FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


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

                For the quarterly period ended September 30, 1998

                                       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 Numbers:
                                   33-99736-01
                                   333-3526-01
                                  333-39365-01

                      TANGER PROPERTIES LIMITED PARTNERSHIP
             (Exact name of Registrant as specified in its Charter)

      NORTH CAROLINA                                             56-1822494
(State or other jurisdiction                                  (I.R.S. Employer
of incorporation or organization)                            Identification No.)

          1400 West Northwood Street, Greensboro, North Carolina 27408
                    (Address of principal executive offices)
                                   (Zip code)

                                 (336) 274-1666
              (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 [ ]

<PAGE>
                     TANGER PROPERTIES LIMITED PARTNERSHIP

                                     Index

                         Part I. Financial Information

                                                                     Page Number
Item 1.  Financial Statements (Unaudited)

        Statements of Operations
           For the three and nine months ended September 30, 1998 and 1997     3

        Balance Sheets
           As of September 30, 1998 and December 31, 1997                      4
                                                                         
        Statements of Cash Flows                                         
           For the nine months ended September 30, 1998 and 1997               5
                                                                         
        Notes to Financial Statements                                          6
                                                                         
Item 2.  Management's Discussion and Analysis of Financial               
             Condition and Results of Operations                               8
                                                                         
                                                                         
                                                                         
                          Part II. Other Information                     
                                                                         
Item 1.  Legal proceedings                                                    17
                                                                         
Item 6.  Exhibits and Reports on Form 8-K                                     17
                                                                         
Signatures                                                                    17


                                       2
<PAGE>

                      TANGER PROPERTIES LIMITED PARTNERSHIP
                            STATEMENTS OF OPERATIONS
                      (In thousands, except per unit data)



                                         Three Months Ended    Nine Months Ended
                                            September 30,        September 30,

                                            1998     1997        1998     1997
                                         ---------------------------------------
                                           (Unaudited)          (Unaudited)

REVENUES                                                                       

   Base rentals                          $16,771  $14,404     $48,895  $41,362
   Percentage rentals                        803      779       1,678    1,482
   Expense reimbursements                  6,957    6,200      20,442   17,799
   Other income                              536      274       1,208      695
                                         ---------------------------------------
        Total revenues                    25,067   21,657      72,223   61,338
                                         ---------------------------------------
EXPENSES                                                                       

   Property operating                      7,981    6,584      22,030   18,732
   General and administrative              1,627    1,500       4,966    4,528
   Interest                                5,840    4,414      16,065   12,193
   Depreciation and amortization           5,728    4,790      16,407   13,694
                                         ---------------------------------------
        Total expenses                    21,176   17,288      59,468   49,147
                                         ---------------------------------------
Income before gain on sale of real                           
estate and extraordinary item              3,891    4,369      12,755   12,191
Gain on sale of real estate                  ---      ---         994      ---
                                         ---------------------------------------
Income before extraordinary item           3,891    4,369      13,749   12,191
Extraordinary item - Loss on early                           
extinguishment                                               
   of debt                                   ---      ---       (460)      ---
                                         ---------------------------------------
Net income                                 3,891    4,369      13,289   12,191
Income allocated to the limited partner    (946)  (1,207)     (3,296)  (3,357)
                                         ---------------------------------------
Income allocated to the general partner   $2,945   $3,162      $9,993   $8,834
                                         =======================================
Basic earnings per unit                                                        

   Income before extraordinary item         $.31     $.40       $1.13    $1.11
   Extraordinary item                        ---      ---       (.04)      ---
                                         ---------------------------------------
   Net income                               $.31     $.40       $1.09     1.11
                                         =======================================
Diluted earnings per unit                                                      

   Income before extraordinary item         $.31     $.39       $1.11    $1.10
   Extraordinary item                        ---      ---       (.05)      ---
                                         ---------------------------------------
   Net income                               $.31     $.39       $1.06    $1.10
                                         =======================================

Distributions paid per unit                 $.60     $.55       $1.75    $1.62
                                         =======================================

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


                                       3
<PAGE>

                      TANGER PROPERTIES LIMITED PARTNERSHIP
                                 BALANCE SHEETS
                        (In thousands, except unit data)

                                                     September 30,  December 31,
                                                          1998        1997
                                                     ---------------------------
                                                       (Unaudited)             
ASSETS                                                                         
   Rental property                                                             
        Land                                               $53,869     $48,059
        Buildings, improvements and fixtures               456,510     379,842
        Developments under construction                      9,299      26,807
                                                     ---------------------------
                                                           519,678     454,708
        Accumulated depreciation                          (79,282)    (64,177)
                                                     ---------------------------
             Rental property, net                          440,396     390,531
   Cash and cash equivalents                                 2,654       3,607
   Deferred charges, net                                     8,765       8,651
   Other assets                                             12,016      12,789
                                                     ---------------------------
        Total assets                                      $463,831    $415,578
                                                     ===========================

