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

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FORM 10-Q/A

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

For the quarterly period ended March 31, 2000

or

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

Commission File No. 1-12328
CHELSEA GCA REALTY, INC.(Exact name of registrant as specified in its charter)

|Maryland(State or other jurisdiction
of incorporation or organization) | 22-3251332(I.R.S. employer
identification number)
|---------------------------------------------------------------------- | -------------------------------------------------

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

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

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

The number of shares outstanding of the registrants common
stock, $0.01 par value was 15,935,572 at May 8, 2000.

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Chelsea GCA Realty, Inc.
Index

Part I. Financial Information

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

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

| | Condensed Consolidated Statements of Income
   for the three months ended March 31, 2000 and 1999 | 4
| | ------------------------------------------------------------------------------------------------- | -

| | Condensed Consolidated Statements of Cash Flows
   for the three months ended March 31, 2000 and 1999 | 5
| | ----------------------------------------------------------------------------------------------------- | -

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

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

|Item 3.    Quantitative and Qualitative Disclosures about Market Risk | 14
|--------------------------------------------------------------------- | --

Part II. Other Information

|Item 6.    Exhibits and Reports on Form 8-K | 15
|------------------------------------------- | --

|Signatures | 16
|---------- | --

Item 1. Financial Statements

`Chelsea GCA Realty, Inc.
                                    Condensed Consolidated Balance Sheets
                                    (In thousands, except per share data)
                                                                                March 31,       December 31,
                                                                                  2000              1999
                                                                            --------------    ---------------
                                                                              (Unaudited)           (Note 1)
Assets
Rental properties:
  Land..................................................................     $ 119,040         $ 118,494
  Depreciable property..................................................       741,442           730,319
                                                                            --------------    ---------------
Total rental property...................................................       860,482           848,813
Accumulated depreciation................................................      (147,166)         (138,221)
                                                                            --------------    ---------------
Rental properties, net..................................................       713,316           710,592
Cash and cash equivalents...............................................        20,806             8,862
Notes receivable-related party..........................................         2,201             2,213
Deferred costs, net.....................................................        13,285            14,290
Property held for sale..................................................             -             3,388
Other assets............................................................        59,229            66,710
                                                                            --------------    ---------------
Total assets............................................................     $ 808,837         $ 806,055
                                                                            ==============    ===============

Liabilities and stockholders' equity
Liabilities:
  Unsecured bank debt...................................................     $ 131,035         $ 131,035
  7.75% Unsecured Notes due 2001........................................        99,925            99,905
  Construction loan due 2003............................................         1,319                 -
  7.25% Unsecured Notes due 2007........................................       124,752           124,744
  Construction payables.................................................         9,432             9,277
  Accounts payable and accrued expenses.................................        23,977            27,127
  Obligation under capital lease........................................         3,039             3,233
  Accrued dividend and distribution payable.............................        15,862             3,813
  Other liabilities.....................................................        24,631            27,064
                                                                            --------------    ---------------
Total liabilities.......................................................       433,972           426,198

Commitments and contingencies

Minority interest.......................................................       101,683           102,561

Stockholders' equity:
  8.375% series A cumulative redeemable preferred stock, $0.01 par
  value, authorized 1,000 shares, issued and outstanding 1,000
  shares in 2000 and 1999 (aggregate liquidation preference $50,000)                10                10
  Common stock, $0.01 par value, authorized 50,000 shares,
  issued and outstanding 15,935 in 2000 and 15,932 in 1999..............           159               159
  Paid-in-capital.......................................................       347,782           347,725
  Distributions in excess of net income.................................       (74,769)          (70,598)
                                                                            --------------    ---------------
Total stockholders' equity..............................................       273,182           277,296
                                                                            --------------    ---------------
Total liabilities and stockholders' equity..............................     $ 808,837         $ 806,055
                                                                            ==============    ===============`

`Chelsea GCA Realty, Inc.
                               Condensed Consolidated Statements of Income
                            for the Three Months Ended March 31, 2000 and 1999
                                               (Unaudited)
                                  (In thousands, except per share data)

                                                                       2000                1999
                                                                -----------------   -----------------
Revenues:
   Base rent................................................          $26,251             $24,555
   Percentage rent..........................................            2,566               2,371
   Expense reimbursements...................................            8,774               8,192
   Other income.............................................            2,003               1,845
                                                                -----------------   -----------------
Total revenues..............................................           39,594              36,963
                                                                -----------------   -----------------

