FOR IMMEDIATE RELEASE                                  FOR MORE INFORMATION CALL

December 16, 2002                              Investors:      Robert A. Brvenik
                                                             President and Chief
                                                               Financial Officer
                                                                  (410) 234-1750

                                                 Media:          Steven A. Sless
                                                    Director of Public Relations
                                                                  (410) 234-8333


                   PRIME RETAIL REPAYS MEZZANINE LOAN IN FULL

     BALTIMORE - Prime Retail,  Inc. (the "Company") (OTC Bulletin Board:  PMRE,
PMREP,  PMREO) today announced it has repaid in full the remaining $30.2 million
principal  balance  on a  mezzanine  loan (the  "Mezzanine  Loan")  with (i) net
proceeds from the previously announced two separate sales transactions completed
on December 6, 2002 and (ii) cash from operations. The Mezzanine Loan, which was
obtained on December 22, 2000, was in the original amount of $90.0 million, bore
interest at 19.75% and was scheduled to mature in September 2003.
     Glenn D.  Reschke,  chairman  and chief  executive  officer of the Company,
stated,  "The repayment of the entire Mezzanine Loan in less than two years is a
significant  milestone for Prime Retail. It is indicative of our diligent effort
to reduce the overall  debt  levels of our  Company  and  improve its  financial
condition."
     Prime Retail is a  self-administered,  self-managed  real estate investment
trust engaged in the  ownership,  leasing,  marketing  and  management of outlet
centers throughout the United States. Prime Retail owns and/or manages 38 outlet
centers totaling approximately 10.5 million square feet of GLA. The Company also
owns  154,000  square  feet of office  space.  Prime  Retail  has been an owner,
operator  and  a  developer  of  outlet   centers  since  1988.  For  additional
information, visit Prime Retail's website at www.primeretail.com.
     Some  of the  statements  contained  herein  which  are not  statements  of
historical  facts are  forward-looking  statements  within  the  meaning  of the
Private  Securities  Litigation  Reform  Act of 1995 that  reflect  management's
current views with respect to future events and financial performance. The words
"believes,"   "expects,"   "anticipates,"   "estimates"  and  similar  words  or
expressions  are  generally  intended  to identify  forward-looking  statements.
Actual  results may differ  materially  from those  expected  because of various
risks and  uncertainties,  including,  but not  limited  to,  changes in general
economic  conditions,  adverse  changes in real estate  markets as well as other
risks and uncertainties included from time to time in the Company's filings with
the Securities and Exchange  Commission.  Prime Retail accepts no responsibility
for updating forward-looking statements.