The Metreon at 135 Fourth St. — downtown's only Target and IMAX, more than 90% leased — passed to TMG Partners and Bridges Capital in February, not as the clean sale the for-sale sign implied but as a deed-in-lieu from the lender after Starwood Capital walked away from a distressed loan.

On the corner of Fourth and Mission, across from the Moscone Center, the Metreon still does the thing downtown malls aren't supposed to do anymore: it stays busy. The City Target on the second level, the 16-screen AMC on the third with the tallest IMAX screen in North America, a food court running cuisines from Japan to Vietnam — the 320,000-square-foot center is more than 90% leased, while the San Francisco Centre two blocks north sits gutted and stalled in financing.

That corner changed hands in February, though not the way the for-sale sign implied. When private equity firm Starwood Capital Group listed the property in October 2024, the expected story was a clean sale to a local buyer, and by June the Bay Area developer TMG Partners had been named as that buyer. But the deal that actually closed on Feb. 9 was a deed-in-lieu transaction: TMG, with equity partner Bridges Capital, took the Metreon from Acore Capital — the lender — after Starwood exited a distressed loan. No sale price was disclosed. The city assesses the property at $150.7 million.

What TMG bought is a leasehold, not the land. The dirt at 135 Fourth St. belongs to the City and County of San Francisco, and the ground lease runs to 2082 — the city stays the landlord for another 56 years. Target and AMC together throw off about 60% of the building's income; the rest is food and beverage on lease terms averaging eight years.

"A powerful vote of confidence in our downtown recovery," Mayor Daniel Lurie said of the deal. TMG's president, Ben Kochalski, said the firm would improve "the theaters, dining options, retail, common areas, and most notably the top-floor event space" — the fourth-floor City View room, which TMG plans to reimagine with the venue group Skylight.

The Metreon opened in 1999 as Sony's arcade-and-toy-store theme-park experiment, was sold in 2006 to the Westfield Group and Forest City Enterprises, and became a plain shopping center. Someone walking past this fall will notice nothing different at the sidewalk — same awnings, same Target cart return — and a new owner upstairs who got the keys because the last one couldn't carry the note.