Expenses:
   Interest.................................................            5,637               6,283
   Operating and maintenance................................            9,855               9,151
   Depreciation and amortization............................           10,878               9,924
   General and administrative...............................              758               1,139
   Other....................................................              538                 418
                                                                -----------------   -----------------
Total expenses..............................................           27,666              26,915
                                                                -----------------   -----------------

Income before minority interest.............................           11,928              10,048

Minority interest...........................................           (3,101)             (1,621)
                                                                -----------------   -----------------

Net income..................................................            8,827               8,427

Preferred dividend requirement..............................           (1,047)             (1,047)
                                                                -----------------   -----------------

Net income to common shareholders...........................           $7,780              $7,380
                                                                =================   =================

Earnings per share
Basic:
Net income per common share.................................            $0.49               $0.47
Weighted average common shares outstanding..................           15,934              15,608

Diluted:
Net income per common share.................................            $0.49               $0.47
Weighted average common shares outstanding..................           16,011              15,760

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

`Chelsea GCA Realty, Inc.
                           Condensed Consolidated Statements of Cash Flows
                          for the Three Months Ended March 31, 2000 and 1999
                                              (Unaudited)
                                             (In thousands)


                                                                        2000                1999
                                                                     -------------      -------------
Cash flows from operating activities
Net income.......................................................       $8,827              $8,427
Adjustments to reconcile net income to net cash
   provided by operating activities:
    Depreciation and amortization................................       10,878              9,924
    Minority interest in net income..............................        3,101              1,621
    Proceeds from non-compete receivable.........................        4,600              4,600
    Amortization of non-compete revenue..........................       (1,284)            (1,284)
    Additions to deferred lease costs............................          -                 (101)
    Other operating activities...................................          185                 29
    Changes in assets and liabilities:
      Straight-line rent receivable..............................         (401)              (335)
      Other assets...............................................        4,582              6,142
      Accounts payable and accrued expenses......................       (3,426)            (2,936)
                                                                      ------------      -------------
Net cash provided by operating activities........................       27,062             26,087
                                                                      ------------      -------------

Cash flows used in investing activities
Additions to rental properties...................................      (12,433)            (13,803)
Additions to deferred development costs..........................           89                (359)
Proceeds from sale of center.....................................        3,372               4,483
Payments from related party......................................           12               4,500
Additions to investments in joint ventures.......................       (2,180)            (13,153)
                                                                      ------------      -------------
Net cash used in investing activities............................      (11,140)            (18,332)
                                                                      ------------      -------------

Cash flows from financing activities
Distributions....................................................       (4,928)             (3,414)
Debt proceeds....................................................        1,319               4,000
Additions to deferred financing costs............................         (426)                (90)
Net proceeds from sale of common stock...........................           57                  37
                                                                      ------------      -------------
Net cash (used in) provided by financing activities..............       (3,978)                533
                                                                      ------------      -------------

Net increase in cash and cash equivalents........................       11,944               8,288
Cash and cash equivalents, beginning of period...................        8,862               9,631
                                                                      ------------      -------------
Cash and cash equivalents, end of period.........................      $20,806             $17,919
                                                                      ============      =============
       The accompanying notes are an integral part of the financial statements.`

Chelsea GCA Realty, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)

1. Organization and Basis of Presentation

Chelsea GCA Realty, Inc. (the Company) is a self-administered
and self-managed real estate investment trust (REIT). The Company is
the managing general partner of Chelsea GCA Realty Partnership, L.P. (the
Operating Partnership or OP), an operating partnership
which at March 31, 2000 owned and provided development, leasing, marketing and
management services for 19 upscale and fashion-oriented manufacturers
outlet centers (the Properties) containing approximately 5.3 million
square feet of gross leasable area (GLA). The Properties are located
near large metropolitan areas including New York City, Los Angeles, San
Francisco, Sacramento, Boston, Atlanta, Washington DC, Portland (Oregon) and
Cleveland, or at or near tourist destinations including Honolulu, the Napa
Valley, Palm Springs and the Monterey Peninsula. The Company also has a number
of properties under development and expansion.

