Here is how Dúo has been using this:
Señor, ¿quiere usted (Ud.) un café? Sir, do you want a coffee?
El señor quiere un café. The gentleman wants a coffee.
El señor (sometimes accepted Sr.) Martínez quiere un café. Mr. Martínez wants a coffee.
Small children will sometimes address an older man as "mister" (Hey, mister, you dropped something), but it's customary to use the more respectful "sir".
Should "usted" be captilaised, as its the start of the sentence ? Or am i missing a rule ?