LIABILITIES AND PARTNERS' EQUITY                                               
Liabilities                                                                    
   Long-term debt                                                              
        Senior, unsecured notes                           $150,000    $150,000
        Mortgages payable                                   73,116      74,050
        Lines of credit                                     65,330       5,000
                                                     ---------------------------
                                                           288,446     229,050
   Construction trade payables                               8,649      12,913
   Accounts payable and accrued expenses                    12,485      13,090
                                                     ---------------------------
        Total liabilities                                  309,580     255,053
                                                     ---------------------------
Commitments                                                                    
Partners' equity                                                               
   General partner                                         132,339     136,649
   Limited partner                                          21,912      23,876
                                                     ---------------------------
        Total partners' equity                             154,251     160,525
                                                     ---------------------------
             Total liabilities and partners' equity       $463,831    $415,578
                                                     ===========================

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


                                       4
<PAGE>

                      TANGER PROPERTIES LIMITED PARTNERSHIP
                            STATEMENTS OF CASH FLOWS
                                 (In thousands)


                                                           Nine Months Ended
                                                             September 30,

                                                           1998       1997
                                                              (Unaudited)
OPERATING ACTIVITIES                                                           
   Net income                                             $13,289      $12,191
   Adjustments to reconcile net income to net cash                             
provided by operating activities:                   
      Depreciation and amortization                        16,407       13,694
      Amortization of deferred financing costs                810          780
      Loss on early extinguishment of debt                    460          ---
      Gain on sale of real of estate                         (994)         ---
      Straight-line base rent adjustment                     (573)        (328)
      Compensation under Unit Option Plan                     177          253
   Increase (decrease) due to changes in:                                      
      Other assets                                            931          383
      Accounts payable and accrued expenses                  (605)      (1,612)
                                                     ---------------------------
           Net cash provided by operating activities       29,902       25,361
                                                     ---------------------------
INVESTING ACTIVITIES                                                           
   Acquisition of rental properties                       (44,650)     (37,500)
   Additions to rental properties                         (26,267)     (36,231)
   Additions to deferred lease costs                       (1,891)      (1,489)
   Net proceeds from sale of real estate                    2,561          ---
                                                     ---------------------------
           Net cash used in investing activities          (70,247)     (75,220)
                                                     ---------------------------
FINANCING ACTIVITIES                                                           
   Contributions from general partner                         ---       27,038
   Cash distributions paid                                (20,502)     (17,163)
   Repayments on notes payable                               (934)        (856)
   Proceeds from revolving lines of credit                112,945      107,050
   Repayments on revolving lines of credit                (52,615)     (65,800)
   Additions to deferred financing costs                     (264)        (102)
   Proceeds from exercise of unit options                     762          483
                                                     ---------------------------
           Net cash provided by financing activities       39,392       50,650
                                                     ---------------------------
Net increase (decrease) in cash and cash equivalents         (953)         791
Cash and cash equivalents, beginning of period              3,607        2,567
                                                     ---------------------------
Cash and cash equivalents, end of period                   $2,654       $3,358
                                                     ===========================

Supplemental schedule of non-cash investing activities:
     The Operating Partnership purchases capital equipment and incurs costs
relating to construction of new facilities, including tenant finishing
allowances. Expenditures included in construction trade payables as of September
30, 1998 and 1997 amounted to $8,649 and $19,160, respectively.

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


                                       5
<PAGE>

                     TANGER PROPERTIES LIMITED PARTNERSHIP
                         NOTES TO FINANCIAL STATEMENTS
                              September 30, 1998
               (In thousands, except per unit and square feet data)
                                  (Unaudited)

1. Interim Financial Statements

   The unaudited Financial Statements of Tanger Properties Limited Partnership,
   a North Carolina limited partnership (the "Operating Partnership"), have been
   prepared pursuant to generally accepted accounting principles and should be
   read in conjunction with the Financial Statements and Notes thereto of the
   Operating Partnership's Annual Report on Form 10-K for the year ended
   December 31, 1997. Certain information and note disclosures normally included
   in financial statements prepared in accordance with generally accepted
   accounting principles have been condensed or omitted pursuant to the
   Securities and Exchange Commission's ("SEC") rules and regulations, although
   management believes that the disclosures are adequate to make the information
   presented not misleading.

   The accompanying Financial Statements reflect, in the opinion of management,
   all adjustments necessary for a fair presentation of the interim financial
   statements. All such adjustments are of a normal and recurring nature.

2. Acquisitions, Dispositions and Development of Rental Properties

   On July 31, 1998, the Operating Partnership completed the acquisition of
   Sanibel Factory Stores, a factory outlet center on the Gulf coast of Florida
   between Fort Myers and Sanibel Island containing approximately 186,000 square
   feet, for a purchase price of $27,650. On March 31, 1998, the Operating
   Partnership completed the acquisition of Dalton Factory Stores, a factory
   outlet center in Dalton, GA containing approximately 173,000 square feet, for
   an aggregate purchase price of $17,000. The acquisitions were accounted for
   using the purchase method whereby the purchase price is allocated to assets
   acquired based on their fair values. The results of operations of the
   acquired properties have been included in the results of operations since the
   respective acquisition dates.

   During the first nine months, the Operating Partnership completed the sale of
   its 8,000 square foot, single tenant property in Manchester, VT for $1,850
   and the sale of three outparcels at other centers for sales prices
   aggregating $940. As a result of these dispositions, the Operating
   Partnership recognized a gain on sale of real estate of $994 for the nine
   months ended September 30, 1998.

