The Social Club in the Age of TikTok
As more people seek out physical communities, a new generation of entrepreneurs is innovating on the members-only social club concept, creating new kinds of spaces and real estate models.
Thesis Driven dives deep into emerging themes and real estate operating models by featuring a handful of operators executing on each theme. This week’s letter explores the future of the members-only social club, featuring interviews with entrepreneurs serving new audiences and exploring new models of club ownership.
The social club is among the oldest business models in real estate. New York’s Union Club has been in operation since 1836 and has occupied a prime corner of 69th and Park since 1933. And dozens of other clubs have gained a reputation for their communities, exclusivity, and—in many cases—extremely valuable portfolios of real estate.
Starting in the 1990s, the social club concept evolved through the emergence of increasingly exclusive—and expensive—clubs that prioritized white-glove service and amenities often at the expense of tight-knit membership bases. While Soho House was at the forefront of this trend, they’ve since been topped by clubs with fees significantly higher; for example, Manhattan’s CORE Club charges $17,000 per year plus a $50,000 initiation fee. In many cases, these membership clubs are integrated with hotels that share amenities and staff.
Today’s letter is about the continued evolution of social club models. A new generation of entrepreneurs is bucking recent club trends, eschewing over-the-top amenities in favor of highly targeted audiences and tighter social bonds. As Americans increasingly suffer from loneliness and social isolation–and remote work remains sticky among top-tier knowledge workers–there’s an increasing need for the kind of community these clubs can provide.
Today we’ll look at a few of these new club models, including:
How they differ from conventional membership club models;
Club economics and real estate models;
Sources of financing;
How macro trends in office and retail are influencing the future of the social club.
And as always, we’ll do this through profiles of operators in the trenches.