Related Party Transactions

6 Months Ended

Jul. 02, 2023

Related Party Transactions [Abstract]

Related Party Transactions

18.Related Party Transactions

The amounts owed by (to) equity method investees due within one year are as follows:

	As of
(in thousands)	July 2, 2023			January 1, 2023
Soho House Toronto Partnership	$	852		$	1,015
Raycliff Red LLP		(5,088	)		(4,169	)
Mirador Barcel S.L.		(844	)		(499	)
Little Beach House Barcelona S.L.		(319	)		(313	)
Mimea XXI S.L.		678			477
	$	(4,721	)	$	(3,489	)

Amounts owed by equity method investees due within one year are included in prepaid expenses and other current assets on the consolidated balance sheets. Amounts owed to equity method investees due within one year are included in other current liabilities on the consolidated balance sheets.

Through Soho Works 875 Washington, LLC, we are a party to a property lease agreement dated April 19, 2019, for 875 Washington Street, New York with 875 Washington Street Owner, LLC, an affiliate of Raycliff Capital, LLC controlled by a member of the SHCO board of directors. The handover of five floors of the leased property occurred on a floor-by-floor basis resulting in multiple lease commencement dates in 2019 and 2020. The various lease contracts run for a term of 15 years until March 31, 2036, with further options to extend. The total operating lease right-of-use asset and liability associated with this property were $43 million and $55 million, respectively, as of July 2, 2023 and $44 million and $56 million, respectively, as of January 1, 2023. The rent expense associated with this lease was $2 million and $2 million in the 13 weeks ended July 2, 2023 and July 3, 2022, respectively, and $3 million and $3 million during the 26 weeks ended July 2, 2023 and July 3, 2022, respectively.

The Company is party to a property lease arrangement with The Yucaipa Companies LLC for 9100-9110 West Sunset Boulevard, Los Angeles, California. This lease runs for a term of 25 years until March 31, 2040. The operating right-of-use asset and liability associated with this lease are $17 million and $21 million as of July 2, 2023, respectively, and $17 million and $21 million as of January 1, 2023, respectively. Rent expense associated with this lease totaled $1 million and $1 million for the 13 weeks ended July 2, 2023 and July 3, 2022, respectively, and $1 million and $1 million during the 26 weeks ended July 2, 2023 and July 3, 2022, respectively.

Through Soho-Ludlow Tenant LLC, the Company is a party to a property lease agreement dated May 3, 2019, for 137 Ludlow Street, New York with 137 Ludlow Gardens LLC, an affiliate of The Yucaipa Companies LLC. This lease runs for a term of 27 years until May 31, 2046, with options to extend for two additional five-year terms. The operating lease right-of-use asset and liability associated with this lease were $8 million and $15 million, respectively, as of July 2, 2023 and $8 million and $15 million, respectively, as of January 1, 2023. The rent expense associated with this lease was less than $1 million and less than $1 million for the 13 weeks ended July 2, 2023 and July 3, 2022, respectively, and $1 million and $1 million during the 26 weeks ended July 2, 2023 and July 3, 2022, respectively.

The Company leases the Little House West Hollywood, 8465 Hollywood Drive, West Hollywood, California, from GHWHI, LLC, an affiliate of The Yucaipa Companies LLC. This lease commenced on October 16, 2021. This lease runs for a term of 25 years (15-year base lease term, including two 5-year renewal options). The operating lease right-of-use asset and liability associated with this lease were $65 million and $68 million, respectively, as of July 2, 2023 and $65 million and $69 million, respectively, as of January 1, 2023. The rent expense associated with this lease was $1 million and $1 million for the 13 weeks ended July 2, 2023 and July 3, 2022, respectively, and $3 million and $2 million during the 26 weeks ended July 2, 2023 and July 3, 2022, respectively.

The Company leases the Tel Aviv House, 27 Yefet Street, Tel Aviv, Israel, from an affiliate of Raycliff Capital, LLC which held a portion of the SHHL redeemable C ordinary shares prior to the IPO and continues to hold Class A common stock of SHCO. This lease commenced on June 1, 2021. This lease runs for a term of 19 years until December 15, 2039. The operating lease right-of-use asset and liability associated with this lease were $22 million and $22 million, respectively, as of July 2, 2023 and $22 million and $22 million, respectively, as of January 1, 2023. The rent expense associated with this lease was $1 million and $1 million for the 13 weeks ended July 2, 2023 and July 3, 2022, respectively, and $1 million and $1 million during the 26 weeks ended July 2, 2023 and July 3, 2022, respectively.

