This was published 7 years ago
Revealed: why real estate superstar James Dack quit
James Dack clawed his way from a housing commission terrace to become Australia’s top real estate agent. Then he quit. For the first time, he explains why.
By Jana Wendt
In the push and shove of Sydney real estate, James Dack, 194 centimetres of him, loomed tall as a column. His clients were not small people. They were some of the city's wealthiest and best-known figures. Television bosses Ryan Stokes and David Gyngell, one-time Qantas chief Geoff Dixon and Malcolm Turnbull all bought and sold through the medium of Dack's earthy Australian pitch. In the rich hunting ground of Sydney's eastern suburbs, Dack reaped a bounty in the glory years of the 1990s and well into the new century. The industry recognised a star, and awarded Dack its trophy for being the nation's leading real-estate agent several years running. He was top salesman at his firm for 19 years in a row. As one friend puts it, "He could convince you water wasn't wet."
It was in 1987, as James Dack played touch football in Sydney's Domain parkland, that he met John McGrath, a young man with a background not dissimilar to his own, and as eager to succeed as Dack himself. McGrath, who was just beginning his real-estate business, pressed Dack to join him. Dack was 27 and had had a troubled start to life, but was trying to change things. Following a disturbed and unsuccessful final year at school (scoring 115 out of a possible 500 in his leaving exams), he had become an orderly at Sydney's St Vincent's Hospital. In due course, he was promoted to managing the hospital's payroll and ultimately ran the public hospital payrolls for the state of NSW.
James Dack has become Australia's top real estate agent as head of Sunshine Group Investments and co founder of McGrath Real Estate. Credit: James Brickwood
As Dack tells it, after McGrath sold him on the real-estate business, the Health Department office where he worked suddenly "looked like it was covered in cobwebs". Dack decided to "jump off the cliff". What unnerved him, he says, was that "there was a lot of expectation, a lot of pressure, a lot of debt – I had to get a whole lot of suits and a car". As it happened, Dack and McGrath's collaboration, which turned into the phenomenally successful McGrath real estate business, ultimately made them both multimillionaires.
At the height of his powers, as part of the swashbuckling McGrath team, Dack's comings and goings – the purchase of a new car, the sale of his old house, the announcement of his engagement – were fodder for the social pages. In 1999, a year before he was to marry into big money (his wife, Mary Cowin, is the daughter of Hungry Jack's fast food titan, Jack Cowin, who is on the board of Fairfax Media), a Sunday newspaper reported on the engagement of "the Herculean property flogger". Papers described his extracurricular exploits, too: climbing Mt Kilimanjaro in 2006 and, five years later, trekking the Kokoda Track. In 2010, Dack, by then a significant McGrath shareholder, was part of a team of "celebrity sailors" on board a super-maxi yacht in the Sydney to Hobart race. In photographs, Dack is pictured smiling alongside fellow media and sports stars, including boxing champ Danny Green and rugby union greats Phil Waugh and Phil Kearns.
John McGrath (left) and James Dack at the offices of McGrath in 1997.Credit: Dallas Kilponen
The sailing high life was an ocean away from where he grew up: the depressed, hardscrabble streets of Sydney's inner-city suburb of Woolloomooloo, where his family moved in 1973, when Dack was 13. He was the eldest child; five years ahead of Stephen, eight years older than Alison. He was also trouble. At the family's previous address in Camperdown, Dack had prowled the sewers with the local kids and almost managed to electrocute himself while breaking into a perfume factory.
The rundown housing commission terrace in Woolloomooloo was nonetheless an advance on the flat in a grimy public housing block his family had left behind. Still, he can recall the pub brawlers, the nightly shrieks and smashes, and the prostitutes. He can picture the colossal bonfire in his street every year when local kids piled up all the rubbish they could find and set the junk heap alight. There was the year when the ritual turned criminal as locals ran wild, pillaging cars and hurling their contents onto the fire, which melted a streetlight. Dack played football in the nearby Domain and went to school at St Mary's Cathedral Christian Brothers High across the road.
The 55-year-old remembers all this with fondness. But what also enters his thoughts, this time with revulsion, is that his father, an English wharfie, was an alcoholic who beat his mother, assaulted him, and tormented the family. Dack readily describes his father as an animal, stumbling in and out of the family's life, mostly in alcoholic rages, and only occasionally contrite. In the end, his eldest son threw him out and took charge.
Sitting opposite Dack on the first-floor balcony of the Darlinghurst cafe he has frequented since those days, I ask if his own angular face resembles his father's. His eyes narrow. As a teenager, he tore "to shreds" all his parents' wedding photos. "I was really upset that [my mother] met this bloke and I didn't want a trace of any of that in the house," says Dack, looking away into the late-afternoon sky to avoid the question. He adds: "This is a 14-year-old kid thinking." He blames his father for his mother, Florence, dying from cancer at 52.
