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, 1999

                                       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                                           22-3258100
  (STATE OR OTHER JURISDICTION                          (I.R.S. EMPLOYER
  OF INCORPORATION OR ORGANIZATION)                    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    Yes X No .

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

<PAGE>


                      CHELSEA GCA REALTY PARTNERSHIP, L.P.

                                      INDEX


PART I.  FINANCIAL INFORMATION


Item 1.  Financial Statements (Unaudited)                                 Page

         Condensed Consolidated Balance Sheets
           as of March 31, 1999 and December 31, 1998.................     3

         Condensed Consolidated Statements of Income
           for the three months ended March 31, 1999 and 1998.........     4

         Condensed Consolidated Statements of Cash Flows
           for the three months ended March 31, 1999 and 1998.........     5

         Notes to Condensed Consolidated Financial Statements.........     6

Item 2.  Management's Discussion and Analysis of Financial Condition 
           and Results of Operations..................................    10

Item 3.  Quantitative and Qualitative Disclosures about Market Risk...    15

PART II. OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K.............................    16

Signatures............................................................    17

<PAGE>

ITEM 1.  FINANCIAL STATEMENTS

                      CHELSEA GCA REALTY PARTNERSHIP, L.P.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                      March 31,             December 31,
                                                                                        1999                   1998
                                                                                   ------------------   ------------------
                                                                                      (Unaudited)            (Note 1)
Assets
Rental properties:
<S>                                                                                  <C>                   <C>     
     Land.......................................................................     $ 109,031             $109,318
     Depreciable property.......................................................       692,520              683,408
                                                                                   ------------------     ---------------
Total rental property...........................................................       801,551              792,726
Accumulated depreciation........................................................      (111,367)            (102,851)
                                                                                   ------------------     ---------------
Rental properties, net..........................................................       690,184              689,875
Cash and equivalents............................................................        17,919                9,631
Notes receivable-related party..................................................          -                   4,500
Deferred costs, net.............................................................        15,222               17,766
Properties held for sale........................................................         4,125                8,733
Other assets....................................................................        47,407               42,847
                                                                                   ------------------     ---------------
TOTAL ASSETS....................................................................     $ 774,857             $773,352
                                                                                   ==================     ===============

LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
     Unsecured bank debt........................................................     $ 155,035            $ 151,035
     7.75% Unsecured Notes due 2001.............................................        99,845               99,824
     7.25% Unsecured Notes due 2007.............................................       124,720              124,712
     Construction payables......................................................         8,367               12,927
     Accounts payable and accrued expenses......................................        16,808               19,769
     Obligation under capital lease.............................................         9,571                9,612
     Accrued distribution payable...............................................        14,615                3,274
     Other liabilities..........................................................        27,624               29,257
                                                                                   ------------------    ----------------
TOTAL LIABILITIES...............................................................       456,585              450,410

Commitments and contingencies

Partners' capital:
     General partner units outstanding, 15,609 in 1999 and 15,608 in 1998.......       276,569              280,391
     Limited partners units outstanding, 3,429 in 1999 and 1998.................        41,703               42,551
                                                                                   ------------------   -----------------
     TOTAL PARTNERS' CAPITAL....................................................       318,272              322,942
                                                                                   ------------------   -----------------
     TOTAL LIABILITIES AND PARTNERS' CAPITAL....................................     $ 774,857            $ 773,352
                                                                                   =================   ==================
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.

<PAGE>

                      CHELSEA GCA REALTY PARTNERSHIP, L.P.
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
               FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998
                                   (UNAUDITED)
                      (IN THOUSANDS, EXCEPT PER UNIT DATA)

<TABLE>
<CAPTION>

                                                                        1999                  1998
                                                                      -----------         ------------

REVENUES:
<S>                                                                    <C>                   <C>    
   Base rent.....................................................      $24,555               $19,266
   Percentage rent...............................................        2,371                 1,786
   Expense reimbursements........................................        8,192                 6,800
   Other income..................................................        1,845                   654
                                                                     ------------       ---------------
TOTAL REVENUES...................................................       36,963                28,506
                                                                    -------------       ---------------

