The Promote Podcast: Soho House Postgame And Billion-Dollar Capstacks
Date: August 27, 2025
Host: Hiten Samtani (A), Will Krasne (B)
Episode Overview
This episode of The Promote Podcast dives deep into three attention-grabbing stories in the commercial real estate (CRE) world:
- The private takeout of Soho House, examining the prospects for its future under high-profile new ownership and big financial moves.
- Recent billion-dollar deals in Manhattan, with breakdowns of their intricate capital stacks and what they signal for the market.
- The perils of real estate crowdfunding, focusing on immense investor losses at YieldStreet and the flawed mechanics of the model.
1. The Soho House Saga: Return to Cool or Glamorous Flame-Out?
(00:28 - 13:31)
The Set-up
- Opens with an amusing exchange between Paramount Group’s CEO and his ex (00:03), then pivots: “We have much bigger fish to fry today. We’re talking Soho House. Can Tyler Morse and Ashton Kutcher make the members only club cool again—and profitable again, despite the appearance of Apollo?” (A, 00:50-01:02)
- Will confesses he was twice rejected by Soho House, but once a member of Soho Works at Dumbo House. (B, 02:03-02:25)
- Notable quote:
“I drank them out of Pellegrino and home. It was completely unsustainable.” (B, 02:25-03:04)
The Deal Details
- Soho House is being taken private for $2.7 billion.
- Headline buyers/investors: Ron Burkle (serial dealmaker), Tyler Morse (MCR, hotel operator), Ashton Kutcher (celebrity/tech investor), and Apollo Global Management (finance titan).
- Morse’s background: Ex-Barry Sternlicht chief of staff, later founder of MCR, legendary for select-service hotels (think Marriotts/Hiltons).
“To run those well, you have to be super focused on costs. You have to be an operations assassin.” (B, 04:48-05:13)
What Makes Soho House Different, and Maybe Doomed?
- Soho House isn’t a hotel; it’s a global members club (40+ clubs, ~300,000 members, $5k/year fees).
- The catch-22:
“Growth is completely against what makes it popular, which is exclusivity.” (B, 10:02-10:11)
- Massive competition in high-end club space (Zero Bond, San Vicente Bungalows, etc.)
“Unless there’s some sort of Ashton Kutcher voodoo to make it cool again, I don’t really understand this.” (B, 10:40-11:01)
- Apollo’s big $700M investment is puzzling:
“It doesn’t seem like their type of business. There’s not really assets, not really cash flow. It hasn’t been profitable.” (B, 11:13-11:18)
Memorable Moments
- “These are gonna be some excellent board meetings: Burkle, Apollo, Ashton Kutcher and Tyler Morse.” (B, 12:52-13:09)
- Groucho Marx reference:
“I think this unholy combination…are going to challenge that notion.” (B, 13:22-13:31)
2. Manhattan Megadeals: 590 Madison & 800 Fifth Avenue
(13:31 - 24:02)
590 Madison (IBM Tower): First Billion-Dollar Office Deal Since 2019
- RXR buys for $1.08B, with Elliott Investment Management as equity partner.
- Financing led by Athene (insurance arm of Apollo)—$785M in total debt, $135M in mezzanine, $60M for improvements (14:42-15:16).
“That is a lot of mez. And frankly, I’m a little bit surprised that Elliott agrees to be common behind that mez.” (B, 15:16-15:31)
- Building is 1M sq ft, bought for about $1,000/sq ft; leases range from $85/sq ft (LVMH) to $150 (Cemex)—with long free rent periods (16:38-17:20).
- Cash flow will be tight:
“The mez is going to eat up a lot of that cash flow.” (B, 17:33-17:43)
- But: If RXR can reposition and raise rents, big upside is possible.
Seller Drama & Financing Intrigue
- Seller: Stirs Ohio Pension Fund, embroiled in infighting; RXR paid $5M for a closing extension after original lender Kale Street dropped.
- Notable:
“The kind of details the Promote lives for.” (A, 19:44-19:46)
800 Fifth Avenue: The Ultra-Luxury Condo Bet
- Mickey Naftali buys Spitzer-owned site for $810M; secures $675M in debt from JPMorgan and Golden Tree (private credit), plus equity from Mexican, Israeli, and Japanese family offices (20:19-21:09).