   During the first nine months, the Operating Partnership completed the
   construction and opened approximately 130,600 square feet in expansions which
   were significantly underway at December 31, 1997. In addition, the Operating
   Partnership substantially completed construction and opened 20,000 square
   feet of a 25,000 square foot expansion to its property in Branson, MO and
   construction has begun on additional expansions in Sevierville, TN (96,000
   square feet) and Riverhead, NY (67,000 square feet). Commitments to complete
   construction of the expansions to the existing properties and other capital
   expenditure requirements amounted to approximately $4,800 at September 30,
   1998. Commitments for construction represent only those costs contractually
   required to be paid by the Operating Partnership.


                                       6
<PAGE>

      Interest costs capitalized during the three months ended September 30,
      1998 and 1997 amounted to $113 and $399, respectively, and during the nine
      months ended September 30, 1998 and 1997 amounted to $512 and $1,451,
      respectively.

3.    Long-Term Debt

      During the first nine months, the Operating Partnership amended certain of
      its unsecured lines of credit to increase the maximum borrowing capacity
      by an aggregate amount of $25,000. In addition, the Operating Partnership
      terminated its $50,000 secured line of credit and expensed the related
      unamortized deferred financing costs, recognizing an extraordinary loss of
      $460 in the accompanying statements of operations.

      At September 30, 1998, the Operating Partnership had revolving lines of
      credit with an unsecured borrowing capacity of $100,000, of which $34,670
      was available for additional borrowings.

      In October 1998, the Operating Partnership entered into an interest rate
      swap effective through October 2001 with a notional amount of $20,000
      which fixed the 30 day LIBOR index at 5.47%.

4.    Income Per Unit

      The following table sets forth a reconciliation of the numerators and
      denominators in computing earnings per unit in accordance with Statement
      of Financial Accounting Standards No. 128, which the Operating Partnership
      adopted in its financial statements for the year ended December 31, 1997.
<TABLE>
<CAPTION>
                                                           Three Months Ended       Nine Months Ended
                                                              September 30,            September 30,
<S>                                                       <C>         <C>         <C>         <C>     
                                                           1998     1997            1998     1997
                                                           -----------------------------------------
   Basic earnings per unit                                                                    
   Income before extraordinary item                       $  3,891    $  4,369    $ 13,749    $ 12,191
   Less: Preferred Unit distributions                         (481)       (450)     (1,433)     (1,358)
                                                          --------------------------------------------
   Income available to the general and limited partners   $  3,410    $  3,919    $ 12,316    $ 10,833
   Weighted average partnershipUnits                        10,934       9,852      10,914       9,789
                                                          --------------------------------------------
        Basic earnings per unit                           $    .31    $    .40    $   1.13    $   1.11
                                                          ============================================
Diluted earnings per share

   Income before extraordinary item                       $  3,891    $  4,369    $ 13,749    $ 12,191
   Less: Preferred Unit distributions                         (481)       (450)     (1,433)     (1,358)
                                                          --------------------------------------------
   Income available to the general and limited partners   $  3,410    $  3,919    $ 12,316    $ 10,833
                                                          --------------------------------------------
   Units:
        Weighted average partnership Units                  10,934       9,852      10,914       9,789
        Effect of outstanding unit options                     116         144         160          93
                                                          --------------------------------------------
        Weighted average partnership Units plus
            assumed conversions                             11,050       9,996      11,074       9,882
                                                          --------------------------------------------
        Diluted earnings per unit                         $    .31    $    .39    $   1.11    $   1.10
                                                          ============================================
</TABLE>

                                       7
<PAGE>

     Options to purchase Units which were excluded from the computation of
     diluted earnings per unit because the exercise price was greater than the
     average market price, which is assumed to be equivalent to the price of the
     Common Shares of the general partner, totaled 248 and 246 for the three and
     nine months ended September 30, 1998. No options to purchase partnership
     Units were excluded from the computation of diluted earnings per unit for
     the three and nine months ended September 30, 1997. The assumed conversion
     of the Preferred Units as of the beginning of the year would have been
     anti-dilutive.

     At September 30, 1998 and December 31, 1997, the ownership interests of the
     Operating Partnership consisted of the following:


                                                   September 30,    December 31,
                                                       1998           1997
                                                     ------------------------
      Preferred Units, held by the general partner       89           91
                                                     ========================
      Partnership Units:                                           
         General partner                              7,903        7,854
         Limited partner                              3,033        3,033
                                                     ------------------------
            Total                                    10,936       10,887
                                                     ========================

5.      Partners' Equity

     On October 13, 1998, the Board of Directors of the general partner
     authorized the repurchase of up to $5 million of the general partner's
     common shares. The timing and amount of purchases will be at the discretion
     of the general partner's management. Proceeds for such purchases will be
     funded by the Operating Partnership in exchange for a number of partnership
     units held by the general partner equivalent to the number of common shares
     purchased.

