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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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FORM 10-K/A
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 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

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CHELSEA GCA REALTY PARTNERSHIP, L.P.(Exact name of registrant as specified in its charter)

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

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

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

Securities registered pursuant to Section 12(b)
of the Act: None

Securities registered pursuant to Section 12 (g) of the Act:  None

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

Indicate by check mark if the disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of the registrants knowledge, in definitive proxy
or information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. [x]

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

Documents incorporated by reference:

Portions of the definitive Proxy Statement of Chelsea GCA
Realty, Inc. relating to its 2000 Annual Meeting of Shareholders are
incorporated by reference into Part III as set forth herein.

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PART I

Item 1. Business
The Operating Partnership

Chelsea GCA Realty Partnership, L.P., a Delaware limited
partnership (the Operating Partnership or OP), is 82.6%
owned and managed by its sole general partner, Chelsea GCA Realty, Inc.
(Chelsea GCA or the Company), a self-administered and
self-managed real estate investment trust (REIT). The Operating
Partnership owns, develops, redevelops, leases, markets and manages upscale and
fashion-oriented manufacturers outlet centers. At the end of 1999, the OP
owned and operated 19 centers (the Properties) with approximately
5.2 million square feet of gross leasable area (GLA) in 11 states.
At December 31, 1999, the Company had approximately 424,000 square feet of
wholly-owned new GLA under construction, comprising the 232,000 square foot
first phase of Allen Premium Outlets (Allen, Texas  located on US Highway
75 approximately 30 miles north of Dallas), the 104,000 square-foot third phase
of Leesburg Corner and expansions totaling 88,000 square feet at two centers;
these openings and expansions are part of a total of approximately 550,000
square feet of wholly-owned new space scheduled for completion in 2000.
Additionally, construction is 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 and phase one of Gotemba Premium Outlets (GPO) a 220,000
square foot center located in Gotemba, outside of Tokyo, Japan. OPO is a joint
venture project between the Company and Simon Property Group, Inc.
(Simon) and is scheduled to open as a single phase in mid-2000. GPO
is a joint venture project 40% owned by the Company and 30% each by Mitsubishi
Estate Co., Ltd. and Nissho Iwai Corporation, and is scheduled to open mid-2000.
The Companys existing portfolio includes properties in or near New York
City, Los Angeles, San Francisco, Sacramento, Boston, Portland (Oregon),
Atlanta, Washington DC, Cleveland, Honolulu, Napa Valley, Palm Springs and the
Monterey Peninsula.

The Operating Partnerships executive offices are located
at 103 Eisenhower Parkway, Roseland, New Jersey 07068 (telephone 973-228-6111).

Recent Developments

Between January 1, 1999 and December 31, 1999, the OP added
340,000 square feet of GLA to its portfolio as a result of four expansions.

A summary of expansion activity from January 1, 1999 through
December 31, 1999 is contained below:

`Opening          GLA          Number
Property                       Date(s)       (Sq. Ft.)     of Stores    Tenants(1)
--------                     ------------  --------------  -----------

As of January 1, 1999                       4,876,000         1,282
Expansions:
     Wrentham Village            5/99         120,000            35     Banana Republic, Guess,
                                                                         Eddie Bauer, Zales
     North Georgia             9-12/99        103,000            26     Banana Republic, Lego, Nike, Zales
     Leesburg Corner            11/99          55,000            15     Adidas, Bose, Cole-Haan, Movado,
                                                                        Williams-Sonoma
     Camarillo Premium
        Outlets                 11/99          45,000             9     Banana Republic, Coach, Polo Ralph
                                                                        Lauren, Tommy Hilfiger
     Other (net)                               17,000            (3)
                                           --------------  -----------
          Total expansions                    340,000            82
                                           --------------  -----------

As of December 31, 1999                     5,216,000         1,364
                                           ==============  ===========


(1) consists of the largest tenants who lease more than 5,000 square feet of GLA
    and have estimated sales of more than $377 per square foot, which was the
    weighted average sales generated by the Company's tenants in 1999.  Most tenants
    pay a fixed base rent based on the square feet leased by them and also pay a
    percentage rent based on sales`

The most recent newly developed or expanded centers are
discussed below:

Wrentham Village Premium Outlets, Wrentham,
Massachusetts. Wrentham Village Premium Outlets, a 473,000 square foot
center containing 125 stores, opened in three phases in October 1997, May 1998
and May 1999. The center is located near the junction of Interstates 95 and 495
between Boston and Providence. The populations within a 30-mile, 60-mile and
100-mile radius are approximately 3.9 million, 6.9 million and 10.3 million,
respectively. Average household income within a 30-mile radius is approximately
$52,000.

North Georgia Premium Outlets, Dawsonville, Georgia.
North Georgia Premium Outlets, a 537,000 square foot center containing 135
stores, opened in four phases, in May 1996, May 1997, October 1998 and September
1999. The center is located 40 miles north of Atlanta on Georgia State Highway
400 bordering Lake Lanier, at the gateway to the North Georgia mountains. The
populations within a 30-mile, 60-mile and 100-mile radius are approximately
700,000, 3.6 million and 5.8 million, respectively. Average household income
within a 30-mile radius is approximately $55,000.

Leesburg Corner Premium Outlets, Leesburg, Virginia.Leesburg Corner Premium Outlets, a 325,000 square foot center containing 73
stores, opened in two phases, in October 1998 and November 1999. The center is
located 35 miles northwest of Washington, DC at the intersection of Routes 7 and
15. The populations within a 30-mile, 60-mile and 100-mile radius are
approximately 2.4 million, 7.1 million and 9.8 million, respectively. Average
household income within a 30-mile radius is approximately $78,000.

Camarillo Premium Outlets, Camarillo, California.
Camarillo Premium Outlets, a 454,000 square foot center containing 124 stores,
opened in eight phases, from March 1995 through November 1999. The center is
located 48 miles north of Los Angeles, about 55 miles south of Santa Barbara on
Highway 101. The populations within a 30-mile, 60-mile and 100-mile radius are
approximately 1.1 million, 8.3 million and 14.6 million, respectively. Average
household income within a 30-mile radius is approximately $66,000.

The OP has started construction on approximately 424,000 square
feet of wholly-owned new GLA scheduled for completion in 2000, including the
232,000 square foot first phase of Allen Premium Outlets, the 104,000 square
foot third phase of Leesburg Corner and expansions totaling 88,000 square feet
at two centers. In addition construction is well underway on two joint venture
projects, Orlando Premium Outlets, a 430,000 square foot center located in
Orlando, Florida and the 220,000 square foot first phase of Gotemba Premium
Outlets, located outside Tokyo, Japan. These projects, and others, are in
various stages of development and there can be no assurance they will be
completed or opened, or that there will not be delays in opening or completion.

Strategic Alliance and Joint Ventures

In June 1999, the OP signed a definitive agreement with
Mitsubishi Estate Co., Ltd. and Nissho Iwai Corporation to jointly develop, own
and operate premium outlet centers in Japan. The joint venture, known as Chelsea
Japan Co., Ltd. (Chelsea Japan) is developing its initial project in
the city of Gotemba. In conjunction with the agreement, the OP contributed $1.7
million in equity. In addition, an equity investee of the OP entered into a 4
billion yen (US $40 million) line of credit guaranteed by the Company and OP to
fund its share of construction costs. At December 31, 1999, no amounts were
outstanding under the loan. In December 1999, construction began on the 220,000
square-foot first phase of Gotemba Premium Outlets with opening scheduled for
mid-2000. Gotemba is located on the Tomei Expressway, approximately 60 miles
west of Tokyo and midway between Mt. Fuji and the Hakone resort area. Subject to
governmental and other approvals, Chelsea Japan also expects to announce during
the next quarter a project outside Osaka, the second-largest city in Japan, to
open in late 2000.

In May 1997, the OP announced the formation of a strategic
alliance with Simon to develop and acquire high-end outlet centers with GLA of
500,000 square feet or more in the United States. The OP and Simon are
co-managing general partners, each with 50% ownership of the joint venture and
any entities formed with respect to specific projects; the OP will have primary
responsibility for the day-to-day activities of each project. In conjunction
with the alliance, on June 16, 1997, the OP completed the sale of 1.4 million
shares of common stock to Simon for an aggregate price of $50 million. Proceeds
from the sale were used to repay borrowings under the Credit Facilities. Simon
is one of the largest publicly traded real estate companies in North America as
measured by market capitalization, and at February 2000 owned, had an interest
in and/or managed approximately 184 million square feet of retail and mixed-use
properties in 36 states.

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

Construction is 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 OP 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 project costs. The loan is 50%
guaranteed by each of the OP and Simon and as of December 31, 1999, $20.8
million was outstanding.

Organization of the Operating Partnership

The Operating Partnership was formed through the merger in 1993
of The Chelsea Group (Chelsea) and Ginsburg Craig Associates
(GCA), two leading outlet center development companies, providing
for greater access to the public and private capital markets. Virtually all of
the Properties are held by and all of its business activities conducted through
the Operating Partnership. The Company (which owned 82.6% in the Operating
Partnership as of December 31, 1999) is the sole general partner of the
Operating Partnership and has full and complete control over the management of
the Operating Partnership and each of the Properties, excluding joint ventures.

The Manufacturers Outlet Business

Manufacturers outlets are manufacturer-operated retail
stores that sell primarily first-quality, branded goods at significant discounts
from regular department and specialty store prices. Manufacturers outlet
centers offer numerous advantages to both consumer and manufacturer: by
eliminating the third party retailer, manufacturers are often able to charge
customers lower prices for brand name and designer merchandise; manufacturers
benefit by being able to sell first quality in-season, as well as out-of-season,
overstocked or discontinued merchandise without compromising their relationships
with department stores or hampering the manufacturers brand name. In
addition, outlet stores enable manufacturers to optimize the size of production
runs while maintaining control of their distribution channels.

Business of the Operating Partnership

The OP believes its strong tenant relationships, high-quality
property portfolio and managerial expertise give it significant advantages in
the manufacturers outlet business.

Strong Tenant Relationships. The OP maintains strong
tenant relationships with high-fashion, upscale manufacturers that have a
selective presence in the outlet industry, such as Armani, Brooks Brothers, Cole
Haan, Donna Karan, Gap/Banana Republic, Gucci, Jones New York, Nautica, Polo
Ralph Lauren, Tommy Hilfiger and Versace, as well as with national brand-name
manufacturers such as Adidas, Carters, Nike, Phillips-Van Heusen (Bass,
Izod, Gant, Van Heusen), Timberland and Sara Lee (Champion, Hanes, Coach
Leather). The OP believes that its ability to draw from both groups is an
important factor in providing broad customer appeal and higher tenant sales.

High Quality Property Portfolio. The Properties generated
weighted average reported tenant sales during 1999 of $377 per square foot,
among the three publicly traded outlet companies . As a result, the OP has been
successful in attracting some of the worlds most sought-after brand-name
designers, manufacturers and retailers and each year has added new names to the
outlet business and its centers. The OP believes that the quality of its centers
gives it significant advantages in attracting customers and negotiating
multi-lease transactions with tenants.

Management Expertise. The OP believes it has a
competitive advantage in the manufacturers outlet business as a result of
its experience in the business, long-standing relationships with tenants and
expertise in the development and operation of manufacturers outlet
centers. Management developed a number of the earliest and most successful
outlet centers in the industry, including Liberty Village (one of the first
manufacturers outlet centers in the U.S.) in 1981, Woodbury Common in
1985, and Desert Hills and Aurora Farms in 1990. Since the IPO, the OP has added
significantly to its senior management in the areas of development, leasing and
property management without increasing general and administrative expenses as a
percentage of total revenues; additionally, the OP intends to continue to invest
in systems and controls to support the planning, coordination and monitoring of
its activities.

