Blue Hotel
RETAIL/HOSPITALITY/SRO | 9.22% CAP
Marketing description
Located less than a mile from San Francisco’s Union Square, the Blue Hotel presents a rare opportunity to acquire a mixed use building in the heart of the city. The ground floor is anchored by the established Louder Restaurant, providing steady commercial income, while the upper floors consist of 13 SRO units. Residents benefit from access to a common kitchen along with private and shared restrooms. Seven of the rooms hold city designated tourist licenses and are rented on a nightly basis, generating strong short term rental income in one of the country’s top travel destinations. The remaining six rooms suit longer term tenants, with four to be delivered vacant, allowing a new owner the flexibility to select tenants and stabilize rents. Offered at a 9.22% CAP rate and 8.25 GRM, the property provides immediate income with significant upside potential through lease up and operational optimization.
Investment highlights
Prime Central Location Less Than One Mile from Union Square
Situated in the vibrant core of San Francisco, the property offers unmatched proximity to Union Square, one of the city's premier shopping, cultural, and transportation hubs. Tenants and guests benefit from easy access to MUNI, BART, and a rich mix of dining, retail, and nightlife destinations.
Rare Mixed-Use Opportunity in the Heart of the Entertainment Corridor
This is a unique chance to acquire a mixed use asset in a high traffic corridor that caters to both tourists and locals. The property combines stable commercial income with residential cash flow, positioned within a neighborhood known for its hotels, theaters, and boutique attractions.
Street-Level Retail Occupied by Louder Restaurant, a Highly Rated Thai Eatery
The ground floor retail space is leased to Louder, a popular Thai restaurant known for its loyal customer base, strong reviews, and consistent foot traffic. This long term tenant adds stability and visibility to the property’s income profile.
13 SRO Units Across Upper Floors Provide Diversified Revenue Streams
The second and third floors comprise 13 Single Room Occupancy (SRO) units, creating a balanced and flexible residential component. The unit mix allows the owner to capture both short term and long term income opportunities in a high demand urban market.
7 Tourist-Approved Rooms with City Licenses for Nightly Rentals
Seven of the SRO rooms are officially licensed by the city for short term tourist use, enabling the owner to capitalize on San Francisco’s robust demand for alternative accommodations. These units are currently operated as nightly rentals, providing higher income per square foot.
6 Long-Term Occupied Units, with 4 Vacancies for Immediate Repositioning
The remaining six SRO rooms are occupied by long term tenants, with four of these units scheduled to be delivered vacant, offering immediate upside through market rate leasing or conversion to short term use.
Strong Value-Add Potential via Operational Efficiencies and Revenue Optimization
Investors can unlock additional value through better management of short term rentals, dynamic pricing strategies, and reducing vacancy. There is an opportunity to streamline expenses while increasing revenue in both the commercial and residential components.
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