- Plan: Redevelop into ultra-high-end condos (possibly $11k/sq ft).
- “Such a big number, but…if anyone can do it, it’s Mickey.” (B, 22:18-22:53)
- Discussion of “overbuilt” rental, potential for creative redevelopment to maximize value.
Market and Timing Context
- “Equity markets at all time highs…crypto booming…maybe this is time for a new buyer.” (B, 23:34-24:02)
3. Crowdfunding’s ‘Original Sin’: YieldStreet Investor Wipeout
(24:02 - 31:40)
The Debacle, By the Numbers
- CNBC analysis: Of 30 YieldStreet deals, 4 are “wipeouts” (total loss), 23 “watch-listed” (in trouble), only 3 active with any distributions (24:36-24:52).
“Four wipeouts mean: equity all gone.” (B, 24:52-24:55)
- Real-world pain:
“There isn’t a day that goes by without me saying, I can’t believe what happened… I consider myself moderately financially savvy and I got duped by this company.” (Investor, 27:04-27:24)
Core Problems & Sharp Critique
- The model syndicates CRE deals to retail investors—often those institutional capital has rejected or sponsors can’t fund elsewhere.
“If you are one of these firms… and you can’t raise the money from them, like, those deals go here.” (B, 25:20-25:27)
- Will’s take:
“Democratizing investing, which means we’re trying to get the dumbest f—ing people and steal their money.” (B, 27:52-27:58)
Anatomy of a Loss: The Flow Nashville Deal
- Flow’s Nashville project (part-owned by Adam Neumann’s firm) defaulted, investors lost everything:
“YieldStreet told investors… the property has been sold to Tishman Speyer, resulting in a complete loss of capital for investors.” (A, 26:45-26:58)
- Not only total loss, but also tax pain:
“It’s an extra loss of capital post the depreciation recapture.” (B, 26:58-27:04)
The Crowdfunding Ecosystem: Web of Failure
- Noted incestuousness:
“A16Z never miss. Good for them.” (B, 29:40-29:44) (sarcastic, referencing A16Z’s disastrous investments in Cadre, Flow, and others)
- A16Z’s repeated bets lost hundreds of millions.
Should Crowdfunding Be Allowed?
- Will argues for regulation, not liberalization:
“If you have a $1 million net worth… you need zero private real estate exposure.” (B, 31:16-31:21)
- “This exists to take money from people who can’t afford to lose it.” (B, 31:39-31:40)
Notable Quotes & Moments
-
“To run those [select service hotels] well, you have to be an operations assassin.”
— Will Krasne (B), 04:48 -
“Growth is completely against what makes it [Soho House] popular, which is exclusivity.”
— Will Krasne (B), 10:02 -
“These are going to be some excellent board meetings: Burkle, Apollo, Ashton Kutcher, and Tyler Morse.”
— Will Krasne (B), 12:52 -
“There isn’t a day that goes by without me saying, I can’t believe what happened. … I got duped by this company.”
— YieldStreet Investor (quoted by Hiten), 27:04 -
“Democratizing investing, which means just like, we're trying to get the dumbest fucking people and get—and trying to steal their money.”
— Will Krasne (B), 27:52
Timestamps for Key Segments
- Soho House Deal Begins: 03:04
- Tyler Morse’s Background: 05:19
- Soho House: Business Model Breakdown: 08:19
- Apollo's Role & Boardroom Guessing: 11:01 – 13:31
- Cap Stack at 590 Madison: 13:54 – 18:43
- 800 Fifth Avenue Analysis: 19:32 – 24:02
- YieldStreet Crowdfunding Crisis: 24:02 – 31:40
Tone and Style
The conversation is insider-y, sharp, irreverent, and sometimes profane. Hiten and Will alternate deep financial analysis with caustic industry humor and namedrops, positioning them as critical yet affectionate insiders in the CRE game.
Summary Takeaways
- Soho House’s future remains an enigma, caught between operating costs, exclusivity, and boardroom circus vibes—despite some big names and deeper pockets.
- Manhattan’s billion-dollar deals signal selective market strength, but also highlight the risky new normal for capital structures, especially reliance on big slices of mezzanine and private credit.
- Crowdfunded CRE investments are facing a crisis of trust, as losses mount and the entire business model is raked over the coals—a warning to individual investors and an indictment of “democratized” platforms that often serve up institutional leftovers.