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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 September 30, 2000

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

CHELSEA GCA REALTY PARTNERSHIP, 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.

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Chelsea GCA Realty Partnership, L.P.
Index

Part I. Financial Information

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

| | Condensed Consolidated Balance Sheets
     as of September 30, 2000 and December 31, 1999 | 3
| | ----------------------------------------------------------------------------------------- | -

| | Condensed Consolidated Statements of Income
     for the three and nine months ended September 30, 2000 and 1999 | 4
| | ---------------------------------------------------------------------------------------------------------------- | -

| | Condensed Consolidated Statements of Cash Flows
for the nine months ended September 30, 2000 and 1999 | 5
| | ----------------------------------------------------------------------------------------------------- | -

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

|Item 2. | Management's Discussion and Analysis of Financial Condition
     and Results of Operations | 12
|------- | ------------------------------------------------------------------------------------------ | --

|Item 3. | Quantitative and Qualitative Disclosures about Market Risk | 19
|------- | ---------------------------------------------------------- | --

Part II.  Other Information

|Item 6. | Exhibits and Reports on Form 8-K | 20
|------- | -------------------------------- | --

|Signatures | 21
|---------- | --

Item 1.  Financial Statements

Chelsea GCA Realty Partnership, L.P.
Condensed Consolidated Balance Sheets
(In thousands)

`September 30,       December 31,
                                                                           2000                1999
                                                                   ----------------   -----------------
                                                                    (Unaudited)             (Note 1)
Assets
Rental properties:
     Land..........................................................   $ 118,177           $ 118,494
     Depreciable property..........................................     782,802             730,319
                                                                   ----------------   -----------------
Total rental property..............................................     900,979             848,813
Accumulated depreciation...........................................    (165,701)           (138,221)
                                                                   ----------------   -----------------
Rental properties, net.............................................     735,278             710,592
Cash and cash equivalents..........................................      32,077               8,862
Notes receivable-related party.....................................       2,216               2,213
Deferred costs, net................................................      13,512              14,290
Property held for sale.............................................           -               3,388
Investments in affiliates..........................................      47,187              25,318
Other assets.......................................................      31,993              41,392
                                                                   ----------------   ----------------
Total assets.......................................................   $ 862,263           $ 806,055
                                                                   ================   =================

Liabilities and stockholders' equity
Liabilities:
     Unsecured bank debt...........................................   $   5,035           $ 131,035
     7.75% Unsecured Notes due 2001................................      99,966              99,905
     8.375% Unsecured Notes due 2005...............................      49,871                   -
     7.25% Unsecured Notes due 2007................................     124,768             124,744
     8.625% Unsecured Notes due 2009...............................      49,896                   -
     Secured bank debt.............................................      84,758                   -
     Construction payables.........................................       9,676               9,277
     Accounts payable and accrued expenses.........................      29,894              27,127
     Obligation under capital lease................................       2,844               3,233
     Accrued dividends and distributions payable...................      15,869               3,813
     Other liabilities.............................................      19,831              27,064
                                                                   ----------------   -----------------
Total liabilities..................................................     492,408             426,198

Commitments and contingencies

Partners' capital:
     General partner units outstanding, 15,942 in 2000
        and 15,932 in 1999.........................................     269,076             277,296
     Limited partners units outstanding, 3,357 in 2000 and 1999....      37,464              39,246
     Preferred partners units outstanding, 1,300 in 2000 and 1999..      63,315              63,315
                                                                   ----------------   -----------------
Total partners' capital............................................     369,855             379,857
                                                                   ----------------   -----------------
Total liabilities and partners' capital............................   $ 862,263           $ 806,055
                                                                   ================   =================


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

Chelsea GCA Realty Partnership, L.P.
Condensed Consolidated Statements of Income
for the Three and Nine Months Ended September 30, 2000 and 1999
(Unaudited)
(In thousands, except per unit data)

`Three Months                    Nine Months
                                                  Ended September 30,            Ended September 30,
                                                 2000            1999            2000            1999
                                             --------------  --------------  -------------   -------------
Revenues:
   Base rent.............................        $26,867         $24,687         $79,726         $73,822
   Percentage rent.......................          4,063           3,700           9,812           8,715
   Expense reimbursements................         10,582           9,800          29,587          27,343
   Other income..........................          3,054           2,054           7,086           6,094
                                             --------------  --------------  -------------   -------------
Total revenues...........................         44,566          40,241         126,211         115,974
                                             --------------  --------------  -------------   -------------

Expenses:
   Interest..............................          6,113           6,050          17,481          18,737
   Operating and maintenance.............         11,793          10,668          33,132          30,027
   Depreciation and amortization.........         10,616           9,975          31,823          29,680
   General and administrative............            857           1,070           2,597           3,613
   Other.................................          1,159             728           2,324           1,846
                                             --------------  --------------  -------------   -------------
Total expenses...........................         30,538          28,491          87,357          83,903
                                             --------------  --------------  -------------   -------------

Net operating income.....................         14,028          11,750          38,854          32,071
Income from unconsolidated entities......          2,199             143           2,644             253
Loss from Chelsea Interactive............           (530)             -             (805)             -
                                             --------------  --------------  -------------   -------------

