George Johnstone: Yeah. Sure. I mean, in terms of square footage, the open plan is roughly 340,000 square feet. 100,000 of that are renewals that we feel confident about and then about 240,000 square feet of new leasing. And again, we’ve got 55% of that new leasing coming out of Pennsylvania, both the suburban and the downtown operations and about 42% coming out of Austin. So, we think again, the fact that at $19.3 million achieved. I mean, we’ve kind of achieved last year’s total spec revenue run rate. And we think the balance of the plan is certainly achievable and we’re doing everything we can every day to hopefully outperform that plan. But I think in terms of expectations, we think these are appropriate given where we are today.
Steve Sakwa: Okay. Thanks for the color. Jerry, I think if we did the math right, the leasing on the residential in Schuylkill was pretty slow in the fourth quarter. If we did our math right, maybe there was 20 leases done in the fourth quarter from the last time you had reported. A, is that correct? And if so, why was the leasing so slow on that new project? I know time of year is a little tough, but 20 in a quarter just seems abnormally low?
Jerry Sweeney: Yeah. I think, Steve, great question. And I think your math is always correct, if I remember correctly, but we wound up — our last earnings call was late October, and I think that the numbers we gave kind of reflected that leasing activity through the earning state. So frankly from our standpoint, just a backdrop, we were really delighted to get that level of activity, because a lot of the amenity space in the buildings weren’t completed until much later in the year. So we did have a slower November and December, primarily as a function of the holidays, but tour activity has picked up. There’s a seasonality to it. So, we do expect to do 12 to 13 new leases in each of January and February and kind of move into an accelerated pace as the spring leasing season picks up.
But we really benchmarked that based on a number of tours. We’ve had as many as seven to eight tours a day coming through the project. And now again that it’s 100% physically done. The outdoor park area is done, the lobbies are finished, all the furnitures at the amenity floor, the outdoor amenity deck is fully operational. We really do expect to see a good acceleration of that leasing velocity going into the into the full season. As I mentioned, we do expect it to wind up being about 80% to 85% leased by the end of the year.
Steve Sakwa: And just a quick follow-up. Are the rents that you’re achieving and the concession levels consistent with what you had budgeted? Or have rents and/or concessions kind of been better or worse than you thought?
Jerry Sweeney: No. We had a level of concessions that were in line with our pro forma to kind of do the opening occupancy levels. Right now the average rent is around $3200 a month and we’re running right on line with our performance. Certainly, as we start to move into the leasing season. We hope that the concessions we were giving will disappear based upon the tour activity that we’re seeing. So we have a high level of comps in the pro forma that we pulled together for this project will be executed.
Steve Sakwa: Great. Thanks. That’s it
Jerry Sweeney: Thank you, Steve.
Operator: Thank you. Our next question comes from Upal Rana with KeyBanc. Your line is open.
Upal Rana: Hi. Good morning. Could you talk about some of the sequential changes you saw in the development pipeline? I saw that there were some ownership increases completions and stabilization days are pushed out and some additional leasing done. So if you can give some color on that that would be great.
Jerry Sweeney: Sure. The — and we can tag team that. The increase in ownership as you may recall those — the Schuylkill Yards and the Uptown ATX developments are in joint ventures. Those joint venture partners are preferred. So they had an obligation to fund up to their level of investment which they’ve done. And beyond that we make additional capital contributions. As we make those capital contributions our ownership percentage could change. So that’s the reason for that. I think the — where there were changes made to the development schedule it simply reflects what our reassessment has been of the time to get the space actually built out and delivered. And we continue to see delays at the regulatory level of getting permits approved getting all the appropriate clearances to actually build out the space. One of the reasons why I was mentioning that we’re doing a lot of interior space planning and spec build-outs so we can kind of circumvent that delay process.
Tom Wirth: And Upal on the reason for that is we do most of those increases that’s causing us to put in more capital was really related to interest rates and in carry on the project. So when we started these projects we had a certain level of — or even before we started while we’re working on the loans we had a certain level of interest based on where the curve is at the time and that kind of got built into the budget. Certainly as rates went up a little faster than we thought and they’re coming back down a little slower than we anticipated they have caused the that part of the budget to go up. And that’s what we’re funding primarily. There hasn’t been many increases other than just some of the interest numbers related to the loans going up. And we’ve chosen to fund those as Jerry said.
Upal Rana: Okay. Got it. Thank you. And as a follow-up could you talk about any updates on the vacancy reduction plan? What’s the breakdown of some of the assets that you plan on leasing up selling and converting on the listed assets? I know you mentioned some of the disposition plans and timing. So want to see if there’s any other color you wanted to add there?
Jerry Sweeney: Well, the full-court press is on leasing a number of those properties particularly when we take a look at some of the higher-quality projects on that list like Cira Centre, 401 Plymouth Road. So there it’s more of an accelerated leasing marketing outreach program. We take a look at 101 West Elm we have commenced a significant lobby renovation there and common area upgrades that we think will help reposition that property. 300 – excuse me, 300 Delaware Avenue, we’re evaluating the feasibility of the conversion opportunity on that project to residential as we are with a couple of these other projects as well. So I think it ranges across the board. But I do think we’ve identified a couple of those is probably more appropriate for a residential conversion opportunity versus continuing to re-tenant as office space and then making some capital investments in a couple of the projects as well in their lobbies, common areas, et cetera.