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

CAUTIONARY STATEMENTS

Certain statements contained in the discussion below, including, without
limitation, statements containing the words "believes," "anticipates,"
"expects," and words of similar import, constitute "forward-looking statements"
within the meaning of the Private Securities Reform Act of 1995. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors that may cause the actual results, performance or achievements of
the Operating Partnership, or industry results, to be materially different from
any future results, performance or achievements expressed or implied by such
forward-looking statements. Such factors include, among others, the following:
the effects of future events on the Operating Partnership's financial
performance; the risk that the Operating Partnership may not be able to finance
its planned development, acquisition and expansion activities; risks related to
the retail industry in which the Operating Partnership's outlet centers compete,
including the potential adverse impact of external factors such as inflation,
tenant demand for space, consumer confidence, unemployment rates and consumer
tastes and preferences; risks associated with the Operating Partnership's
development, acquisition and expansion activities, such as the potential for
cost overruns, delays and lack of predictability with respect to the financial
returns associated with these development activities; the risk of potential
increase in market interest rates from current rates; risks associated with real
estate ownership, such as the potential adverse impact of changes in the local
economic climate on the revenues and the value of the Operating Partnership's
properties; and the risks that a significant number of tenants may become unable
to meet their lease obligations or that the Operating Partnership may be unable
to renew or re-lease a significant amount of available space on economically

                                       8
<PAGE>

favorable terms. Given these uncertainties, current and prospective investors
are cautioned not to place undue reliance on such forward-looking statements.
The Operating Partnership disclaims any obligation to update any such factors or
to publicly announce the result of any revisions to any of the forward-looking
statements contained herein to reflect future events or developments.

OVERVIEW

The discussion and analysis of the financial condition and results of operations
should be read in conjunction with the Financial Statements and Notes thereto.
Historical results and percentage relationships set forth in the Statements of
Operations, including trends which might appear, are not necessarily indicative
of future operations.

The discussion of the Operating Partnership's results of operations reported in
the Statements of Operations compares the three and nine months ended September
30, 1998 with the three and nine months ended September 30, 1997. Certain
comparisons between the periods are also made on a percentage basis as well as
on a weighted average gross leasable area ("GLA") basis, a technique which
adjusts for certain increases or decreases in the number of centers and
corresponding square feet related to the development, acquisition, expansion or
disposition of rental properties. The computation of weighted average GLA,
however, does not adjust for fluctuations in occupancy which may occur
subsequent to the original opening date.

The Operating Partnership continues to grow principally through acquisitions and
expansions of existing factory outlet centers. On July 31, 1998, the Operating
Partnership completed the acquisition of Sanibel Factory Stores, a factory
outlet center on the Gulf coast of Florida between Fort Myers and Sanibel Island
containing approximately 186,000 square feet, for a purchase price of $27.65
million. On March 31, 1998, the Operating Partnership completed the acquisition
of Dalton Factory Stores, a factory outlet center in Dalton, GA containing
approximately 173,000 square feet, for an aggregate purchase price of $17.0
million. On March 31, 1998, the Operating Partnership also completed the sale of
its 8,000 square foot, single tenant property in Manchester, VT for $1.85
million.

During the first nine months, the Operating Partnership completed the
construction and opened approximately 130,600 square feet in expansions which
were significantly underway at December 31, 1997. In addition, the Operating
Partnership substantially completed construction and opened 20,000 square feet
of a 25,000 square foot expansion to its property in Branson, MO and
construction has begun on additional expansions in Sevierville, TN (96,000
square feet) and Riverhead, NY (67,000 square feet).


                                       9
<PAGE>

A summary of the operating results for three and nine months ended September 30,
1998 and 1997, calculated on a weighted average GLA basis, is presented in the
following table.
<TABLE>
<CAPTION>
                                             Three Months Ended       Nine Months Ended
                                               September 30,            September 30,
                                               1998     1997          1998        1997
                                             ------------------------------------------
<S>                  <C>                      <C>      <C>            <C>         <C>  
GLA at end of period (000's)                  4,954    4,289          4,954       4,289
Weighted Average GLA(a) (000's)               4,869    4,079          4,700       3,928
Outlet centers in operation                      31       30             31          30
New centers acquired                              1        2              2           3
Centers sold                                    ---      ---              1         ---
Centers expanded                                  1        1              1           2
States operated in at end of period              23       23             23          23
                                             
     Per square foot                                                                    
Revenues                                                                                
     Base rentals                             $3.44    $3.53         $10.40      $10.53
     Percentage rentals                         .16      .19            .36         .38
     Expense reimbursements                    1.43     1.52           4.35        4.53
     Other income                               .11      .07            .26         .18
                                             ------------------------------------------
          Total revenue                        5.14     5.31          15.37       15.62
                                             ------------------------------------------
Expenses                                                                                
     Property operating                        1.64     1.61           4.69        4.77
     General and administrative                 .33      .37           1.06        1.15
     Interest                                  1.20     1.08           3.42        3.10
     Depreciation and amortization             1.18     1.17           3.49        3.49
                                             ------------------------------------------
          Total expenses                       4.35     4.23          12.66       12.51
                                             ------------------------------------------
Income before gain on sale of real estate                                                      
   and extraordinary item                     $ .79    $1.08          $2.71       $3.11
                                             ==========================================
</TABLE>

  (a) GLA weighted by months of operations. GLA is not adjusted for fluctuations
      in occupancy which may occur subsequent to the original opening date.


RESULTS OF OPERATIONS

Comparison of the three months ended September 30, 1998 to the three months
ended September 30, 1997

Base rentals increased $2.4 million, or 16%, in the 1998 period when compared to
the same period in 1997 primarily as a result of a 19% increase in weighted
average GLA. The increase in weighted average GLA is due to the acquisitions in
October 1997 (180,000 square feet), March 1998 (173,000 square feet), and July
1998 (186,000 square feet) as well as expansions completed in the fourth quarter
of 1997 and first quarter 1998. The decrease in base rentals per weighted
average GLA of $.09 in the three months ended September 30, 1998 compared to the
same period in 1997 reflects the impact of these acquisitions, which
collectively have 


                                       10
<PAGE>

a lower average base rental rate per square foot, as well as a decrease in the
occupancy rate from 98% at September 30, 1997 to 95% at September 30, 1998. Base
rentals per weighted average GLA, excluding these acquisitions, during the 1998
period decreased $.06 per foot to $3.47.