Growth Strategy

The OP seeks growth through increasing rents in its existing
centers; developing new centers and expanding existing centers; and acquiring
and re-developing centers.

Increasing Rents at Existing Centers. The OPs
leasing strategy includes aggressively marketing available space and maintaining
a high level of occupancy; providing for inflation-based contractual rent
increases or periodic fixed contractual rent increases in substantially all
leases; renewing leases at higher base rents per square foot; re-tenanting space
occupied by underperforming tenants; and continuing to sign leases that provide
for percentage rents.

Developing New Centers and Expanding Existing Centers.
The OP believes that there continue to be significant opportunities to develop
manufacturers outlet centers across the United States. The OP intends to
undertake such development selectively, and believes that it will have a
competitive advantage in doing so as a result of its development expertise,
tenant relationships and access to capital. The OP expects that the development
of new centers and the expansion of existing centers will continue to be a
substantial part of its growth strategy. The OP believes that its development
experience and strong tenant relationships enable it to determine site viability
on a timely and cost-effective basis. However, there can be no assurance that
any development or expansion projects will be commenced or completed as
scheduled.

Acquiring and Redeveloping Centers. The OP intends to
selectively acquire individual properties and portfolios of properties that meet
its strategic investment criteria as suitable opportunities arise. The OP
believes that its extensive experience in the outlet center business, access to
capital markets, familiarity with real estate markets and advanced management
systems will allow it to evaluate and execute acquisitions competitively.
Furthermore, management believes that the OP will be able to enhance the
operation of acquired properties as a result of its (i) strong tenant
relationships with both national and upscale fashion retailers; and (ii)
development, marketing and management expertise as a full-service real estate
organization. Additionally, the OP may be able to acquire properties on a
tax-advantaged basis through the issuance of Operating Partnership units.
However, there can be no assurance that any acquisitions will be consummated or,
if consummated, will result in an advantageous return on investment for the OP.

International Development.The OP intends to develop, own
and operate premium outlet centers in Japan through its joint venture OP,
Chelsea Japan Co., Ltd. Chelsea Japan is currently developing its first outlet
center in Gotemba, located outside Tokyo, and is seeking governmental approval
on another site outside Osaka, Japan. The OP believes that there are significant
opportunities to develop manufacturers outlet centers in Japan and intends
to pursue these opportunities as viable sites are identified.

The OP 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 Company 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 OPs total investment in Europe as of February 2000 is
approximately $4.5 million. The OP 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 February 2000, the OP has
provided limited debt service guarantees of approximately $20 million for three
projects.

Operating Strategy

The OPs primary business objective is to enhance the value
of its properties and operations by increasing cash flow. The OP plans to
achieve these objectives through continuing efforts to improve tenant sales and
profitability, and to enhance the opportunity for higher base and percentage
rents.

Leasing. The OP pursues an active leasing strategy
through long-standing relationships with a broad range of tenants including
manufacturers of mens, womens and childrens ready-to-wear,
lifestyle apparel, footwear, accessories, tableware, housewares, linens and
domestic goods. Key tenants are placed in strategic locations to draw customers
into each center and to encourage shopping at more than one store. The OP
continually monitors tenant mix, store size, store location and sales
performance, and works with tenants to improve each center through re-sizing,
re-location and joint promotion.

Market and Site Selection. To ensure a sound long-term
customer base, the OP generally seeks to develop sites near densely-populated,
high-income metropolitan areas, and/or at or near major tourist destinations.
While these areas typically impose numerous restrictions on development and
require compliance with complex entitlement and regulatory processes, the OP
believes that these areas provide the most attractive long-term demographic
characteristics. The OP generally seeks to develop sites that can support at
least 400,000 square feet of GLA and that offer the long-term opportunity to
dominate their respective markets through a critical mass of tenants.

Marketing. The OP pursues an active, property-specific
marketing strategy using a variety of media including newspapers, television,
radio, billboards, regional magazines, guide books and direct mailings. The
centers are marketed to tour groups, conventions and corporations; additionally,
each property participates in joint destination marketing efforts with other
area attractions and accommodations. Virtually all consumer marketing expenses
incurred by the OP are reimbursable by tenants.

Property Design and Management. The OP believes that
effective property design and management are significant factors in the success
of its properties and works continually to maintain or enhance each
centers physical plant, original architectural theme and high level of
on-site services. Each property is designed to be compatible with its
environment and is maintained to high standards of aesthetics, ambiance and
cleanliness in order to promote longer visits and repeat visits by shoppers. Of
the OPs 388 full-time and 99 part-time employees, 286 full-time and 97
part-time employees are involved in on-site maintenance, security,
administration and marketing. Centers are generally managed by an on-site
property manager with oversight from a regional operations director.

Financing

The OP seeks to maintain a strong, flexible financial position
by: (i) maintaining a conservative level of leverage, (ii) extending and
sequencing debt maturity dates, (iii) managing floating interest rate exposure
and (iv) maintaining liquidity. Management believes these strategies will enable
the OP to access a broad array of capital sources, including bank or
institutional borrowings, secured and unsecured debt and equity offerings.

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

In November 1998, the OP obtained a $60 million term loan that
expires April 2000 and bears interest at a rate of London Interbank Offered Rate
(LIBOR) plus 1.40% (7.53% at December 31, 1999). Proceeds from the loan were
used to pay down borrowings under the Senior Credit Facility. The OP is
currently exploring several refinancing alternatives including an extension or
payoff of this loan.

On March 30, 1998, the OP replaced its two unsecured bank
revolving lines of credit, totaling $150 million (the Credit
Facilities), with a $160 million senior unsecured bank line of credit (the
Senior Credit Facility). The Senior Credit Facility expires on March
30, 2002 and 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. The OP
has requested and expects approval to extend the Facility until March 30, 2003.
The Facility bears interest on the outstanding balance, payable monthly, at a
rate equal of LIBOR plus 1.05% (7.24% at December 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 OPs Senior Debt rating. A fee on the unused portion of
the Senior Credit Facility is payable quarterly at rates ranging from 0.15% to
0.25% depending on the balance outstanding. At December 31, 1999, $94 million
was available under the Senior Credit Facility.

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. The Lender has credit committee approval
to extend the Term Loan to March 30, 2003.

In October 1997, the OP completed a $125 million offering of
7.25% unsecured term notes due October 2007 (the 7.25% Notes). The
7.25% Notes were priced to yield 7.29% to investors. Net proceeds from the
offering were used to repay substantially all borrowings under the OPs
Credit Facilities, redeem $40 million of Reset Notes and for general corporate
purposes.

In October 1997, the Company issued 1.0 million shares of
non-voting 8.375% Series A Cumulative Redeemable Preferred Stock (the
Preferred Stock), par value $0.01 per share, with 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 OP. The Preferred Stock is
redeemable on or after October 15, 2027 at the OPs option. Net proceeds
from the offering were used to repay borrowings under the OPs Credit
Facilities.

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

Competition

The Properties compete for retail consumer spending on the basis
of the diverse mix of retail merchandising and value oriented pricing.
Manufacturers outlet centers have established a niche capitalizing on
consumers desire for value-priced goods. The Properties compete for
customer spending with other outlet locations, traditional shopping malls,
off-price retailers, and other retail distribution channels. The OP believes
that the Properties generally are the leading manufacturers outlet centers
in each market. The OP carefully considers the degree of existing and planned
competition in each proposed market before deciding to build a new center.

Environmental Matters

The OP is not aware of any environmental liabilities relating to
the Properties that would have a material impact on the OPs financial
position and results of operations.

Personnel

As of December 31, 1999, the OP had 388 full-time and 99
part-time employees. None of the employees are subject to any collective
bargaining agreements, and the OP believes it has good relations with its
employees.

Item 2. Properties

The Properties are upscale, fashion-oriented manufacturers
outlet centers located near large metropolitan areas, including New York City,
Los Angeles, San Francisco, Boston, Washington DC, Atlanta, Sacramento, Portland
(Oregon), and Cleveland, or at or near tourists destinations, including
Honolulu, Napa Valley, Palm Springs and the Monterey Peninsula. The Properties
were 99% leased as of December 31, 1999 and contained approximately 1,400 stores
with approximately 450 different tenants. During 1999 and 1998, the Properties
generated weighted average tenant sales of $377 and $360 per square foot,
respectively. As of December 31, 1999, the OP had 19 operating outlet centers.
Of the 19 operating centers, 18 are owned 100% in fee; and one, American Tin
Cannery Premium Outlets, is held under a long-term lease expiring December 2004.
The OP manages all of its Properties.

Approximately 34% and 35% of the OPs revenues for the
years ended December 31, 1999 and 1998, respectively, were derived from the
OPs two centers with the highest revenues, Woodbury Common Premium Outlets
and Desert Hills Premium Outlets. The loss of either center or a material
decrease in revenues from either center for any reason might have a material
adverse effect on the OP. In addition, approximately 30% and 34% of the
OPs revenues for the years ended December 31, 1999 and 1998, respectively,
were derived from the OPs centers in California, including Desert Hills.

Additionally, Woodbury Common Premium Outlets and Desert Hills
Premium Outlets either contributed 10% or more of the OPs aggregate gross
revenues during 1999 or had a book value equal to 10% or more of the total
assets of the OP at year-end 1999. No tenant at these centers leases more than
10% of such centers GLA. The following chart shows certain information for
these centers.

`Woodbury Common                   Desert Hills
                                      Premium Outlets                  Premium Outlets
                                Average        Avg. Annual          Average       Avg. Annual
Fiscal                         Occupancy           Rent            Occupancy          Rent
Year                              Rate          Per sq.ft.            Rate         Per sq.ft.
----
                             ---------------  ---------------    --------------- ---------------
1995........................      99.7%            $25.97             99.0%           $21.48
1996........................     100.0              27.74            100.0             22.16
1997........................      98.8              31.42            100.0             23.37
1998........................     100.0              33.16            100.0             24.74
1999........................      99.5              35.61            100.0             26.26`

Woodbury Common Premium Outlets opened in four phases in 1985,
1993, 1995 and 1998 and contains 841,000 square feet of GLA. As of June 30,
2000, the center was leased to 214 tenants. Woodbury Common is located
approximately 50 miles north of New York City at the Harriman exit of the New
York State Thruway. The populations within a 30-mile, 60-mile and 100-mile
radius are approximately 2.5 million, 17.3 million and 25.2 million,
respectively. Average household income within the 30-mile radius is
approximately $83,000.

Desert Hills Premium Outlets is located on Interstate 10, 16
miles west of Palm Springs, and 75 miles east of Los Angeles. The property
opened in three phases in 1990, 1995 and 1997 and contains 475,000 square feet
of GLA. As of June 30, 2000, the center was leased to 121 tenants. The center
serves the population of southern California as well as tourists. The
populations within a 30-mile, 60-mile and 100-mile radius total approximately
1.0 million, 4.8 million and 17.5 million, respectively. Average annual
household income within the 30-mile radius is approximately $50,000.

The following tables show lease expiration data as of June 30,
2000 for Woodbury Common Premium Outlets and Desert Hills Premium Outlets for
the next ten years (assuming that none of the tenants exercise renewal options).

