Highest and best use concept is one of the most important and least understood dimensions of real estate business. The highest and best use among the reasonably possible and adequately supported alternative uses is defined as follows:
- Legally allowed,
- Physically possible,
- Financially practicable, and
- Efficient at maximum level
Property is valued on the basis of the highest and best use to be offered by the existing or potential use. The land value is also determined on the basis of the highest and best use. The values of developments are established on the basis of their contribution to the value of the land. The highest and best use can be estimated for a foreseeable future. Long-term or speculative perspectives can not be included within the framework of highest and best use concept.
IGD team composed of professionals with diverse backgrounds would help you answer the questions similar to the following, with respect to your investment:
- What is physically possible?
- What is allowed legally?
- What can be practicable from a financial point of view?
- What would bring the highest return on investment?
- What would be the most prudent option? Development, expansion, transformation or destruction?
- Which procedures are subject to special permits from a legal point of view?