All of the Companys assets are held by, and all of its
operations are conducted through, the OP. Due to the Companys ability, as
the sole general partner, to exercise both financial and operational control
over the OP, it is consolidated in the accompanying financial statements. All
significant intercompany transactions and accounts have been eliminated in
consolidation. The Company accounts for its non-controlling investments under
the equity method. Such investments are included in other assets in the
financial statements.

Common ownership of the OP as of March 31, 2000 was approximately as follows:

`Company                 82.6%             15,935,000  units
         Unitholders             17.4%              3,356,000  units
                               -----------     ---------------
                     Total      100.0%             19,291,000`

The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions to Form
10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of
the information and notes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for fair
presentation have been included. Operating results for the three month period
ended March 31, 2000 are not necessarily indicative of the results that may be
expected for the year ending December 31, 2000. The balance sheet at December
31, 1999 has been derived from the audited financial statements at that date but
does not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. These
financial statements should be read in conjunction with the consolidated
financial statements and accompanying notes included in the Companys
Annual Report on Form 10-K for the year ended December 31, 1999.

The Company is engaged in the development, ownership,
acquisition and operation of manufacturers outlet centers and has one
reportable segment, retail real estate. The Company 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 Companys
investment in foreign operations is not material to the consolidated financial
statements.

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 Company expects to adopt
the new Statement effective January 1, 2001. The Statement will require the
Company 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 Company does not anticipate that
the adoption of the Statement will have a significant effect on its results of
operations or financial position.

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 Companys financial position or results of
operations.

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 Company 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 Company does not anticipate that the
adoption of the SAB will have a material effect of its results of operations or
financial position.

On March 31, 2000 the Financial Accounting Standards Board
issued FASB Interpretation No. 44 Accounting for Certain Transactions
Involving Stock Compensation an interpretation of APB Opinion No. 25. The
Interpretation clarifies guidance for certain issues that arose in the
application of APB Opinion No. 25, Accounting for Stock Issued to
Employees. The Interpretation is primarily applied prospectively to all
new awards, modifications to outstanding awards, and changes in employee status
after July 1, 2000. Management does not anticipate that its adoption will have a
material effect on the financial position or results of operations of the
Company.

2. Property Held for Sale

As of December 31, 1999, property held for sale represented the
fair value, less estimated costs to sell, of Solvang Designer Outlets
(Solvang). On January 4, 2000, Solvang was sold for a net selling
price of $3.3 million. For the quarter ended March 31, 2000, Solvang accounted
for less than 1% of the Companys revenues and net operating income.

3. Non-Compete Agreement

In October 1998, the Company 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 Company withdrew from the Houston development partnership and
agreed to certain restrictions on competing in the Houston market through 2002.
The Company 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 Company was reimbursed for its share of land costs, development costs
and fees related to the project. The revenue is being recognized on a
straight-line basis over the term of the non-compete agreement and $1.3 million
has been recognized as other income in each of the three month periods ended
March 31, 2000 and 1999.

4. Debt

The OP has a $160 million senior unsecured bank line of credit
(the Senior Credit Facility) and has an annual right to request a
one-year extension which may be granted at the option of the lenders. The
Companys lenders have agreed to extend the Facility until March 30, 2003.
The Facility bears interest on the outstanding balance, payable monthly, at a
rate equal to the London Interbank Offered Rate (LIBOR) plus 1.05%
(7.19% at March 31, 2000) or the prime rate, at the OPs option. The LIBOR
rate spread ranges from 0.85% to 1.25% depending on the Companys Senior
Debt rating. A fee on the unused portion of the Senior Credit Facility is
payable quarterly at rates ranging from 0.15% to 0.25% depending on the balance
outstanding. At March 31, 2000, $94 million was available under the Senior
Credit Facility.

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

In November 1998, the OP obtained a $60 million term loan which
expired April 2000 and bore interest on the outstanding balance at a rate equal
to LIBOR plus 1.40% (7.59% at March 31, 2000).

In April 2000 a subsidiary of the Company entered into a $70
million mortgage loan secured by four of its properties which matures April 2010
and bears interest, payable quarterly, at a rate equal to LIBOR plus 1.50% or
prime rate plus 1.00%. Net proceeds were used to retire the $60 million term
loan and to repay borrowings under the Companys Senior Credit Facility.