`Woodbury Common Premium Outlets
                                                                               % of Annual
                                         Contractual              No. of         "CBR"
                                       Base Rents ("CBR")         Leases       Represented by
Expiration Year          GLA      Per Sq. Ft.        Total        Expiring     Expiring Leases
                    ------------  ------------  -------------- -----------  -------------------
2000.................   42,608       $21.85        $931,153         11              3.6%
2001.................   43,673        34.90       1,524,284         13              5.9
2002.................   45,280        25.50       1,154,555         13              4.4
2003.................  293,989        31.22       9,178,313         70             35.4
2004.................   39,589        32.58       1,289,768         12              5.0
2005.................  102,511        35.06       3,593,710         26             13.8
2006.................   17,066        37.50         639,930          8              2.5
2007.................   32,997        39.36       1,298,868         11              5.0
2008.................  111,795        34.00       3,801,135         23             14.6
2009.................   41,956        40.09       1,682,110         14              6.5

                                                 Desert Hills Premium Outlets
                                                                             % of Annual
                                           Contractual           No. of        "CBR"
                                         Base Rents ("CBR")     Leases       Represented by
Expiration Year          GLA       Per Sq. Ft.       Total      Expiring     Expiring Leases
                     ------------ -------------- -------------- ---------  ---------------
2000.................   44,344        $21.29        $944,079       17            9.1%
2001.................   40,159         23.13         928,731       10            8.9
2002.................   94,326         24.37       2,298,613       27           22.1
2003.................   38,468         23.33         897,357       11            8.6
2004.................   55,314         19.28       1,066,648        8           10.3
2005.................  105,263         22.24       2,341,108       28           22.5
2006.................   20,985         24.77         519,786        4            5.0
2007.................   18,790         20.12         378,138        5            3.6
2008.................    7,724         33.82         261,238        3            2.5
2009.................   12,057         45.15         544,361        5            5.2`

Depreciation on Woodbury Common Premium Outlets and Desert Hills
Premium Outlets is calculated using the straight line method over the estimated
useful life of the real property and land improvements which ranges from 10 to
40 years. At December 31, 1999, the Federal tax basis in these centers was as
follows: Woodbury Common Premium Outlets - $129,508,887 and Desert Hills Premium
Outlets - $55,340,210.

The realty tax rate on the above centers is approximately $4.73
per $100 of assessed value for Woodbury Common Premium Outlets and $1.16 per
$100 of assessed value for Desert Hills Premium Outlets. Estimated 2000 taxes
for these centers are as follows: $3,270,000 for Woodbury Common Premium Outlets
and $907,000 for Desert Hills Premium Outlets.

The OP believes the Properties are adequately covered by
insurance.

The OP does not consider any single store lease to be material;
no individual tenant, combining all of its store concepts, accounts for more
than 5% of the OPs gross revenues or total GLA; and only two tenants
occupy more than 4% of the OPs total GLA. As a result, and considering the
OPs past success in re-leasing available space, the OP believes the loss
of any individual tenant would not have a significant effect on future
operations.

Set forth in the table below is certain property information as
of December 31,1999:

`Year       GLA        No. of
Name/Location                  Opened    (Sq. Ft.)    Stores    Tenants
                             ---------  ----------  ---------  --------------------------------------------

Woodbury Common                 1985      841,000       213     Brooks Brothers, Calvin Klein, Coach
Central Valley, NY                                              Leather, Gap, Gucci, Last Call Neiman
(New York City                                                  Marcus, Polo Ralph Lauren
metro area)

North Georgia                   1996      537,000       135     Brooks Brothers, Donna Karan, Gap,
Dawsonville, GA (Atlanta                                        Nautica, Off 5th-Saks Fifth Avenue,
metro area)                                                     Williams-Sonoma


Desert Hills                    1990      475,000       120     Burberry, Coach Leather, Giorgio
Cabazon, CA (Palm Springs-                                      Armani, Gucci, Nautica, Polo Ralph
Los Angeles area)                                               Lauren, Tommy Hilfiger

Wrentham Village                1997      473,000       125     Brooks Brothers, Calvin Klein, Donna
Wrentham, MA (Boston/                                           Karan, Gap, Polo Jeans Co., Sony,
Providence metro                                                Versace
area)

Camarillo Premium Outlets       1995      454,000       124     Ann Taylor, Barneys New York, Bose,
Camarillo, CA (Los Angeles                                      Cole-Haan, Donna Karan, Jones NY,
metro area)                                                     Off 5th-Saks Fifth Avenue

Leesburg Corner                 1998      325,000        73     Banana Republic, Brooks Brothers,
Leesburg, VA (Washington                                        Gap, Donna Karan, Off 5th-Saks Fifth
DC area)                                                        Avenue

Aurora Premium Outlets          1987      297,000        69     Ann Taylor, Bose, Brooks Brothers,
Aurora, OH (Cleveland                                           Carters, Liz Claiborne, Nautica, Off
metro area)                                                     5th-Saks Fifth Avenue

Clinton Crossing                1996      272,000        67     Coach Leather, Crate & Barrel, Donna
Clinton, CT (I-95/NY-New                                        Karan, Gap, Off 5th-Saks Fifth Avenue,
England corridor)                                               Polo Ralph Lauren

Folsom Premium Outlets          1990      246,000        68     Bass, Donna Karan, Gap, Liz Claiborne,
Folsom, CA (Sacramento                                          Nike, Off 5th-Saks Fifth Avenue
metro area)

Waikele Premium Outlets (1)     1997      214,000        52     Barneys New York, Bose, Donna Karan, Guess,
Waipahu, HI (Honolulu area)                                     Polo Jeans Co., Off 5th-Saks Fifth Avenue

Petaluma Village                1994      196,000        51     Ann Taylor, Bose, Brooks Brothers, Donna
Petaluma, CA (San Francisco                                     Karan, Off 5th-Saks Fifth Avenue
metro area)

Napa Premium Outlets            1994      171,000        48     Cole-Haan, Dansk, Ellen Tracy, Esprit, J.
Napa, CA (Napa Valley)                                          Crew, Nautica, Timberland, TSE Cashmere

Columbia Gorge                  1991      164,000        44     Adidas, Carter's, Gap, Harry & David,
Troutdale, OR (Portland                                         Mikasa
metro area)

Liberty Village                 1981      157,000        56     Calvin Klein, Donna Karan, Ellen Tracy,
Flemington, NJ (New York-                                       Polo Ralph Lauren, Tommy Hilfiger
Phila. metro area)

American Tin Cannery            1987      135,000        48     Anne Klein, Bass, Carole Little, Nine West,
Pacific Grove, CA (Monterey                                     Reebok, Totes
Peninsula)

Santa Fe Premium Outlets        1993      125,000        40     Brooks Brothers, Coach Leather, Donna
Santa Fe, NM                                                    Karan, Liz Claiborne, Nine West

Patriot Plaza                   1986       76,000        11     Lenox, Polo Ralph Lauren, WestPoint Stevens
Williamsburg, VA (Norfolk-
Richmond area)

Mammoth Premium Outlets         1990       35,000        11     Bass, Polo Ralph Lauren
Mammoth Lakes, CA (Yosemite
National Park)

St. Helena Premium Outlets      1992       23,000         9     Brooks Brothers, Coach Leather, Donna
St. Helena, CA (Napa Valley)                                    Karan, Joan & David
                                         ----------  ---------
   Total                                5,216,000     1,364
                                         ==========  =========

(1)  Acquired in March 1997`

The OP rents approximately 27,000 square feet of office space in
its headquarters facility in Roseland, New Jersey and approximately 4,000 square
feet of office space for its west coast regional development office in Newport
Beach, California.

Item 3. Legal Proceedings

The OP is not presently involved in any material litigation
other than routine litigation arising in the ordinary course of business and
that is either expected to be covered by liability insurance or to have no
material impact on the OPs financial position and results of operations.

Item 4.  Submission of Matters to a Vote of Security Holders

None.

PART II

Item 5. Market for the Registrants Common
Stock and Related Security Matters

None.

Item 6: Selected Financial Data

Chelsea GCA Realty Partnership, L.P.
(In thousands except per unit, and number of centers)

`Year Ended
                                                                             December 31,
                                                      -------------------------------------------------
Operating Data:                                         1999        1998      1997     1996      1995
                                                      --------   ---------  --------  -------  --------

Rental revenue.....................................   $114,485     $99,976   $81,531  $63,792   $51,361
Total revenues.....................................    162,926     139,315   113,417   91,356    72,515
Loss on writedown of assets........................        694      15,713         -        -         -
Total expenses.....................................    115,370     113,879    78,262   59,996    41,814
Income before minority interest
    and extraordinary item.........................     47,556      25,436    35,155   31,360    29,650
Minority interest..................................          -           -      (127)    (257)     (285)
Income before extraordinary item...................     47,556      25,436    35,028   31,103    29,365
Extraordinary item - loss on retirement of debt....          -        (345)     (252)    (902)        -
Net income.........................................     47,556      25,091    34,776   30,201    29,365
Preferred distribution.............................     (6,137)     (4,188)     (907)       -         -
Net income to common unitholders...................    $41,419     $20,903   $33,869  $30,201   $29,365
Net income per common unit:
    General partner (including $0.02 and $0.01 net
    loss per unit from extraordinary item
    in 1998 and 1997, respectively)................      $2.17       $1.11     $1.88    $1.77    $1.75
    Limited partner (including $0.02 and $0.01 net
    loss per unit from extraordinary item
    in 1998 and 1997, respectively)................      $2.16       $1.09     $1.87    $1.76    $1.75

Ownership Interest:
General partner....................................     15,742      15,440    14,605   11,802   11,188
Limited partners...................................      3,389       3,431     3,435    5,316    5,601
                                                      --------   ---------  --------  -------  -------
Weighted average units outstanding.................     19,131      18,871    18,040   17,118   16,789

Balance Sheet Data:
Rental properties before accumulated
    depreciation...................................   $848,813    $792,726  $708,933  $512,354 $415,983
Total assets.......................................    806,055     773,352   688,029   502,212  408,053
Total liabilities  ................................    426,198     450,410   342,106   240,878  141,577
Minority interest..................................          -           -         -     5,698    5,441
Partners' capital..................................    379,857     322,942   345,923   255,636  261,035
Distributions declared per common unit.............      $2.88       $2.76     $2.58    $2.355   $2.135

Other Data:
Funds from operations to common unitholders (1)        $79,980     $67,994   $57,417   $48,616  $41,870
Cash flows from:
   Operating activities............................    $87,590     $78,731   $56,594   $53,510  $36,797
   Investing activities............................    (77,578)   (119,807) (199,250)  (99,568) (82,393)
   Financing activities............................    (10,781)     36,169   143,308    55,957   40,474

GLA at end of period...............................      5,216       4,876     4,308     3,610    2,934
Weighted average GLA (2)...........................      4,995       4,614     3,935     3,255    2,680
Centers at end of the period.......................         19          19        20        18       16
New centers opened.................................          -           1         1         2        1
Centers expanded...................................          4           7         5         5        7
Center sold........................................          1           -         -         -        1
Centers held for sale..............................          1           2         -         -        -
Center acquired....................................          -           -         1         -        -`

Notes to Selected Financial Data:

|(1) | The OP believes that FFO is helpful to investors as a measure of the performance
of an equity REIT because, along with cash flow from operating activities,
financing activities and investing activities, it provides investors with an
indication of the ability of the OP to incur and service debt, to make capital
expenditures and to fund other cash needs. The OP computes FFO in accordance
with the current standards established by NAREIT which may not be comparable to
FFO reported by other REIT's that do not define the term in accordance with the
current NAREIT definition or that interpret the current NAREIT definition
differently than the OP. FFO does not represent cash generated from operating
activities in accordance with GAAP and should not be considered as an
alternative to net income (determined in accordance with GAAP) as an indication
of the OP's financial performance or to cash flow from operating activities
(determined in accordance with GAAP) as a measure of the OP's liquidity, nor is
it indicative of funds available to fund the OP's cash needs, including its
ability to make cash distributions. See Management's Discussion and Analysis for
definition of FFO.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | GLA weighted by months in operation.
|--- | ------------------------------------

Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations

The following discussion should be read in connection with the
financial statements and notes thereto appearing elsewhere in this annual
report.

