Waterman, 47, of Riverside County, was reported missing on Monday along with her husband Billy, the San Mateo County Sheriff's Office said.
She was found by an employee in a hotel room in the 1900 block of Lombard Street at about 1 p.m. Thursday, San Francisco police Lt. Lyn Tomioka said.
Colleen's death has been deemed suspicious pending the results of an autopsy, Tomioka said.
Deputies found the couple's car parked and unoccupied on state Highway 1 near Devil's Slide at about 2:30 p.m. Thursday, Tomioka said.
Tomioka said Billy Waterman, 51, is a person of interest in the death investigation, but that there could be other people also linked to Colleen's death.
"We haven't ruled out other people of interest," she said.
Billy is a white 51-year-old man who is 6 feet tall and weighs 160 pounds. Police said he has blue eyes and red or balding hair.
Anyone with information about Billy Waterman's location is asked to call the sheriff's office at (650) 363-4911 or the San Francisco Police Department's anonymous tip line at (415) 575-4444. Anonymous tipsters can also text a tip to San Francisco police at TIP411.