Jack Manning, the charismatic Chief Executive of Boston Capital, speaks with Kellogg’s Executive MBA students about entrepreneurship, real estate, and the importance of political involvement
Jack Manning began his real estate career at the age of 25 with $1,000 in capital, working out of a one bedroom apartment. He has since grown that enterprise into over $13 billion invested in over 187,000 apartment units, making Boston capital the largest owner of apartments in the United States. Mr. Manning visited the Evanston campus on March 16, where he held an informal lunch with a small group of students and spoke before the Executive MBA program (EMP 85 and 86).
Manning emphasized the importance of “never feeling successful” until your career is finished, because, “if you ultimately lose that success, then you really weren’t that successful.” He claims that this attitude towards success is what has driven him to keep discovering new opportunities.
Manning spoke about how, in the beginning, that drive and humility allowed him to take prospective investors to the only meal he would actually be able to afford to eat some days, guided him to federal affordable housing programs as a source of equity for his early development projects, and pushes him today to find new opportunities in a more challenging marketplace. As evidence of the creativity that comes of unflagging determination, he cited the recent use of energy tax credits to build a rooftop solar energy system for a large big-box tenant in a state with very high energy costs. The tenant pre-contracted the first several years of energy from Boston Capital at fixed rate and agreed to an otherwise unachievable lease, which ultimately made the financing of the retail development possible.
Manning emphasized the importance to his career of getting involved in politics. He explained that his involvement in politics has given him access to both potential investors and policy makers, but that it has more importantly made him aware, given him ideas, led to more successful investments, and instilled a sense of responsibility to continue to be involved. To illustrate both the influence and responsibility that come with public service, Manning told students about one rather humorous incident that began with a request for specific regulatory oversight of the Low Income Housing Tax Credit (LIHTC) industry, but which resulted with him receiving 24-hour notice to be at the White House to meet with President Clinton at Senator Ted Kennedy’s request. For this favor, he ended up having to hold Senator Kennedy’s dog while wearing one of his nicest suits.
Although he was repeatedly asked “So you want to be regulated?”, the request ultimately resulted in passage of industry oversight which reduced the risk of IRS audit for the LIHTC Industry.
On the current state of investment in multifamily housing, Manning claims that equity is easy to come by, but that putting it to good use is much harder. With premiums presently being paid for apartment buildings and lower loan-to-value requirements for financing, he said, “everybody is searching for yield, which remains elusive.”
On starting an investment company, Manning advised students to look at the myriad of opportunities created by public funding and tax credits. He also counseled that deferred compensation is often an acceptable form of co-investment and that there is no substitute for determination.