Highest Best Use

							Highest & Best Use

        Jim Burton, Ph.D.
        Marketing & Real
        Estate
Overview
 Definitions
 Highest & Best Use Test
 H & B Use as if Vacant
 The Ideal Improvement
 Physical Possibilities
 H & B Use as Improved
 Special H & B Use Situations
Definitions
 Highest & Best Use – The reasonably
  probable and legal use of vacant land or
  an improved property that is physically
  possible, appropriately supported,
  financially feasible and that results in the
  highest value.
 As if vacant
 As improved
Highest & Best Use Test

 Physically   possible
 Legally permissible
 Financially feasible
 Maximally productive – highest return on
  the land
H & B Use as if Vacant
 Existinguse
 A proposed development
 A subdivision
 An assemblage
 Holding for appreciation
 Probability of zoning change
The Ideal Improvement
 Takes maximum advantage of the site’s
  potential given market demand
 Conforms to current market standards &
  the character of the market area
 Contains the most suitably priced
  components
Physical Possibilities
 Size
 Shape
 Terrain
 Frontage/accessibility
 Flood/earthquakes
 Utilities available
 Current zoning limitations
H & B Use as Improved

 Existing   use
 Renovation or rehabilitation
 Expansion
 Conversion to another use
 Partial or total demolition
 Some combination of these alternatives
Special H & B Use Situations
 Single uses
 Legally nonconforming uses
 Interim uses
 Uses that are not H & B use
 Multiple uses
 Special purpose uses