Percentage rentals, which represent revenues based on a percentage of tenants'
sales volume above predetermined levels (the "breakpoint"), increased $24,000,
or 3%, due primarily to the expansions and acquisitions completed in 1997. On a
weighted average GLA basis, percentage rentals decreased $.03 per square foot
primarily as a result of the dilutive effect of the increase in additional
square footage associated with the 1998 acquisitions, without a corresponding
increase in percentage rentals.

Expense reimbursements, which represent the contractual recovery from tenants of
certain common area maintenance, insurance, property tax, promotional,
advertising and management expenses generally fluctuates consistently with the
reimbursable property operating expenses to which it relates. Expense
reimbursements, expressed as a percentage of property operating expenses,
decreased from 94% in the 1997 period to 87% in the 1998 period primarily as a
result of the decrease in occupancy rates and an increase in expenses incurred
from 1997 to 1998 of $.03 per square foot.

Property operating expenses increased by $1.4 million, or 21%, in the 1998
period as compared to the 1997 period. On a weighted average GLA basis, property
operating expenses increased $.03 per square foot, or 2%, from $1.61 to $1.64.
The increase in somewhat offset by the impact of the acquisitions, which
collectively have a lower average operating cost per foot. Property operating
expenses per weighted average GLA, excluding the acquisitions, increased $.06
per foot to $1.67, due primarily to an increase in expenses for advertising and
promotion incurred in the 1998 period compared to the 1997 period.

General and administrative expenses increased $127,000, or 8%, in the 1998
quarter as compared to the 1997 quarter. As a percentage of revenues, general
and administrative expenses decreased in the 1998 period compared to the 1997
period from 6.9% to 6.5%, and on a weighted average GLA basis, decreased $.04
per square foot to $.33 in 1998.

Interest expense increased $1.4 million during the 1998 period as compared to
the 1997 period due to higher average borrowings outstanding during the period
and due to less interest capitalized during the 1998 period as a result of a
decrease in ongoing construction activity relative to the 1997 period. Average
borrowings have increased principally to finance the acquisitions and expansions
to existing centers (see "Overview" above). Depreciation and amortization per
weighted average GLA increased $.01 per square foot to $1.18 per square foot
during the 1998 period compared to the 1997 period.

Comparison of the nine months ended September 30, 1998 to the nine months ended
September 30, 1997

Base rentals increased $7.5 million, or 18%, in the 1998 period when compared to
the same period in 1997 primarily as a result of a 20% increase in weighted
average GLA. The increase in weighted average GLA is due to the acquisitions in
February 1997 (approximately 123,000 square feet), October 1997 (180,000 square
feet), March 1998 (173,000 square feet), and July 1998 (186,000 square feet), as
well as expansions completed in the fourth quarter of 1997 and first quarter
1998. The decrease in base rentals per weighted average GLA of $.13 in the first
nine months of 1998 compared to the same period in 1997 reflects the impact of
these acquisitions, which collectively have a lower average base rental rate per
square foot, as well as a decrease in the occupancy rate from 98% at September
30, 1997 to 95% at September 30, 1998. Base rentals per weighted average GLA,
excluding these acquisitions, during the 1998 period decreased $.06 per square
foot to $10.47.


                                       11
<PAGE>

Percentage rentals increased $196,000, or 13%, due to the acquisitions and
expansions completed in 1997. On a weighted average GLA basis, percentage
rentals decreased slightly from $.38 to $.36 per square foot. For the nine
months ended September 30, 1998, reported same-store sales, defined as the
weighted average sales per square foot reported by tenants for stores open since
January 1,1997, decreased 2% compared with the same period in 1997. Total tenant
sales for all centers increased approximately 20% for the first nine months in
1998 to $770 million compared to $642 million for the same period in 1997.

Expense reimbursements, which represent the contractual recovery from tenants of
certain common area maintenance, insurance, property tax, promotional,
advertising and management expenses generally fluctuates consistently with the
reimbursable property operating expenses to which it relates. Expense
reimbursements, expressed as a percentage of property operating expenses,
decreased from 95% in the 1997 period to 93% in the 1998 period primarily as a
result of the decrease in occupancy.

Property operating expenses increased by $3.3 million, or 18%, in the 1998
period as compared to the 1997 period but, on a weighted average GLA basis,
decreased $.08 per square foot from $4.77 to $4.69. The decrease reflects the
impact of the acquisitions, which collectively have a lower average operating
cost per foot. Property operating expenses per weighted average GLA, excluding
the acquisitions, decreased $.01 per foot to $4.76.

General and administrative expenses increased $438,000, or 10%, in the 1998
quarter as compared to the 1997 quarter. As a percentage of revenues, general
and administrative expenses decreased from approximately 7.4% of revenues in the
1997 period to 6.9% in the 1998 period and, on a weighted average GLA basis,
decreased $.09 per square foot to $1.06 in 1998.