EXPENSES:
   Interest......................................................        6,283                 4,125
   Operating and maintenance.....................................        9,151                 7,590
   Depreciation and amortization.................................        9,924                 7,278
   General and administrative....................................        1,139                   886
   Other.........................................................          418                   628
                                                                   --------------       ---------------
TOTAL EXPENSES...................................................       26,915                20,507
                                                                   --------------       ---------------

NET INCOME.......................................................      $10,048                $7,999
Preferred unit requirement.......................................       (1,047)               (1,047)
                                                                   --------------       --------------
NET INCOME TO COMMON UNITHOLDERS.................................       $9,001                $6,952
                                                                   ==============       ===============

NET INCOME TO COMMON UNITHOLDERS:
     General partner.............................................       $7,380                $5,682
     Limited partners............................................        1,621                 1,270
                                                                   --------------       ---------------
TOTAL............................................................       $9,001                $6,952
                                                                   ==============       ===============

NET INCOME PER COMMON UNIT:
     General partner.............................................        $0.47                 $0.37
     Limited partners............................................        $0.47                 $0.37

WEIGHTED AVERAGE UNITS OUTSTANDING:
     General partner.............................................       15,608                15,353
     Limited partners............................................        3,429                 3,431
                                                                  ---------------       ---------------
TOTAL............................................................       19,037                18,784
</TABLE>


THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.

<PAGE>

                      CHELSEA GCA REALTY PARTNERSHIP, L.P.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
               FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998
                                   (UNAUDITED)
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>

                                                                           1999               1998
                                                                        ------------       ------------
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                                       <C>                <C>   
Net income..................................................              $10,048            $7,999
Adjustments to reconcile net income to net cash 
  provided by operating activities:
   Depreciation and amortization............................                9,924             7,278
   Proceeds from non-compete receivable.....................                4,600               -
   Amortization of non-compete revenue......................               (1,284)              - 
   Additions to deferred lease costs........................                 (101)             (978)
   Other operating activities...............................                   29                97
   Changes in assets and liabilities:
     Straight-line rent receivable..........................                 (335)             (329)
     Other assets...........................................                6,142             5,762
     Accounts payable and accrued expenses..................               (2,936)             (200)
                                                                         ------------      ------------
Net cash provided by operating activities...................               26,087            19,629
                                                                         ------------      ------------
CASH FLOWS USED IN INVESTING ACTIVITIES
Additions to rental properties..............................              (13,803)          (27,238)
Additions to deferred development costs.....................                 (359)             (890)
Proceeds from sale of center................................                4,483               -
Payments from related party.................................                4,500               -
Additions to investments in joint ventures..................              (13,153)              -
Other investing activities..................................                  -                (285)
                                                                         ------------      ------------
Net cash used in investing activities.......................              (18,332)          (28,413)
                                                                         ------------      ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Distributions...............................................               (3,414)           (3,414)
Debt proceeds...............................................                4,000            12,000
Repayments of debt..........................................                  -              (4,000)
Additions to deferred financing costs.......................                  (90)           (1,083)
Net proceeds from sale of common stock......................                   37                25
Other financing activities..................................                  -                 (57)
                                                                         ------------      ------------
Net cash provided by financing activities...................                  533             3,471
                                                                         ------------      ------------
Net increase (decrease) in cash and equivalents.............                8,288            (5,313)
Cash and equivalents, beginning of period...................                9,631            14,538
                                                                         ------------      ------------
Cash and equivalents, end of period.........................              $17,919            $9,225
                                                                         ============      ============
</TABLE>

   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.

<PAGE>

                      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 March 31, 1999, the Operating Partnership operated 19 centers in 11 states
(the "Properties") containing approximately 4.9 million square feet of gross
leasable area ("GLA"). The Properties are located near large metropolitan areas
including New York City, Los Angeles, San Francisco, Sacramento, Boston,
Atlanta, Washington DC, Portland (Oregon) and Cleveland, or at or near tourist
destinations including Honolulu, the Napa Valley, Palm Springs and the Monterey
Peninsula. The Operating Partnership 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.

Ownership of the Operating Partnership as of March 31, 1999 was as follows:

        General Partner               82.0%              15,609,000   units
        Limited Partners              18.0%               3,429,000   units
                                  ----------------    ---------------
                         TOTAL       100.0%              19,038,000


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 month period ended March 31, 1999
are not necessarily indicative of the results that may be expected for the year
ending December 31, 1999. The balance sheet at December 31, 1998 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 Operating Partnership's Annual Report on Form
10-K for the year ended December 31, 1998.

