Shifting Gears

KONE and Schindler provide insight into an evolving NYC property and VT market. 

As the COVID-19 pandemic ushered in an era of remote and hybrid work that appears to be permanent, demand for new office space in NYC waned, along with the vertical-transportation (VT) equipment to serve it. But the Big Apple is far more than just offices, and VT providers are adept at shifting gears to serve customers’ evolving needs. The major OEMS continue to install unique, record-breaking VT systems as infrastructure, residential and modernization projects surge to the forefront. KONE Inc. NYC District Vice President (VP) Justin Tomasino (JT) and Schindler Senior VP for the NYC Metropolitan Area Mike Chatterton (MC) spoke with your author (KW) about the challenges and rewards of the market as the companies remain “strong and committed” to NYC. 

KW: Which boroughs are busiest for the company right now, and what are the main business drivers?

JT (KONE): The outer boroughs continue to be very consistent, but it’s no secret there is little new development in commercial office buildings in Manhattan. The main drivers today are infrastructure, which remains strong, and transportation and airports. Office buildings remain a strong driver, but everyone in the industry has seen that activity slow somewhat based on current interest and occupancy rates. In modernization, we’re seeing increasing interest in destination control system (DCS) installations in older commercial properties.

In modernization, we’re seeing increasing interest in destination control system installations in older commercial properties.

 — KONE Inc. NYC District VP Justin Tomasino

MC (Schindler): Manhattan and Brooklyn remain very busy, with Queens close behind. With NYC code-required upgrades approaching a 2026 deadline, equipment upgrades and modernizations remain vibrant, with new equipment projects slowing slightly as a result of the larger economic picture. We are also seeing a significant increase in projects to improve efficiency for managing tenant traffic as unique tenant amenity spaces are being created throughout properties. Finally, there is a real push to improve sustainability as buildings look to reduce their environmental impact. 

KW: Please provide a few examples of major NYC projects either ongoing or recently completed and what they consist of, generally.

JT (KONE): KONE is installing transit-grade equipment (63 elevators, 38 escalators and seven moving walks) at the new Terminal One at John F. Kennedy International Airport. With KONE monitoring solutions, all of the equipment at what will soon be the world’s largest international terminal can be monitored from a single location. KONE is excited to be providing the VT systems that will move visitors from around the world smoothly, safely and efficiently. At a 45-story Class A office building in Manhattan, KONE will install the latest KONE DCS offering, including the newest KONE destination-operation panels and guides, which will create smooth movement through the building. The project also features modernization of 17 elevators and automatic transfer floor operation at the sky deck lobby.

MC (Schindler): Schindler recently completed several projects that are shaping the Manhattan skyline and improving the movement of New Yorkers through our city. These include:

• Disney’s new headquarters in Hudson Square, consisting of Schindler 7000 gearless traction elevators equipped with PORT technology, to be completed in 2023
• Redevelopment of One Madison Avenue with SL Green and Hines (p. ??), consisting of Schindler 7000 gearless traction elevators equipped with PORT technology, to be completed in 2023
• Grand Central Madison (Long Island Rail Road East Side Access hub), which includes the tallest Schindler 9700 escalators manufactured and installed in North America, as well as a number of unique elevators; it opened in January 2023 

KW: How much did the pandemic affect business in NYC and are the effects now over — or not?

JT (KONE): Spending patterns have clearly changed in response to changes in the way people work and live in this post-pandemic era. As we collaborate with our customers, we see that the impacts and possibilities of remote and hybrid work are still unfolding.

To help address [the need for affordable housing], Schindler is taking a more active role in the low- and mid-rise residential market in NYC and is excited to continue supporting the vibrant communities that occupy the city.

 — Schindler Senior VP for the NYC Metropolitan Area Mike Chatterton

MC (Schindler): In terms of our workforce, we’re very proud that we were able to maintain our entire team of NYC field technicians during the pandemic and continued to provide uninterrupted service to our customers. Like a lot of industries, the elevator industry is still feeling the lingering effects of COVID-19, in particular how changing work routines have affected commercial real estate. From a product standpoint, customers — especially in NYC — emerged from the pandemic with a stronger propensity for touchless technology. Post-COVID, customers are increasingly requesting to have their elevator systems integrated with their tenant amenity applications to improve efficiency and champion a truly seamless and integrated building experience.

KW: What are the company’s main challenges in NYC and how are they being addressed?

JT (KONE): At KONE, we continue to focus on the ways advanced technology can streamline movement through urban space. We’re also seeing new opportunities result from the evolution of work and lifestyle habitats. And modernization is always an exciting area for KONE, including work in some of the city’s most prestigious properties.

MC (Schindler): As much of the workforce has shifted to hybrid or remote working models, demand for high-rise commercial buildings is evolving. The need for affordable housing in NYC is greater than ever, with the Real Estate Board of New York estimating the need for “560,000 new units by 2030,” much of which “will need to be affordable to those earning less than the area median income.” To help address this, Schindler is taking a more active role in the low- and mid-rise residential market in NYC and is excited to continue supporting the vibrant communities that occupy the city. We are also actively working with building owners as they repurpose commercial buildings to residential projects, including both modernization and new equipment. 

KW: What is your business outlook for NYC over the next five years?

JT (KONE): The KONE team is made up of New Yorkers who live in NYC. We’re always optimistic about NYC! The current focus on infrastructure will make this city a better place to work and live. Challenges lie ahead for all of us, but we at KONE remain strong and committed to this city’s future.

MC (Schindler): As I mentioned previously, the demand for housing is on the rise, and we foresee an increased focus on the residential building market. Within this market, we’re seeing an even greater call for sustainable mobility and implementation of energy-saving technology into VT solutions. Additionally, we’ll continue to see growing demand for facility owners and managers seeking interconnectivity between their building operations and their elevators and escalators via Internet of Things solutions. With products like Schindler Ahead, we’re able to remotely monitor a building’s elevators and escalators to identify — and increasingly prevent — an issue before it impacts the unit, allowing increased uptime and an improved customer experience.