Interest expense increased $3.9 million during the 1998 period as compared to
the 1997 period due to higher average borrowings outstanding during the period
and due to less interest capitalized during the 1998 period as a result of a
decrease in ongoing construction activity relative to the 1997 period. Average
borrowings have increased principally to finance the acquisitions and expansions
to existing centers (see "Overview" above). Depreciation and amortization per
weighted average GLA remained level in the 1998 period when compared with the
1997 period at $3.49 per square foot.

The gain on sale of real estate for the nine months ended September 30, 1998
represents the sale of an 8,000 square foot, single tenant property in
Manchester, VT for $1.85 million and the sale of three outparcels at other
centers for sales prices aggregating $940,000.

The extraordinary loss for the nine months ended September 30, 1998 represents a
write-off of the unamortized deferred financing costs due to the termination of
a $50 million secured line of credit.

LIQUIDITY AND CAPITAL RESOURCES

Net cash provided by operating activities was $29.9 and $25.3 million for the
nine months ended September 30, 1998 and 1997, respectively. Net cash used in
investing activities amounted to $70.2 and $75.2 million during the first nine
months of 1998 and 1997, respectively, reflecting lower levels of construction
activity in the 1998 period compared to the 1997 period. The net decrease in the
1998 period is also attributable to the proceeds received from the sale of one
factory outlet center and three outparcels located at other existing centers.
Net cash from financing activities amounted to $39.4 and $50.7 million during
the first nine months of 1998 and 1997, respectively, and has decreased
consistently with the capital needs of the current acquisition and expansion
activity. The net decrease of $11.3 million in the 1998 period compared with the
1997 period also reflects additional partnership distributions paid as a result
of additional partnership Units outstanding and


                                       12
<PAGE>

a $.13 per unit increase in the year-to-date partnership distributions.

During the first nine months, the Operating Partnership completed the
construction and opened approximately 130,600 square feet in expansions which
were significantly underway at December 31, 1997. In addition, the Operating
Partnership substantially completed construction of an expansion to its property
in Branson, MO (25,000 square feet) and construction has begun on additional
expansions in Sevierville, TN (96,000 square feet) and Riverhead, NY (67,000
square feet). Commitments to complete construction of the expansions to the
existing properties and other capital expenditure requirements amounted to
approximately $4,800 at September 30, 1998. Commitments for construction
represent only those costs contractually required to be paid by the Operating
Partnership.

In September 1998, the Operating Partnership sold its interest, approximately 35
acres, in a planned site in Concord, North Carolina due to the project not
meeting the Operating Partnership's investment criteria. The net proceeds from
the sale approximated the asset's carrying cost at the time of sale.

The Operating Partnership is in the process of developing plans for additional
expansions and new centers for completion in 1999 and beyond and will consider
other acquisitions that are suitable for its portfolio. The Operating
Partnership is continuing the preleasing of a planned site located in Romulus,
Michigan (Detroit). However, there can be no assurance that any of these
anticipated or planned developments or expansions will be started or completed
as scheduled, or that any development or expansion will result in accretive
funds from operations. In addition, the Operating Partnership regularly
evaluates acquisition proposals, engages from time to time in negotiations for
acquisitions and may from time to time enter into letters of intent for the
purchase of properties. No assurance can be given that any of the prospective
acquisitions that are being evaluated or which are subject to a letter of intent
will be consummated, or if consummated, will result in accretive funds from
operations.

Management intends to continually have access to the capital resources necessary
to expand and develop its business and, accordingly, may seek to obtain
additional funds through equity offerings or debt financing. The Operating
Partnership, together with the general partner, have an active shelf
registration with the SEC providing for the issuance of up to $100 million in
additional equity securities and $100 million in additional debt securities. In
addition, the Operating Partnership maintains revolving lines of credit which
provide for unsecured borrowings of up to $100 million, of which $34.67 million
was available for additional borrowings as of September 30, 1998. Based on
existing credit facilities, ongoing negotiations with certain financial
institutions and funds available under the shelf registration, management
believes that the Operating Partnership has access to the necessary financing to
fund the planned remaining capital expenditures during 1999.

During the first nine months of 1998, the Operating Partnership terminated a $50
million secured line of credit and increased the unsecured lines of credit by
$25 million. At September 30, 1998, approximately 75% of the outstanding
long-term debt represented unsecured borrowings and approximately 79% of the
Operating Partnership's real estate portfolio was unencumbered. The weighted
average interest rate on debt outstanding on September 30, 1998 was 8.2%.

The Operating Partnership anticipates that adequate cash will be available to
fund its operating and administrative expenses, regular debt service
obligations, and the payment of distributions in accordance with REIT
requirements in both the short and long term. Although the Operating Partnership
receives most of its rental payments on a monthly basis, distributions to
unitholders are made quarterly and interest payments on the senior, unsecured
notes are made semi-annually. Amounts accumulated for such payments will be used
in the interim to reduce the outstanding borrowings under the existing lines of
credit or invested in short-term money market or other suitable instruments.
Certain of the Operating Partnership's debt agreements or 


                                       13
<PAGE>

instruments limit the payment of distributions such that distributions will not
exceed funds from operations ("FFO"), as defined in the agreements, on an annual
basis or 95% of FFO on a cumulative basis from the date of the agreement.