Effective January 1, 1998, the Operating Partnership adopted the Financial
Accounting Standards Board's Statement of Financial Accounting Standards No.
131, Disclosures about Segments of an Enterprise and Related Information
("Statement 131"). Statement 131 superseded FASB Statement No. 14, Financial
Reporting for Segments of a Business Enterprise. Statement 131 establishes
standards for the way that public business enterprises report information about
operating segments in annual financial statements and requires that those
enterprises report selected information about operating segments in interim
financial reports. Statement 131 also establishes standards for related
disclosures about products and services, geographic areas, and major customers.
The adoption of Statement 131 did not affect results of operations, financial
position or disclosure of segment information as the Operating Partnership is
engaged in the development, ownership, acquisition and operation of
manufacturers' outlet centers and has one reportable segment, retail real
estate. The Operating Partnership 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. The Operating Partnership's investment in
foreign operations is not material to the consolidated financial statements.

<PAGE>

In June 1998, the Financial Accounting Standards Board issued Statement No. 133,
Accounting for Derivative Instruments and Hedging Activities, which is required
to be adopted in years beginning after June 15, 1999. Statement 133 permits
early adoption as of the beginning of any fiscal quarter after its issuance. The
Operating Partnership expects to adopt the new Statement effective January 1,
2000. The Statement will require the Operating Partnership 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 Operating Partnership does not anticipate that the
adoption of the Statement will have a significant effect on its results of
operations or financial position.

2.    PROPERTIES HELD FOR SALE

As of March 31, 1999, properties held for sale represented the fair value, less
estimated costs to sell, of Solvang Designer Outlets ("Solvang"). As of December
31, 1998, Lawrence Riverfront Plaza was also included in properties held for
sale and was sold on March 26, 1999 with no additional loss recognized.

During the second quarter of 1998, the Operating Partnership decided to sell
Solvang, a 51,000 square foot center in Solvang, California, for a net selling
price of $5.6 million. The center had a book value of $10.5 million, resulting
in a writedown of $4.9 million in the second quarter of 1998. During the fourth
quarter, the initial purchase offer was withdrawn and the Operating Partnership
received another offer for a net selling price of $4.1 million, requiring a
further writedown of $1.6 million. For the quarter ended March 31, 1999, Solvang
accounted for less than 1% of the Operating Partnership's revenues and net
operating income.

3.  NON-COMPETE AGREEMENT

In October 1998, the Operating Partnership signed a definitive agreement to
terminate the development of Houston Premium Outlets, a joint venture project
with Simon Property Group, Inc. Under the terms of the agreement, the Operating
Partnership will receive payments totaling $21.4 million from The Mills
Corporation, to be made over four years, as well as immediate reimbursement 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
agreement. The Operating Partnership received a payment of $4.6 million and
recognized income of $1.3 million during the 1999 first quarter. The Operating
Partnership has withdrawn from the Houston development partnership and agreed to
certain restrictions on competing in the Houston market through the year 2002.

4.    DEBT

On March 30, 1998, the OP replaced its two unsecured bank revolving lines of
credit, totaling $150 million (the "Credit Facilities"), with a new $160 million
senior unsecured bank line of credit (the "Senior Credit Facility"). The Senior
Credit Facility expires on March 30, 2001 and bears interest on the outstanding
balance, payable monthly, at a rate equal to the London Interbank Offered Rate
("LIBOR") plus 1.05% (6.05% at March 31, 1999) or the prime rate, at the OP's
option. The LIBOR rate spread ranges from 0.85% to 1.25% depending on the
Operating Partnership'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 OP has an annual right to request a
one-year extension of the Senior Credit Facility which may be granted at the
option of the lenders. Lenders representing 84% of the Senior Credit Facility
have agreed to extend the Facility until March 30, 2002. At March 31, 1999, $70
million was available under the Senior Credit Facility.

<PAGE>

Also on March 30, 1998, the OP entered into a $5 million term loan (the "Term
Loan") which carries the same interest rate and maturity as the Senior Credit
Facility.

