Why NYC's most exclusive social clubs are hot with investors
Not since the 19th century have New Yorkers been so keen on clubs. Suddenly, everybody who is anybody has joined up with a schmoozy society outlet catering to seemingly every interest and income bracket — from Casa Cipriani for the social set, to the Leash Club for canine parents.
Even the old guard along West 44th Street, aka Club Row, as well as other yesteryear organizations like the National Arts Club, Lotos Club and University Club, are attracting fresh faces anew.
'I'm a wonderful guest at most of the city's clubs, but I tend to be drawn to the old-school clubs of New York where you are stepping back in time,' said residential broker Mike Fabbri of the Agency, who lives in Gramercy Park and is joining the nearby National Arts Club. 'After COVID, there's been a resurgence of people wanting to belong and have a community.'
5 Even heritage haunts like the National Arts Clubs are booming.
Getty Images for The National Arts Club
But it's not just a spirit of bonhomie or overcrowded restaurants that are driving New Yorkers into exclusive sets — it's smart money. Unlike a typical restaurant, bar or gathering space, a membership model allows founders and operators to avoid taxes. That's because social clubs are considered nonprofits, where the Benjamins remain in the club's pockets and fund member benefits. As long as earnings aren't used to the private benefit of any particular person, a club is in the clear per the IRS.
Better still, 35% of a social club's revenue can even come from non-member sources, including investment income. But taxes must be paid on up to 15% of the income from non-members who are not a guest of members — i.e. public walk-ins.
And there's absolutely nothing on this earth that real estate investors love more than saving on taxes. Financier John Paulson, who recently purchased the storied Princeton Club's defaulted mortgage, told Page Six he may turn it into a place for 'vibrant 20- and 30-year-olds' as 'their place to go.' And no wonder Jeff Klein dropped $130 million to build out the new 'it' club, the San Vicente West Village in the Jane Hotel.
5 The new San Vicente West Village club cost $130 million.
Helayne Seidman
Initiation costs a reported $3,200 to $15,000 with annual dues of $1,800 to $4,200 depending on age.
'We've gotten a lot of inquiries from social clubs for properties we represent,' said Lee Block of RTL (previously Winick). 'There's a lot of activity for that in the city.'
London's celebrity haunt Anabelle's opened in 1963 and has had several iterations. But the founder's son, Robin Brierly, has now collaborated with stateside owners the Reuben Brothers on Maxime's, which opened in March in the former Westbury Hotel at 848 Madison Ave.
The Twenty Two, another London-based club, opened late last year in the Reuben Brothers' 16 E. 16th St. in the Flatiron District by Union Square and includes a public restaurant and hotel along with the private club and rooftop nightclubs.
Meanwhile, Miami hotspot Casa Tua opened at the new Surrey hotel at 20 E. 76th St. It has an annual fee of $4,300 that rises to $7,000 if you want to visit its other locations in Aspen and Miami (after initiation fees). But the restaurant is open to non-members.
5 It costs $3,400 a year to party at Casa Tua in the Upper East Side.
Olga Ginzburg for NY Post
'Casa Tua is the new hot spot,' said Lisa Simonsen, a residential broker with Brown Harris Stevens who belongs to 'a lot' of clubs. 'I join the ones that fit me and my family.'
Social clubs hunting for a house have been eyeing 26 Little W. 12th St. in the Meatpacking District, brokers said.
'There's a lot of action on it from various member clubs looking to expand here or coming here from overseas,' said Jared Epstein of Aurora Capital Associates. 'It makes a lot of sense because it looks over the Hudson River.'
5 Thank city real estate players who see private clubs like Jean-Georges Vongerichten's Chez Margaux as surefire assets with guaranteed revenue.
WWD via Getty Images
Nearby, Jean-Georges Vongerichten turned his former Spice Market restaurant at 403 W. 13th St. into the elegant Chez Margaux dining club. Fees range from $1,800 to $2,600 annually, depending on age, with an initiation of $1,000 to $2,000.
Chez Margaux is not far from where the now publicly traded global Soho House and its celebrity-packed rooftop heated pool became the club du jour when it opened in 2003 at 29-35 Ninth Ave. Fittingly, Vongerichten's partner in the club is developer Michael Cayre of Midtown Equities who bought Soho House from Ron Burkle in 2012. He's also a partner in the luxurious redevelopment of the Lower Manhattan Battery Maritime Building into the private and successful Casa Cipriani.
'If you travel a lot, Soho House has sites globally but it went public and doesn't feel as exclusive and culturally relevant anymore and has lost its luster,' opined Brandon Charnas, a commercial broker with Current Real Estate Advisors.
5 Zero Bond helped prove the club business model to investors.
dzobel
Charnas rebranded and leased Zero Bond and then helped prominent night club founder Scott Sartiano launch the club during COVID in 2020. Zero Bond's 'no photos' policy helped it become a celebrity haunt for Taylor Swift and Leonardo DiCaprio. Elon Musk threw a party here in 2021, the same year frequent late-night Zero Bond flier, Mayor Eric Adams, held his Election Day night victory party and hosted folks in a VIP room unlocked with a fingerprint scanner.
Midtown building owner Craig Deitelzweig of Marx Realty is currently negotiating leases with two different social clubs for his office properties in New York and DC.
'Our buildings have a social club kind of feel and there is a natural gravitation to them by the clubs that adds to the cache of the building,' Deitelzweig said. 'The clubs like buildings that have some heritage and a cool vibe.'
'Being in a real members club is like belonging to a community — it's not selling immediate access but selling relationships.' Brandon Charnas, commercial broker with Current Real Estate Advisors
Each of the clubs will have their own restaurant, Deitelzweig said, while the DC club will allow all tenants to use their terrace.
'People love them in the post-COVID world because they want to be social and form their own networks,' he said.
Most building owners believe social clubs are a 'solid amenity,' explained Robert Gilman, a CPA with the accounting firm Anchin.
For instance, at Hudson Yards, Gilman says ZZ's Club has been 'a standout.' Operated by Major Food Group, in 37 Hudson Yards, its moniker comes from founder Jeff Zalaznick's nickname. It includes a Japanese restaurant, a cigar terrace, a lounge with music programming and has a private location for its restaurant Carbone. The website shows $20,000 for initiation and $10,000 in annual fees.
Developer Rabina's hot new residential and office tower in Midtown at 520 Fifth Ave. will also open a five-story social club, Moss, that will have a sauna, a cold plunge pool and a hammam plus spaces for podcasting, dining and events.
But the sheer number of new clubs has some in the biz worried.
Charnas warns members clubs are swelling into a 'dotcom bubble.'
'Everyone is launching them,' Charnas said. 'Not all of them will survive. They are getting their upfront dues while restaurants are calling themselves 'member clubs.' Being in a real members club is like belonging to a community — it's not selling immediate access but selling relationships.'
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