And certainly as the pace of overall construction slows, we think we’ll be in even a stronger position to leverage our buying power in our core markets to drive even better cost modules from our outside general contracting firms.
Operator: Our next question comes from the line of Upal Rana with KeyBanc.
Upal Rana: Hey, good morning. Thanks for taking my question.
Jerry Sweeney: Good morning.
Upal Rana: Tom, your prepared remarks on the Schuylkill Yards lease up was helpful, but could you expand further on that project? Any LOIs on the office portion you hope to get to the finish line in the near-term? And any timing on the residential lease up and if you can provide any numbers on the impact on the capitalized interest burn off, that’d be helpful. Thanks.
Tom Wirth: Yes. Well, I’ll touch based on just what I talked about.
Jerry Sweeney: Tom and I sounds very much like —
Tom Wirth: Yes. We sounded like. I guess I’ll touch on what I said in the remarks. Yes. We — as we bring the developments online, we’re going to be experiencing a lease up phase and with the multifamily that’s going to be brought in over time. But for the first year, we expect to slowly bring up the operating results for the residential that’ll be both here and when we eventually have Uptown ATX residential started. When that happens, we’re going to have some operating losses as we bring those properties on. So that’s going to be one phase of it. Two, you begin to reduce interest capitalization as more and more of the units become available for lease. And then, number three, we have our preferred equity partner costs that also are phased in on a similar manner.
So those costs over the first two, three, four quarters are going to be at a level that will hopefully decrease as we get them closer to stabilization. So that’s how I think we look at the rollout of some of the JVs, especially on the multifamily side. As you look at the office side until we can lease the square feet, it’s a little simpler. We have — we basically have one year from substantial completion to lease up that space. So again, that’s more of a future thing. And Jerry can touch more on the pipeline and what he’s seeing there. But after the one year, then it does become an operational asset regardless of lease up. So our goal, as we’ve said is to get the leasing completed. So as we roll into that one year window and we start to look at that operational property come online, that we’ve done our best to get the revenue start, but that’ll occur again, we have a year to do that from an office standpoint.
And as leases come on, we just turn on that portion of the building from an operation point of view.
Jerry Sweeney: And Upal, I’ll just add on to Tom’s good comments. I think on the pipeline, the really near-term focus is on 3025 that’s pretty much delivered at this point. We have a number of residential that won’t really deliver for the next couple of months, but the activity levels are very good. I mean, I think we’ve been very pleased with the progress on the residential. We’ve had — there’s tours taking place every day, including the weekends. The leasing team there is doing just a rock star job of getting tenants qualified and leases executed. So to mention, we’re in the low-60s in terms of leases signed, which is right in line with what we’re hoping for and rates are holding in there, we had to do some pre-construction opening, rent concessions, they’re pretty much all burning off.
So we’re very much in line with our pro forma there. I will tell you on the commercial side, we did sign the one lease with Goodwin Procter. We have picked up a whole new listing of prospects in the last quarter. Those tenants range everywhere from 10,000 square feet up through over 100,000 square feet. So very pleased with the pipeline there. Now the building is done, the lobby is done, furniture is in, park is completed, the amenity floor is done. The building really does present a very attractive showcase. So the leasing team is doing more and more tours every day. So while we don’t have anything under LOI or in lease negotiation, we have a number of proposals being exchanged and a number of substantive discussions. Same thing on 3151, which is again not going to be delivered till later in 2024 and we just topped the steel off the other day.
So it’s really hard hat tours up to just the first few levels, but the activity level there has picked up as well. The life science market is showing some signs of recovery. There’s more tenants in the marketplace. The rate environment has created dynamic where there’s not as many new projects on the horizon as there was feared to be a couple of years ago. And those tenants that we’re talking to at 3151 range in the 50,000 to 125,000 square foot range, so good size tenants. Again, proposals being exchanged, nothing signed at this point. Uptown ATX the residential won’t really deliver till the latter half of next year, so it’s still a bit too early to tell. The business plan there looks good. Market dynamics seems solid. And on the commercial side, that market as I touched on remains slow, but we do have a number of prospects that we are doing tours and having discussions with.
So hopefully that provides you a little more color than the prepared comments.
Upal Rana: Great. That was very helpful. And just one quick last one for me. What was the $11 million impairment related to?
Jerry Sweeney: We looked at our assets. Some of them are in used impairments that we take at a couple of property levels as we start to assess whether we’re going to sell those assets or not. So that is not related to Three Barton. Last quarter we did take an impairment on Three Barton ahead of that sale. This is impairment on assets that we are taking a look at as possible sale candidates.
Operator: That concludes today’s question-and-answer session. I’d like to turn the call back to Jerry Sweeney for closing remarks.
Jerry Sweeney: Great, Liz. Thank you for your help today. And thanks to all of you for participating in our third quarter earnings conference call and we look forward to updating you on our business plan progress after the first of the year. So thank you very much.
Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.