In February 2000, a subsidiary of the Company entered into a $40
million construction loan facility that will be used to fund the Allen Premium
Outlets project. The loan which matures February 2003 bears interest on the
outstanding balance at a rate equal to LIBOR plus 1.625% (7.70% at March 31,
2000) and is guaranteed by the Company and the OP. At March 31, 2000, $1.3
million was outstanding.

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.

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

Interest and loan costs of approximately $1.1 million and $0.6
million were capitalized as development costs during the three months ended
March 31, 2000 and 1999, respectively.

5. Stockholders Equity

Following is a statement of stockholders' equity for the three
months ended March 31, 2000 (in thousands):

`Preferred  Common Stock              Distrib. in      Total
                                             Stock At       At        Paid-in-     Excess of  Stockholders'
                                            Par Value    Par Value     Capital    Net Income     Equity
                                            ---------    ---------     -------    ----------     ------

Balance December 31, 1999...................  $10         $159         $347,725    ($70,598)   $277,296

Net income..................................    -            -            -           8,827       8,827
Preferred dividend requirement..............    -            -            -          (1,047)     (1,047)
Cash distributions declared ($0.75 per
     common share)..........................    -            -            -         (11,951)    (11,951)
Exercise of stock options...................    -            -               50            -         50
Shares issued through Employee Stock
     Purchase Plan (net of costs)...........    -            -                7            -          7
                                             -----       -------      ----------   ----------  ---------
Balance March 31, 2000......................  $10         $159         $347,782     ($74,769)   $273,182
                                             =====       =======      ==========   ==========  =========`

6. 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. Proceeds
from the sale were used to pay down borrowings under the Senior Credit Facility.
Activity related to the Preferred Units is included in Minority Interest.

7. Preferred Stock

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

8. Dividends

On March 9, 2000, the Board of Directors of the Company declared
a $0.75 per share dividend to shareholders of record on March 31, 2000. The
dividend, totaling $12.0 million, was paid on April 17, 2000. The OP
simultaneously paid a $0.75 per unit cash distribution, totaling $2.5 million,
to its unitholders.

9. Income Taxes

The Company is taxed as a REIT under Section 856(c) of the
Internal Revenue Code of 1986, as amended, and generally will not be subject to
federal income tax to the extent it distributes at least 95% of its REIT taxable
income to its stockholders and meets certain other requirements. If the Company
fails to qualify as a REIT in any taxable year, the Company will be subject to
federal income tax on its taxable income at regular corporate rates. The Company
may also be subject to certain state and local taxes on its income and property
and federal income and excise taxes on its undistributed taxable income. At
March 31, 2000 and 1999, the Company was in compliance with all REIT
requirements and was not subject to federal income taxes.

10. Net Income Per Common Share

Basic earnings per common share is computed using the weighted
average number of shares outstanding. Diluted earnings per common share is
computed using the weighted average number of shares outstanding adjusted for
the incremental shares attributed to outstanding options to purchase common
stock of 0.1 million for the three months ended March 31, 2000 and 0.2 million
for the three months ended March 31, 1999.

The following table sets forth the computation of basic and
diluted earnings per share for the periods indicated:

`Three Months Ended
                                                                            March 31,
   (In thousands, except per share amounts)                            2000            1999
   Numerator
   Numerator for basic and diluted earnings per share -
      net income to common shareholders..........................     $7,780          $7,380

   Denominator
   Denominator for basic earnings per share - weighted
      average shares.............................................     15,934          15,608
   Effect of dilutive securities:
      Stock options..............................................         77             152
   Denominator for diluted earnings per share - adjusted
      weighted-average shares and assumed conversions............     16,011          15,760
   Per share amounts:

      Net income - basic.........................................      $0.49           $0.47

      Net income - diluted.......................................      $0.49           $0.47`

11. Commitments and Contingencies

The Company 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 Companys total investment in Europe as of
March 31, 2000 was approximately $4.6 million. The Company has also agreed under
a standby facility to provide up to $22 million in limited debt service
guarantees for loans provided to Value Retail PLC, 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 March 31, 2000, the Company has provided guarantees of
approximately $20 million for three projects.

