Propmodo Technology

By Travis Barrington · Mar. 7, 2024

Greetings!

Sluggish elevators frustrate occupants and hurt a property's appeal and value. From hotels to offices, inefficient elevators lead to dissatisfaction, vacancies, and diminished valuations. This week, we're exploring vertical transportation, including how building owners are increasingly seeking high-tech elevator systems to differentiate themselves, especially for office properties. For existing buildings, fully upgrading aging elevators is very expensive. But, more affordable solutions like implementing smart tech and cab improvements can enhance performance, user experience, compliance, and potentially even generate some revenue – breathing new life into old elevators.

Let’s go!

No One Wants a Twenty-Floor Walk-Up

The business case for prioritizing elevator performance upgrades

We've all found ourselves waiting in a crowded hotel lobby for an elevator to arrive. In those situations, we often consider whether taking the stairs would be faster, if only we didn't have luggage to carry. Elevator wait times are a frequent complaint highlighted in hotel reviews, negatively impacting guests' willingness to book stays, the rates they are willing to pay, and their likelihood of leaving positive reviews. This issue directly affects a hotel's reputation and financial performance. However, the problem extends beyond just the hospitality industry.

In residential buildings, sluggish elevator service can deter potential tenants and buyers, resulting in higher vacancy rates and lengthening the time required to successfully rent or sell units. Ultimately, this impacts the achievable prices for sales and rentals, decreasing the overall property valuation. For commercial properties, inefficient elevators can reduce employee productivity and morale, a particularly concerning issue when building owners are striving to bring workers back from remote environments.

Of course, addressing elevator problems is no easy task. Undertaking a comprehensive renovation of an elevator system can be very expensive. For basic upgrades like modernizing fixtures and railings, it may only cost a few hundred dollars. But upgrading the control system typically costs around $12,500. If you're planning a full modernization, which involves replacing most major components like the hoisting machinery, doors, and cabin interiors, you can expect to pay between $125,000 and $150,000 per elevator. Taller buildings require faster elevators, and the cost for a full modernization in such cases can increase to a range of $150,000 to $250,000 per elevator.

In addition to the substantial upfront capital costs, there are significant longer-term financial implications to consider. Beyond the expense of the upgrades themselves, owners must account for potentially reduced occupancy rates during the construction period when elevators may be out of service. This temporary downtime can dissuade current and prospective occupants, leading to lost revenue extending beyond just the construction timeline.

Deferring an elevator modernization brings its own ongoing financial burdens. Elevators that are not upgraded will inevitably require more frequent and costly maintenance and repairs over time. These recurring expenses can place a considerable financial strain on building owners. And it's worth repeating, the negative experiences caused by outdated or sluggish elevators can devalue the property and make it less appealing, compounding the financial impact.

To mitigate the immense costs of full elevator replacements, building owners can implement strategies aimed at enhancing elevator speed and performance. Modernizing elevator control systems, for example, can significantly improve dispatching efficiency and reduce wait times. Adjusting speeds for door opening/closing cycles eliminates unnecessary delays. Conducting traffic analysis during peak usage periods provides valuable data to optimize elevator scheduling according to demand patterns.

Incorporating smart technologies presents another avenue for improving elevator service and the user experience. Destination dispatching systems and mobile app integrations can streamline elevator usage and traffic management, diminishing wait times and raising overall satisfaction levels. Additionally, adhering to a disciplined preventative maintenance and inspection program is crucial for preventing breakdowns and ensuring elevators operate at peak efficiency.

Most commercial properties don’t have the problem of bad elevator reviews to worry about, like hotels do. But they should still be thinking about the elevator service as a key part of the occupant experience. By improving elevator service and reducing wait time, building owners can substantially enhance the performance of their buildings, bolstering user satisfaction while preserving or even increasing property valuations and appeal. While full elevator replacements may ultimately be required, prioritizing upgrades and operational improvements to existing systems delivers immediate benefits. These proactive measures can mitigate the detrimental effects of obsolete, inefficient elevators, improving the user experience and the long-term financial prospects for the property.

Bytes

☁️ Up grade: Elevator company Otis will modernize most of the lifts and escalators in Burj Khalifa, the world's tallest building, and continue to service them for another 10 years.

🪤 Trapped: The Mayor of San Francisco has taken criticism for the delays in repairing a broken elevator in a city-run hotel for formerly homeless residents.

🤖 AI factory: Driven by the surge in AI, data centers are transforming from storage facilities to "AI factories" that require more power and land, creating both opportunities and challenges for commercial real estate.

🍎 Silicon Alley redux: AI is booming in NYC, with startups like Cohere driving demand for office space and propelling the city towards becoming a major AI hub.

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Propmodo Technology is edited by Franco Faraudo with contributions from readers like you and the Propmodo team.

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