highest and best use
Definition
Key appraisal and zoning principle employed in valuing any parcel of land or property. Since the value of a property and its use are closely linked, its highest and best use is that which results in the highest present value, and brings in the greatest net return over a given period or the foreseeable future - within the applicable constraints. The value of, and return on, a property are related to its surrounding environment so its use has to be consistent with the neighboring land use. Because a property's value is influenced by the local competitive and political forces, the timing of the property development is another critical factor. And, especially in metropolitan areas, where a property can be put to several different uses, its combination of uses is very important. A highest and best use appraisal must take these four factors into consideration: (1) legal permissibility, (2) physical possibility, (3) financial feasibility, and (4) maximum productive use. However, even the most detailed appraisal is simply a considered opinion of an appraiser, not the final word.
Use this term in a sentence
“ We had used the highest and best use framework for assessing the value and optimal use of the land and property. ”
“ You should try and figure out way to make sure you get the best score when dealing with the highest and best use. ”
“ Zane knew that the highest and best use of the vacant lot behind the grocery store would be a ten-story apartment complex that would attract young professionals. ”
