First quarter funds from operations (FFO) before minority interest rose 22% to $27.9 million from $22.9 million in the year-ago first quarter, and diluted FFO per share rose 7% to $1.24 from $1.16, respectively. FFO attributable to real estate operations rose 27% to $30.6 million from $24.1 million; or to $1.36 per share from $1.22 per share, up 11%, respectively. Rental revenues from wholly-owned assets rose 32% to $41.6 million from $31.5 million, and total revenues from wholly-owned assets rose 26% to $56.7 million from $44.8 million, respectively. Income from unconsolidated investments rose 15% to $3.8 million from $3.3 million, partially offset by a $2.7 million loss related to the Company's investment in Chelsea Interactive. First quarter earnings before interest, depreciation and amortization (EBITDA) rose 19% to $42.5 million from $35.8 million, respectively.

First quarter revenue and earnings comparisons were positively impacted by internal rent growth; higher percentage rents; the completion since December 31, 2000 of expansions totaling approximately 215,000 square feet at two operating Premium Outlet(TM) centers; and the acquisition in September, 2001 - valued at $180 million - of a portfolio of 31 retail properties from Konover Property Trust.

Gross leasable area (GLA) in operation, including joint venture projects in the United States and Japan, totaled 12.6 million square feet at March 31, 2002, compared to 8.2 million square feet a year earlier. The Company's U.S. Premium Outlet portfolio remained 98% leased at the end of the quarter.

Same-space sales (weighted average sales per square foot reported in space open for the full duration of both comparison periods) at the Company's U.S. Premium Outlet centers were up 2% in the first quarter. In 2001, sales in the U.S. Premium Outlet portfolio averaged $379 per square foot.

As previously announced, on March 8 the Company's 40%-owned joint venture - Chelsea Japan Co., Ltd. - opened the 70,000 square-foot second phase of Rinku Premium Outlets, near Osaka, Japan. Rinku Premium Outlets is now the largest outlet center in Japan, with 250,000 square feet of GLA fully leased, followed by Chelsea Japan's other property, Gotemba Premium Outlets, at 220,000 square feet.

Also as reported earlier, on April 1 the Company completed two property acquisitions with a combined value of $103.3 million. The purchases were of the 50% interest in Orlando Premium Outlets previously owned by Simon Property Group (NYSE: SPG), for $76.3 million of equity and assumed debt; and Prime Outlets at Edinburgh, a 305,000 square-foot outlet center located in Edinburgh, Indiana, for cash of $27.0 million.

David Bloom, Chairman and Chief Executive Officer, said, "Our strong first quarter results reflect continued internal growth, higher-than-expected percentage rents, new income from project expansions, and the successful integration and management of the Konover properties acquired last year. Although sales results for the quarter differed regionally and were affected to varying degrees by a continued slowdown in international tourism, we are very encouraged by positive same-space comparisons for the portfolio as a whole.

"We are continuing to take advantage of acquisition opportunities such as Orlando and Edinburgh, which will contribute to funds from operations and further strengthen our portfolio, and our planned projects in Las Vegas and Chicago remain on schedule, as do Chelsea Japan's new developments," he added.

Chelsea Property Group, Inc. is a fully integrated, self-administered and self-managed real estate investment trust (REIT) that wholly or partially owns 58 Premium Outlet and other shopping centers - containing approximately 13.0 million square feet of GLA - in 28 states and Japan. The Company's leading properties include Woodbury Common Premium Outlets, near New York City; Orlando Premium Outlets, in Orlando, Florida; Wrentham Village Premium Outlets, near Boston; Desert Hills Premium Outlets, near Palm Springs, California; and Gotemba Premium Outlets, near Tokyo, Japan. Please see www.cpgi.com for more information.

The Company will host a conference call with investors and analysts tomorrow, Thursday, May 2, 2002, at 2:00 p.m. eastern time. The call may be accessed by dialing 800-680-1402 (U.S. callers) or 646-862-1064 (international callers) and referencing reservation No. 20544942. A replay of the call will be available through May 9, 2002 by dialing 800-633-8284 (U.S. callers) or 858-812-6440 (international callers) with the same reservation number.

This news release includes "forward-looking" statements under the safe harbor provisions of the Private Securities 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. Risks include, without limitation, obtaining regulatory entitlements for and completion of development projects; the availability and cost of capital and foreign currency; credit risk; the Company's ability to lease its properties; retail, real estate and economic conditions; risks related to e-commerce and the development of technology-based systems; risks inherent to being a partner in joint ventures; competition; and other risks 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.