On October 8, 1998, the Board of Directors of the general partner declared a
$.60 cash distribution per partnership Unit payable on November 16, 1998 to each
unitholder of record on October 30, 1998. The Board of Directors of the general
partner also declared a cash distribution of $.5406 per preferred Unit payable
on November 16, 1998 to each preferred unitholder of record on October 30, 1998.

NEW ACCOUNTING PRONOUNCEMENTS

In June 1997, the Financial Accounting Standards Board ("FASB") issued SFAS No.
131, "Disclosures about Segments of an Enterprise and Related Information."
SFAS No. 131 requires public business enterprises to adopt its provisions for
fiscal years beginning after December 15, 1997, and to report certain
information about operating segments in complete sets of financial statements of
the enterprise issued to unitholders. Segment disclosures will also be required
in interim financial statements beginning in the second year of application. The
Operating Partnership does not believe the provisions of SFAS No. 131 will have
a significant impact to the financial statements.

In May 1998, the Emerging Issues Task Force of the FASB reached a consensus on
Issue 98-9, "Accounting for Contingent Rent in Interim Financial Periods". The
consensus states that a lessor should defer recognition of contingent rental
income until specified targets that trigger the contingent rent are met. Since
the Operating Partnership is currently, and has historically, followed this
practice when recognizing percentage rental income, the adoption of this
consensus did not have any impact on the Operating Partnership's current
accounting practices.

On June 15, 1998, the FASB issued Statement of Financial Accounting Standards
No. 133, "Accounting for Derivative Instruments and Hedging Activities (FAS
133). FAS 133 is effective for all fiscal quarters of all fiscal years beginning
after June 15, 1999. FAS 133 requires that all derivative instruments be
recorded on the balance sheet at their fair value. Changes in the fair value of
derivatives are recorded each period in current earnings or other comprehensive
income, depending on whether a derivative is designated as part of a hedge
transaction and, if it is, the type of hedge transaction. Management of the
Operating Partnership anticipates that, due to its limited use of derivative
instruments, the adoption of FAS 133 will not have a significant effect on the
Operating Partnership's results of operations or its financial position.


FUNDS FROM OPERATIONS

Management believes that to facilitate a clear understanding of the historical
operating results of the Operating Partnership, FFO should be considered in
conjunction with net income as presented in the unaudited financial statements
included elsewhere in this report. FFO is presented because it is a widely
accepted financial indicator used by certain investors and analysts to analyze
and compare one equity real estate investment trust ("REIT") with another on the
basis of operating performance. FFO is generally defined as net income (loss),
computed in accordance with generally accepted accounting principles, before
extraordinary items and gains (losses) on sale of properties, plus depreciation
and amortization uniquely significant to real estate. The Operating Partnership
cautions that the calculation of FFO may vary from entity to entity and as such
the presentation of FFO by the Operating Partnership may not be comparable to
other similarly titled measures of other reporting companies. 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 


                                       14
<PAGE>

indication of operating performance or to cash from operations as a measure of
liquidity. FFO is not necessarily indicative of cash flows available to fund
distributions to unitholders and other cash needs.

Below is a computation of FFO for the three and nine months ended September 30,
1998 and 1997 as well as actual cash flow and other data for applicable
reporting periods:
<TABLE>
<CAPTION>
                                                      Three months ended       Nine months ended 
                                                         September 30             September 30
                                                     --------------------------------------------
<S>                                                    <C>      <C>               <C>      <C> 
                                                       1998     1997              1998     1997
                                                     -------------------------------------------- 
                                                                  (In thousands)               
Income before gain on sale or real estate                                                       
   and extraordinary item                              $3,891   $4,369        $12,755     $12,191
Adjusted for depreciation and amortization uniquely                                                                    
   significant to real estate                           5,661    4,745         16,250      13,556
                                                     --------------------------------------------  
Funds from operations                                  $9,552   $9,114        $29,005     $25,747
                                                     ============================================ 
Diluted weighted average units outstanding(1)          11,852   10,814         11,882      10,713
                                                     ============================================ 
Cash flows provided by (used in):                                                         
   Operating activities                                                       $29,902     $25,361
   Investing activities                                                      ($70,247)   ($75,220)
   Financing activities                                                       $39,392     $50,650
</TABLE>       
(1) Assumes the preferred Units and Unit options are converted to general
partnership Units.

ECONOMIC CONDITIONS AND OUTLOOK

Substantially all of the Operating Partnership's leases contain provisions
designed to mitigate the impact of inflation. Such provisions include clauses
for the escalation of base rent and clauses enabling the Operating Partnership
to receive percentage rentals based on tenants' gross sales (above predetermined
levels, which the Operating Partnership believes often are lower than
traditional retail industry standards) which generally increase as prices rise.
Most of the leases require the tenant to pay their share of property operating
expenses, including common area maintenance, real estate taxes, insurance,
advertising and promotion, thereby reducing exposure to increases in costs and
operating expenses resulting from inflation.

Approximately 731,000 square feet will come up for renewal in 1999. In addition,
as typical in the retail industry, certain tenants have closed, or will close,
certain stores by terminating their lease prior to its natural expiration or as
a result of filing for protection under bankruptcy laws. There can be no
assurance that any tenant whose lease expires will renew such lease or that
renewals or terminated leases will be released on economically favorable terms.
Also, certain tenants have requested, or may request, and management may grant,
from time to time, a reduction in rent to remain in operation.