In Dack's mind, Florence clearly represents all that is good. He still wonders how she survived on a cleaner's wage. "It's a monumental achievement to have three kids, feed them, clothe them, house them and educate them," he says, and then adds, with evident disgust, "And you've got people talking about, 'Is 10 million [dollars] enough? Is 20 million enough? Is 30 million enough?' " After this he utters an expletive he does not want me to write. But the fact is, expletives are part of the deal with Dack, whose swagger demands your attention. He tells me on a couple of occasions that a well-known business figure "throws around the word 'integrity' like a frisbee". This line, I suspect, along with many others like it, has been fine-tuned over time.
While James Dack was establishing himself as an all-conquering salesman, his younger brother Stephen succumbed to the same scourge that had blighted the boys' childhood: alcoholism. Despite a lively intelligence, and his talent on the rugby league field and in the boxing ring (he gained a NSW title), Stephen Dack was felled by his addiction. From a young age, James became what Woolloomooloo Police Citizens Youth Club president Bruce Collins, a close friend to both brothers, describes as the "wicket keeper", who tried to field every vicious ball that came his brother's way.
As James Dack tells it, with their mother gone and sister Alison living elsewhere, the boys made a decision to give up the family's Housing Commission home. With nowhere to go, the Dack brothers spent about 18 months at the PCYC in Woolloomooloo, the first of a statewide network of clubs founded in the 1930s to divert disadvantaged boys from crime. Dack describes the brothers' stay as "the greatest time of my life" and the kindness shown to the young men then and in later years, during some of the most harrowing periods of Stephen's drinking, converted into lifelong gratitude – James has served as the PCYC's president, now sits on its NSW board, has donated significant sums to the organisation and trains at the club several times each week. "I'm just a bloke who's seen a lot of interesting things in life, and those things come back. They're very strong," he says, referring to his memories, "and they're still with me."
Walking through his old neighbourhood one afternoon, we bump into one of Dack's childhood friends. She tells him at length about a young man in the family who is in trouble with the law. "Send him up to us," he says, pointing towards the PCYC. Then we stop at the Matthew Talbot Hostel, another of Dack's long-favoured projects. Inside, homeless men, old and young, sit impassively in front of a television.
You carry your childhood with you all your life.
Close by, at the Plunkett Street Public School, tall trees in the front yard cast long shadows over an empty playground at day's end. A disco held there recently, reports the headmistress, was made possible by Dack, as is the handsome playground equipment that stands in the yard. "I need to do whatever I can within my means to actually try to stop, particularly, young people going through what I went through," he tells me.
Two years ago, in 2014, James Dack performed a manoeuvre more complex than his most delicate sales jobs. As sales director of the McGrath company for over a decade, Dack supervised the turnover of more than $100 million a year in property transactions. Over time, though, he had been quietly selling down his share-holding. Early one September morning, he gathered his belongings from an office at the firm's headquarters and, with antiseptic detachment, cut all ties with McGrath. After 25 years in the business, he informed its 500 or so staff of his departure in a three-line email starting, "Dear everyone, today is my last day in the real estate industry." He mentioned his new venture, Sunshine Group Investments, and signed off with "Kind regards".
Why did he leave? "The thing that made me uncomfortable with it was that all I was doing was making a lot of money selling a lot of houses; why do I deserve your respect? For what I was doing, the reward, relative to a lot of other people in the workforce, was a lot higher than it perhaps should've been. A good friend of mine is a heart surgeon, and let me tell you, in three or four or five transactions you're earning his annual salary. So there was a degree of embarrassment about that … When you're holding someone's life in your hands it's not like holding a set of keys, is it?" Dack sounds pleased with the turn of phrase.
For the past two years, James Dack has been trying to show the world that he is no longer that man who sold rich people's houses. He wants me to understand that this is not a real estate story, and that in his heart he was always, and forever will be, a man concerned with the things that matter. "I don't want to be running around in a second-hand BMW, opening and closing doors," he adds, caustically.
These days, he says, he spends most of his time working on behalf of the PCYC at what he sees as a pivotal time in the organisation's history. "Times are changing, and I think the PCYC's changing … in terms of the clubs and where they're best suited." He's heavily engaged in property acquisition and club location on behalf of the PCYC, which today has more than 60 clubs around the state offering myriad activities.
Dack says leaving real estate allowed him to alter the proportions of his daily life. "Previously I would have been spending 70 per cent of my time on real estate and, say, 30 per cent on charity work. But now it's the reverse." His new private investment business "doesn't take a lot of managing other than the fact that you have to be careful about where you put your money".