Net income...............................         15,697          11,893          40,693          32,324
Preferred unit requirement...............         (2,509)         (1,534)         (7,527)         (3,628)
                                             --------------  --------------  -------------   -------------
Net income to common unitholders.........        $13,188         $10,359         $33,166         $28,696
                                             ==============  ==============  =============   =============

Net income to common unitholders:
     General partner.....................        $10,894          $8,540         $27,395         $23,591
     Limited partners....................          2,294           1,819           5,771           5,105
                                             --------------  --------------  -------------   -------------
Total....................................        $13,188         $10,359         $33,166         $28,696
                                             ==============  ==============  =============   =============

Net income per common unit:
     General partner.....................          $0.68           $0.54           $1.72           $1.50
     Limited partners....................          $0.68           $0.54           $1.72           $1.50

Weighted average units outstanding:
     General partner.....................         15,942          15,791          15,937          15,697
     Limited partners....................          3,357           3,363           3,357           3,399
                                             --------------  --------------  -------------   -------------
Total....................................         19,299          19,154          19,294          19,096


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

Chelsea GCA Realty Partnership, L.P.
Condensed Consolidated Statements of Cash Flows
for the Nine Months Ended September 30, 2000 and 1999
(Unaudited)
(In thousands)

`2000                1999
                                                                          --------------      -------------
   Cash flows from operating activities
   Net income.......................................................        $40,693             $32,324
   Adjustments to reconcile net income to net cash
      provided by operating activities:
       Depreciation and amortization................................         31,823              29,680
       Equity-in-earnings of unconsolidated entities................           (983)                (88)
       Proceeds from non-compete receivable.........................          4,600               4,600
       Amortization of non-compete revenue..........................         (3,852)             (3,852)
       Additions to deferred lease costs............................           (210)             (1,049)
       Other operating activities...................................            208                 710
       Changes in assets and liabilities:
           Straight-line rent receivable............................         (1,048)             (1,172)
           Other assets.............................................         (2,789)             (1,078)
           Accounts payable and accrued expenses....................          2,166               1,854
                                                                           -------------      -------------
   Net cash provided by operating activities........................         76,186              61,929
                                                                           -------------      -------------

   Cash flows used in investing activities
   Additions to rental properties...................................        (52,699)            (42,578)
   Additions to deferred development costs..........................            (91)               (269)
   Proceeds from sale of center.....................................          3,372               4,483
   Payments from related party......................................            -                 4,500
   Advance to related party.........................................            -                (1,222)
   Additions to investments in affiliates...........................        (20,354)            (16,894)
                                                                          --------------      -------------
   Net cash used in investing activities............................        (69,772)            (51,980)
                                                                          --------------      -------------

   Cash flows from financing activities
   Distributions....................................................        (39,001)            (32,977)
   Net proceeds from sale of preferred units........................            -                63,340
   Debt proceeds....................................................        210,008              27,000
   Repayments of debt...............................................       (151,250)            (69,000)
   Additions to deferred financing costs............................         (3,201)               (645)
   Net proceeds from sale of common stock...........................            245               4,020
                                                                          --------------      -------------
   Net cash provided by (used in) financing activities..............         16,801              (8,262)
                                                                          --------------      -------------

   Net increase (decrease) in cash and cash equivalents.............         23,215               1,687
   Cash and cash equivalents, beginning of period...................          8,862               9,631
                                                                          --------------      -------------
   Cash and cash equivalents, end of period.........................        $32,077             $11,318
                                                                          ==============      =============


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

Chelsea GCA Realty Partnership, L.P.
Notes to Condensed Consolidated Financial Statements
(Unaudited)

1. Organization and Basis of Presentation

Chelsea GCA Realty Partnership, L.P. (the Operating
Partnership or OP), which commenced operations on November 2,
1993, is engaged in the development, ownership, acquisition, leasing and
operation of manufacturers outlet centers. As of September 30, 2000, the
OP had interests in 21 properties in twelve states and Japan (the
Properties) that contained approximately 6.0 million square feet of
gross leasable area (GLA). The Properties are located near large
metropolitan areas including New York City, Los Angeles, San Francisco, Boston,
Atlanta, Washington DC, and Tokyo, Japan, or at or near tourist destinations
including Orlando, Honolulu, the Napa Valley, Palm Springs and the Monterey
Peninsula. The OP also has a number of properties under development and
expansion. The sole general partner in the Operating Partnership, Chelsea GCA
Realty, Inc. (the Company), is a self-administered and self-managed
Real Estate Investment Trust.

On July 19, 2000, the Company announced that through an
unconsolidated subsidiary, Chelsea Interactive, Inc. (Chelsea
Interactive), it has been developing a new technology-based e-commerce
platform. This platform will provide fashion and other retail brands their own
customized direct-to-the-consumer Internet online stores, incorporating
e-commerce design, development, fulfillment and customer services. In
consideration for such services, Chelsea Interactive will receive a percentage of each
brands online sales.

Common ownership of the OP as of September 30, 2000 was
approximately as follows:

`General Partner                  82.6%             15,942,000  units
         Limited Partners                 17.4%              3,357,000  units
                                       -----------     ---------------
                     Total               100.0%             19,299,000`

The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with generally accepted accounting
principles 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 generally accepted accounting principles
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 and nine month
periods ended September 30, 2000 are not necessarily indicative of the results
that may be expected for the year ending December 31, 2000. The balance sheet at
December 31, 1999 has been derived from the audited financial statements at that
date but does not include all of the information and footnotes required by
generally accepted accounting principles 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, 1999.

