David Bloom, Chairman and Chief Executive Officer of Chelsea, said, "This transaction is an excellent way for us to participate in the continuing consolidation of the outlet industry, further expand our asset base and add to funds from operations. While we remain committed to growing our core Premium Outlet business, market changes are now leading to opportunities to supplement that strategy. We believe that we can leverage our management and financial resources to create significant shareholder value by acquiring moderate outlet centers at attractive prices."

Chelsea will host a conference call for investors and analysts tomorrow, Tuesday, July 17, 2001 at 11:00 a.m. EDST. Access is available by dialing 888-391-0095 (U.S. callers) or 415-904-2445 (international callers) and referencing reservation No. 19376511. A replay of the call will be available through July 27, 2001 by dialing 800-633-8284 (U.S. callers) or 858-812-6440 (international callers) with the same reservation number.

Chelsea Property Group is being advised by Merrill Lynch & Co. and Konover Property Trust is being advised by Credit Suisse First Boston.

Chelsea Property Group, Inc. is a fully integrated, self-administered and self-managed real estate investment trust (REIT) that wholly or partially owns 27 manufacturers' outlet shopping centers -- containing 8.2 million square feet of gross leasable area -- in 15 states and Japan. The Company's leading properties include Woodbury Common Premium Outlets, near New York City; Wrentham Village Premium Outlets, near Boston; Orlando Premium Outlets, in Orlando, Florida; Desert Hills Premium Outlets, near Palm Springs, California; and Gotemba Premium Outlets, near Tokyo, Japan. For more information, please visit http://www.cpgi.com.

Headquartered in Raleigh, North Carolina, Konover Property Trust, Inc. is a self-administered real estate investment trust (REIT) engaged in the management, leasing, marketing, development and acquisition of community and neighborhood shopping centers. The Company currently owns, operates or has under development 148 shopping centers in 22 states totaling approximately 16.9 million square feet. For a complete listing of centers, stores and other information on Konover Property Trust, Inc., visit the Company's web site at http://www.konovertrust.com.

This news release contains "forward-looking" statements under the safe harbor provisions of the Private Litigation Reform Act of 1995. Although Chelsea Property Group believes that the expectations reflected in such statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. Forward-looking statements involve known and unknown risks that may cause actual results to differ materially from expected results. Risk factors include, without limitation, findings discovered in due diligence; closing and documentation risks; the availability and cost of capital; credit risk; the Company's ability to lease its properties; retail, real estate and economic conditions; competition; and other factors detailed from time to time in Chelsea Property Group's reports to the Securities and Exchange Commission. The Company accepts no responsibility for updating forward-looking statements.