Ritter Communications on Wednesday (May 15) closed on a $6.6 million sale and leaseback transaction for its Jonesboro headquarters building with Haag Brown Development. In the transaction, Ritter Communications committed to a 20-year lease on the property with multiple renewal options included.
A sale-leaseback is a common transaction in which a business sells assets and leases them back through a long-term agreement. This transaction allows Ritter Communications to release capital to invest in further network expansions, according to the company.
One expansion includes the $7 million fiber project recently announced in Hot Springs. Ritter Communications’ operations will be unaffected by the building ownership change and no employees will be impacted.
“We are really proud of our corporate headquarters building here in Jonesboro,” Ritter Communications President Alan Morse said. “We plan on being here for a long time, and our new 20-year lease with Haag Brown reflects that. However, the capital invested in the building wasn’t generating any direct return for our shareholders. This sale-leaseback transaction allows us to free up that capital to invest in further network expansion and services.”
The Ritter corporate office opened in 2012 and was the first LEED Silver Certified office building in the Jonesboro. It is located within the Hill Park development and houses the company’s headquarters operations including network engineering and operations, sales, marketing, customer service, accounting, human resources and information technology systems. Nearly 200 workers are employed at the facility.
Joshua Brown, principal of Haag Brown Development, said his company is pleased with the deal.
“This partnership demonstrates the progressive approach we’re taking to development in Northeast Arkansas,” Brown said. “We are more than a retail development firm. Our team supports and develops a thriving business community in innovative ways. On a more personal note, being a Marked Tree native where Ritter Communications originated, makes the partnership very meaningful to me.”
Ritter Communications began providing local phone service in 1906. The company operates in 89 communities and has more than 45,000 customers in Arkansas, southeast Missouri and west Tennessee. The family-owned company has expanding rapidly since 2010 and is now the largest privately-held regional fiber, telecom, video and cloud services provider in the state.
Established in 2010, Haag Brown is a real estate company that focuses on developing medical, retail and mixed-use developments throughout the southern U.S. The company has been involved with the development, construction, leasing and management of multi and single-tenant projects across 15 states.