Article
In the Oerlikon district of Zurich, an imposing high-rise at Schulstrasse 44 is currently home to Switzerland's largest co-living community. More than 200 residents are breathing new life into this building. Their tenancy is limited, however. It will end next year, when the property is renovated and converted into apartments, a hotel, and a terrace overlooking the city.
January 28, 2022
Private and qualified investors
With its mirrored, bronze-colored exterior, this 28-story building is the symbol of Zurich-Oerlikon. The 85-meter-high structure, located across the street from the Oerlikon train station, was built in 1969 – and it is soon to be fully renovated. However, it will not stand empty until construction begins in early 2022. The Global Real Estate unit of Credit Suisse Asset Management engaged the company Novac-Solutions, which specializes in the interim use of properties, to help create the largest co-living space in Switzerland, along with a self-check-in hotel.
Two-thirds of the property is devoted to co-living. Since the beginning of 2021, more than 200 people between the ages of 17 and 75 have moved into spaces that have been converted from hotel rooms into rooms in a co-living community. Conference rooms have been transformed into common areas. Mailboxes have been installed in what was once the lobby. From a shared lounge on the second-from-the-top floor, residents can look out over the city of Zurich. A game room allows them to demonstrate their skills in table football or darts. In addition to the shared living areas, there are 115 rooms for hotel guests, who can check themselves in and out using a convenient, fully automated system.
The building is part of the CS REF Hospitality portfolio. As Jessica Lindauer, the fund's manager, observes, "Using the building on a temporary basis has a number of advantages. It prevents loss of rent, damage resulting from lack of use, uncovered operating costs, and even vandalism. It is also an innovative interim solution for a structure that is of historical interest."
There have long been plans to fully renovate the building. The official building permit was issued in September 2021. "This was an important milestone for our project," says Lindauer, adding that Novac-Solutions has shown flexibility in response to changes in the schedule.
Flexible co-living requires more than just infrastructure, according to Alexandros Tyropolis, founder of Novac-Solutions: "We need to create an atmosphere that encourages a heterogeneous group to come together in a supportive community. Newer, modern furnishings are helpful, but 'house rules' for living together are useful as well. For example, all of the residents are expected to take off their shoes when they enter the living room; this makes everyone feel at home."
At first, "guerrilla tactics" were used to publicize the co-living opportunity. Lights in some of the building's rooms were turned on, spelling out the countdown "3–2–1" and then the word "Go." This piqued curiosity about plans for the building.
Another important factor in the success of the co-living arrangement: the new residents. "From the very beginning, we attached a great deal of importance to the selection process. With the co-living model, you have to want to be part of a community and enjoy getting to know and interacting with new people," says Tyropolis. The early adopters – rather, the first tenants – shaped and exemplified the community's culture. And now the co-living area is also inspiring the guests of the self-check-in hotel.
"They notice the casual, open way the tenants interact with one another – an important aspect when guests are discovering a new environment," the company's founder points out. The two uses of the building complement each other well. With its interior areas, the property in Zurich-Oerlikon offers exactly the right conditions: The existing hotel rooms provide space for housing as well as a hotel, along with spaces that can be converted to common areas for co-living. "This interim use of the property has been a success. It has shown that a great deal of added value can be created within a short period of time – for investors, for us as the owner, and also for the residents themselves," says Lindauer.
Work on the renovation will begin in the spring of 2022. By 2024, the 28-story building will include 132 rental apartments, a terrace overlooking the city, shops, and a lifestyle hotel. The terrace will feature a large viewing deck and a pergola, and will be open to the public. Shops, restaurants, and services will be located on the lower levels of the building, just as they are today. Above the ground floor will be a hotel with 178 rooms, and beginning with the 13th floor there will be small loft apartments, each with 1.5 to 2.5 rooms. At the top will be six penthouses with patios.
Illustrations: Fully booked: A high-rise building in Zurich-Oerlikon is currently home to Switzerland's largest co-living community. There was considerable interest in this temporary housing opportunity; within a very short period of time, all the rooms were spoken for.
"When housing remains unoccupied, a great deal of potential is lost"
A conversation with Alexandros Tyropolis
Founder and CEO of Novac-Solutions
Alexandros Tyropolis: Until just a few years ago, this was regarded as a niche sector. The term "interim use" often has negative connotations in the real estate business; people may associate it with squatting, for example. So I prefer to talk about the temporary use of vacant real estate properties.
There can be various reasons for such temporary use. In some cases the building is new, or it may be an old structure that is scheduled to be torn down. In the past, we have accepted the fact that some buildings in Switzerland have remained vacant, with the rationale that these situations are only temporary. But this leads to the loss of a great deal of potential.
High-visibility examples of temporary use, such as the property in Zurich-Oerlikon, attract attention and raise investors' awareness of this issue and the opportunities that can arise. However, we must not forget the many less well-known properties that remain vacant. Some 72,000 housing units in Switzerland were unoccupied in 2021, costing the real estate sector the equivalent of more than CHF 1 billion in rental income every year. For that reason alone, but also in light of the social responsibilities of today's companies, it is important to think about how vacant properties might be put to temporary use.
Generally, yes, but of course not every building offers the same structural and geographic features. That's why we always tailor our efforts to each individual property, since every one offers its own possibilities and opportunities.
Pop-up projects can be found almost everywhere, particularly in retail spaces. But our approach is unique. We examine portfolios in their entirety to identify the potential for professional temporary use, develop individualized plans, and then put those plans into effect.
Cities like Amsterdam, Berlin, Vienna, London, and New York offer inspiring examples. Thus co-living, for instance, is not a niche sector; it is in great demand in the market. In Amsterdam, there are some exciting examples of temporary residences and workplaces in the city's industrial areas; even a dockside crane has been converted into apartments. And restaurants, coworking spaces, and cafés can be found in what used to be a shipbuilding hall. In other countries, I'm always fascinated to see how a variety of day-to-day activities are combined under one roof – living, working, eating, and sleeping all take place in a single location. It's not about perfection, but about trying new things and transforming ideas into practice.
After completing commercial training in the real estate sector, Alexandros Tyropolis studied international business management in Berlin and Dubai. He worked as a research analyst to finance his studies, drawing up comprehensive market reports. He observed the increase in the number of vacant real estate properties over a period of several years. In 2016, he came up with the idea of finding interim solutions for using such properties. After returning to Switzerland that year, he founded the company Novac-Solutions GmbH – the name is derived from "no vacancy." Today the company employs seven people and is active throughout Switzerland.
