Which statement best defines highest and best use in appraisal practice?
Correct Answer
A) The reasonably probable legal use that is physically possible, financially feasible, and maximally productive
Highest and best use is the reasonably probable legal use of land or improved property that is physically possible, financially feasible, and maximally productive. It is not merely the current use or the most intensive use allowed on paper.
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Investors begin paying more for warehouse sites near a planned port expansion because they expect stronger rents and resale prices after the project opens. Which principle is most directly reflected in those bids?
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A site is zoned for a 10-story mixed-use tower, and the parcel can physically support that design. However, market rents are too low to cover development costs, while a 3-story retail project would earn a profit. What is the best highest and best use conclusion as of the appraisal date?