In June 1999, the Company entered into an agreement with
Mitsubishi Estate Co., Ltd. and Nissho Iwai Corporation to jointly develop, own
and operate premium outlet centers in Japan. The joint venture, known as Chelsea
Japan Co., Ltd. ("Chelsea Japan") is nearing completion of its initial project,
in the city of Gotemba. In conjunction with the agreement, the Company
contributed $1.7 million in equity. In addition, an equity investee of the
Company 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 March 31,
2000, no amounts were outstanding under the loan. In March 2000, Chelsea Japan
entered into a 3.6 billion yen (US $36 million) loan with a Japanese bank to
fund construction costs. As of March 31, 2000, 1.6 billion yen was outstanding.
The loan is secured by the property under construction and is 40% guaranteed by
the Company and the OP. In November 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. Chelsea
Japan has also started construction on a second project outside Osaka, the
second-largest city in Japan, to open in late 2000.

Construction is nearly complete on Orlando Premium Outlets
(OPO), a 430,000 square foot 50/50 joint venture project between the
Company 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 the end
of May 2000. In February 1999, the joint venture entered into an $82.5 million
construction loan agreement. The loan is 50% guaranteed by each of the Company
and Simon and as of March 31, 2000, $35.4 million was outstanding.

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

12. 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 March
31, 2000, loans made to two unitholders totaled $2.2 million. Each unitholder
issued a note that is secured by OP units, bears interest at a rate of LIBOR
plus 200 basis points per annum, payable quarterly and is due June 2004.

Chelsea GCA Realty, Inc.

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

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

General Overview

From April 1, 1999 to March 31, 2000, the Company grew by
increasing rent at its existing centers resulting in base rent revenue growth of
$0.2 million and expanding its existing centers resulting in base rent revenue
growth of $1.4 million. The Company operated 19 manufacturers outlet
centers at March 31, 2000 and March 31, 1999. The Companys operating gross
leasable area (GLA) at March 31, 2000, increased 7.3% to 5.3 million square feet
from 4.9 million square feet at March 31, 1999. Net GLA added since April 1,
1999 is detailed as follows:

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

Centers expanded:
    Wrentham Village.............................           120                 -               120
    North Georgia................................           103                 -               103
    Leesburg Corner..............................            89                34                55
    Camarillo....................................            45                 -                45
    Other (net)..................................             2                 -                 2
                                                     -------------     -------------     -------------
Total centers expanded...........................           359                34               325

Net GLA added during the period..................           359                34               325

GLA at end of period.............................         5,250             5,250             5,216`

---

Results of Operations

Comparison of the three months ended March 31, 2000 to the
three months ended March 31, 1999.

Income before minority interest increased $1.9 million to $11.9
million for the three months ended March 31, 2000 from $10.0 million for the
three months ended March 31, 1999. Increases in revenues, primarily the result
of expansions, were offset by increased depreciation and amortization.

Base rentals increased $1.7 million, or 6.9%, to $26.3 million
for the three months ended March 31, 2000 from $24.6 million for the three
months ended March 31, 1999 due to expansions and higher average rents on new
leases and renewals.

Percentage rents increased $0.2 million to $2.6 million for the
three months ended March 31, 2000, from $2.4 million for the three months ended
March 31, 1999. The increase was primarily due to expansions.

Expense reimbursements, representing contractual recoveries from
tenants of certain common area maintenance, operating, real estate tax,
promotional and management expenses, increased $0.6 million, or 7.1%, to $8.8
million for the three months ended March 31, 2000 from $8.2 million for the
three months ended March 31, 1999, due to the recovery of operating and
maintenance costs from increased GLA. The average recovery of reimbursable
expenses was 89.0% in the first quarter of 2000, compared to 89.5% in the first
quarter of 1999.

Other income increased $0.2 million to $2.0 million for the
three months ended March 31, 2000, from $1.8 million for the three months ended
March 31, 1999. The increase is primarily the result of income from center
ancillary operations including vending and kiosks.

Interest in excess of amounts capitalized decreased $0.7 million
to $5.6 million for the three months ended March 31, 2000 from $6.3 million for
the three months ended March 31, 1999 primarily due to lower debt balances in
the first quarter 2000.

Operating and maintenance expenses increased $0.7 million, or
7.7%, to $9.9 million for the three months ended March 31, 2000 from $9.2
million for the three months ended March 31, 1999. The increase was primarily
due to costs related to expansions.

Depreciation and amortization expense increased $1.0 million, or
9.6%, to $10.9 million for the three months ended March 31, 2000 from $9.9
million for the three months ended March 31, 1999. The increase was due to
depreciation of expansions.

