An investment group with Texas ties sold a regional shopping mall in the greater Washington, D.C., area less than two years after buying it and landing a series of new retailers such as Dick's House of Sport and Dave and Buster's.
Macerich, a publicly traded real estate investment trust based in Santa Monica, California, purchased the Annapolis Mall, a roughly 1.5 million-square-foot mall in Annapolis, Maryland, last week for $272 million from a joint venture between a Kildare Partners' fund, Centennial Real Estate Co. and Atlas Hill Real Estate. Terms were not immediately disclosed by the selling entities.
The deal quickly closed within about 60 days of when the buyer was initially identified, officials said, making this a rare retail transaction.
The deal reflects a "broader return of capital to high-quality retail with strong operating upside," Michael Gillman, who leads asset management for U.S. investments for Texas-based Kildare Partners, told CoStar News in an exclusive interview. "The fact that Annapolis transacted quickly suggests buyers are willing to underwrite malls when the asset has strong sales productivity, limited competition, strong surrounding demographics, and a diversified tenant base.
"We think well-located centers with durable income, credible leasing or redevelopment strategy will continue to attract capital," Gillman said.
Annapolis Mall, which opened in 1980, is the only enclosed shopping center in a 25-minute drive of Maryland's Chesapeake Bay region. At the time of the joint venture's acquisition in August 2024 for $160 million, Dallas-based Centennial founder and CEO Steve Levin told CoStar News that it "is the dominant retail property in the area with limited competition," making it a sought-after acquisition.
Leasing success
Less than two years later, the joint venture was looking at potential buyers after completing a comprehensive repositioning strategy by securing a new anchor tenant for what was once a vacant box with Dick's House of Sport. The sports retailer plans to open its 116,000-square-foot store by this fall.
The joint venture includes Atlas Hill, which is led by longtime real estate executive Sandeep Mathrani. Mathrani, who founded Palm Beach, Florida-based Atlas Hill in 2024, previously served as the CEO of WeWork, oversaw Sycamore Partners' real estate activity and served as CEO of Brookfield Properties' retail group. He has also served on the board of Dick's Sporting Goods since September 2020. Dave and Buster's leased space at Annapolis Mall that was vacated by H&M with plans to open the entertainment venue in 2027.
Along with Dick's and Dave and Buster's, Annapolis Mall has added several new retail tenants in the last year, including Uniqlo, Swarovski, Jack & Jones, Offline by Aerie, Goat USA, Fello and Talbots.
Gillman said the key to the property's leasing success was creating immediate momentum. The team focused on reinvestment, adding new experiential anchors and renewing strong existing tenants.
"We focused first on the anchor boxes, signing Dick’s House of Sport and Dave & Buster’s early in the process, which signaled conviction and credibility to the tenant market," Gillman said.
"In total, the team leased over 500,000 square feet, including bringing more than 300,000 square feet of new major national retailers to the property," Gillman said.
Trading up
Macerich, which released its first-quarter earnings on Wednesday evening, has been buying as well as offloading properties, rejiggering its portfolio and even expanding into the Southeast.
Last June, the REIT acquired the Crabtree Mall in Raleigh, North Carolina, for $290 million from New York-based Clarion Partners, according to CoStar data. That retail center, totaling 1.3 million square feet, is the largest mall in the high-growth Research Triangle area of the Tar Heel State.
But Macerich has also been shedding properties. Last August, in one of the region's biggest deals, Macerich sold its Lakewood Center mall in the Los Angeles area for $332.1 million to a joint venture that included Pacific Retail Capital Partners. The new owners plan to redevelop that roughly 2 million-square-foot property.
As part of an effort to divest underperforming properties, the REIT sold The Oaks in Thousand Oaks mall in California for $157 million in December 2024. And Santa Monica Place, an open-air shopping center designed by Frank Gehry, went into receivership after Macerich defaulted on a $300 million loan on the property.
The volume of U.S. retail investment sales has risen this year, according to Brandon Svec, national director of U.S. Retail Analytics for CoStar. Sales volume in the first quarter was $16.7 billion and so far in the second quarter has totaled $4.7 billion, he said.
"First-quarter 2026 sales volume increased 31% compared to the same period in 2025, representing the strongest first three months of the year on record in total consideration, excluding the atypical cyclical peak in 2022," CoStar said in its most recent national retail report.
"Transaction activity has returned to, and now exceeds, levels observed during the pre-pandemic period," the report stated. "Activity has been supported by participation from individual investors, REITs, and selective institutional buyers, each focused on different segments of the market."
Maryland has been a strong retail market for investors. In downtown Annapolis, Maryland’s capital city, asking retail rents regularly exceed $50 per square foot triple-net lease, according to CoStar’s latest report.
Less than a mile away from the Annapolis Mall, a portion of the 480,000-square-foot open-air complex Annapolis Town Center sold in the fall to Federal Realty Investment Trust for $187 million.
Another Maryland shopping center, about 12 miles west toward Washington, D.C., sold earlier this year for $50 million. That retail destination in Bowie, Maryland, was traded away by an investment group that had been selling off its various malls and shopping centers after filing for bankruptcy protection.
Looking forward
Bob Young, executive managing director at Weitzman, a Dallas-based, retail-focused real estate services firm, said he wasn't surprised that one of Maryland's top malls has traded to institutional capital.
"These are finite properties," Young told CoStar News. "They are not being built anymore and malls are in great trade areas and locations. This is a publicly traded entity managing its risk and the firms that put their blood, sweat and tears into the property looking for a return."
In an environment where returning invested capital remains challenging, Kildare Chief Operating Officer Ginger Quillen said in a statement that the firm is "especially pleased to deliver a strong internal rate of return and multiple on invested capital to our fund and co-investors within a two-year hold window."
Gillman said that Kildare "remains active and opportunistic" while maintaining a disciplined investment strategy — with acquisitions not having to be retail properties.
"Our mandate supports investments across real estate sectors," Gillman told CoStar News. "We continue to focus on opportunities where we can combine strong basis discipline with hands-on asset management, particularly in asset classes or situations that may be overlooked by more traditional investment managers.
"We are especially well-positioned for complex portfolio transactions, rescue capital opportunities and situations that require flexibility, creativity and speed of execution," he added.