Certain comparisons between periods have been made on a
percentage or weighted average per square foot basis. The latter technique
adjusts for square footage changes at different times during the year.

General Overview

At December 31, 1999 and 1998, the OP operated 19
manufacturers outlet centers, compared to 20 at the end of 1997. The
OPs operating gross leasable area (GLA) at December 31, 1999
was 5.2 million square feet compared to 4.9 million square feet and 4.3 million
square feet at December 31, 1998 and 1997, respectively.

From January 1, 1997 to December 31, 1999, the OP grew by
increasing rents at its operating centers, opening two new centers, acquiring
one center and expanding nine centers. Increasing rents at operating centers
resulted in base and percentage rent revenue growth of $13.8 million. The
opening of two new centers, acquisition of one center and expansion of nine
centers increased base and percentage rent revenues by $10.6 million, $6.3
million and $20.0 million, respectively during the three year period ended
December 31, 1999. The 1.6 million square feet (sf) of net GLA added
during the period is detailed as follows:

`Since
                                      January 1,
                                         1997          1999           1998          1997
                                        -----          -----          ----          ----
Changes in GLA (sf in 000's):

   New centers developed:
         Leesburg Corner                   270             -            270             -
         Wrentham Village                  227             -              -           227
                                      --------      --------       --------       -------
   Total new centers                       497             -            270           227

   Centers expanded:
         Wrentham Village                  246           120            126             -
         North Georgia                     245           103             31           111
         Leesburg Corner                    55            55              -             -
         Camarillo Premium Outlets         175            45             45            85
         Woodbury Common                   268             -            268             -
         Folsom Premium Outlets             34             -             19            15
         Columbia Gorge                     16             -             16             -
         Desert Hills                       42             -              6            36
         Liberty Village                    12             -              -            12
         Other                               -            17            (15)           (2)
                                      --------      --------       --------       -------

   Total centers expanded                1,093           340            496           257

   Centers held for sale:
         Solvang Designer Outlets          (52)            -            (52)            -
         Lawrence Riverfront              (146)            -           (146)            -
                                      --------      --------       --------       -------

                                          (198)            -           (198)            -

   Center acquired:
         Waikele Premium Outlets           214             -              -           214
                                      --------      --------       --------       -------

Net GLA added during the period          1,606           340            568           698

Other Data:
         GLA at end of period                          5,216          4,876         4,308
         Weighted average GLA (1)                      4,995          4,614         3,935
         Centers in operation at end
          of period                                       19             19            20
         New centers opened                                -              1             1
         Centers expanded                                  4              7             5
         Centers sold                                      1              -             -
         Centers held for sale                             1              2             -
         Center acquired                                   -              -             1`

Note:  (1)  Average GLA weighted by months in operation

The OP's centers produced weighted average reported tenant sales
of approximately $377 per square foot in 1999 and $360 per square foot in 1998
and 1997. Weighted average sales is a measure of tenant performance that has a
direct effect on base and percentage rents that can be charged to tenants over
time.

Two of the OP's centers, Woodbury Common and Desert Hills,
generated approximately 34%, 35% and 34% of the OP's total revenue for the years
1999, 1998 and 1997, respectively. In addition, approximately 30%, 34%, and 38%
of the OP's revenues for the years ended December 31, 1999, 1998 and 1997,
respectively, were derived from the OP's centers in California, including Desert
Hills.

The OP does not consider any single store lease to be material;
no individual tenant, combining all of its store concepts, accounts for more
than 5% of the OP's gross revenues or total GLA; and only two tenants occupy
more than 4% of the OP's total GLA. In view of these statistics and the OP's
past success in re-leasing available space, the OP believes the loss of any
individual tenant would not have a significant effect on future operations.

The discussion below is based upon operating income before
minority interest and extraordinary item. The minority interest in net income
varies from period to period as a result of changes in the OP's 50% investment
in Solvang prior to June 30, 1997.

Comparison of year ended December 31, 1999 to year ended
December 31, 1998

Operating income before interest, depreciation and amortization
increased $18.6 million, or 19.8%, to $112.2 million in 1999 from $93.6 million
in 1998. This increase was primarily the result of expansions and a new center
opening during 1999 and 1998. Income from operations increased $7.1 million or
17.3% to $48.3 million in 1999 from $41.2 million in 1998. Increased revenues
from expansions and a new center opening during 1999 and 1998 were offset by
higher interest costs.

Base rentals increased $12.2 million, or 14.1%, to $98.8 million
in 1999 from $86.6 million in 1998 due to expansions, a new center opening in
1998 and higher average rents. Base rental revenue per weighted average square
foot increased to $19.79 in 1999 from $18.77 in 1998 as a result of higher
rental rates on new leases and renewals.

Percentage rents increased $2.3 million, or 16.9%, to $15.7
million in 1999 from $13.4 million in 1998. The increase was primarily due to a
new center opening in 1998, expansions of existing centers and increase in
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 $4.4 million, or 12.5%, to $39.7
million in 1999 from $35.3 million in 1998, due to the recovery of operating and
maintenance costs from increased GLA. On a weighted average square foot basis,
expense reimbursements increased 3.9% to $7.96 in 1999 from $7.66 in 1998. The
average recovery of reimbursable expenses was 90.8% in 1999 compared to 91.3% in
1998.

Other income increased $4.7 million to $8.7 million in 1999 from
$4.0 million in 1998. The increase was primarily due to income from the
agreement not to compete with the Mills Corporation in the Houston, Texas area.

Interest, in excess of amounts capitalized, increased $4.2
million to $24.2 million in 1999 from $20.0 million in 1998, due to higher debt
balances from increased GLA in operation.

Operating and maintenance expenses increased $5.1 million, or
13.1%, to $43.8 million in 1999 from $38.7 million in 1998. The increase was
primarily due to costs related to increased GLA. On a weighted average square
foot basis, operating and maintenance expenses increased 4.4% to $8.76 in 1999
from $8.39 in 1998 as a result of increased real estate tax and promotion costs.

General and administrative expenses were $4.8 million during
1999 and 1998 due to stabilized overhead costs during 1999.

Depreciation and amortization expense increased $7.2 million to
$39.7 million in 1999 from $32.5 million in 1998. The increase was due to
depreciation of expansions and a new center opened in 1998.

The loss on writedown of assets of $0.7 million in 1999 and
$15.7 million in 1998 was attributable to the re-valuation of two centers held
for sale at their estimated fair values and the write-off of pre-development
costs of an abandoned site.

Other expenses remained stable at $2.1 million during 1999 and
1998.

Comparison of year ended December 31, 1998 to year ended
December 31, 1997

Operating income before interest, depreciation and amortization
increased $18.2 million, or 24.2%, to $93.6 million in 1998 from $75.4 million
in 1997. This increase was primarily the result of expansions and new center
openings during 1997 and 1998. Income from operations increased $6.0 million, or
17.1%, to $41.2 million in 1998 from $35.2 million in 1997. Increased revenues
from expansions and new center openings in 1997 and 1998 were offset by
increased interest costs.

Base rentals increased $15.9 million, or 22.5%, to $86.6 million
in 1998 from $70.7 million in 1997 due to expansions, new center openings in
1997 and 1998, one acquired center and higher average rents. Base rental revenue
per weighted average square foot increased to $18.77 in 1998 from $17.97 in 1997
as a result of higher rental rates on new leases and renewals.

Percentage rents increased $2.6 million, or 23.5%, to $13.4
million in 1998 from $10.8 million in 1997. The increase was primarily due to a
new center opening in 1997, 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 $6.3 million, or 21.9%, to $35.3
million in 1998 from $29.0 million in 1997, due to the recovery of operating and
maintenance costs from increased GLA. On a weighted average square foot basis,
expense reimbursements increased 4.1% to $7.66 in 1998 from $7.36 in 1997. The
average recovery of reimbursable expenses was 91.3% in 1998 compared to 92.2% in
1997.

Other income increased $1.1 million to $4.0 million in 1998 from
$2.9 million in 1997. The increase was due to income from the agreement not to
compete with the Mills Corporation in the Houston, Texas area and a $0.3 million
increase in outparcel income during 1998.

Interest, in excess of amounts capitalized, increased $4.6
million to $20.0 million in 1998 from $15.4 million in 1997, due to higher debt
balances from increased GLA in operation.

Operating and maintenance expenses increased $7.3 million, or
23.2%, to $38.7 million in 1998 from $31.4 million in 1997. The increase was
primarily due to costs related to increased GLA. On a weighted average square
foot basis, operating and maintenance expenses increased 5.0% to $8.39 in 1998
from $7.99 in 1997 as a result of increased real estate tax and promotion costs.

Depreciation and amortization expense increased $7.5 million to
$32.5 million in 1998 from $25.0 million in 1997. The increase was due to
depreciation of expansions and new centers opened in 1997 and 1998.

General and administrative expenses increased $1.0 million to
$4.8 million in 1998 from $3.8 million in 1997. On a weighted average square
foot basis, general and administrative expenses increased 8.2% to $1.05 in 1998
from $0.97 in 1997 primarily due to increased personnel, overhead costs and
accrual for deferred compensation.

The loss on writedown of assets of $15.7 million in 1998 was
attributable to the re-valuation of two centers held for sale at their estimated
fair values and the write-off of pre-development costs of an abandoned site.

Other expenses decreased $0.4 million to $2.2 million in 1998
from $2.6 million in 1997. The decrease was primarily due to recoveries of bad
debts previously written off.

Liquidity and Capital Resources

The OP believes it has adequate financial resources to fund
operating expenses, distributions, and planned development and construction
activities over the short-term, which is less than 12 months and the long-term,
which is 12 months or more. Operating cash flow in 1999 of $87.6 million is
expected to increase with a full year of operations of the 340,000 square feet
of GLA added during 1999 and scheduled openings of approximately 853,000 square
feet in 2000, which includes the OP's 50% ownership share in Orlando Premium
Outlets and 40% ownership share in Gotemba Premium Outlets. The OP has adequate
funding sources to complete and open all of its current development projects
through the use of available cash of $8.9 million; construction loans for the
Orlando and Allen projects up to a maximum borrowing of $82.5 million and $40.0
million, respectively; a yen-denominated line of credit totaling 4 billion yen
(US $40 million) for the OP's share of projects in Japan; and approximately $90
million available under its Senior Credit Facility. Chelsea also has the ability
to access the public markets through its $175 million debt shelf registration
and if current market conditions become favorable through its $200 million
equity shelf registration.

Operating cash flow is expected to provide sufficient funds for
distributions. In addition, the OP anticipates retaining sufficient operating
cash to fund re-tenanting and lease renewal tenant improvement costs, as well as
capital expenditures to maintain the quality of its centers.

Common distributions declared and recorded in 1999 were $55.2
million or $2.88 per unit. The OP's 1999 distribution payout ratio as a
percentage of net income before minority interest, loss on writedown of assets
and depreciation and amortization, exclusive of amortization of deferred
financing costs, ("FFO") was 69%. The Senior Credit Facility limits aggregate
dividends and distributions to the lesser of (i) 90% of FFO on an annual basis
or (ii) 100% of FFO for any two consecutive quarters.

The OP's ratio of earnings to fixed charges for each of the
three years ended December 31, 1999, 1998 and 1997 was 2.5, 2.3 and 2.4,
respectively. For purposes of computing the ratio, earnings consist of income
from continuing operations after depreciation and before fixed charges,
exclusive of interest capitalized and amortization of loan costs capitalized.
Fixed charges consist of interest expense, including interest costs capitalized,
the portion of rent expense representative of interest and total amortization of
debt issuance costs expensed and capitalized.