General and administrative expense decreased $0.4 million to
$0.7 million for the three months ended March 31, 2000 from $1.1 million for the
three months ended March 31, 1999 primarily due to decreased accrual for
deferred incentive compensation.

Other expenses increased $0.1 million to $0.5 million for the
three months ended March 31, 2000 from $0.4 million for the three months ended
March 31, 1999. The increase was primarily due to the impact of legal fee
recoveries in 1999.

Liquidity and Capital Resources

The Company believesit has adequate financial resources
to fund operating expenses, distributions, and planned development and
construction activities over the short-term, which is less than 12 months and
the long-term, which is 12 months or more. Operating cash flow of $87.6 million
in 1999 is expected to increase in 2000 with a full year of operations of the
340,000 square feet of GLA added during 1999 and scheduled openings of
approximately 1.3 million square feet in 2000, which includes the Companys
50% ownership share in the 430,000 square foot Orlando Premium Outlets and 40%
ownership share each in the 220,000 square foot Gotemba Premium Outlets, outside
Tokyo, Japan and the 175,000 square foot Rinku Premium Outlets, outside Osaka,
Japan. The Company has adequate funding sources to complete and open all of its
current development projects through the use of available cash of $20.8 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 Companys share of
project costs in Japan; and approximately $94 million available under its Senior
Credit Facility. Chelsea also has the ability to access the public markets, if
market conditions become favorable, through its $175 million debt shelf
registration and its $200 million equity shelf registration.

Operating cash flow is expected to provide sufficient funds for
dividends and distributions in accordance with REIT federal income tax
requirements. In addition, the Company 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 during the three
months ended March 31, 2000 were $14.5 million, or $0.75 per share or unit. The
Companys dividend payout ratio as a percentage of net income before
minority interest, depreciation and amortization (exclusive of amortization of
deferred financing costs (FFO) was 73.1% for the three months ended
March 31, 2000. The Senior Credit Facility limits aggregate dividends and
distributions to the lesser of (i) 90% of FFO on an annual basis or (ii) 100% of
FFO for any two consecutive quarters.

In September 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.

The OP has a $160 million senior unsecured bank line of credit
(the Senior Credit Facility) and has an annual right to request a
one-year extension which may be granted at the option of the lenders. The
Companys lenders have agreed to extend the Facility until March 30, 2003.
The Facility bears interest on the outstanding balance, payable monthly, at a
rate equal to the London Interbank Offered Rate (LIBOR) plus 1.05%
(7.19% at March 31, 2000) or the prime rate, at the OPs option. The LIBOR
rate spread ranges from 0.85% to 1.25% depending on the Company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
expired April 2000 and bore interest on the outstanding balance at a rate equal
to LIBOR plus 1.40% (7.59% at March 31, 2000). In April 2000 a subsidiary of the
Company entered into a $70 million mortgage loan secured by four of its
properties which matures April 2010 and bears interest, payable quarterly, at a
rate equal to LIBOR plus 1.50% or prime rate plus 1.00%. Net proceeds were used
to retire the $60 million term loan and to repay borrowings under the
Companys Senior Credit Facility. This mortgage loan strengthened the
Companys balance sheet by extending and sequencing debt maturities.

In February 2000, Chelsea Allen Development L.P., a subsidiary
of the Company entered into a $40 million construction loan facility that will
be used to fund the Allen Premium Outlets project. The loan which matures
February 2003 bears interest on the outstanding balance at a rate equal to LIBOR
plus 1.625% (7.70% at March 31, 2000) and is guaranteed by the Company and the
OP. At March 31, 2000, $1.3 million was outstanding.

Development activity during the year includes the 430,000
square-foot Orlando Premium Outlets scheduled to open at the end of May 2000;
the 220,000 square-foot first phase of Gotemba Premium Outlets (outside Tokyo,
Japan), a Chelsea Japan Co. project scheduled to open in mid-July 2000; the
230,000 square-foot first phase of Allen Premium Outlets (Allen, Texas),
scheduled to open in the fourth quarter; and the 175,000 square-foot first phase
of Rinku Premium Outlets (near Osaka, Japan), Chelsea Japans second
project, also scheduled to open in the fourth quarter. Additionally, expansions
totaling approximately 285,000 square feet of GLA are under construction and
scheduled to open in the next 12 months, including 125,000 square feet at
Wrentham Village Premium Outlets (Wrentham, Massachusetts); 105,000 square feet
at Leesburg Corner Premium Outlets (Leesburg, Virginia); and 55,000 square feet
at Folsom Premium Outlets (Folsom, California). These projects are under
development and there can be no assurance that they will be completed or opened,
or that there will not be delays in opening or completion. All current
development activity is fully financed either through project specific secured
construction financing or through the Senior Credit Facility. The Company will
seek to obtain permanent financing once the projects are completed and income
has been stabilized.

