Members Club

A further demonstration of the operationalisation of real estate??

"I just don't want to belong to any club that will accept me as a member."?

— Groucho Marx?

Members clubs have long been a fixture of elite social circles, but their resurgence in recent years isn’t just about networking over cocktails. The boom in members clubs is being driven by a financial reality that makes them highly attractive to investors: they offer a reliable and recurring revenue stream that can be valued and monetised. ?

Since the opening of The Groucho Club in 1985, members clubs in London and beyond had seemed a relatively niche affair. Yet, in the past four years alone, more clubs have opened than in the previous three decades combined. Soho House, once the disruptor, is now the blueprint.???

The private members club sector is expanding rapidly, with Mordor Intelligence forecasting 11% annual growth, reaching $25.8 billion by 2027. Yet, despite the boom, cracks are emerging. Last year, the House of St Barnabas in Soho shut down due to financial struggles, and women’s-only club Chief in Bloomsbury followed in March after barely a year in operation. Many others are under pressure, raising concerns about market saturation. As clubs proliferate, maintaining exclusivity - their key selling point - becomes increasingly difficult. ?

Private members clubs have historically thrived during periods of political and economic upheaval. The coffee houses of 17th-century London fostered debate after the English Civil War, while The Groucho and Soho House emerged in the 1980s and 1990s as a reaction to traditional club culture, coinciding with Thatcher’s economic reset and the rise of new technology. Today, their resurgence comes amid the lingering effects of the 2008 financial crisis and shifting work patterns. ?

“Weirdly enough, clubs are counter-cyclical,” says Seth Alexander Thévoz, author of 'Behind Closed Doors: The Secret Life of London Private Members.'' “They tend to do really badly when there’s a boom in the economy overall, while usage goes right up in a recession.” He attributes this to their affordability for regular socialising, offering value beyond simple exclusivity. ?

Members clubs differ from hotels and restaurants in that they are designed for habitual use, with many members visiting multiple times a week. This requires a different approach to service. “Hotels are transient places, where people travel from all over the world and you see them rarely,” says hospitality expert Jamie Caring. “Clubs are places where you see the same people every day. A club is supposed to be a home away from home.” ?

This distinction shapes both experience and business model. While hotels prioritise high occupancy, clubs focus on fostering a community and a sense of belonging. The challenge is to maintain exclusivity and familiarity without becoming stale or losing the aspirational appeal that draws members in. "Mysterious, glamorous, a dimly lit inward world tucked into this world," writes Deborah Levy of Silencio, a Parisian members club designed by filmmaker David Lynch. With hidden corners for conversation and the thrill of the dance floor, it embodies the allure of stepping into another world. Yet beyond the spectacle, the real draw is belonging. “They offer a feeling of belonging,” says Claire Reynolds of Savills, particularly for those far from home. “The staff know your name, the newspaper you read, and what you like to drink.” In cities like London, where clubs abound, people join not just for exclusivity but for the comfort of a familiar community."

While some may balk at the idea of being confined within a carefully curated social bubble, demand for some private members clubs soars. Soho House, which is listed in New York, grew its membership by 16% year on year to over 200,000 members, with more openings in the pipeline including a 250-acre property in Rhinebeck, New York. Singapore’s 1880 is expanding into Hong Kong, and 5 Hertford Street proprietor Robin Birley is preparing to open his first New York outpost. ?

“More money is being invested in the sector than at any time in history,” says Liam Bailey, global head of research at Knight Frank, whose report in 2024 entitled “A Guide to Private Members’ Clubs” was invaluable to this note. As the industry continues to expand, new entrants are finding ways to refine the model, whether by offering hyper-localised experiences, more exclusive membership criteria, or blending social clubs with co-working spaces and wellness hubs. The challenge, as ever, will be maintaining the allure of exclusivity in an industry that is becoming ever more accessible. ?

Forbes is the latest company to see opportunity in the private members club space. The US media giant will open Forbes House Madrid, a high-end club aimed at business executives and entrepreneurs. Located in the Spanish capital’s financial district, the club is a partnership between Forbes and SpainMedia, publisher of Forbes Espa?a. This marks the first step in Forbes' wider strategy to launch clubs in key cities worldwide. The move is part of a broader diversification effort at Forbes, which has been expanding into ecommerce, real estate, and branded content to offset challenges in traditional media. “We pride ourselves on that editorial integrity,” said Sherry Phillips, Forbes’ newly appointed CEO, who has been overseeing the company’s revenue diversification strategy. Madrid, she said, will “prove it out” as a concept before other locations follow.

Miami’s social scene, which has always been effervescent, is burgeoning still with new members clubs emerging across the city. One of the latest is Harbour Club, a South Beach retreat featuring a members-only speakeasy and weekly backgammon tournaments. Backed by real estate developer Joseph Sitt and private club veteran James Julius, the club has attracted 40 lifetime members, paying up to $55,000 for exclusive access to dining and networking. Julius raised $2 million through these lifetime deals before inviting members to recommend new candidates, who pay initiation fees of up to $9,000 and annual dues reaching $4,000 per couple. About 99% of members are local or spend at least six months a year in Miami. While some are billionaire business figures, others come from the arts and politics. “They’re folks that might learn from each other or want to grow with each other,” says Sitt, an investor in the club. As Miami continues attracting high-net-worth individuals, clubs like Harbour are becoming key hubs of exclusivity and community.

Institutional investors are increasingly backing members clubs. Dutch pension provider APG has partnered with London Central Portfolio to launch The Other House, operating two properties in South Kensington and Covent Garden. Debt provers too are supportive; in Milan, private equity firm Three Hills Capital Partners secured a €30m loan from Unicredit to launch The Wilde. The Reuben Brothers own the real estate underlying 5 Hertford Street, while Trophaeum owned the Maison Estelle building which went on the market last year for ￡68m. Queensway and Clearbell acquired The Sloane Club for ￡80.6m in 2017 and are now investing ￡20m to attract a younger, more metropolitan clientele. ?

The appeal for investors lies in stable cash flows. Subscription-based models ensure predictable income, balancing out lower-margin hospitality services. “It’s a high-margin product [the subscription] because it doesn’t cost us a lot to sell it,” says hospitality executive Chande. However, rapid expansion comes with risks. Soho House, once the dominant force in the sector, has faced criticism for overextending. A report by short-seller GlassHouse Research compared its accounting practices to WeWork, claiming service quality has declined with rapid membership growth. “Soho House, I mean what they’ve done is quite incredible,” says Jivraj Stevenson. “But I think they’ve got to a point now where the experience has started to become a little compromised, because of the volume of members they have taken in.” ?

Membership models are no longer just a niche luxury but a fundamental shift in how real estate and hospitality operate. The world’s biggest businesses, such as Spotify, Netflix, Apple One, are all built on subscription models, and members clubs are proving that the same principle can apply to physical spaces. Rather than relying on one-off transactions or fluctuating occupancy rates, clubs provide reliable, recurring income through memberships (just look at the nomenclature’s Soho House adopts in their filings). ?

The appeal is clear: members, seeking a community, stay longer, spend more, and create a built-in demand base that shields clubs from economic downturns. Traditional real estate models, which once depended on long leases and predictable rental income, are shifting towards selling access rather than just space. Private travel clubs, flexible workspaces, branded residential communities, and second-home subscriptions are all following the same pattern, promising stability and exclusivity in an increasingly fragmented world.?