The Company leases a property from GHPSI, LLC, an affiliate of The Yucaipa Companies LLC, in order to operate the Le Vallauris restaurant, 385 West Tahquitz Canyon Way, Palm Springs, California. This lease runs for a term of 15 years until March 16, 2037, with options to extend for two additional five-year terms. The operating lease right-of-use asset and liability associated with this lease were $7 million and $7 million, respectively, as of July 2, 2023 and $7 million and $7 million, respectively as of January 1, 2023. The rent expense associated with this lease was less than $1

million and less than $1 million for the 13 weeks ended July 2, 2023 and July 3, 2022, respectively, and less than $1 million and less than $1 million during the 26 weeks ended July 2, 2023 and July 3, 2022, respectively.

The Company leases a property from GHPSI, LLC in order to operate the Willows Historic Palm Springs Inn, 412 West Tahquitz Canyon Way, Palm Springs, California. GHPSI’s ultimate parent entity is GHREP, LLC, an affiliate of The Yucaipa Companies LLC. This lease commenced on September 15, 2022. This lease runs for a term of 15 years until September 14, 2037, with options to extend for two additional five-year terms. The operating lease right-of-use asset and liability associated with this lease were $14 million and $14 million, respectively, as of July 2, 2023 and $14 million and $14 million, respectively, as of January 1, 2023. The rent expense associated with this lease was less than $1 million and $1 million for the 13 weeks and 26 weeks ended July 2, 2023, respectively.

The Company leases the Soho House Stockholm property located at Majorsgatan 5, Stockholm, Sweden from Majorsbolaget AB, an affiliate of The Yucaipa Companies LLC. This lease commenced on December 8, 2022. This lease runs for a term of 15 years. The operating lease right-of-use asset and liability associated with this lease were $26 million and $27 million, respectively, as of July 2, 2023 and $28 million and $28 million, respectively, as of January 1, 2023. The rent expense associated with this lease was $1 million and $2 million for the 13 weeks and 26 weeks ended July 2, 2023, respectively.

Ned-Soho House, LLP received management fees, development fees and cost reimbursements from The Ned totaling $1 million and less than $1 million for the 13 weeks ended July 2, 2023 and July 3, 2022, respectively, and $2 million and $2 million during the 26 weeks ended July 2, 2023 and July 3, 2022, respectively.

The Company received management fees from an affiliate of The Yucaipa Companies LLC related to the operations of The Ned New York, which opened in June 2022, totaling less than $1 million and less than $1 million for the 13 weeks ended July 2, 2023 and July 3, 2022, respectively, and $1 million and less than $1 million for the 26 weeks ended July 2, 2023 and July 3, 2022, respectively. The Company received management fees and cost reimbursements from affiliates of the Company related to the operations of The Ned Doha, which opened in November 2022, totaling $1 million and $1 million for the 13 weeks and 26 weeks ended July 2, 2023, respectively.

The Company received management fees under our hotel management contract for the operation of the LINE and Saguaro hotels from an affiliate of The Yucaipa Companies LLC. These fees amounted to $2 million and $2 million for the 13 weeks ended July 2, 2023 and July 3, 2022, respectively, and $4 million and $4 million during the 26 weeks ended July 2, 2023 and July 3, 2022, respectively.

Fees from the provision of Soho House Design services were received from affiliates of the Company totaled less than $1 million and $4 million for the 13 weeks ended July 2, 2023 and July 3, 2022, respectively, and $1 million and $5 million during the 26 weeks ended July 2, 2023 and July 3, 2022, respectively. Costs incurred on behalf of affiliates of the Company in connection to the provision of Soho House Design services totaled less than $1 million and less than $1 million for the 13 weeks ended July 2, 2023 and July 3, 2022, respectively, and less than $1 million and $2 million for the 26 weeks ended July 2, 2023 and July 3, 2022, respectively.

As of July 2, 2023, the Company is owed $8.3 million, classified as other receivables within the prepaid expenses and other current assets financial statement line item, from the affiliates of The Yucaipa Companies LLC in respect of certain reimbursable payments for Houses that are under development.