On September 3, 1999, the OP completed a private sale of $65
million of Series B Cumulative Redeemable Preferred Units ("Preferred Units") to
an institutional investor. The private placement took the form of 1.3 million
Preferred Units at a stated value of $50 each. The Preferred Units may be called
at par on or after September 3, 2004, have no stated maturity or mandatory
redemption and pay a cumulative quarterly dividend at an annualized rate of
9.0%. The Preferred Units are not convertible to any other securities of the OP
or Company. Proceeds from the sale were used to pay down borrowings under the
Senior Credit Facility.

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 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. The OP has requested and
expects approval to extend the Facility until March 30, 2003. The Facility bears
interest on the outstanding balance, payable monthly, at a rate equal to the
London Interbank Offered Rate ("LIBOR") plus 1.05% (7.24% at December 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.

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% (7.53% at December 31, 1999). Proceeds from the loan were
used to pay down borrowings under the Senior Credit Facility. The OP is
currently exploring several refinancing alternatives including extension and
payoff of this loan.

The OP is in the process of planning development for 2000 and
beyond. At December 31, 1999, approximately 424,000 square feet of the OP's
planned 2000 development was under construction, including of the 232,000 square
foot first phase of Allen Premium Outlets (Allen, Texas - located on US Highway
75 approximately 30 miles north of Dallas), the 104,000 square foot third phase
of Leesburg Corner and expansions totaling 88,000 square feet at two other
centers. 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 separately financed joint venture projects, the OP
anticipates 2000 development and construction costs of $40 million to $50
million. Funding is currently expected from borrowings under the Senior Credit
Facility, additional debt offerings, and/or equity offerings, except Allen
Premium Outlets. In February 2000, Chelsea Allen Development L.P., a subsidiary
of the OP entered into a $40 million construction loan agreement that is
expected to fund approximately 75% of the costs of the Allen project. The loan,
guaranteed by the OP, matures February 2003 and bears interest at LIBOR plus
1.625% .

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 OP 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 and as of December 31, 1999, $20.8 million was
outstanding. The loan which matures March 2002 and bears interest at LIBOR plus
1.50% is 50% guaranteed by each of the OP and Simon.

In June 1999, the OP signed a definitive agreement with
Mitsubishi Estate Co., Ltd. and Nissho Iwai Corporation to jointly develop, own
and operate premium outlet centers in Japan. The joint venture, known as Chelsea
Japan Co., Ltd. ("Chelsea Japan") intends to develop its initial project in the
city of Gotemba. In conjunction with the agreement, the OP contributed $1.7
million in equity. In addition, Chelsea International Operating Corp., a
subsidiary of the OP entered into a 4 billion yen (US $40 million) line of
credit guaranteed by the Company and OP to fund its share of construction costs.
The line of credit bears interest at yen LIBOR plus 1.35% and matures April
2002. At December 31, 1999, no amounts were outstanding under the loan. In
December 1999, construction began on the 220,000 square-foot first phase of
Gotemba Premium Outlets with opening scheduled for mid-2000. Gotemba is located
on the Tomei Expressway, approximately 60 miles west of Tokyo and midway between
Mt. Fuji and the Hakone resort area. Subject to governmental and other
approvals, Chelsea Japan also expects to announce a project outside Osaka, the
second-largest city in Japan, to open in late 2000.

The OP 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 Company 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 OP's total investment in Europe as of February 2000 is
approximately $4.5 million. The OP 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 February 2000, the OP has
provided limited debt service guarantees of approximately $20 million for three
projects.

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

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

Net cash provided by operating activities was $87.6 million and
$78.7 million for the years ended December 31, 1999 and 1998, respectively. The
increase was primarily due to the growth of the OP's GLA to 5.2 million square
feet in 1999 from 4.9 million square feet in 1998 and receipt of payment on a
non-compete receivable. Net cash used in investing activities decreased $42.2
million for the year ended December 31, 1999 compared to the corresponding 1998
period, as a result of decreased construction activity, proceeds from sale of a
center and receipt of payment on a note receivable. For the year ended December
31, 1999, net cash provided by financing activities decreased by $47.0 million
primarily due to higher borrowings during 1998 offset in part by the sale of
preferred units in September 1999. Proceeds from the sale were used to repay
borrowings under the OP's Senior Credit Facility.

Net cash provided by operating activities was $78.7 million and
$56.6 million for the years ended December 31, 1998 and 1997, respectively. The
increase was primarily due to the growth of the OP's GLA to 4.9 million square
feet in 1998 from 4.3 million square feet in 1997. Net cash used in investing
activities decreased $79.4 million for the year ended December 31, 1998 compared
to the corresponding 1997 period, primarily as a result of the Waikele Factory
Outlets acquisition in March 1997. For the year ended December 31, 1998, net
cash provided by financing activities decreased by $107.1 million primarily due
to borrowings for the Waikele Factory Outlets acquisition and excess capital
raised for development during 1997.

Year 2000 Compliance

In prior years, the OP discussed the nature and progress of its
plans to become Year 2000 ready. In late 1999, the OP completed its remediation
and testing of systems. As a result of those planning and implementation
efforts, the OP experienced no significant disruptions in mission-critical
information technology and non-information technology systems and believes those
systems successfully responded to the Year 2000 date change. The OP expensed
less than $100,000 during 1999 in connection with remediating its systems. The
OP is not aware of any material problems resulting from Year 2000 issues, either
with its internal systems, or the products and services of third parties. The OP
will continue to monitor its mission critical computer applications and those of
its suppliers and vendors throughout the year 2000 to ensure that any latent
Year 2000 matters that may arise are addressed promptly.

Funds from Operations

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

`Year Ended December 31,
                                                                        1999              1998
                                                                     -----------     -------------

Income to common unitholders before extraordinary item.........      $41,419           $21,248
Add:
Depreciation and amortization..................................       39,716            32,486
Loss on writedown of assets....................................          694            15,713

Amortization of deferred financing costs and depreciation
    of non-rental real estate assets...........................       (1,849)           (1,453)
                                                                   -------------     ------------
FFO............................................................      $79,980           $67,994
                                                                   =============     ============

Average units outstanding......................................       19,131            18,871
Distributions declared per unit................................        $2.88             $2.76`

Economic Conditions

Substantially all leases contain provisions, including
escalations of base rents and percentage rentals calculated on gross sales, to
mitigate the impact of inflation. Inflationary increases in common area
maintenance and real estate tax expenses are substantially all reimbursed by
tenants.

Virtually all tenants have met their lease obligations and the
OP continues to attract and retain quality tenants. The OP intends to reduce
operating and leasing risks by continually improving its tenant mix, rental
rates and lease terms, and by pursuing contracts with creditworthy upscale and
national brand-name tenants.

Item 7-A. Quantitative and Qualitative Disclosures
about Market Risk

The OP is exposed to changes in interest rates primarily from
its floating rate debt arrangements. Under its current policies, the OP does not
use interest rate derivative instruments to manage exposure to interest rate
changes. A hypothetical 100 basis point adverse move (increase) in US Treasury
and LIBOR rates would adversely affect the OPs annual interest cost by
approximately $1.3 million annually.

Following is a summary of the OP's debt obligations at December
31, 1999 (in thousands):

`Expected Maturity Date
                             ----------------------------------------------------------------
                                2000      2001   2002      2003   2004    Thereafter    Total     Fair Value
                                ----      ----   ----      ----   ----    ----------    -----     ----------
Fixed Rate Debt:                   -   $99,905      -         -      -    $124,744    $224,649    $212,905
Average Interest Rate:             -     7.75%      -         -      -       7.25%       7.47%
Variable Rate Debt:          $60,000         -      -   $71,035      -          -     $131,035    $131,035
Average Interest Rate:         7.53%         -      -     7.24%      -          -        7.37%`

Item 8. Financial Statements and Supplementary Data

The financial statements and financial information of the OP for
the years ended December 31, 1999, 1998 and 1997 and the Report of the
Independent Auditors thereon are included elsewhere herein. Reference is made to
the financial statements and schedules in Item 14.

Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure

None.

PART III

Items 10, 11, 12 and 13.

The Operating Partnership does not have any directors, executive
officers or stock authorized, issued or outstanding. If the information was
required it would be identical to the information contained in Items 10, 11, 12
and 13 of the Companys Form 10-K, that will appear in the Companys
Proxy Statement furnished to shareholders in connection with the Companys
2000 Annual Meeting. Such information is incorporated by reference in this Form
10-K.

PART IV

Item 14. Exhibits, Financial Statement Schedules
and Reports on Form 8-K

(a) 1 and 2. The response to this portion of Item 14 is
submitted as a separate section of this report.

| | 3. | Exhibits
| | -- | --------

| | 3.1 | Articles of Incorporation of the Company, as amended, including Articles
Supplementary relating to 8 3/8% Series A Cumulative Redeemable Preferred Stock
and Articles Supplementary relating to 9% Series B Cumulative Redeemable
Preferred Stock.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 3.2 | By-laws of the Company. Incorporated by reference to Exhibit 3.2 to Registration
Statement filed by the Company on Form S-11 under the Securities Act of 1933
(file No. 33-67870) (S-11).
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 3.3 | Agreement of Limited Partnership for the Operating Partnership. Incorporated by
reference to Exhibit 3.3 to S-11.
| | --- | -----------------------------------------------------------------------------------------------------------------

| | 3.4 | Amendments No. 1 and No. 2 to Partnership Agreement dated March 31, 1997 and
October 7, 1997. Incorporated by reference to Exhibit 3.4 to Form 10K for the
year ended December 31, 1997.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 3.5 | Amendment No. 3 to Partnership Agreement dated September 3, 1999.
| | --- | -----------------------------------------------------------------

| | 4.1 | Form of Indenture among the Company, Chelsea GCA Realty Partnership, L.P., and
State Street Bank and Trust Company, as Trustee. Incorporated by reference to
Exhibit 4.4 to Registration Statement filed by the Company on Form S-3 under the
Securities Act of 1933 (File No. 33-98136).
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.1 | Registration Rights Agreement among the Company and recipients of Units.
Incorporated by reference to Exhibit 4.1 to S-11.
| | ---- | --------------------------------------------------------------------------------------------------------------------------

| | 10.2 | Term Loan Agreement dated November 3, 1998 among Chelsea GCA Realty Partnership,
L.P., BankBoston, N.A., individually and as an agent, and other Lending
Institutions listed therein. Incorporated by reference to Exhibit 10.2 to Form
10K for the year ended December 31, 1998 ("1998 10K").
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.3 | Credit Agreement dated March 30, 1998 among Chelsea GCA Realty Partnership,
L.P., BankBoston, N.A, individually and as an agent, and other Lending
Institutions listed therein. Incorporated by reference to Exhibit 10.3 to 1998
10K.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.4 | Agreement dated October 23, 1998, among Chelsea GCA Realty Partnership, L.P.,
Chelsea GCA Realty, Inc., Simon Property Group, L.P., the Mills Corporation and
related parties. Incorporated by reference to Exhibit 10.4 to 1998 10K.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.5 | Limited Liability Company Agreement of Simon/Chelsea Development Co., L.L.C.
dated May 16, 1997 between Simon DeBartolo Group, L.P. and Chelsea GCA Realty
Partnership, L.P. Incorporated by reference to Exhibit 10.3 to Form 10K for the
year ended December 31, 1997.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.6 | Subscription Agreement dated as of March 31, 1997 by and among Chelsea GCA
Realty Partnership, L.P., WCC Associates and KM Halawa Partners. Incorporated by
reference to Exhibit 1 to current report on Form 8-K reporting on an event which
occurred March 31, 1997.
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.7 | Stock Subscription Agreement dated May 16, 1997 between Chelsea GCA Realty, Inc.
and Simon DeBartolo Group, L.P. Incorporated by reference to Exhibit 10.5 to
Form 10K for the year ended December 31, 1997.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

