An undisclosed buyer is expected to close a deal this week purchasing the $56M delinquent mortgage on the struggling Huntington Hotel in San Francisco.

The Huntington Hotel at 1075 California St. holds 135 rooms, but it is not yet known what the mystery buyer plans to do with the property, though the parcel it sits on is zoned for residential use.

Woodridge Capital is the debtor on the property. Woodridge purchased the property in 2018 for $51M from Grace International.

The hotel has struggled to turn a profit, with Atlas Hospitality President Alan Reay telling the San Francisco Business Times that the hotel hasn't seen a positive annual cash flow since 2005.

Reay also speculated that the new owner would likely turn to redeveloping the property, shifting it away from being a union labor hotel, attributing the cost of union labor to the hotel's inability to turn a profit.

San Francisco’s hospitality industry has been on the rebound, but recovery has been slow going, as the city lags behind other metros.

As the city’s office vacancy rate continues to rise, there has been a growing interest in office-to-hotel conversions, according to Stanton Architecture associate principal Steve Allen, speaking during a recent Bisnow event on the hospitality sector.

“We've seen a lot of interest in conversions," Allen said. "The hotel market is looking better than office is and also, like, parking garages. So, we're getting a lot of interest in that area,” he said.