TMG Partners and Bridges Capital Acquire San Francisco's 320,000-SF Metreon

TMG Partners and Bridges Capital LLC have acquired the Metreon, a 320,000-square-foot shopping center at 135 Fourth Street in downtown San Francisco, in a deal that marks one of the most significant retail transactions in the city in recent years.

Deal Structure

TMG assumed the property through a deed-in-lieu transaction from lender Acore Capital. Starwood Capital Group had previously listed the property in October 2024. The purchase price was not disclosed, though the property was previously assessed by the city at $150.7 million.

The land beneath the Metreon is owned by the City and County of San Francisco. TMG assumes the ground lease, which expires in 2082, giving the new owners more than 55 years of control.

Property Profile

Built in 1999, the four-story Metreon is 92% leased with an average lease term of eight years. The two anchor tenants — Target (which recently renewed for 10 years) and AMC Theaters (15 screens, including the tallest IMAX screen in the country) — account for 60% of property income.

Other tenants include Chipotle, Super Duper Burgers, and Lemonade.

Plans

TMG and Bridges Capital plan to rebrand the fourth-floor City View event space in collaboration with placemaking group Skylight, with the refresh expected to take three to six months. The repositioning aims to activate underutilized upper-floor space and strengthen the property's appeal as an entertainment and events destination.

Bet on Downtown San Francisco

The acquisition represents a contrarian bet on downtown San Francisco, which has faced well-documented challenges with office vacancy, foot traffic, and retail closures since the pandemic. TMG Partners is simultaneously negotiating involvement with the Macy's Union Square flagship store, suggesting the firm sees a broader opportunity in downtown SF retail at current pricing levels.

For a property with strong anchor tenancy, a long ground lease, and over 90% occupancy, the Metreon may represent exactly the kind of discount-to-replacement-cost opportunity that value-oriented investors have been waiting for.