The OP is principally engaged in the development, ownership,
acquisition and operation of manufacturers outlet centers and has one
reportable segment, retail real estate. The OP evaluates real estate performance
and allocates resources based on net operating income and weighted average sales
per square foot. 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 segment meets the quantitative threshold for
determining reportable segments.

In June 1998, the Financial Accounting Standards Board issued
Statement No. 133, Accounting for Derivative Instruments and Hedging Activities
(as amended by FASB Statement No. 137), which is required to be adopted in years
beginning after June 15, 2000. Statement 133 permits early adoption as of the
beginning of any fiscal quarter after its issuance. The OP expects to adopt the
new Statement effective January 1, 2001. The Statement will require the OP to
recognize all derivatives on the balance sheet at fair value. Derivatives that
are not hedges must be adjusted to fair value through income. If a derivative is
a hedge, depending on the nature of the hedge, changes in the fair value of the
derivative will either be offset against the change in fair value of the hedged
asset, liability, or firm commitment through earnings, or recognized in other
comprehensive income until the hedged item is recognized in earnings. The
ineffective portion of a derivatives change in fair value will be
immediately recognized in earnings. The OP does not anticipate that the adoption
of the Statement will have a significant effect on its results of operations or
financial position.

In December 1999, the SEC staff issued Staff Accounting Bulletin
101 (SAB 101), Revenue Recognition.SAB 101 discusses the SEC
staff views on certain revenue recognition transactions. The OP is required to
adopt SAB 101 no later than the fourth quarter of 2000 and any change in
accounting would be recognized as a cumulative effect of a change in accounting
principle as of January 1, 2000. The OP does not anticipate that the adoption of
the SAB will have a significant effect on its financial position or results of
operations.

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

2. Property Held for Sale

As of December 31, 1999, property held for sale represented the
fair value, less estimated costs to sell, of Solvang Designer Outlets. On
January 4, 2000, Solvang was sold for a net selling price of $3.3 million.

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 and guarantee fees earned are included in income from
unconsolidated entities and loss from Chelsea Interactive in the consolidated
financial statements.

In May 1997, the OP and Simon Property Group, Inc.
(Simon) entered into a joint venture agreement to develop and
acquire high-end outlet centers in the United States. The OP and Simon agreed to
be co-managing general partners, each with 50% ownership interest in the joint
venture and any entities formed with respect to a specific project; the OP has
primary responsibility for the day-to-day activities of each center. The first
completed project, Orlando Premium Outlets (OPO), a 430,000 square
foot 50/50 joint venture began a phased opening at the end of May 2000. OPO is
located on Interstate 4, midway between Walt Disney World/EPCOT and Sea World in
Orlando. The OP also receives a fee for managing OPO based on gross revenues.
The OPs total investment in OPO as of September 30, 2000 was $13.7
million.

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 OP has a 40% interest in the joint venture
which is known as Chelsea Japan Co., Ltd. (Chelsea Japan). In
conjunction with the agreement, the OP contributed $1.7 million in equity and
will provide its share of construction financing and/or loan guarantees. Chelsea
Japan opened its initial project, the 220,000 square-foot first phase of Gotemba
Premium Outlets, on July 13, 2000. Gotemba is located on the Tomei Expressway,
approximately 60 miles west of Tokyo and midway between Mt. Fuji and the Hakone
resort area. Chelsea Japans second project, scheduled to open in November
2000 is Rinku Premium Outlets, a 175,000 square-foot center located outside
Osaka, the second-largest city in Japan. The OPs total investment in Japan
as of September 30, 2000 was $5.0 million.

The OP has minority interests ranging from 5% to 15% in several
outlet centers and outlet development projects in Europe. Outlet centers,
outside of London, England, Barcelona and Madrid, Spain, are currently open and
operated by Value Retail PLC and its affiliates. Three new European projects and
expansions of the two existing centers are in various stages of development and
are expected to open within the next two years. The OPs total investment
in Europe as of September 30, 2000 was $4.7 million.

On July 19, 2000, the Company announced that through an
unconsolidated subsidiary, Chelsea Interactive, Inc. (Chelsea
Interactive), it has been developing a new technology-based e-commerce
platform. This platform will provide fashion and other retail brands their own
customized direct-to-the-consumer Internet online stores, incorporating
e-commerce design, development, fulfillment and customer services. In
consideration for such services, Chelsea Interactive will receive a percentage of each
brands online sales. To date, the OP has invested $22.2 million in Chelsea
Interactive to build the platform and there have been no material operations.

4. Non-Compete Agreement

In October 1998, the OP signed a definitive agreement to
terminate the development of Houston Premium Outlets, a joint venture project
with Simon. Under the terms of the agreement, the OP withdrew from the Houston
development partnership and agreed to certain restrictions on competing in the
Houston market through 2002. The OP will receive non-compete payments totaling
$21.4 million from The Mills Corporation; $3.0 million was received at closing,
and four annual installments of $4.6 million will be received on each January 2,
1999 through 2002. The OP was reimbursed for its share of land costs,
development costs and fees related to the project. The revenue is being
recognized on a straight-line basis over the term of the non-compete agreement
and $3.9 million has been recognized as other income in each of the nine month
periods ended September 30, 2000 and 1999.

