The commercial building stock in the United States is older than most portfolio conversations acknowledge. JLL data puts 68 percent of national office inventory as built before 2000, and in many gateway cities more than 70 percent of space is at least 30 years old. The median office building that traded in the first quarter of 2026 was 39 years old, up from 22 in 2000.

Equipment inside those buildings is aging on the same schedule, and vertical transportation is approaching a point where a lot of it needs attention simultaneously. “Nine million of the world’s 23 million elevators are already 15 to 20 years old, that’s right at the age where refurbishment is recommended,” said Joseph Armas, President of Otis Americas. More than a million of those units are in the United States and Canada.

The timing is awkward. Owners carrying buildings through a period of compressed valuations and expensive debt are not looking for capital projects, and elevator modernization is a meaningful one. What most are looking for instead is a way to defer the full expense without letting the equipment degrade to the point where it becomes a tenant problem.

Partial upgrades can buy real time. Replacing a controller, updating a drive, or improving door operation addresses the components most likely to fail without touching the machine or the cab. Armas is direct about what that purchases and what it does not. “That 15-year-old equipment might be able to have its life extended by five to seven years but the owners still need to be thinking about upgrading,” he said.

Deciding when to move from maintenance to modernization depends on what has actually been going wrong. An elevator with occasional mechanical issues is a different asset than one with recurring electrical faults, and the distinction matters because electrical problems tend to indicate the control system has reached the end of its useful life. “The performance history of the elevator is really important,” Armas said. “Are there electrical failures as well as mechanical? If so, you might want to pursue a larger modernization.” Shutdown frequency and duration belong in that analysis as well, since the cost of a building with unreliable vertical transportation shows up in tenant relationships before it shows up in a repair invoice.

There is a second reason the modernization question has gotten more pressing, which has to do with what buildings are being asked to do. Owners investing in building management systems, access control, and occupancy analytics are connecting systems that were never designed to talk to each other, and legacy elevator controllers generally cannot participate.

“We are the spine of the building so we have to be able to integrate with everything,” Armas said. “That can only happen if the elevators get modernized.” A destination dispatch system that cannot read from access control is solving a smaller problem than it could be. An occupancy platform that cannot see elevator traffic is missing the most reliable signal available about how people move through a property.

AI has raised the hardware requirement further. Dispatch algorithms that respond to a call button need very little processing. Systems that anticipate demand need considerably more, along with access to data from outside the elevator itself.

“AI is requiring elevators to have more compute,” Armas said. “They need to know how many people are likely going to be using the elevator, where they are coming from, and how many other elevators are there.” Running that calculation continuously across a bank of elevators in a high-rise is a different computational problem than the equipment installed in 2008 was built to handle.

The same technology is improving how owners plan the work. Modernization decisions have historically been made reactively, triggered by a failure or a code requirement, with limited visibility into what else in the system was approaching the end of its life. Performance data collected continuously changes what can be planned in advance.

“AI is starting to add an intelligence layer that can help the building team and our teams design better operations,” Armas said. “Now it will be able to give a roadmap for any upgrades that would help the building.” A sequenced plan that identifies which components need replacement in which order lets an owner phase the capital rather than absorbing it at once.

Prediction also changes day-to-day operation in ways that matter for buildings running at or near capacity. An elevator system aware of a scheduled event on an upper floor can position cars before attendees arrive and again when the event ends, rather than responding to a surge after it has already formed. Otis has applied that kind of analysis outside the equipment itself, including for a New York finance firm whose employees were consistently returning late from lunch. The traffic data showed the elevators could not handle the noon rush, and the recommendation was a 20 percent lunch discount offered 45 minutes before the peak.

Demand on these systems is not easing. Cities are densifying, office attendance has been climbing on peak midweek days, and the buildings absorbing that traffic are largely the same ones whose equipment is reaching the age where modernization gets recommended.

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