The need for multi-functional unmanned aerial vehicle (UAV) operations (e.g., in disaster response), or for adapting to varying conditions, have given rise to hybrid UAVs. Of particular interest are hybrid platforms that provide some combination of VTOL, hovering, and long-range flight capabilities, by operating in and transitioning between distinct flight states. This paper proposes a new hybrid UAV that seeks to address the drawbacks (e.g., rotor under-usage and cross-wind vulnerability) of existing designs (tilt-rotor/tilt-body/tilt-wing), and thereby provide increased operational flexibility. This UAV, called the BWB-Integrated Transitioning UAV or BITU, comprises a pair of tilt-arms (with two rotors mounted on the ends) that can rotate about shafts; the latter are integrated into the wing tips of the blended wing body (BWB). A conceptual design framework is developed to explore the feasibility/performance of BITU, which includes numerical mass and inertia estimation, aerodynamic analysis, and simulation and control of the state transition dynamics. Two design case studies are performed using mixed-discrete PSO. The optimal designs of BITU are found to provide competitive combinations of weight (< 5.5kg), payload capacity (2kg specified), hovering endurance (20min @ 40km roundtrip range), and forward flight range (> 270 km), and substantial improvement over the baseline.