5. Debt

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 which may be granted at the option of the lenders. The
OPs lenders have agreed to extend the Facility until March 30, 2003. The
Facility bears interest on the outstanding balance, payable monthly, at a rate
equal to the London Interbank Offered Rate (LIBOR) plus 1.05% (7.75
% at September 30, 2000) 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. The entire $160 million Senior Credit Facility was available at
September 30, 2000.

The OP also has a $5 million term loan (the "Term Loan") which
carries the same interest rate and maturity as the Senior Credit
Facility.

In August 2000, the OP completed a $100 million private
placement debt offering to institutional investors consisting of $50 million of
8.375% unsecured term notes due August 2005 (the 8.375% Notes) and
$50 million of 8.625% unsecured term notes due August 2009 (the 8.625%
Notes). The 8.375% Notes were priced to yield 8.44% to the investors at
243 basis points over the five-year U.S. Treasury Rate and the 8.625% Notes were
priced to yield 8.66% to the investors at 275 basis points over the ten-year
U.S. Treasury Rate. Proceeds were used to repay borrowings under the Senior
Credit Facility and for general corporate purposes.

In April 2000, a wholly-owned subsidiary of the OP entered into
a $70 million mortgage loan, secured by four of its properties, that matures
April 2010 and bears interest at a rate equal to LIBOR plus 1.50% (8.20% at
September 30, 2000) or prime rate plus 1.00%. Net proceeds were used to retire
the $60 million term loan due April 30, 2000 and to repay borrowings under the
OPs Senior Credit Facility. At September 30, 2000, $69.8 million was
outstanding.

In February 2000, Chelsea Allen Development L.P., a wholly-owned
subsidiary of the OP, entered into a $40.0 million construction loan facility
that will be used to fund the Allen Premium Outlets project. The loan, which
matures February 2003, bears interest on the outstanding balance at a rate equal
to LIBOR plus 1.625% (8.22% at September 30, 2000) and is guaranteed by the
Company and the OP. At September 30, 2000, $15.0 million was outstanding.

In October 1997, the OP completed a $125 million offering of
7.25% unsecured term notes due October 2007 (the 7.25% Notes). The
7.25% Notes were priced to yield 7.29% to investors, 120 basis points over the
10-year U.S. Treasury rate.

In January 1996, the OP completed a $100 million offering of
7.75% unsecured term notes due January 2001 (the 7.75% Notes), which
are guaranteed by the OP. The five-year non-callable 7.75% Notes were priced to
yield 7.85% to investors.

Interest and loan costs of approximately $3.6 million and $1.8
million were capitalized as development costs during the nine months ended
September 30, 2000 and 1999, respectively.

6. Partners Capital

Following is a statement of Partners' Capital for the nine
months ended September 30, 2000 (in thousands):

`General          Limited          Preferred     Total Partners'
                                           Partner's        Partners'         Partner's
                                            Capital          Capital           Capital          Capital
                                        ---------------- ----------------  ---------------- ----------------

Balance December 31, 1999............        $277,296          $39,246           $63,315         $379,857
Contributions (net of costs).........             245                -                 -              245
Net income...........................          30,536           10,157                 -           40,693
Common distributions.................         (35,860)          (7,552)                -          (43,412)
Preferred distributions..............          (3,141)          (4,387)                -           (7,528)

                                        ---------------- ----------------  ---------------- ----------------
Balance September 30, 2000...........        $269,076          $37,464           $63,315         $369,855
                                        ================ ================  ================ ================`

7. Preferred Units

On September 3, 1999, the OP completed a private sale of $65
million of Series B Cumulative Redeemable Preferred Units (Preferred
Units) to an institutional investor. The private placement took the form
of 1.3 million Preferred Units at a stated value of $50 each. The Preferred
Units may be called at par on or after September 3, 2004, have no stated
maturity or mandatory redemption and pay a cumulative quarterly dividend at an
annualized rate of 9.0%. The Preferred Units are exchangeable into Series B
Cumulative Redeemable Preferred Stock of the OP after ten years. Proceeds from
the sale were used to pay down borrowings under the Senior Credit Facility.

8. Preferred Stock

In October 1997, the Company issued 1.0 million shares of
non-voting 8.375% Series A Cumulative Redeemable Preferred Stock (the
Preferred Stock), par value $0.01 per share, having a liquidation
preference of $50 per share. The Preferred Stock has no stated maturity and is
not convertible into any other securities of the Company. The Preferred Stock is
redeemable on or after October 15, 2027 at the Companys option. Net
proceeds from the offering were used to repay borrowings under the OPs
Credit Facilities.

9. Distributions

On September 14, 2000, the Board of Directors of the Company
declared a $0.75 per unit cash distribution to unitholders of record on
September 30, 2000. The distribution, totaling $14.5 million, was paid on
October 16, 2000.

10. 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.

11. 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.

