“Wadda ya wanna know about it?” asked my Vegas cabbie, careening under the hot desert sun from McCarran International Airport to The Venetian.

It was July 2002, and I was in town for my buddy Faceman’s now-legendary bachelor party.* I had just asked the driver about the prospects for the site of the old Desert Inn, a once-great casino-hotel built by the inimitable Howard Hughes. The hotel had been demolished by the new landowner, Wharton alumnus Steve Wynn, with his customary audacity - barely a month after the September 2001 terrorist attacks.

“Tell me all about it, what’s Wynn thinking of doing?”

“Well, of course,” began the cabbie in the flat vowels which betrayed a thick Midwestern accent, “Wynn is a real player. He built the 3000-room Bellagio for $1.6 billion, although some $350 million of that was for the art in the gallery.** When he sold out to MGM mirage, he cashed out about $700 million after taxes. So now he’s got a little bankroll to play with.”

“Right, so what’s next, eh?”

“Oh, this guy has balls!” gestured the cabbie, swerving to avoid a clueless tourist. “He puts together the deal of a lifetime – a real Kirk Kerkorian deal! He throws the whole chunk of change in the pot - buys the DI and the DI golf course, with all its land. So now he’s all in. But he needs to get a few of his chips back, cause he still hasn’t built his casino!”

One of the cool things about Vegas is that cab drivers, when discussing real estate deals, will invariably use poker metaphors.

“So it takes him almost two years, but he finally lines up some equity financing, from these Japanese guys. And get this – he gets them to put up like $600 million for 49.9% of the deal! He takes almost all of his chips off the table, and still maintains control! And now he’s gonna get Wall Street to finance the sticks and bricks. Unbelievable! What a guy!”

At this point, the cabbie got really excited, and we started talking about the plans for what would eventually open in May 2005 as the Wynn Las Vegas.

I only bring this up because, to a greater extent in Vegas, but also to a lesser extent in other locales, cabdrivers tend to be experts in land economics. The average Las Vegas cabdriver knows as much about real estate development as the typical contestant on “The Apprentice”. Occupancy rates, building costs, partnership control arrangements – ask your cabbie next time you’re in Sin City, he’ll know the answer.

Today I am in Bodrum and my Turkish is far enough along that I can talk basic economics with my cabbie. Absolutely critical from a due diligence perspective.


*At which nothing happened. Nothing.
**All numbers in this post are estimates, because unfortunately – disastrously – that notebook was lost during an all-nighter at Binion’s Horseshoe.