PART IV

Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K (continued)

| | 10.8 | Contribution Agreement by and among an institutional investor and Chelsea GCA
Realty Partnership, L.P. and Chelsea GCA Realty, Inc. dated September 3, 1999.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.9 | Joint Venture Agreement among Chelsea GCA Realty Partnership, L.P., Mitsubishi
Estate Co., Ltd. and Nissho Iwai Corporation dated June 16, 1999.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------

| | 23.1 | Consent of Ernst & Young LLP.
| | ---- | -----------------------------

|(b) | Reports on Form 8-K.
None
|--- | -------------------------

|(c) | Exhibits
See (a) 3
|--- | ------------------

|(d) | Financial Statement Schedules - The response to this portion
of Item 14 is submitted as a separate schedule of this report.
|--- | ---------------------------------------------------------------------------------------------------------------------------

Item 8, Item 14(a)(1) and (2) and Item 14(d)

(a)1.   Financial Statements

| | Form 10-KReport Page | 
| | -------------------- | 

|Consolidated Financial Statements-Chelsea GCA Realty Partnership, L.P. | 
|---------------------------------------------------------------------- | 

|Report of Independent Auditors | F-1 | 
|------------------------------ | --- | 

|Consolidated Balance Sheets as of December 31, 1999 and 1998 | F-2 | 
|------------------------------------------------------------ | --- | 

|Consolidated Statements of Income for the years ended December 31, 1999,
     1998 and 1997 | F-3 | 
|------------------------------------------------------------------------------------------- | --- | 

|Consolidated Statements of Stockholders' Equity for the years ended
     December 31, 1999, 1998 and 1997 | F-4 | 
|--------------------------------------------------------------------------------------------------------- | --- | 

|Consolidated Statements of Cash Flows for the years ended December 31, 1999,
     1998 and 1997 | F-5 | 
|----------------------------------------------------------------------------------------------- | --- | 

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

(a)2 and (d) Financial Statement Schedule

|Schedule III-Consolidated Real Estate and Accumulated Depreciation | F-20
and F-21 | 
|------------------------------------------------------------------ | ------------- | 

All other schedules are omitted since the required information
is not present or is not present in amounts sufficient to require submission of
the schedule, or because the information required is included in the consolidated
financial statements and notes thereto.

Report of Independent Auditors

To the Owners
Chelsea GCA Realty Partnership, L.P.

We have audited the accompanying consolidated balance sheets of
Chelsea GCA Realty Partnership, L.P. as of December 31, 1999 and 1998, and the
related consolidated statements of income, partners capital and cash flows
for each of the three years in the period ended December 31, 1999. Our audits
also included the financial statement schedule listed in the Index as Item
14(a). These financial statements and schedule are the responsibility of the
management of Chelsea GCA Realty, Partnership, L.P. Our responsibility is to
express an opinion on the financial statements and schedule based on our audits.

We conducted our audits in accordance with auditing standards
generally accepted in the United States. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
Chelsea GCA Realty Partnership, L.P. as of December 31, 1999 and 1998, and the
consolidated results of its operations and its cash flows for each of the three
years in the period ended December 31, 1999, in conformity with accounting
principles generally accepted in the United States. Also, in our opinion, the
related financial statement schedule, when considered in relation to the basic
financial statements taken as a whole, presents fairly in all material respects
the information set forth therein.

Ernst & Young LLP

New York, New York
February 2, 2000

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

`December 31,
                                                                            1999                 1998

Assets
Rental properties:

     Land.............................................................    $ 118,494           $ 109,318
     Depreciable property.............................................      730,319             683,408
                                                                         ------------        ------------
Total rental property.................................................      848,813             792,726
Accumulated depreciation..............................................     (138,221)           (102,851)
                                                                         ------------        ------------
Rental properties, net................................................      710,592             689,875
Cash and equivalents..................................................        8,862               9,631
Notes receivable-related parties......................................        2,213               4,500
Deferred costs, net...................................................       14,290              17,766
Properties held for sale..............................................        3,388               8,733
Other assets..........................................................       66,710              42,847
                                                                         ------------        ------------
Total assets..........................................................    $ 806,055           $ 773,352
                                                                         ============        ============

Liabilities and partners' capital
Liabilities:
     Unsecured bank debt..............................................    $ 131,035           $ 151,035
     7.75% Unsecured Notes due 2001...................................       99,905              99,824
     7.25% Unsecured Notes due 2007...................................      124,744             124,712
     Construction payables............................................        9,277              12,927
     Accounts payable and accrued expenses............................       27,127              19,769
     Obligation under capital lease...................................        3,233               9,612
     Accrued distribution payable.....................................        3,813               3,274
     Other liabilities................................................       27,064              29,257
                                                                         ------------       ------------
Total liabilities.....................................................      426,198             450,410

Commitments and contingencies

Partners' capital:
General partner units outstanding, 15,932 in 1999 and 15,608 in 1998..      277,296             280,391
Limited partners units outstanding, 3,357 in 1999 and 3,429 in 1998...       39,246              42,551
Preferred partners units outstanding, 1,300 in 1999...................       63,315                   -
                                                                         ------------        ------------
Total partners' capital...............................................      379,857             322,942
                                                                         ------------        ------------
Total liabilities and partners' capital...............................    $ 806,055           $ 773,352
                                                                         ============        ============


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

Chelsea GCA Realty Partnership, L.P.
Consolidated Statements of Income
(In thousands, except per unit data)

`Year ended December 31,
                                                                1999               1998              1997

Revenues:
     Base rental...................................            $98,838            $86,592           $70,693
     Percentage rentals............................             15,647             13,384            10,838
     Expense reimbursements........................             39,748             35,342            28,981
     Other income..................................              8,693              3,997             2,905
                                                        ------------------ ----------------- ------------------
Total revenues.....................................            162,926            139,315           113,417

Expenses:
     Interest.......................................            24,208             19,978            15,447
     Operating and maintenance......................            43,771             38,704            31,423
     Depreciation and amortization..................            39,716             32,486            24,995
     General and administrative.....................             4,853              4,849             3,815

     Other..........................................             2,128              2,149             2,582
                                                        ------------------ ----------------- ------------------
Total operating expenses............................           114,676             98,166            78,262

Income from operations..............................            48,250             41,149            35,155
Loss on writedown of assets........................                694             15,713                 -
                                                        ------------------ ----------------- ------------------
Income before minority interest and
     extraordinary item.............................            47,556             25,436            35,155
Minority interest...................................                 -                  -              (127)
                                                        ------------------ ----------------- ------------------
Income before extraordinary item....................            47,556             25,436            35,028
Extraordinary item-loss on early
     extinguishment of debt.........................                 -               (345)             (252)
                                                        ------------------------------------ ------------------
Net income..........................................            47,556            25,091             34,776
Preferred unit requirement..........................            (6,137)            (4,188)             (907)
                                                        ------------------ ----------------- ------------------
Net income to common unitholders....................           $41,419            $20,903           $33,869
                                                        ================== ================= ==================

Net income to common unitholders:
     General partner................................           $34,093            $17,162           $27,449
     Limited partners...............................             7,326              3,741             6,420
                                                        ------------------ ----------------- ------------------
Total...............................................           $41,419            $20,903           $33,869
                                                        ================== ================= ==================

Net income per common unit:
     General partner (including $0.02 and $0.01
     net loss per unit from extraordinary item in
     1998 and 1997, respectively)...................            $2.17              $1.11             $1.88
     Limited partners (including $0.02 and $0.01
     net loss per unit from extraordinary item in
     1998 and 1997, respectively)...................            $2.16              $1.09             $1.87

Weighted average units outstanding:
     General partner................................            15,742             15,440            14,605
     Limited partners...............................             3,389              3,431             3,435
                                                        ------------------ ----------------- ------------------
Total...............................................            19,131             18,871            18,040

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

Chelsea GCA Realty Partnership, L.P.
Consolidated Statements of Partners Capital
(In thousands)

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

Balance December 31, 1996..................      $185,340          $70,296       $     -         $255,636
Contributions..............................       103,357              389             -          103,746
Net income.................................        28,356            6,420             -           34,776
Common distributions.......................       (38,475)          (8,853)            -          (47,328)
Preferred distribution.....................          (907)               -             -             (907)
Transfer of a limited partners' interest...        19,999          (19,999)            -                -
                                            ---------------- ----------------  ------------- ----------------

Balance December 31, 1997..................       297,670           48,253             -          345,923
Contributions..............................         8,266                -             -            8,266
Net income.................................        21,350            3,741             -           25,091
Common distributions.......................       (42,707)          (9,407)            -          (52,114)
Preferred distribution.....................        (4,188)               -             -           (4,188)
Transfer of a limited partners' interest...             -              (36)            -              (36)
                                            ---------------- ----------------  ------------- ----------------

Balance December 31, 1998..................       280,391           42,551             -          322,942
Contributions (net of costs)...............         7,335                -        63,315           70,650
Net income.................................        38,281            9,275             -           47,556
Common distributions.......................       (45,426)          (9,728)            -          (55,154)
Preferred distribution.....................        (4,188)          (1,949)            -           (6,137)
Transfer of a limited partners' interest...           903             (903)            -                -
                                            ---------------- ----------------  ------------- ----------------
Balance December 31, 1999..................      $277,296          $39,246       $63,315         $379,857
                                            ================ ================  ============= ================

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

Chelsea GCA Realty Partnership, L.P.
Consolidated Statements of Cash Flows
(In thousands)

`Year ended December 31,
                                                                  1999            1998            1997

Cash flows from operating activities
Net income...............................................        $47,556         $25,091         $34,776
Adjustments to reconcile net income to
  net cash provided by operating activities:
  net cash provided by operating activities:
     Depreciation and amortization.......................         39,716          32,486          24,995
     Minority interest in net income.....................              -               -             127
     Loss on writedown of assets.........................            694          15,713               -
     Proceeds from non-compete receivable................          4,600               -               -
     Amortization of non-compete revenue.................         (5,136)              -               -
     Extraordinary loss on early extinguishment of debt..              -             345             252
     Additions to deferred lease costs...................         (2,771)         (3,178)         (6,629)
     Other operating activities..........................            511             522             319
     Changes in assets and liabilities:
      Straight-line rent receivable......................         (1,554)         (1,900)         (1,523)
      Other assets.......................................         (3,076)          1,094             287
      Accounts payable and accrued expenses..............          7,050           8,558           3,990
                                                            ----------------- ------------- ----------------
Net cash provided by operating activities................         87,590          78,731          56,594

Cash flows from investing activities
Additions to rental properties...........................        (62,119)       (116,339)       (195,058)
Additions to deferred development costs..................           (753)         (3,468)         (2,237)
Proceeds from sale of center.............................          4,483               -               -
Loans to related parties.................................         (2,213)              -               -
Payments from related parties............................          4,500               -               -
Additions to investments in joint ventures...............        (21,476)              -               -
Other investing activities...............................              -               -          (1,955)
                                                            ------------------ ------------ ----------------
Net cash used in investing activities....................        (77,578)       (119,807)       (199,250)

Cash flows from financing activities
Net proceeds from sale of preferred units................         63,315               -               -
Net proceeds from sale of common units...................          7,335           8,287          54,951
Net proceeds from sale of preferred stock................              -               -          48,406
Distributions............................................        (60,752)        (56,366)        (48,791)
Debt proceeds ...........................................         49,000         154,000         261,710
Repayments of debt.......................................        (69,000)        (68,000)       (172,000)
Additions to deferred financing costs....................           (679)         (1,695)           (855)
Other financing activities...............................              -             (57)           (113)
                                                            ------------------ ------------ ----------------
Net cash (used in) provided by financing activities......        (10,781)         36,169         143,308

Net (decrease) increase in cash and cash equivalents.....           (769)         (4,907)            652
Cash and cash equivalents, beginning of period...........          9,631          14,538          13,886
                                                            ------------------ ------------ ----------------
Cash and cash equivalents, end of period.................         $8,862          $9,631         $14,538
                                                            ================== ============ ================

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

Notes to Financial Statements

1. Organization and Basis of Presentation
Organization

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 and operation of
manufacturers outlet centers. As of December 31, 1999, the Operating
Partnership operated 19 manufacturers outlet centers in 11 states. 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.