In November 1998, the OP obtained a $60 million term loan which expires April
2000 and bears interest on the outstanding balance at a rate equal to LIBOR plus
1.40% (6.40% at March 31, 1999). Proceeds from the loan were used to pay down
borrowings under the Senior Credit Facility.

In January 1996, the OP completed a $100 million public debt offering of 7.75%
unsecured term notes due January 2001 (the "7.75% Notes"), which are guaranteed
by the Company. The 7.75% Notes were priced at a discount of 99.592 to yield
7.85% to investors.

In October 1997, the OP completed a $125 million public debt 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.

Interest and loan costs of approximately $0.5 million and $1.6 million were
capitalized as development costs during the three months ended March 31, 1999
and 1998, respectively.

5.  PREFERRED STOCK

In October 1997, the Company issued 1.0 million shares of 8.375% Series A
Cumulative Redeemable Preferred Stock (the "Preferred Stock"), par value $0.01
per share, having a liquidation preference of $50.00 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 Operating Partnership's Credit Facilities.

6.    DISTRIBUTIONS

On March 11, 1999, the Board of Directors of the Company declared a $0.72 per
unit cash distribution to unitholders of record on March 31, 1999. The
distribution, totaling $13.7 million, was paid on April 19, 1999.

7.    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.

8.    NET INCOME PER PARTNERSHIP UNIT

Net income per partnership unit is determined by allocating net income to the
general partner (including the general partner's preferred unit allocation) and
the limited partners based on their weighted average partnership units
outstanding during the respective periods presented.

<PAGE>
9.    COMMITMENTS AND CONTINGENCIES

The Operating Partnership has minority interests ranging from 5% to 15% in
several outlet centers and outlet development projects in Europe. Two outlet
centers, Bicester Village outside of London, England and La Roca Operating
Partnership Stores outside of Barcelona, 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 Operating Partnership's
total investment in Europe as of March 1999 are approximately $3.5 million. The
Operating Partnership has also agreed to provide up to $22 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 is three years and guarantees shall not be outstanding for longer than
five years after project completion. As of March 1999, the Operating Partnership
has provided limited debt service guaranties of approximately $14 million for
two projects.

During 1998, the Operating Partnership entered into a memorandum of
understanding (expiring in June 1999) with two partners to study the feasibility
of developing new outlet centers in Japan. The partners are currently
researching potential development sites and intend to organize a formal joint
venture when viable projects are located and approved. The Operating
Partnership's current financial commitment is not material.

Construction has commenced on Orlando Premium Outlets ("OPO"), a 430,000 square
foot 50/50 joint venture project between the Operating Partnership and Simon.
OPO is located on Interstate 4, midway between Walt Disney World/EPCOT and Sea
World in Orlando, Florida and is scheduled to open in the first half of 2000. In
February 1999, the joint venture entered into a $82.5 million construction loan
agreement that is expected to fund approximately 75% of the costs of the
project. The loan is 50% guaranteed by the Operating Partnership and as of March
31, 1999, there were no amounts outstanding. The balance of construction costs
will be funded equally by the Operating Partnership and Simon.

The Operating Partnership is not presently involved in any material litigation
nor, to its knowledge, is any material litigation threatened against the
Operating Partnership or its properties, other than routine litigation arising
in the ordinary course of business. Management believes the costs, if any,
incurred by the Operating Partnership related to this litigation will not
materially affect the financial position, operating results or liquidity of the
Operating Partnership.

10.        RELATED PARTY INFORMATION

In September 1995, the Operating Partnership transferred property with a book
value of $4.8 million to the Company's former President (a current unitholder)
in exchange for a $4.0 million note secured by units in the Operating
Partnership (the "Secured Note") and an $0.8 million unsecured note receivable
(the "Unsecured Note"). In January 1999, the Operating Partnership received $4.5
million as payment in full for the two notes. The remaining $0.3 million write
off was recognized in December 1998.