12. Commitments and Contingencies

Orlando Premium Outlets began a phased opening at the end of May
2000. In February 1999, the joint venture entered into an $82.5 million
construction loan agreement which matures March 2002 and bears interest at LIBOR
plus 1.50% (8.16% at September 30, 2000). The loan is 50% guaranteed by each of
the OP and Simon and as of September 30, 2000, $51.4 million was outstanding.

In October 1999, an equity investee of the OP entered into a 4
billion yen (approximately US $40.0 million) line of credit guaranteed by the
Company and OP to fund its share of Chelsea Japans construction costs. The
line of credit bears interest at yen LIBOR plus 1.35% (1.89% at September 30,
2000) and matures April 2002. At September 30, 2000, 1.32 billion yen
(approximately US $13.2 million) was outstanding under the loan. In March 2000,
Chelsea Japan entered into a 3.6 billion yen (approximately US $36.0 million)
loan with a Japanese bank to fund construction costs. As of September 30, 2000,
1.6 billion yen (approximately US $16.0 million) was outstanding. The loan is
secured by the properties under construction and is 40% guaranteed by the
Company and the OP and bears interest at 2.20%.

In November 1998, the OP agreed under a standby facility to
provide up to $22 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 is three years and guarantees shall not be
outstanding for longer than five years after project completion. As of September
30, 2000, the OP has provided guarantees of approximately $10.1 million for
three projects.

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, if any, incurred by the OP related to
this litigation will not materially affect the financial position, operating
results or liquidity of the OP.

13. Related Party Information

During the second quarter of 1999, the OP established a $6
million secured loan facility for the benefit of certain unitholders. At
September 30, 2000, loans made to two unitholders totaled $2.2 million. Each
unitholder issued a note that is secured by OP units, bears interest at a rate
of LIBOR plus 200 basis points per annum (8.67% at September 30, 2000), payable
quarterly and is due June 2004.

Chelsea GCA Realty Partnership, L.P.

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

The following discussion should be read in conjunction 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
the interim periods presented, and all such adjustments are of a normal
recurring nature.

General Overview

From October 1, 1999 to September 30, 2000, the OP grew by
increasing rent at its existing centers resulting in base rent revenue growth of
$2.1 million and expanding its existing centers resulting in base rent revenue
growth of $3.9 million. Additionally, the OP invested in two new centers through
joint ventures that added $2.3 million of net income.

The OP had an interest in 21 manufacturers outlet centers
at September 30, 2000 compared to 19 at the end of the same quarter in the prior
year. At September 30, 2000, the gross leasable area (GLA) at these centers
increased 17.4% to 6.0 million square feet from 5.1 million square feet at
September 30, 1999. Net GLA added since October 1, 1999 is detailed as follows:

`12 mos ended           9 mos ended      3 mos ended
                                                     September 30,         September 30,     December 31,
                                                         2000                   2000             1999
                                                     -------------          -------------    -------------
Changes in GLA (sf in 000's):

New centers developed:
    Orlando Premium Outlets (50% owned)..............       428                    428                -
    Gotemba Premium Outlets (40% owned)..............       220                    220                -
                                                     -------------          -------------    -------------
Total new centers....................................       648                    648                -

Centers expanded:
    Leesburg Corner..................................        88                     34               54
    Folsom...........................................        54                     54                -
    North Georgia....................................        45                      -               45
    Camarillo........................................        45                      -               45
    Other (net)......................................         1                     (1)               2
                                                     -------------          -------------    -------------
Total centers expanded...............................       233                     87              146

Net GLA added during the period......................       881                    735              146

GLA at end of period.................................     5,951                  5,951            5,216`

---

Results of Operations

Comparison of the three months ended September 30, 2000 to the
three months ended September 30, 1999.

Income before minority interest increased $3.8 million to
$15.7 million for the three months ended September 30, 2000 from $11.9 million
for the three months ended September 30, 1999. Increases in revenues, primarily
the result of expansions and higher rents on releasing and renewals, and net
income from unconsolidated entities that commenced operations in the second and
third quarters of 2000 were partially offset by the loss from Chelsea
Interactive and increases in operating, maintenance, depreciation and
amortization expenses.

Base rentals increased $2.2 million, or 8.8%, to $26.9 million
for the three months ended September 30, 2000 from $24.7 million for the three
months ended September 30, 1999 due to expansions and higher average rents on
new leases and renewals.

Percentage rents increased $0.4 million, or 9.8%, to $4.1
million for the three months ended September 30, 2000, from $3.7 million for the
three months ended September 30, 1999. The increase was primarily due to
expansions, increased tenant sales and a larger number of tenants contributing
percentage rents.

Expense reimbursements, representing contractual recoveries from
tenants of certain common area maintenance, operating, real estate tax,
promotional and management expenses, increased $0.8 million, or 8.0%, to $10.6
million for the three months ended September 30, 2000 from $9.8 million for the
three months ended September 30, 1999, due to the recovery of operating and
maintenance costs from expansions. The average recovery of reimbursable expenses
was 89.7% in the third quarter of 2000, compared to 91.9% in the third quarter
of 1999.

Other income increased $1.0 million to $3.1 million for the
three months ended September 30, 2000, from $2.1 million for the three months
ended September 30, 1999. The increase was primarily due to pad sale gains in
2000 and increased center operations income.

