBOR plus 1.35% (1.475% at March 31, 2002)
and matures April 2002 and has two one-year extensions. At March 31, 2002, 1.08
billion yen (approximately US $8.1 million) was outstanding under the line of
credit. In March 2000, Chelsea Japan entered into a 3.8 billion yen
(approximately US $28.6 million) loan with a Japanese bank to fund construction
costs. The loan matures in 2012 and as of March 31, 2002, the entire facility
was outstanding and bears interest at 2.20%. On March 29, 2002 Chelsea Japan
entered into a 600 million yen (approximately US $4.5 million) loan with a
Japanese bank to fund construction on the second phase of Rinku. The loan
matures in 2015 and as of March 31, 2002, the entire facility is outstanding and
bears interest at 1.5%. Both loans are secured by the two operating properties
and are 40% guaranteed by the OP. Subject to governmental and other approvals,
Chelsea Japan expects to announce additional projects during 2002. Funding for
such construction is anticipated to be through partner loans or a loan with a
Japanese bank.

In July 2000, the OP developed an e-commerce venture through its
affiliate, Chelsea Interactive. The OP's funding to this venture was $45.8
million as of March 31, 2002. The Board of Directors has approved funding up to
$60.0 million. The OP anticipates funding the balance of development costs
during the next twenty-four months; however there can be no assurance that
future revenue will be adequate to recover the OP's investment.

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

Net cash provided by operating activities decreased $6.6 million
for the three months ended March 31, 2002 compared to the corresponding 2001
period. The decrease was primarily due to the payout of the deferred incentive
compensation in March 2002, partially offset by the increased operating cash
flow generated from the growth of the OP's GLA. Net cash used in investing
activities increased $2.1 million for the three months ended March 31, 2002
compared to the corresponding 2001 period as a result of increased development
costs and reduced distributions from investments in unconsolidated affiliates in
excess of earnings offset by decreased rental properties additions. Net cash
used in financing activities increased by $26.2 million compared to the
corresponding period in 2001 as a result of reduced net debt borrowings and the
redemption and retirement of the Company's preferred stock, offset by increased
offerings of the Company's common stock.

Funds from Operations

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

`Three Months Ended
                                                                                      March 31,
                                                                                 2002         2001
                                                                            -------------  --------------

   Net income available to common unitholders........................           $13,880       $10,231
   Add/(deduct):
   Depreciation and amortization-wholly-owned........................            12,941        11,559
   Depreciation and amortization-joint ventures......................             1,643         1,480
   Amortization of deferred financing costs and
    depreciation of non-rental real estate assets....................              (552)         (408)
                                                                            -------------  --------------
   FFO...............................................................           $27,912      $ 22,862
                                                                            =============  ==============
   Average /units outstanding........................................            21,936         19,314
   Dividends declared per unit.......................................             $0.81          $0.78`

Recent Accounting Pronouncements

In October 2001, the FASB issued Statement of Financial
Accounting Standard No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets", which addresses financial accounting and reporting for the
impairment or disposal of long-lived assets. This standard harmonizes the
accounting for impaired assets and resolves some of the implementation issues as
originally described in SFAS 121. The new standard became effective and was
adapted by the OP on January 1, 2002. The adoption of this pronouncement has not
had a material impact on the OP's results of operations or financial position.

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.

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.

Foreign Exchange Exposure

From time to time, the OP may enter into hedging contracts to
protect against fluctuations in foreign exchange rates. Receivables from Chelsea
Japan are recorded in the accompanying financial statements at the exchange rate
on the date of valuation. Significant changes in the exchange rate may result in
changes to the receivable realized.

Valuation of Investments

The OP reviews its investments in unconsolidated affiliates for
impairment wherever events or changes in circumstances indicate that the
carrying value of the asset may not be recoverable.

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 all 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 this risk by using derivative
transactions as appropriate to minimize the variability that floating rate
interest and foreign currency fluctuations could have on cash flow. In December
2000, a wholly-owned subsidiary of the OP entered into an interest rate swap
agreement effective January 2, 2001 with a financial institution for a notional
amount of $69.3 million amortizing to $64.1 million to hedge against unfavorable
fluctuations in the LIBOR rates of its secured mortgage loan facility. The hedge
effectively produces a fixed interest rate of 7.2625% on the notional amount
until January 1, 2006.

At March 31, 2002 a hypothetical 100 basis point adverse move
(increase) in U.S. Treasury and LIBOR rates applied to unhedged debt would
adversely affect the OP's annual interest cost by approximately $0.3 million
annually.

Following is a summary of the OP's debt obligations at March 31,
2002 (in thousands):

`Expected Maturity Date
                          2002     2003     2004    2005       2006    Thereafter          Total    Fair Value
                       -------- -------- -------- ---------- -------- ------------- -------------- -------------
 Fixed Rate Debt             -        -        -   $ 49,900        -     $ 395,628      $ 445,528     $ 459,721
          Average            -        -        -      8.38%        -         7.88%          7.93%
 Interest Rate
  Variable Rate Debt         -  $29,691   $5,035          -        -       $68,000      $ 102,726     $ 102,726
         Average             -    3.29%    3.05%          -        -         5.56%          4.78%
 Interest Rate`

Part II. Other Information

Item 6. Exhibits and Reports on Form 8-K

None.

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
       Chief Financial Officer
| | ----------------------------------------------------------------------------------------------------

Date:  May 13, 2001