<PAGE>

                      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

The Operating Partnership has grown by increasing rent at its existing centers,
expanding its existing centers, developing new centers and acquiring and
redeveloping centers. The Operating Partnership operated 19 manufacturers'
outlet centers at March 31, 1999 compared to 20 at the end of the same quarter
in the prior year. The Operating Partnership's operating gross leasable area
(GLA) at March 31, 1999 (which excludes properties held for sale), increased
10.3% to 4.9 million square feet from 4.4 million square feet at March 31, 1998.
Net GLA added since April 1, 1998 is detailed as follows:

<TABLE>
<CAPTION>

                                                     12 mos ended           3 mos ended            9 mos ended
                                                       March 31,             March 31,             December 31,
                                                         1999                   1999                   1998
                                                     ------------           ------------           ------------
Changes in GLA (sf in 000's):
NEW CENTER DEVELOPED:
<S>                                                       <C>                                           <C>
    Leesburg Corner..............................         270                    -                      270
                                                     ------------           ------------           ------------
TOTAL NEW CENTER.................................         270                    -                      270

CENTERS EXPANDED:
    Woodbury Common..............................         145                    -                      145
    Wrentham Village.............................         126                    -                      126
    Camarillo....................................          45                    -                       45
    North Georgia................................          31                    -                       31
    Folsom.......................................          19                    -                       19
    Columbia Gorge...............................          16                    -                       16
    Other (net)..................................           2                    15                     (13)
                                                     ------------           ------------           ------------
TOTAL CENTERS EXPANDED...........................         384                    15                     369

CENTERS HELD FOR SALE/SOLD:
    Lawrence Riverfront..........................        (146)                   -                     (146)
    Solvang Designer Outlets.....................         (52)                   -                      (52)
                                                     ------------           ------------           ------------
TOTAL CENTERS HELD FOR SALE/SOLD                         (198)                  -                      (198)

NET GLA ADDED DURING THE PERIOD                           456                    15                     441

GLA AT END OF PERIOD.............................       4,891                 4,891                   4,876
---------------------------------------------------------------------------------------------------------------
</TABLE>

RESULTS OF OPERATIONS

COMPARISON OF THE THREE MONTHS ENDED MARCH 31, 1999 TO THE THREE MONTHS ENDED
MARCH 31, 1998.

Net income before minority interest increased $2.0 million to $10.0 million for
the three months ended March 31, 1999 from $8.0 million for the three months
ended March 31, 1998. Increases in revenues, primarily the result of expansions,
and a new center opening, were offset by higher interest on borrowings and
depreciation and amortization.

Base rentals increased $5.3 million, or 27.5%, to $24.6 million for the three
months ended March 31, 1999 from $19.3 million for the three months ended March
31, 1998 due to expansions, a new center opened, and higher average rents on new
leases and renewals.

Percentage rents increased $0.6 million to $2.4 million for the three months
ended March 31, 1999, from $1.8 million for the three months ended March 31,
1998. The increase was primarily due to the opening of one new center in 1998,
expansions, increased tenant sales and a higher 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 $1.4 million, or 20.5%, to $8.2 million for the
three months ended March 31, 1999 from $6.8 million for the three months ended
March 31, 1998, due to the recovery of operating and maintenance costs from
increased GLA. The average recovery of reimbursable expenses was 89.5% in the
first quarter of 1999, compared to 89.6% in the first quarter of 1998.

Other income increased $1.2 million to $1.8 million for the three months ended
March 31, 1999, from $0.6 million for the three months ended March 31, 1998. The
increase is primarily the result of income from the agreement not to compete
with the Mills Corporation in the Houston, Texas area.

Interest in excess of amounts capitalized increased $2.2 million to $6.3 million
for the three months ended March 31, 1999 from $4.1 million for the three months
ended March 31, 1998 primarily due to higher debt balances from increased GLA in
operation.

Operating and maintenance expenses increased $1.6 million, or 20.6%, to $9.2
million for the three months ended March 31, 1999 from $7.6 million for the
three months ended March 31, 1998. The increase was primarily due to costs
related to expansions and a new center opening.

Depreciation and amortization expense increased $2.6 million, or 36.4%, to $9.9
million for the three months ended March 31, 1999 from $7.3 million for the
three months ended March 31, 1998. The increase was due to depreciation of
expansions and a new center opening in 1998.

General and administrative expenses increased $0.2 million to $1.1 million for
the three months ended March 31, 1999 from $0.9 million for the three months
ended March 31, 1998 primarily due to increased personnel, overhead costs and
accrual for deferred compensation.