The Operating Partnership's portfolio is currently 95% leased. Existing tenants'
sales have remained stable and renewals by existing tenants have remained
strong. In addition, the Operating Partnership has continued to attract and
retain additional tenants. The Operating Partnership's factory outlet centers
typically include well known, national, brand name companies. By maintaining a
broad base of credit tenants and a geographically diverse portfolio of
properties located across the United States, the Operating Partnership reduces
its operating and leasing risks. No one tenant (including affiliates) accounts
for more than 10% of the Operating Partnership's combined base and percentage
rental revenues. Accordingly, management currently does not expect any material
adverse impact on the Operating Partnership's results of operation and financial
condition as a result of leases to be renewed or stores to be released.


                                       15
<PAGE>

YEAR 2000 COMPLIANCE

Many currently installed computer systems are not capable of distinguishing 21st
century dates with 20th century dates. As a result, in less than two years,
computer systems and/or software used by many companies in a very wide variety
of applications will experience operating difficulties unless they are modified
or upgraded to adequately process information involving, related to or dependent
upon the century change. Significant uncertainty exists concerning the scope and
magnitude of problems associated with the century change.

The Operating Partnership recognizes the need to ensure its operations will not
be adversely impacted by Year 2000 software failures and has established a
project team to address Year 2000 risks. The project team has coordinated the
identification of and will coordinate the implementation of changes to computer
hardware and software applications that will attempt to ensure availability,
integrity and reliability of the Operating Partnership's information systems.
The Operating Partnership is also assessing the potential overall impact of the
impending century change on its business, results of operations and financial
position.

The Operating Partnership has reviewed its information and operational systems
in order to identify those services and systems that are not Year 2000
compliant. As a result of this review, the Operating Partnership has determined
that it will be required to modify or replace certain information and
operational systems so they will be Year 2000 compliant. These modifications and
replacements are being, and will continue to be, made in conjunction with the
Operating Partnership's overall systems initiatives. The total cost of these
Year 2000 compliance activities, estimated at less than $200,000, has not been,
and is not anticipated to be, material to the Operating Partnership's financial
position or its results of operations. The Operating Partnership expects to
complete its Year 2000 project during 1999. Based on available information, the
Operating Partnership does not believe any material exposure to significant
business interruption exist as a result of Year 2000 compliance issues. However,
the Operating Partnership is in the process of developing a contingency plan in
the event its Year 2000 project is not completed in a timely manner. These costs
and the timing in which the Operating Partnership plans to complete its Year
2000 modification and testing processes are based on management's best
estimates. However, there can be no assurance that the Operating Partnership
will timely identify and remediate all significant Year 2000 problems, that
remedial efforts will not involve significant time and expense, or that such
problems will not have a material adverse effect on the Operating Partnership's
business, results of operations or financial position.

The Operating Partnership also faces the risk to the extent that suppliers of
products, services and systems purchased by the Operating Partnership and others
with whom the Operating Partnership transacts business do not comply with Year
2000 requirements. The Operating Partnership has initiated formal communications
with significant suppliers and customers to determine the extent to which the
Operating Partnership is vulnerable to these third parties failure to remediate
their own Year 2000 issues. In the event any such third parties cannot provide
the Operating Partnership with products, services or systems that meet the Year
2000 requirements on a timely basis, or in the event Year 2000 issues prevent
such third parties from timely delivery of products or services required by the
Operating Partnership, the Operating Partnership's results of operations could
be materially adversely affected. To the extent Year 2000 issues cause
significant delays in, or cancellation of, payments from tenants of their
monthly rental obligations, the Operating Partnership's business, results of
operations and financial position would be materially adversely affected.

CONTINGENCIES

There are no recorded amounts resulting from environmental liabilities as there
are no known material loss contingencies with respect thereto. Future claims for
environmental liabilities are not measurable given the uncertainties surrounding
whether there exists a basis for any such claims to be asserted and, if so,
whether any 


                                       16
<PAGE>

claims will, in fact, be asserted. Furthermore, no condition is known to exist
that would give rise to a material environmental liability for site restoration,
post-closure and monitoring commitments, or other costs that may be incurred
upon the sale or disposal of a property. Management has no plans to abandon any
of the properties and is unaware of any other material loss contingencies.

                           PART II. OTHER INFORMATION

Item 1.  Legal Proceedings

Neither the general partner nor the Operating Partnership is presently involved
in any material litigation nor, to their knowledge, is any material litigation
threatened against the general partner or the Operating Partnership or its
properties, other than routine litigation arising in the ordinary course of
business and which is expected to be covered by the liability insurance.

Item 6.  Exhibits and Reports on Form 8-K

The Operating Partnership file the following reports on Form 8-K during the
three months ended September 30, 1998:

         Current Report on Form 8-K dated July 31, 1998 to file the financial
         statements and related schedules related to the acquisition of Sanibel
         Factory Stores, a factory outlet center in Fort Myers, Florida.



                                   SIGNATURES


Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                   TANGER PROPERTIES LIMITED PARTNERSHIP

                                   By:  Tanger Factory Outlet Centers, Inc.,
                                        its general partner


                                   By:   /s/  FRANK C. MARCHISELLO, JR.
                                         --------------------------------------
                                        Frank C. Marchisello, Jr.
                                        Vice President, Chief Financial Officer




DATED:   November 11, 1998

                                       17