Construction is nearly complete 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 Company 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 which matures
March 2002 and bears interest at LIBOR plus 1.50%. The loan is 50% guaranteed by
each of the Company and Simon and as of March 31, 2000, $35.4 million was
outstanding.

In June 1999, the Company entered into an agreement with
Mitsubishi Estate Co., Ltd. and Nissho Iwai Corporation to jointly develop, own
and operate premium outlet centers in Japan. The joint venture, known as Chelsea
Japan Co., Ltd. (Chelsea Japan) is nearing completion of its initial
project, in the city of Gotemba. In conjunction with the agreement, the Company
contributed $1.7 million in equity. In addition, an Chelsea International
Operating Corp., a subsidiary of the Company 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 March 31, 2000, no amounts were outstanding under the
loan. In March 2000, Chelsea Japan entered into a 3.6 billion yen (US $36
million) loan with a Japanese bank to fund construction costs. As of March 31,
2000, 1.6 billion yen was outstanding. The loan is secured by the property under
construction and is 40% guaranteed by the Company and the OP. In November 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. Chelsea Japan has also started construction on a second
project outside Osaka, the second-largest city in Japan, to open in late 2000.

The Company 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 Companys total investment in Europe as of
March 31, 2000 was approximately $4.6 million. The Company has also agreed under
a standby facility to provide up to $22 million in limited debt service
guarantees for loans provided to Value Retail PLC, 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 March 31, 2000, the Company has provided guarantees of
approximately $20 million for three projects.

The Company 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 Company 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 Company 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 Company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 Company to access a broad array of
capital sources, including bank or institutional borrowings and secured and
unsecured debt and equity offerings, subject to market conditions.

Net cash provided by operating activities increased $1.0 million
for the three months ended March 31, 2000 compared to the corresponding 1999
period, primarily due to the growth of the Companys GLA to 5.3 million
square feet in 2000 from 4.9 million square feet in 1999. Net cash used in
investing activities decreased $7.2 million for the three months ended March 31,
2000 compared to the corresponding 1999 period, as a result of decreased equity
requirements of joint venture activities offset by the receipt of payment on a
note receivable in 1999. At March 31, 2000, net cash used in financing
activities increased by $4.5 million primarily due to higher distributions paid
and lower borrowings during 2000.

Funds from Operations

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

`Three Months Ended
                                                                                 March 31,
                                                                            2000              1999
                                                                      -------------     ------------

Net income to common shareholders ..............................          $7,780            $7,380
Add back:
  Depreciation and amortization.................................          10,878             9,924
  Amortization of deferred financing costs and depreciation
    of non-rental real estate assets............................            (508)             (435)
  Preferred unit distribution...................................          (1,462)                -
  Minority interest.............................................           3,101             1,621
                                                                      -------------     ------------
FFO.............................................................         $19,789           $18,490
                                                                      =============     ============

Average diluted shares/units outstanding........................          19,368            19,189

Dividends declared per share....................................           $0.75             $0.72`

Item 3. Quantitative and Qualitative Disclosures
about Market Risk

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

Following is a summary of the Company's debt obligations at
March 31, 2000 (in thousands):

`Expected Maturity Date
                         ----------------------------------------------------------------
                                                                                                  Fair
                            2000      2001    2002      2003   2004    Thereafter     Total       Value
                            ----      ----    ----      ----   ----    ----------     -----       -----
Fixed Rate Debt:               -   $99,925       -         -      -    $124,752     $224,677    $212,905
Average Interest Rate:         -     7.75%       -         -      -       7.25%        7.47%
Variable Rate Debt:      $60,000         -       -   $72,354      -          -      $132,354    $132,354
Average Interest Rate:     7.59%         -       -     7.22%      -          -         7.39%`

Chelsea GCA Realty, Inc.

Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K

The Company did not file any reports on Form 8-K during the
three months ended March 31, 2000.

Chelsea GCA Realty, Inc.

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