Other expenses decreased $0.2 million to $0.4 million for the three months ended
March 31, 1999 from $0.6 million for the three months ended March 31, 1998. The
decrease was primarily due to reduced legal expenses.

LIQUIDITY AND CAPITAL RESOURCES

The Operating Partnership believes it has adequate financial resources to fund
operating expenses, distributions, and planned development and construction
activities. Operating cash flow during 1999 is expected to increase with a full
year of operations of the 776,000 square feet of GLA added during 1998,
including the opening of Leesburg Corner Premium Outlets in October 1998, and
expansions of approximately 310,000 square feet in 1999. In addition, at March
31, 1999 the Operating Partnership had $70.0 million available under its Senior
Credit Facility, access to the public markets through shelf registrations
covering $200 million of equity and $175 million of debt, and cash equivalents
of $17.9 million.

Operating cash flow is expected to provide sufficient funds for distributions.
In addition, the Operating Partnership 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.

<PAGE>

Distributions declared and recorded during the three months ended March 31, 1999
were $13.7 million, or $0.72 per unit. The Operating Partnership's distribution
payout ratio as a percentage of net income before depreciation and amortization,
exclusive of amortization of deferred financing costs, minority interest and
extraordinary item ("FFO") was 74.1% during the three months ended March 31,
1999. 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.

On March 30, 1998, the OP replaced its two unsecured bank revolving lines of
credit, totaling $150 million (the "Credit Facilities"), with a new $160 million
senior unsecured bank line of credit (the "Senior Credit Facility"). The Senior
Credit Facility expires on March 30, 2001 and bears interest on the outstanding
balance, payable monthly, at a rate equal to the London Interbank Offered Rate
("LIBOR") plus 1.05% (6.05% at March 31, 1999) or the prime rate, at the OP's
option. The LIBOR spread ranges from 0.85% to 1.25% depending on the Operating
Partnership'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 OP has an annual right to request a
one-year extension of the Senior Credit Facility which may be granted at the
option of the lenders. Lenders representing 84% of the Senior Credit Facility
have agreed to extend the Facility until March 30, 2002.

Expansions totaling more than 300,000 square feet of GLA are currently under
construction and scheduled to open in 1999. These include the 120,000
square-foot third phase of Wrentham Village Premium Outlets (Wrentham,
Massachusetts); the 100,000 square-foot fourth phase of North Georgia Premium
Outlets (Dawsonville, Georgia); and the 90,000 square-foot second phase of
Leesburg Corner Premium Outlets. 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. Excluding joint venture projects with
Simon Property Group, Inc. ("Simon"), the Operating Partnership anticipates 1999
development and construction costs of $50 million to $60 million. Funding is
currently expected from borrowings under the Senior Credit Facility, additional
debt offerings, and/or equity offerings.

Construction is also underway on Orlando Premium Outlets ("OPO"), a 430,000
square-foot upscale outlet center located on Interstate 4 midway between Walt
Disney World/EPCOT and Sea World in Orlando, Florida. OPO is a joint venture
project between the Operating Partnership and Simon and is scheduled to open as
a single phase in mid-2000. In February 1999, the joint venture entered into a
$82.5 million construction loan agreement that is expected to fund approximately
75% of the costs of the project. The loan is 50% guaranteed by the Operating
Partnership and as of March 31, 1999, there were no amounts outstanding on the
loan. The balance of construction costs will be funded equally by the Operating
Partnership and Simon.

The Operating Partnership 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 Operating Partnership
will receive non-compete payments totaling $21.4 million from The Mills
Corporation; $3.0 million was received at closing, the first of four annual
installments of $4.6 million was received in January 1999 and the remaining
installments are to be received on each January 2, through 2002. The Operating
Partnership has also been reimbursed for its share of land costs, development
costs and fees related to the project.

The Operating Partnership has minority interests ranging from 5% to 15% in
several outlet centers and outlet development projects in Europe. Two outlet
centers, Bicester Village outside of London, England and La Roca Operating
Partnership Stores outside of Barcelona, 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 Operating Partnership's
total investment in Europe as of March 1999 are approximately $3.5 million. The
Operating Partnership has also agreed to provide up to $22 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 is three years and guarantees shall not be outstanding for longer than
five years after project completion. As of March 1999, the Operating Partnership
has provided limited debt service guaranties of approximately $14 million for
two projects.