CHELSEA PROPERTY GROUP, INC.
STATEMENT OF OPERATIONS - Unaudited            Three Months Ended
(In thousands, except per share data)               March 31,
                                              2002             2001
Revenues:
Base rent (a)                               $38,509          $28,751
Percentage rent                               3,073            2,771
Expense reimbursements                       12,595           10,624
Other income                                  2,504            2,678
                                     --------------    -------------
Total revenues                               56,681           44,824
Expenses:
Operating and maintenance                    16,204           12,118
Depreciation and amortization                12,941           11,559
General and administrative                    1,517            1,074
Other                                         1,093              790
                                     --------------    -------------
Total expenses                               31,755           25,541
Income before unconsolidated
 investments, interest expense
 and minority interest                       24,926           19,283
Income from unconsolidated investments        3,770            3,270
Loss from Chelsea Interactive                (2,700)          (1,198)
Interest expense                             (9,750)          (8,615)
                                     --------------    -------------
Income before minority interest              16,246           12,740
Less minority interest                       (3,455)          (3,187)
                                     --------------    -------------
Net income                                   12,791            9,553
Preferred dividends                            (904)          (1,047)
                                     --------------    -------------
Net income - common shareholders            $11,887           $8,506
Net income per common share (diluted) (b)     $0.61            $0.52
Funds from operations (FFO) (c)             $27,912          $22,862
FFO per common share - Real Estate            $1.36            $1.22
Internet loss per common share                (0.12)           (0.06)
                                     --------------    -------------
FFO per common share (diluted)                $1.24            $1.16
Dividends per common share                    $0.81            $0.78
(a) Base rent includes straight-line rent of $522 and $380 in the
first quarters of 2002 and 2001, respectively
(b) Basic earnings per share were $0.63 and $0.53 in the first
quarters of 2002 and 2001, respectively.
(c) FFO per common share is defined as income before minority
interest, gain or loss on sale or writedown of asset and
depreciation and amortization, reduced by amortization of
deferred financing costs, depreciation of non-real estate
assets, and preferred dividends.
CALCULATION OF FFO                            Three Months Ended
(Amounts in thousands)                              March 31,
                                              2002             2001
Net income - common shareholders            $11,887           $8,506
 Add:
Depreciation and amortization
 - wholly-owned                              12,941           11,559
Depreciation and amortization
 - joint ventures                             1,643            1,480
Amortization of deferred financing
 costs and depreciation of
 non-real estate assets                        (552)            (408)
Preferred unit distributions                 (1,462)          (1,462)
Minority interest                             3,455            3,187
                                     --------------    -------------
  FFO                                       $27,912          $22,862
Ownership interests:
REIT common shares                           19,388           16,453
Partnership units held by
 minority interest                            3,150            3,256
                                     --------------    -------------
Weighted average shares/
 units outstanding                           22,538           19,709
CHELSEA PROPERTY GROUP, INC.
SELECTED BALANCE SHEET DATA - Unaudited    March 31,     December 31,
(In thousands, except center data)            2002             2001
Real estate assets, before depreciation  $1,131,669       $1,127,906
Cash and cash equivalents                    19,566           24,604
Total assets                              1,081,073        1,099,308
Total liabilities                           612,867          624,246
Minority interest                           115,181          115,639
Stockholders' equity                        353,025          359,423
Shares and units outstanding at period-end   22,024           21,920
DEBT DATA:
Unsecured bank debt                           5,035            5,035
Mortgage debt                               169,870          170,209
8.375% Notes due 2005                        49,900           49,892
7.25% Notes due 2007                        124,817          124,809
8.625% Notes due 2009                        49,925           49,923
8.25% Notes due 2011                        148,707          148,670
Interest coverage ratio -
 trailing 12 months                            4.4x             4.3x
OPERATING DATA: (sq ft in thousands)
Gross leasable area at period-end            12,639           12,574
Weighted average GLA during period           12,589            9,349
Lease-up at period-end
 - Domestic Premium Outlets                      98%              98%
Number of centers (including two
 international)                                  57               57
Number of states and foreign countries           29               29

CONTACT:
Chelsea Property Group, Inc.
Leslie T. Chao, President
Michael J. Clarke, CFO
973/228-6111