The new direction he has taken is another kind of investment in the future. "I feel that if I didn't do this now I would regret it for the rest of my life. I'd be the guy lying on the pillow at 75, dribbling [when someone says], 'You've got 20 minutes to live, Mr Dack.' And I'd go, 'What a joke, what a mess.' "
"It's kind of sad he's not doing it any more", says Mary, Dack's wife of 16 years, referring to her husband's old job. She puts his decision to abandon real estate down to "strong-mindedness" and is still anxious about the change. We are discussing the subject in a gracious room in the Dack residence, a large double-storey house in one of Sydney's finest suburbs which features a tennis court, swimming pool and gazebo. (An estate agent might describe it as Tuscan-inspired.)
"What's to say he doesn't do it again in the future?" Mary says as the couple's two children – Riley, 10, and Emily, 9 – dig into snacks. Dack, sunk in a lounge chair across from his wife, shakes his head. This is our first meeting away from the 'Loo, and Dack sits rather awkwardly in the opulent surroundings.
On another day, he tells me: "When I walk into this house I don't feel comfortable. But having said that, my kids are happy …" Dack pauses before continuing. "What I really want to say is, you carry your childhood with you all your life and it pops its head up often. Anybody who's ever been brought up in a Department of Housing situation – the biggest fear that person has is of losing their home, and losing their family.
"And I think part of the reason why I was good at real estate is that I knew what it was like to be fearful of losing your home."
On display in the grand house, among the family's photos, is one of Stephen, nicknamed Sunshine, looking into the camera, open-faced. While his addictions to alcohol and gambling ravaged him, Stephen became a successful lawyer, often defending homeless and strife-prone men in court.
"Stephen's been huge in my life," says Chayana Meirs, a 36-year-old lawyer raised in Woolloomooloo who maintains she may never have taken up law without the younger Dack brother's encouragement.
"When I started working with him he was just fairly fresh out of the rehabilitation stint," recalls Meirs, who now runs her own legal practice. "His philosophy had a big impact on me in terms of the things that you prioritise in life." According to Meirs, the Dack brothers were "idolised" by locals. "They just had this air of still being family to the community – but family that had achieved and gotten out," she says.
In 2007, the brothers' life stories attracted the interest of a publisher, and each contributed his own account for a book. James Dack confesses he was undone by his brother's honesty about the abject humiliations of addiction. As a result, he recast his own reflections to "unplug" himself. He admits: "That's where I got to the point where I actually realised myself that it wasn't a real-estate story. I pulled back all the layers of the bullshit onion, and the materialistic stuff that made me sick about myself."
The brothers agreed to meet to finalise publication details. Stephen Dack did not show. Instead, he took his own life. Sunshine & Shadow was published in 2010. "In the end," says Dack, "I could see that he was slipping back … I think [his life] was so incredibly painful, and so wonderfully beautiful, at either end of the spectrum."
Stephen Dack's death, says his brother, became a large part of the motivation for the final push to get out of real estate. He thought, "I need to act on this before I become one of those people who become very bitter about what they didn't do."
Rumours about the tumultuous relationship between John McGrath and James Dack began circulating two decades into their partnership, at around the time John McGrath advanced plans to float the company. Dack was uneasy about structural changes to the business, and for a time was not on speaking terms with McGrath, the CEO. For the last six years of his tenure at the company, Dack rode the lift from the car park to the first floor of the company's eastern suburbs headquarters and stepped directly into his own office without dealing with McGrath. When pressed for an explanation, Dack simply says, "I don't want to squeeze lemon into the water." (John McGrath did not respond to requests for comment.)
The float, which took place in December 2015, 15 months after Dack's departure, did not go according to plan – the share market savaged what had been described as the anticipated "glamour float of the year". After launching at $2.10 a share, McGrath stock plummeted, and at one point this April the shares were changing hands for as little as 91 cents each. The company is still struggling to deal with the consequences – at the time of writing, its share price sits at $1.16, a little over half of the initial listed price. This is despite the appointment of a new joint chief executive in July 2016, the August departure of its chief operating officer, and John McGrath himself stepping down as CEO, also in August.
Dack, as chief of his private investment company, Sunshine Group Investments, has plunged funds into Carnarvon Petroleum, an exploration company, and biotech firm Starpharma. He also has his eye on social media ventures. One afternoon in June, we attend a pitch presentation of a project being sold as a game-changing advance which has already attracted bankable international interest. "If you're not on social media," says the pitcher-in-chief, "you're an outcast."
"The pressure is as great as when I first started in real estate," says Dack of the venture-capital business. "It's like wiping the whiteboard clean and then starting all over again. I'd hate for my kids to look at me and think I was a failure."
A month after his departure from McGrath in 2014, James Dack lit a match and watched smoke rise from a burning mound on the footpath in front of the Woolloomooloo PCYC. Running through his head as he watched the bonfire was the thought that nearly half his life had been spent selling real estate. "If you can't play football," his mother used to say, "at least look like you can." Turning to ash in front of him now were the suits he'd worn to look the part. The career which had made him very, very rich was going up in flames down the road from his old house. He liked the smell of it.