During 1998, the Operating Partnership entered into a memorandum of
understanding (expiring in June 1999) with two partners to study the feasibility
of developing new outlet centers in Japan. The partners are currently
researching potential development sites and intend to organize a formal joint
venture when viable projects are located and approved. The Operating
Partnership's current financial commitment is not material.

To achieve planned growth and favorable returns in both the short and long term,
the Operating Partnership'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 Operating Partnership 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 $6.5 million for the three
months ended March 31, 1999 compared to the corresponding 1998 period, primarily
due to the growth of the Operating Partnership's GLA to 4.9 million square feet
in 1999 from 4.4 million square feet in 1998 and receipt of payment on a
non-compete receivable. Net cash used in investing activities decreased $10.1
million for the three months ended March 31, 1999 compared to the corresponding
1998 period, as a result of proceeds from sale of a center and receipt of
payment on a note receivable. At March 31, 1999, net cash provided by financing
activities decreased by $2.9 million primarily due to higher borrowings for
construction during the 1998 first quarter.

YEAR 2000 COMPLIANCE

The year 2000 ("Y2K") issue refers generally to computer applications using only
the last two digits to refer to a year rather than all four digits. As a result,
these applications could fail or create erroneous results if they recognize "00"
as the year 1900 rather than the year 2000. The Operating Partnership has taken
Y2K initiatives in three general areas which represent the areas that could have
an impact on the Operating Partnership: information technology systems,
non-information technology systems and third-party issues. The following is a
summary of these initiatives:

INFORMATION TECHNOLOGY: The Operating Partnership has focused its efforts on the
high-risk areas of the corporate office computer hardware, operating systems and
software applications. The Operating Partnership's assessment and testing of
existing equipment revealed that its hardware, network operating systems and
most of the software applications are Y2K compliant. The exception is the
DOS-based accounting systems which were upgraded and replaced at the beginning
of 1999 to make them compatible with Windows applications primarily used by the
Operating Partnership.

NON-INFORMATION TECHNOLOGY: Non-information technology consists mainly of
facilities management systems such as telephone, utility and security systems
for the corporate office and the outlet centers. The Operating Partnership has
reviewed the corporate facility management systems and made inquiry of the
building owner/manager and concluded that the corporate office building systems
including telephone, utilities, fire and security systems are Y2K compliant. The
Operating Partnership is in the process of identifying date-sensitive systems
and equipment including HVAC units, telephones, security systems and alarms,
fire and flood warning systems and general office systems at its outlet centers.
Assessment and testing of these systems is approximately 75% complete and
expected to be completed by June 30, 1999. Critical non-compliant systems will
be replaced when identified. Based on preliminary assessment, the cost of
replacement is not expected to be significant.

THIRD PARTIES: The Operating Partnership has third-party relationships with
approximately 400 tenants and 4,000 suppliers and contractors. Many of these
third parties are publicly-traded corporations and subject to disclosure
requirements. The Operating Partnership has begun assessment of major third
parties' Y2K readiness including tenants, key suppliers of outsourced services
including stock transfer, debt servicing, banking collection and disbursement,
payroll and benefits, while simultaneously responding to their inquiries
regarding the Operating Partnership's readiness. The majority of the Operating
Partnership's vendors are small suppliers that the Operating Partnership
believes can manually execute their business and are readily replaceable.
Management also believes there is no material risk of being unable to procure
necessary supplies and services. Third-party assessment is approximately 50%
complete and expected to be completed by June 30, 1999. The Operating
Partnership continues to monitor Y2K disclosures in SEC filings of
publicly-owned third parties.

COSTS: The accounting software upgrade and conversion is being executed under
maintenance and support agreements with software vendors. The total cost of the
accounting conversion which the Operating Partnership had previously commenced
during the 1998 third quarter is estimated at approximately $200,000 including
the Y2K portion of the conversion that cannot be readily identified and is not
material to the operating results or financial position of the Operating
Partnership.

The identification and remediation of systems at the outlet centers is being
accomplished by in-house business systems personnel and outlet center general
managers whose costs are recorded as normal operating expense. The assessment of
third-party readiness is also being conducted by in-house personnel whose costs
are recorded as normal operating expenses. The Operating Partnership is not yet
in a position to estimate the cost of third-party compliance issues, but has no
reason to believe, based upon its evaluations to date, that such costs will
exceed $100,000.

