Talon Real Estate’s Greg Pfleider brings an unusual strategy to the Twin Cities real estate game.
Greg Pfleider could sell the inside coating of a metal can.
Seriously, he’s done that — for a major paint manufacturer. In the early days of his career, of course.
After stints as a financier with several Wall Street investment banks, the Wayzata native founded Talon Real Estate Corp. a little over a year ago. The publicly traded Golden Valley real estate investment firm has just four employees now, but has big plans to grow.
Since May, Talon made two commercial real estate acquisitions in the Twin Cities totaling $58 million, including the Minneapolis Mart in Minnetonka for $18 million, and 180 East Fifth, a historic office tower in St. Paul, for $40 million.
Talon is on the hunt for more quality properties in the nation’s midsection to build up its real estate portfolio, and there are tax advantages to those building owners who want to sell. The garrulous Pfleider recently discussed Talon’s unique business model with the Star Tribune.
Q: First, how DO you pronounce your name?
A: Phonetically, it’s FLY-DER. [Laughs]. When I make dinner reservations I just use Greg Johnson or something like that.
Q: How did Talon Real Estate get into business?
A: We did a reverse merger with a publicly traded company called Guide Holdings on June 7, 2013. Guide Holdings used to print how-to books, but with the proliferation of Google you can imagine what happened to that. We did it because going public now through Wall Street is very expensive, it can cost some firms anywhere from $6 million to $20 million. That’s a large expense. So we went public for $375,000, and we named it Talon Real Estate Holdings.
Q: Are you a bird lover or bird watcher?
A: [Laughs] No. The name just sort of came up.
Q: What’s the strategy behind your recent deals?
A: They were off-market deals that fit into our investment criteria. We look at real estate investments in two different buckets: Stabilized and value added. Stabilized involves buildings that are 90 percent to 100 percent leased, with very predictable cash flow, like the Minneapolis Mart. Value added is a building like the one in St. Paul that is about 60 percent occupied and cash flowing. We can put together a lease-up strategy with some tenant improvement dollars. Plus the building is obviously a historic landmark, it’s gorgeous.
Q: What is your business model?