Interest expense was flat at $6.1 million in 2000 versus 1999.
Higher interest rates in 2000 were offset by higher debt balances in
1999.

Operating and maintenance expenses increased $1.1 million, or
10.5%, to $11.8 million for the three months ended September 30, 2000 from $10.7
million for the three months ended September 30, 1999. The increase was
primarily due to costs related to expansions.

Depreciation and amortization expense increased $0.6 million, or
6.4%, to $10.6 million for the three months ended September 30, 2000 from $10.0
million for the three months ended September 30, 1999. The increase was due to
depreciation of expansions.

General and administrative expenses decreased $0.2 million, or
20.0%, to $0.9 million for the three months ended September 30, 2000 from $1.1
million for the three months ended September 30, 1999 primarily due to a lower
accrual for deferred incentive compensation.

Other expenses increased $0.4 million to $1.1 million for the
three months ended September 30, 2000 from $0.7 million for the three months
ended September 30, 1999 primarily due to the write-off of development costs
related to inactive projects.

Income from unconsolidated entities increased $2.1 million to
$2.2 million for the three months ended September 30, 2000 from $0.1 million for
the three months ended September 30, 1999. This resulted from equity-in-earnings
and other fees earned from Orlando Premium Outlets, a 50% joint venture center
that opened in May 2000 and from Gotemba Premium Outlets, a 40% joint venture
that opened in July 2000.

Loss from Chelsea Interactive of $0.5 million for the three
months ended September 30, 2000 was related to selling, general, administrative
and maintenance expenses.

Comparison of the nine months ended September 30, 2000 to the
nine months ended September 30, 1999.

Income before minority interest increased $8.4 million to
$40.7 million for the nine months ended September 30, 2000 from $32.3 million
for the nine months ended September 30, 1999. Increases in revenues, primarily
the result of expansions and higher rents on releasing and renewals, and net
income from unconsolidated entities that commenced operations in the second and
third quarters of 2000 were partially offset by the loss from Chelsea
Interactive and increases in operating, maintenance, depreciation and
amortization expenses.

Base rentals increased $5.9 million, or 8.0%, to $79.7 million
for the nine months ended September 30, 2000, from $73.8 million for the nine
months ended September 30, 1999. The increase was primarily due to expansions
and higher average rents on new leases and renewals.

Percentage rents increased $1.1 million, or 12.6%, to $9.8
million for the nine months ended September 30, 2000 from $8.7 million for the
nine months ended September 30, 1999. The increase was primarily due to
expansions, increased tenant sales and a larger number of tenants contributing
percentage rents.

Expense reimbursements, representing contractual recoveries from
tenants of certain common area maintenance, operating, real estate tax,
promotional and management expenses, increased $2.3 million, or 8.4%, to $29.6
million for the nine months ended September 30, 2000 from $27.3 million for the
nine months ended September 30, 1999, due to the recovery of operating and
maintenance costs from expansions. The average recovery of reimbursable expenses
was 89.3% in 2000 compared to 91.1% in 1999.

Other income increased $1.0 million to $7.1 million for the nine
months ended September 30, 2000 from $6.1 million for the nine months ended
September 30, 1999. The increase was primarily due to larger pad sale gains in
2000 and increased center operations income.

Interest expense decreased $1.2 million to $17.5 million for the
nine months ended September 30, 2000 from $18.7 million for the nine months
ended September 30, 1999 primarily due to proceeds from the September 1999 sale
of Preferred Units that were used to pay down debt balances, partially offset by
higher interest rates in 2000.

Operating and maintenance expenses increased $3.1 million, or
10.3%, to $33.1 million for the nine months ended September 30, 2000 from $30.0
million for the nine months ended September 30, 1999. The increase was primarily
due to costs related to expansions.

Depreciation and amortization expense increased $2.1 million, or
7.2%, to $31.8 million for the nine months ended September 30, 2000 from $29.7
million for the nine months ended September 30, 1999. The increase was primarily
due to depreciation of expansions.

General and administrative expenses decreased $1.0 million to
$2.6 million for the nine months ended September 30, 2000 from $3.6 million for
the nine months ended September 30, 1999. The decrease was primarily due to a
lower accrual for deferred incentive compensation.

Other expenses increased $0.5 million to $2.3 for the nine
months ended September 30, 2000 from $1.8 million for the nine months ended
September 30, 1999, primarily due to the write-off of development costs related
to inactive projects.

Income from unconsolidated entities increased $2.3 million to
$2.6 million for the nine months ended September 30, 2000 from $0.3 million for
the nine months ended September 30, 1999. This resulted from equity-in-earnings
and other fees earned from Orlando Premium Outlets, a 50% joint venture center
that opened in May 2000 and from Gotemba Premium Outlets, a 40% joint venture
that opened in July 2000.

Loss from Chelsea Interactive of $0.8 million for the nine
months ended September 30, 2000 was related to selling, general, administrative
and maintenance expenses.