Basis of Presentation

The financial statements contain the accounts of the Operating
Partnership and its majority owned subsidiaries. Such subsidiaries represent
partnerships in which the OP has a greater than 50% ownership interest and the
ability to maintain operational control. All significant intercompany
transactions and accounts have been eliminated in consolidation. The OP accounts
for its non-controlling investments under the equity method. Such investments
are included in other assets in the financial statements.

Disclosure about fair value of financial instruments is based on
pertinent information available to management as of December 31, 1999 and 1998
using available market information and appropriate valuation methodologies.
Although management is not aware of any factors that would significantly affect
the reasonable fair value amounts, such amounts have not been comprehensively
revalued for purposes of these financial statements since that date and current
estimates of fair value may differ significantly from the amounts presented
herein.

2. Summary of Significant Accounting Principles
Rental Properties

Rental properties are presented at cost net of accumulated
depreciation. Depreciation is computed on the straight-line basis over the
estimated useful lives of the assets. The OP uses 25-40 year estimated lives for
buildings, and 15- and 5-7 year estimated lives for improvements and equipment,
respectively. Expenditures for ordinary maintenance and repairs are charged to
operations as incurred, while significant renovations and enhancements that
improve and/or extend the useful life of an asset are capitalized and
depreciated over the estimated useful life. Statement of Financial Accounting
Standards No. 121 (SFAS No. 121), Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of, requires that the
OP review real estate assets for impairment wherever events or changes in
circumstances indicate that the carrying value of assets to be held and used may
not be recoverable. Impaired assets are reported at the lower of cost or fair
value. Assets to be disposed of are reported at the lower of cost or fair value
less cost to sell.

Gains and losses from sales of real estate are recorded when
title is conveyed to the buyer, subject to the buyer's financial commitment
being sufficient to provide economic substance to the sale.

Cash and Equivalents

All demand and money market accounts and certificates of deposit
with original terms of three months or less from the date of purchase are
considered cash equivalents. At December 31, 1999 and 1998 cash equivalents
consisted of repurchase agreements which were held by one financial institution,
commercial paper and U.S. Government agency securities which matured
in January of the following year. The carrying amount of such investments
approximated fair value.

Development Costs

Development costs, including interest, taxes, insurance and
other costs incurred in developing new properties, are capitalized. Upon
completion of construction, development costs are amortized on a straight-line
basis over the useful lives of the respective assets.

Capitalized Interest

Interest, including the amortization of deferred financing costs
for borrowings used to fund development and construction, is capitalized as
construction in progress and allocated to individual property costs.

Foreign Currency Translation

The OP conforms to the requirements of the Statement of
Financial Accounting Standards No. 52 (SFAS 52) entitled Foreign Currency
Translation. Accordingly, assets and liabilities of foreign equity
investees are translated at prevailing year-end rates of exchange. Gains and
losses related to foreign currency were not material for the three year period
ending December 31, 1999.

Rental Expense

Rental expense is recognized on a straight-line basis over the
initial term of the lease.

Deferred Lease Costs

Deferred lease costs consist of fees and direct costs incurred
to initiate and renew operating leases, and are amortized on a straight-line
basis over the initial lease term or renewal period as appropriate.

Deferred Financing Costs

Deferred financing costs are amortized as interest costs on a
straight-line basis over the terms of the respective agreements. Unamortized
deferred financing costs are expensed when the associated debt is retired before
maturity.

Revenue Recognition

Leases with tenants are accounted for as operating leases. Base
rent revenue is recognized on a straight-line basis over the lease term
according to the provisions of the lease. Due and unpaid rents are included in
other assets in the accompanying balance sheet. Certain lease agreements contain
provisions for rents which are calculated on a percentage of sales and recorded
on the accrual basis. These rents are accrued monthly once the required
thresholds per the lease agreement are exceeded. Virtually all lease agreements
contain provisions for additional rents representing reimbursement of real
estate taxes, insurance, advertising and common area maintenance costs.

Bad Debt Expense

Bad debt expense included in other expense totaled $0.8 million,
$0.6 million and $0.8 million for the years ended December 31, 1999, 1998 and
1997, respectively. The allowance for doubtful accounts included in other assets
totaled $1.0 million and $1.1 million at December 31, 1999 and 1998,
respectively.

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.

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.

Concentration of Operating Partnerships
Revenue and Credit Risk

Approximately 34%, 35% and 34% of the Companys revenues
for the years ended December 31, 1999, 1998 and 1997, respectively, were derived
from the Companys two centers with the highest revenues, Woodbury Common
and Desert Hills. The loss of either center or a material decrease in revenues
from either center for any reason may have a material adverse effect on the
Company. In addition, approximately 30%, 34% and 38% of the Companys
revenues for the years ended December 31, 1999, 1998 and 1997, respectively,
were derived from the Companys centers in California, which includes
Desert Hills.

Management of the OP performs ongoing credit evaluations of its
tenants and requires certain tenants to provide security deposits. Although the
Companys tenants operate principally in the retail industry, there is no
dependence upon any single tenant.

Use of Estimates

The preparation of financial statements in conformity with
accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the amounts reported in
the financial statements and accompanying notes. Actual results could differ
from those estimates.

Minority Interest

Through June 30, 1997, the Operating Partnership was the sole
general partner and had a 50% interest in Solvang Designer Outlets
(Solvang), a limited partnership. Accordingly, the accounts of
Solvang were included in the consolidated financial statements of the Operating
Partnership. On June 30, 1997, the Operating Partnership acquired the remaining
50% interest in Solvang. Solvang is not material to the operations or financial
position.

Segment Information

Effective January 1, 1998, the OP 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 OP is engaged in the
development, ownership, acquisition and operation of manufacturers outlet
centers and has one reportable segment, retail real estate. The OP evaluates
real estate performance and allocates resources based on net operating income
and weighted average sales per square foot. The primary sources of revenue are
generated from tenant base rents, percentage rents and reimbursement revenue.
Operating expenses primarily consist of common area maintenance, real estate
taxes and promotional expenses. The retail real estate business segment meets
the quantitative threshold for determining reportable segments. The OPs
investment in foreign operations is not material to the consolidated financial
statements.

Comprehensive Income

In 1997, the FASB issued Statement No. 130, Reporting
Comprehensive Income (Statement 130) which is effective of
fiscal years beginning after December 15, 1997. Statement 130 established
standards for reporting comprehensive income and its components in a full set of
general-purpose financial statements. Statement 130 requires that all components
of comprehensive income be reported in a financial statement that is displayed
with the same prominence as other financial statements. The adoption of this
standard had no impact on the OPs financial position or results of
operations.

Recently Issued Accounting Pronouncements

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

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

3. Rental Properties

The following summarizes the carrying values of rental
properties as of December 31 (in thousands):

`1999             1998
                                                ---------------  --------------
Land and improvements........................       $266,441         $245,814
Buildings and improvements...................        552,240          512,080
Construction-in-process......................         19,288           25,534
Equipment and furniture......................         10,844            9,298
                                                ---------------  --------------
Total rental property........................        848,813          792,726
Accumulated depreciation and amortization....       (138,221)        (102,851)
                                                ---------------  --------------
Total rental property, net...................       $710,592         $689,875
                                                ===============  ==============`

Interest costs capitalized as part of buildings and improvements
were $3.1 million, $5.2 million and $4.8 million for the years ended December
31, 1999, 1998 and 1997, respectively.

Commitments for land, new construction, development, and
acquisitions, excluding separately financed joint venture activity, totaled
approximately $6.2 million at December 31, 1999.

Depreciation expense (including amortization of the capital
lease) amounted to $35.6 million, $29.2 million and $22.3 million for the years
ended December 31, 1999, 1998 and 1997, respectively.

4. Waikele Acquisition

Pursuant to a Subscription Agreement dated as of March 31, 1997,
the OP acquired Waikele Factory Outlets, a manufacturers outlet shopping
center located in Hawaii. The consideration paid by the OP consisted of the
assumption of $70.7 million of indebtedness outstanding with respect to the
property (which indebtedness was repaid in full by the OP immediately after the
closing) and the issuance of special partnership units in the Operating
Partnership, having a fair market value of $0.5 million. Immediately after the
closing, the OP paid a special cash distribution of $5.0 million on the special
units. The cash used by the OP in the transaction was obtained through
borrowings under the OPs Credit Facilities.

The following condensed pro forma (unaudited) information
assumes the acquisition had occurred on January 1, 1997:

`1997

     Total revenue.................................................    $115,802

     Income to common unitholders before extraordinary items.......      34,718

     Net income to common unitholders:
        General partner............................................      27,933
        Limited partners...........................................       6,533
                                                                     -----------
     Total.........................................................      34,466

     Net income per unit:
        General partner (including $0.01 net loss per unit
           from extraordinary item in 1997)........................       $1.91
        Limited partners (including $0.01 net loss per unit
           from extraordinary item in 1997)........................       $1.89`

5. Deferred Costs

The following summarizes the carrying amounts for deferred costs
as of December 31 (in thousands):

`1999          1998
                                             ------------  ------------

Lease costs.................................    $19,838       $17,601
Financing costs.............................     11,557        10,879
Development costs...........................        967         3,675
Other.......................................      1,172         1,172
                                             ------------
                                                           ------------
Total deferred costs........................     33,534        33,327
Accumulated amortization....................    (19,244)      (15,561)
                                             ------------  ------------
Total deferred costs, net...................    $14,290       $17,766
                                             ============  ============`

6. Properties Held for Sale

As of December 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; the property was sold on March 26,
1999.

During the second quarter of 1998, the OP accepted an offer to
purchase 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 of 1998, the initial purchase offer was withdrawn and the OP
received another offer for a net selling price of $4.0 million, requiring a
further writedown of $1.6 million. In January 2000, the center was sold for a
net selling price of $3.3 million resulting in an additional writedown of $0.7
million recognized in the fourth quarter of 1999. For the years ended December
31, 1999 and 1998, Solvang accounted for less than 1% of the OPs revenues
and net operating income.

Management decided to sell these two properties during 1998 as
part of the OPs long-term objective of devoting resources to and focusing
on productive properties. Management determined that the time and effort
necessary to support these two underperforming centers was not worth the
economic benefit to the OP. Management also concluded that these centers would
be more useful as office and/or residential space, which are outside the
OPs area of expertise.

7. Non-Compete Agreement

In October 1998, the OP signed a definitive agreement to
terminate the development of Houston Premium Outlets, a joint venture project
with Simon Property Group, Inc. (Simon). Under the terms of the
agreement, the OP withdrew from the Houston development partnership and agreed
to certain restrictions on competing in the Houston market through 2002. The OP
will receive non-compete payments totaling $21.4 million from The Mills
Corporation; $3.0 million was received at closing, 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 OP has also
been reimbursed for its share of land costs, development costs and fees related
to the project. The revenue is being recognized on a straight-line basis over
the term of the non-compete agreement and the OP recognized income of $5.1
million and $0.9 million during the years ended December 31, 1999 and 1998,
respectively. Such amounts are included in other income.

