In this economically uncertain decade, which has seen near-record interest rates, followed by deep recession, the launching and profitable completion of any real-estate venture has been difficult.
And successfully entering the field for the first time has been harder still.
Yet these difficult economic conditions have not prevented former San Francisco insurance executive Jim Brennan from becoming one of the Bay Area's more innovative and sensitive developers with his first major undertaking, the Nob Hill Inn, a small luxury hotel.
The son of an ''all business,'' investment-banker father and a ''very musical-theater-oriented mother,'' Mr. Brennan grew up in Piedmont, Calif., a hillside suburb of Oakland, across the bay from San Francisco. At age 8 or 9, he was playing the trumpet; by his midteens, he was traveling with bands.
When Brennan graduated from high school a semester early in 1947, he did not head off to college, but pursued his gift for music, going on the road with bands instead. Several years later, he attended New York City's Julliard School of Music on a partial scholarship. By age 20, he was playing the trumpet with jazz groups, symphony orchestras, and opera companies.
''I was in the orchester the night Beverly Sills made her show-stopping debut as Violetta in 'La Traviate,' '' he recalls happily.
''But by the late '50s, I realized that I had done the music thing,'' Brennan says. He decided to go into the insurance business and by the mid-'70s had formed his own company.
''We started that business at just the right moment,'' he adds. Then in 1977 he sold the company to his partner and moved to Nevada, intending to retire.
During one trip through Nevada, Brennan and his wife, Margaret, visited Carson City, where they kept passing and admiring a Gothic Revival-style brick house. When the Brennans learned that the house was for sale, they bought it because of its architecture.
Only a few days later did they learn that the property was the Ormsby-Rosser House, built in 1862 by Margaret Ormsby, the widow of the man who helped lay out Carson City four years before.
''At first Margaret and I planned to restore the house as a single-family residence,'' recalls Brennan, ''but soon we realized that the neighborhood was slowing going commercial. So we converted the house into offices while meticulously restoring all the authentic architectural features. Where some details were missing, we made exact reproductions, such as ornamental plaster ceiling medallions which were cast from the original molds.''
When the Brennans completed their restoration, preservationists hailed the Ormsby-Rosser House as an excellent example of ''adaptive reuse,'' and the secretary of the interior placed it on the National Register of Historic Places.
Shortly after the Brennans had bought the house, Brennan decided to go into the real-estate business full time.
''San Francisco had some great large luxury hotels, such as the Fairmont, Mark Hopkins, and Huntington, as well as some charming but simple and low-cost bed-and-breakfast establishments,'' Brennan says.
''But I felt that travelers would welcome something in between, something that incorporated the best of these two different kinds of lodging places, specifically the luxury and services of the large hotels, together with the warmth and homey atmosphere of the bed and breakfasts.
''So I decided to open a small, high-style, luxury hotel, something that had never been done before in San Francisco.''
Brennan and ex-banker Rick Henriksen bought a ramshackle, 4-story, Edwardian-style building, built in 1906, at 1000 Pine Street. Situated on the south side of Nob Hill, it was just a block from the Huntington Hotel and the Pacific Union Club.
During the two-year and nearly $2 million renovation, the contractors literally gutted the building down to the bare studs, then rebuilt 15 rooms and suites with new plumbing and wiring, plus salvaged original architectural details and exacting modern reproductions.
When the Nob Hill Inn opened in October 1980, the restoration was so well done that guests often asked Brennan how long the hotel had been in his family and if he bought the building from the original owners.
The Nob Hill Inn offers guests an almost-vanished spirit of gentility and calm. The cozy parlor is furnished with overstuffed sofas and armchairs, Oriental rugs, and 19th-century paintings. Near the front desk, a very Frenchy glass elevator rises noiselessly up the center of the oak stairwell to the floors above.
A typical room, No. 4, looks inviting and very, very British with its rose wall-to-wall carpeting, floral-print wallpaper, four-poster canopy beds with quilted satin comforter, antique mahogany armoire, and two wing chairs. The Edwardian bathroom has a pedestal sink, claw-foot bathtub, and stained-glass window.
''I'm happiest when people tell me that they didn't feel like they were staying in a hotel,'' says Brennan.
Despite his obvious delight at the way the inn has turned out, Brennan did experience ''a few surprises'' while working on the hotel.
''When you undertake a renovation and a hotel project like this, you wait three to five years before the money starts coming in,'' he says with a knowing sigh. ''Until you reach that point, you feel like a beggar with a tin cup at the banks, trying to keep the project going.''
A few months ago Brennan and his Nob Hill partner, Mr. Henriksen, began selling off the rooms and suites in one-week time-shared units, thereby being the first to convert a San Francisco luxury hotel into a time-sharing project.
To give potential buyers an even wider choice of room sizes, they renovated the adjacent 1907 three-story building into four 1-bedroom and two 2-bedroom suites, all of which have their own kitchens.
Once Brennan completed his day-to-day supervision of construction at the Nob Hill Inn last October, he decided to form a new partnership with his wife and a friend.
Now the entrepreneur is exploring other hotel and real estate ventures in the Bay Area.