Liquidity and Capital Resources

The OP believesit has adequate financial resources to
fund operating expenses, distributions, and planned development and construction
activities over the short term, which is less than 12 months and the long-term,
which is 12 months or more. Operating cash flow of $87.6 million in 1999 is
expected to increase in 2000 with a full year of operations of the 340,000
square feet of GLA added during 1999 and scheduled openings of approximately 1.3
million square feet in 2000, which includes the OPs 50% ownership share in
the 430,000 square foot Orlando Premium Outlets and 40% ownership share each in
the 220,000 square foot Gotemba Premium Outlets, outside Tokyo, Japan and the
175,000 square foot Rinku Premium Outlets, outside Osaka, Japan. The OP has
adequate funding sources to complete and open all of its current development
projects through the use of available cash of $32.1 million; construction loans
for the Orlando and Allen projects up to a maximum borrowing of $82.5 million
and $40.0 million, respectively; a yen-denominated line of credit totaling 4
billion yen (approximately US $40 million) for the OPs share of project
costs in Japan; and approximately $160 million available under its Senior Credit
Facility. Chelsea also has the ability to access the public markets, if market
conditions become favorable, through its $600 million debt shelf registration
and its $300 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 funding
requirements for Chelsea Interactives technology platform.

Common distributions declared and recorded during the nine
months ended September 30, 2000 were $43.4 million, or $2.25 per share or unit.
The OPs dividend payout ratio as a percentage of net income before
minority interest, depreciation and amortization (exclusive of amortization of
deferred financing costs (FFO)) was 67.3% for the nine months ended
September 30, 2000. 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 which may be granted at the option of the lenders. The
OPs lenders have agreed to extend the Facility until March 30, 2003. The
Facility bears interest on the outstanding balance, payable monthly, at a rate
equal to the London Interbank Offered Rate (LIBOR) plus 1.05% (7.75%
at September 30, 2000) 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. The entire $160 million Senior Credit Facility was available at
September 30, 2000.

The OPs recent debt refinancing activity strengthened the
balance sheet and improved its financial flexibility and liquidity by extending
and sequencing debt maturities and significantly reducing floating rate debt
exposure.

In August 2000, the OP completed a $100 million private
placement debt offering to institutional investors consisting of $50 million of
8.375% unsecured term notes due August 2005 (the 8.375% Notes) and
$50 million of 8.625% unsecured term notes due August 2009 (the 8.625%
Notes). The 8.375% Notes were priced to yield 8.44% to the investors at
243 basis points over the five-year U.S. Treasury Rate and the 8.625% Notes were
priced to yield 8.66% to the investors at 275 basis points over the ten-year
U.S. Treasury Rate. Proceeds were used to repay borrowings under the Senior
Credit Facility and for general corporate purposes.

In April 2000, a wholly-owned subsidiary of the OP entered into
a $70 million mortgage loan secured by four of its properties, that matures
April 2010 and bears interest at a rate equal to LIBOR plus 1.50% (8.20% at
September 30, 2000) or prime rate plus 1.00%. Net proceeds were used to retire
the $60 million term loan due April 30, 2000 and to repay borrowings under the
OPs Senior Credit Facility. At September 30, 2000, $69.8 million was
outstanding.

In February 2000, Chelsea Allen Development L.P., a wholly-owned
subsidiary of the OP, entered into a $40 million construction loan facility that
will be used to fund the Allen Premium Outlets project. The loan, which matures
February 2003, bears interest on the outstanding balance at a rate equal to
LIBOR plus 1.625% (8.22% at September 30, 2000) and is guaranteed by the Company
and the OP. At September 30, 2000, $15.0 million was outstanding.

Development activity as of September 30, 2000 includes the
following projects scheduled to open during the fourth quarter of 2000 and the
first quarter of 2001: the 230,000 square-foot first phase of Allen Premium
Outlets (Allen, Texas); the 175,000 square-foot first phase of Rinku Premium
Outlets (near Osaka, Japan), Chelsea Japans second project; and expansions
including 125,000 square feet at Wrentham Village Premium Outlets (Wrentham,
Massachusetts) and 105,000 square feet at Leesburg Corner Premium Outlets
(Leesburg, Virginia). 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 is fully
financed either through project specific secured construction financing, the yen
denominated line of credit or through the Senior Credit Facility. The OP will
seek to obtain permanent financing once the projects are completed and income
has been stabilized.

Orlando Premium Outlets began a phased opening at the end of May
2000. In February 1999, the joint venture entered into an $82.5 million
construction loan agreement which matures March 2002 and bears interest at LIBOR
plus 1.50% (8.16% at September 30, 2000). The loan is 50% guaranteed by each of
the OP and Simon and as of September 30, 2000, $51.4 million was outstanding.

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 $40.0 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% (1.89% at September 30,
2000) and matures April 2002. At September 30, 2000, 1.32 billion yen
(approximately US $13.2 million) was outstanding under the loan. In March 2000,
Chelsea Japan entered into a 3.6 billion yen (approximately US $36.0 million)
loan with a Japanese bank to fund construction costs. As of September 30, 2000,
1.6 billion yen (approximately US $16.0 million) was outstanding. The Chelsea
Japan loan is secured by their properties and is 40% guaranteed by the Company
and the OP and bears interest at 2.20%. Chelsea Japan opened its initial
project, the 220,000 square-foot first phase of Gotemba Premium Outlets, 60
miles west of Tokyo, on July 13, 2000. Chelsea Japans second project,
scheduled to open in November 2000 is Rinku Premium Outlets, a 175,000
square-foot center located outside Osaka, the second-largest city in Japan.