8. Debt

On March 30, 1998, the OP replaced its two unsecured bank
revolving lines of credit, totaling $150 million (the Credit
Facilities), with a $160 million senior unsecured bank line of credit (the
Senior Credit Facility). The Senior Credit Facility expires on March
30, 2001 and 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. The OP
has requested and expects approval to extend the Facility until March 30, 2003.
The Facility bears interest on the outstanding balance, payable monthly, at a
rate equal to the London Interbank Offered Rate (LIBOR) plus 1.05%
(7.24% at December 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 OPs Senior
Debt rating. A fee on the unused portion of the Senior Credit Facility is
payable quarterly at rates ranging from 0.15% to 0.25% depending on the balance
outstanding. At December 31, 1999, $94 million was available under the Senior
Credit Facility.

Also on March 30, 1998, the OP entered into a $5 million term
loan (the Term Loan) that carries the same interest rate and
maturity as the Senior Credit Facility. The Lender has credit committee approval
to extend the Term Loan to March 30, 2003.

In November 1998, the OP obtained a $60 million term loan that
expires April 2000 and bears interest on the outstanding balance at a rate equal
to LIBOR plus 1.40% (7.53% at December 31, 1999). Proceeds from the loan were
used to pay down borrowings under the Senior Credit Facility. The OP is
currently exploring several alternatives regarding refinancing or payoff of this
loan.

In January 1996, the OP completed a $100 million offering of
7.75% unsecured term notes due January 2001 (the "7.75% Notes"), which are
guaranteed by the Company. The five-year non-callable 7.75% Notes were priced to
yield 7.85% to investors. At December 31, 1999, in the opinion of management,
the 7.75% Notes approximated fair value.

In October 1997, the OP completed a $125 million offering of
7.25% unsecured term notes due October 2007 (the 7.25% Notes). The
7.25% Notes were priced to yield 7.29% to investors, 120 basis points over the
10-year U.S. Treasury rate. At December 31, 1999, in the opinion of management,
the fair value of the 7.25% Notes was approximately $113 million.

Interest paid, excluding amounts capitalized, was $24.1 million,
$19.8 million and $14.1 million for the years ended December 31, 1999, 1998 and
1997, respectively.

9. Preferred Units

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

10. Preferred Stock

In October 1997, the Company issued 1.0 million shares of
nonvoting 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
Companys Credit Facilities.

11. Lease Agreements

The OP is the lessor and sub-lessor of retail stores under
operating leases with term expiration dates ranging from 2000 to 2018. Most
leases are renewable for five years after expiration of the initial term at the
lessees option. Future minimum lease receipts under non-cancelable
operating leases as of December 31, 1999, exclusive of renewal option periods,
were as follows (in thousands):

`2000............      $99,382
               2001............       92,716
               2002............       81,106
               2003............       64,251
               2004............       45,936
               Thereafter......       89,907
                                 --------------
                                    $473,298
                                 ==============`

In 1987, a Predecessor partnership entered into a lease
agreement for property in California. Land was estimated to be approximately 37%
of the fair market value of the property, and accordingly the portion of the
lease attributed to land is classified as an operating lease. The portion
attributed to building is classified as a capital lease as the present value of
payments related to the building exceeded 90% of its fair value at inception of
the lease. The initial lease term is 25 years with two options of 5 and 4 1/2
years, respectively. The lease provides for additional rent based on specific
levels of income generated by the property. No additional rental payments were
incurred during 1999, 1998 or 1997. The OP has the option to cancel the lease
upon six months written notice and six months advance payment of the then fixed
monthly rent. If the lease is canceled, the building and leasehold improvements
revert to the lessor. In August 1999, the OP amended its capital lease resulting
in a writedown of the asset and obligation of $2.7 million and $6.0 million,
respectively. The difference of $3.3 million will be recognized on a
straight-line basis over the remaining term of the amended lease which ends
December 2004.

Operating Leases

Future minimum rental payments under operating leases for land
and administrative offices as of December 31, 1999 were as follows (in
thousands):

`2000...........        $1,021
               2001...........         1,121
               2002...........         1,068
               2003...........         1,058
               2004...........         1,058
               Thereafter.....           529
                                   -----------
                                      $5,855
                                   ===========`

Rental expense amounted to $0.9 million for the year ended
December 31, 1999 and $1.0 million for the years ended December 31, 1998 and
1997.

Capital Lease

A leased property included in rental properties at December 31
consists of the following (in thousands):

`1999              1998
                                              ---------------   ---------------

Building....................................       $6,796            $8,621
Less accumulated amortization...............       (4,830)           (3,937)
                                              ---------------
                                                                ---------------
Leased property, net........................       $1,966            $4,684
                                              ===============   ===============`

Future minimum payments under the capitalized building lease,
including the present value of net minimum lease payments as of December 31,
1999 are as follows (in thousands):

`2000....................................                $819
               2001....................................                 819
               2002....................................                 819
               2003....................................                 819
               2004....................................                 819
                                                               --------------
               Total minimum lease payments............               4,095
               Amount representing interest............                (862)
                                                               --------------
               Present value of net minimum capital
                lease payments.........................              $3,233
                                                               ==============`

12. Commitments and Contingencies

The OP has agreed under a standby facility to provide up to $22
million in limited debt service guarantees for loans provided to Value Retail
PLC, an affiliate, 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 December 31, 1999, the OP
has provided guarantees of approximately $20 million for three projects.

In June 1999, the OP signed a definitive agreement with
Mitsubishi Estate Co., Ltd. and Nissho Iwai Corporation to jointly develop, own
and operate premium outlet centers in Japan. The joint venture, known as Chelsea
Japan Co., Ltd. (Chelsea Japan) intends to develop its initial
project in the city of Gotemba, approximately 60 miles west of Tokyo.
Groundbreaking for the 220,000 square-foot first phase took place in November
1999, with opening scheduled for mid-2000. In conjunction with the agreement,
the OP contributed $1.7 million in equity. In addition, an equity investee of
the OP entered into a 4 billion yen (US $40 million) line of credit guaranteed
by the OP and OP to fund its share of construction costs. At December 31, 1999,
no amounts were outstanding under the loan.

Construction is underway on Orlando Premium Outlets
(OPO), a 430,000 square foot 50/50 joint venture project between the
OP 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 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 each of the OP and Simon and as of
December 31, 1999, $20.8 million was outstanding.

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

13. Related Party Information

During the second quarter of 1999, the OP established a $6
million secured loan facility for the benefit of certain unitholders. At
December 31, 1999, loans made to two unitholders totaled $2.2 million. Each
unitholder issued a note that is secured by OP units, bears interest at a rate
of LIBOR plus 200 basis points per annum, payable quarterly, and is due June
2004. The carrying amount of such loans approximated fair value at December 31,
1999.

In September 1995, the OP transferred property with a book value
of $4.8 million to its 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 OP received $4.5 million as
payment in full for the two notes. The remaining $0.3 million write-off was
recognized in December 1998.

On June 30, 1997 the OP forgave a $3.3 million related party
note and paid $2.4 million in cash to acquire the remaining 50% interest in
Solvang. The OP also collected $0.8 million in accrued interest on the
note.

The OP had space leased to related parties of approximately
56,000 square feet during the years ended December 31, 1999 and 1998 and 61,000
square feet during the year ended December 31, 1997. Rental income from those
tenants, including reimbursement for taxes, common area maintenance and
advertising, totaled $1.8 million during the years ended December 31, 1999 and
1998 and $1.5 million during the year ended December 31 1997.

At December 31, 1999 the OP had a receivable from an equity
investee of $4.0 million that is included in other assets. In January 2000 the
OP received payment of $3.0 million on this receivable.

The OP had a consulting agreement with one of its directors from
August 1998 through December 31, 1999. The agreement called for monthly payments
of $10,000.

Certain Directors and unitholders guarantee OP obligations,
which existed prior to the formation of the OP, under leases for one of the
properties. The OP has indemnified these parties from and against any liability
which they may incur pursuant to these guarantees.

14. Employee Stock Purchase Plan

The Companys Board of Directors and shareholders approved
an Employee Stock Purchase Plan (the Purchase Plan), effective July
1, 1998. The Purchase Plan covers an aggregate of 500,000 shares of the
Companys common stock. Eligible employees have been in the employ of the
OP or a participating subsidiary for five months or more and customarily work
more than 20 hours per week. The Purchase Plan excludes employees who are
highly compensated employees or own 5% or more of the voting power
of the Companys stock. Eligible employees will purchase shares of the
Company through automatic payroll deductions up to a maximum of 10% of weekly
base pay. The Purchase Plan will be implemented by consecutive three-month
offerings (each an Option Period). The price at which shares may be
purchased shall be the lower of (a) 85% of the fair market value of the stock on
the first day of the Option Period or (b) 85% of the fair market value of the
stock on the last day of the Option Period. As of December 31, 1999, 48
employees were enrolled in the Purchase Plan and $1,300 expense has been
incurred and is included in the financial statements. The Purchase Plan will
terminate after five years unless terminated earlier by the Companys Board
of Directors.

15. 401(k) Plan

The OP maintains a defined contribution 401(k) savings plan (the
Plan), which was established to allow eligible employees to make
tax-deferred contributions through voluntary payroll withholdings. All employees
of the OP are eligible to participate in the Plan after completing one year of
service and attaining age 21. Employees who elect to enroll in the Plan may
elect to have from 1% to 15% of their pre-tax gross pay contributed to their
account each pay period. As of January 1, 1998 the Plan was amended to include
an employer discretionary matching contribution in an amount not to exceed 100%
of each participants first 6% of yearly compensation to the Plan. Matching
contributions of approximately $97,000 in 1999 and $150,000 in 1998 are included
in the OPs general and administrative expense.

16. Extraordinary Item

Deferred financing costs of $0.3 million for the years ended
December 31, 1998 and 1997, were expensed as a result of early debt
extinguishments, and are reflected in the accompanying financial statements as
an extraordinary item.

17.  Quarterly Financial Information (Unaudited)

The following summary represents the results of operations,
expressed in thousands except per share amounts, for each quarter during 1999
and 1998:

`March 31    June 30       September 30   December 31
                                                  --------------------------- --------------- ----------------
1999
Base rental revenue............................       $24,555    $24,580          $24,687      $25,016
Total revenues.................................        36,963     38,880           40,384       46,699
Income before extraordinary item to
     common unitholders........................         9,001      9,336           10,359       12,723
Net income to common unitholders...............         9,001      9,336           10,359       12,723
Income before extraordinary item per
     weighted average partnership unit.........         $0.47      $0.49            $0.54        $0.66
Net income per weighted average
     partnership unit..........................         $0.47      $0.49            $0.54        $0.66
1998
Base rental revenue............................       $19,266    $20,815          $22,561      $23,950
Total revenues.................................        28,506     32,068           34,921       43,820
Income before extraordinary item to
     common unitholders........................         6,952      2,582            9,902        1,812
Net income to common unitholders...............         6,952      2,582            9,902        1,467
Income before extraordinary item per
     weighted average partnership unit.........         $0.37      $0.14            $0.52        $0.10
Net income per weighted average
     partnership unit..........................         $0.37      $0.14            $0.52        $0.08`

18.  Non-Cash Financing and Investing Activities

In December 1999, 1998 and 1997, the OP declared distributions
per unit of $0.72, $0.69 and $0.69 for each year, respectively. The limited
partners' distributions were paid in January of each subsequent year.

In June 1997, the OP forgave a $3.3 million related party note
receivable as partial consideration to acquire the remaining 50% interest in
Solvang.

Other assets and other liabilities each include $6.2 million and
$6.6 million in 1999 and 1998, respectively, related to a deferred unit
incentive program with certain key officers to be paid in 2002. Also included is
$12.0 million in 1999 and $16.6 million in 1998 related to the present value of
future payments to be received from The Mills Corporation under the Houston
non-compete agreement.

During 1997, the Operating Partnership issued units with an
aggregate fair market value of $0.5 million to acquire properties.

During 1997, 1.4 million Operating Partnership units were
converted to common shares.

Signatures

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

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

Date:  September 20, 2000