RISKS: The principal risks to the Operating Partnership relating to the
completion of its accounting software conversion is failure to correctly bill
tenants by December 31, 1999 and to pay invoices when due. Management believes
it has adequate resources, or could obtain the needed resources, to manually
bill tenants and pay bills until the systems became operational.

The principal risks to the Operating Partnership relating to non-information
systems at the outlet centers are failure to identify time-sensitive systems and
inability to find a suitable replacement system. The Operating Partnership
believes that adequate replacement components or new systems are available at
reasonable prices and are in good supply. The Operating Partnership also
believes that adequate time and resources are available to remediate these areas
as needed.

The principal risks to the Operating Partnership in its relationships with third
parties are the failure of third-party systems used to conduct business such as
tenants being unable to stock stores with merchandise, use cash registers and
pay invoices; banks being unable to process receipts and disbursements; vendors
being unable to supply needed materials and services to the centers; and
processing of outsourced employee payroll. Based on Y2K compliance work done to
date, the Operating Partnership has no reason to believe that key tenants, banks
and suppliers will not be Y2K compliant in all material respects or can not be
replaced within an acceptable timeframe. The Operating Partnership will attempt
to obtain compliance certification from suppliers of key services as soon as
such certifications are available.

CONTINGENCY PLANS: The Operating Partnership intends to deal with contingency
planning during 1999 as results of the above assessments are known.

<PAGE>

The Operating Partnership's description of its Y2K compliance issue is based
upon information obtained by management through evaluations of internal business
systems and from tenant and vendor compliance efforts. No assurance can be given
that the Operating Partnership will be able to address the Y2K issues for all
its systems in a timely manner or that it will not encounter unexpected
difficulties or significant expenses relating to adequately addressing the Y2K
issue. If the Operating Partnership or the major tenants or vendors with whom
the Operating Partnership does business fail to address their major Y2K issues,
the Operating Partnership's operating results or financial position could be
materially adversely affected.

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 Operating Partnership. Management considers FFO an
appropriate measure of performance for an equity real estate investment trust.
FFO, as defined by the National Association of Real Estate Investment Trusts
("NAREIT"), is net income applicable to common shareholders (computed in
accordance with generally accepted accounting principles), excluding gains (or
losses) from debt restructuring and sales or writedowns of property, exclusive
of outparcel sales, plus real estate related depreciation and amortization, and
after adjustments for unconsolidated partnerships and joint ventures.
Adjustments for unconsolidated partnerships and joint ventures are calculated to
reflect FFO on the same basis. FFO does not represent net income or cash flow
from operations as defined by generally accepted accounting principles and
should not be considered an alternative to net income as an indicator of
operating performance or to cash from operations, and is not necessarily
indicative of cash flow available to fund cash needs.

                                                Three Months Ended March 31,
                                                   1999                 1998
                                               -----------------    -----------

    Net income to common unitholders.............   $9,001              $6,952
    Add back:                                                  
    Depreciation and amortization ...............    9,924               7,278
    Amortization of deferred financing costs and                       
      depreciation of non-real estate assets.....     (435)               (400)
                                                  ----------        -----------
    FFO..........................................  $18,490             $13,830
                                                  ==========        ===========

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Operating Partnership is exposed to changes in interest rates primarily from
its floating rate debt arrangements. The Operating Partnership currently does
not use interest rate derivative instruments to manage exposure to interest rate
changes. A hypothetical 100 basis-point adverse move (increase) in interest
rates along the entire rate curve would adversely affect the Operating
Partnership's annual interest cost by approximately $1.2 million annually.

<PAGE>

                      CHELSEA GCA REALTY PARTNERSHIP, L.P.

PART II.   OTHER INFORMATION

ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K

The Operating Partnership did not file any reports on Form 8-K during the three
months ended March 31, 1999.

<PAGE>

                      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:  CHELSEA GCA REALTY, INC.
                                        Its General Partner


                                 By: /S/ MICHAEL J. CLARKE
                                    ----------------------------
                                    Michael J. Clarke
                                    Chief Financial Officer

Date:  May 11, 1999