The OP has minority interests ranging from 5% to 15% in several
outlet centers and outlet development projects in Europe. Outlet centers,
outside of London, England, Barcelona and Madrid, Spain, are currently open and
operated by Value Retail PLC and its affiliates. Three new European projects and
expansions of the two existing centers are in various stages of development and
are expected to open within the next two years. The OPs total investment
in Europe as of September 30, 2000 was $4.7 million. The OP has also agreed
under a standby facility to provide up to $22 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 is three years and
guarantees shall not be outstanding for longer than five years after project
completion. As of September 30, 2000, the OP has provided guarantees of $10.1
million for three projects.

In July 2000, the OP announced an e-commerce venture through its
affiliate, Chelsea Interactive. The OPs investment in this venture was
$22.2 million at September 30, 2000. The Board of Directors has approved funding
up to $40.0 million that is expected to be provided from operating cash flow.

The OP announced in October 1998 that it sold its interest in
and terminated the development of Houston Premium Outlets, a joint venture
project with Simon. Under the terms of the agreement, the OP will receive
non-compete payments totaling $21.4 million from The Mills Corporation; $3.0
million was received at closing, and four annual installments of $4.6 million
will be received on each January 2, 1999 through 2002. The OP has also been
reimbursed for its share of land costs, development costs and fees related to
the project.

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 increased $14.2
million for the nine months ended September 30, 2000 compared to the
corresponding 1999 period, primarily due to the growth of the OPs GLA to
6.0 million square feet in 2000 from 5.1 million square feet in 1999 and
increased rent. Net cash used in investing activities increased $17.8 million
for the nine months ended September 30, 2000 compared to the corresponding 1999
period, as a result of increased construction activity, equity requirements of
the joint ventures and Chelsea Interactive activities offset by the receipt of
payment on a note receivable in 1999. At September 30, 2000, net cash provided
by financing activities increased by $25.1 million primarily due to the debt
offering in August 2000, offset by higher distributions paid and increased
deferred finance costs. Proceeds from the offering were used to repay borrowings
under the OPs Senior Credit Facility and for general corporate purposes.

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 Company. The White Paper on Funds
from Operations (FFO) 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 Company
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 Company to incur and service debt, to make capital
expenditures and to fund other cash needs. The Company computes FFO in
accordance with the current standards established by NAREIT which may not be
comparable to FFO reported by other REITs that do not define the term in
accordance with the current NAREIT definition or that interpret the current
NAREIT definition differently than the Company. 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 Companys financial performance or to cash flow
from operating activities (determined in accordance with GAAP) as a measure of
the Companys liquidity, nor is it indicative of funds available to fund
the Companys cash needs, including its ability to make cash distributions.

`Three Months Ended               Nine Months Ended
                                                       September 30,                    September 30,
                                                     2000             1999            2000           1999
                                               ------------     -------------   ------------   -------------

Net income to common unitholders .............    $13,188          $10,359         $33,166        $28,696
Add back:
  Depreciation and amortization (1)...........     11,481            9,975          32,688         29,680
  Amortization of deferred financing
    costs and depreciation of non-rental
    real estate assets........................       (423)            (465)         (1,360)        (1,376)
                                               ------------     -------------   ------------   -------------
FFO...........................................    $24,246          $19,869         $64,494        $57,000
                                               ============     =============   ============   =============
                                               ------------     -------------   ------------   -------------
Average units outstanding.....................     19,299           19,154          19,294         19,066
Distributions declared per share..............      $0.75            $0.72           $2.25          $2.16


(1) Includes the OP's share of depreciation and amortization from unconsolidated
    joint ventures of $865 for the three and nine months ended September 30, 2000.`

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. The OP currently does not use interest rate
derivative instruments to manage exposure to interest rate changes. A
hypothetical 100-basis point adverse move (increase) in US Treasury and LIBOR
rates would adversely affect the OPs annual interest cost by approximately
$0.9 million.

Following is a summary of the OP's debt obligations at September
30, 2000 (in thousands):

`Expected Maturity Date
                           ---------------------------------------------------------------
                                                                                                      Fair
                                                                                                   --------
                            2000      2001       2002      2003   2004    Thereafter     Total       Value
                            ----      ----       ----      ----   ----    ----------     -----       -----
Fixed Rate Debt:               -   $99,966          -         -      -    $224,535     $324,501    $312,733
Average Interest Rate:         -      7.75%         -         -      -        7.80%        7.78%       -
Variable Rate Debt:            -         -          -   $20,043      -       $69,750     $89,793   $89,793
Average Interest Rate:         -         -          -      8.10%     -        8.20%        8.18%       -`

Chelsea GCA Realty Partnership, L.P.

Part II. Other Information

Item 6. Exhibits and Reports on Form 8-K

The OP did not file any reports on Form 8-K during the three
months ended September 30, 2000.

Chelsea GCA Realty Partnership, 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.

| | CHELSEA GCA REALTY PARTNERSHIP, L.P.
By: /s/ Michael J. Clarke
Michael J. Clarke
Chief Financial Officer
| | --------------------------------------------------------------------------------------------------------

Date:  November 13, 2000