The long-closed Hotel Whitcomb in San Francisco’s Mid-Market area may finally reopen, bringing new life to a struggling part of downtown.
For five years, the 459-room hotel at 1231 Market Street has sat empty, boarded up, and falling apart. Vandals and trash took over the once-busy property while locals watched a neighborhood landmark go to waste. Now, global investment firm Blackstone is set to foreclose on the hotel and take control from absentee owner RFR Holdings, sources say.
Absentee Owner Blocks Renovation Efforts
RFR, a New York real estate company co-owned by Aby Rosen, had blocked efforts to reopen the hotel. Even after charging the city millions for damages, it failed to make repairs. Last year, RFR and Blackstone tried to sell the eight-story building for almost half of the $130.7 million paid in 2018, calling it a “blank slate” that needed full renovation. At that time, the hotel was a reliable spot for travelers, and its restaurant and event spaces hosted politicians and local workers.
Pandemic Shelter Program Brings Tragedy
Everything changed in 2020, when RFR agreed to let the hotel house San Francisco’s homeless population during the pandemic. That 33-month program ended in tragedy: the city’s chief medical examiner reported 21 overdose deaths inside the hotel during that period.
Neighborhood Impact of a Closed Hotel
Since then, the property has stayed closed, hurting both companies financially and creating problems for the surrounding neighborhood, which includes the theater district and City Hall. Local business owners say the streets around 8th and Market have struggled with safety issues and very little foot traffic. Last month, office brokers even tried to rebrand the area as “Lower Hayes” to attract AI companies.
Foreclosure and Future Plans for the Whitcomb
The city paid RFR nearly $108 million for contracts and settlements during the hotel’s use as a shelter. Despite receiving the funds, the owner never filed permits to renovate the building.
RFR has declined to comment, but sources say it is cooperating in a nonjudicial foreclosure, meaning it won’t fight the default or upcoming public auction. At that auction, Blackstone will make a “credit bid” to take full control of the hotel.
Once Blackstone takes over in the coming months, it plans to bring in new operators to restore the hotel before eventually selling it. Whether the hotel will reopen immediately depends on how fast repairs can be completed.
Documents filed with the city show that Blackstone moved the property’s loan from a public Mortgage Trust company to a private Real Estate Debt Strategies fund, which handles distressed assets. A Blackstone spokesperson said the company wrote down the hotel’s value starting in 2023 but is well-positioned to maximize returns.
Sources say the foreclosure may hurt RFR’s credit, but it also lets Blackstone avoid union obligations with Unite Here Local 2, which represented most of the hotel’s former staff. Lizzy Tapia, the union president, said they are watching the situation closely and will fight for fair treatment.
“Our members at the Whitcomb served this city proudly for decades, including during the pandemic under very tough conditions,” Tapia said. “The hotel has a responsibility to honor their work and sacrifices.”
Author Profile
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The writer is a real estate journalist specializing in all types of New York City properties, including luxury residences, commercial spaces, and homes.
He also writes humorous articles about real estate, investors, and realtors.
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