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Highest and Best Use Studies
Feasibility-Study.com
is the Leader in providing
Highest and Best Use Studies Nationwide!
Whether the subject of the study is land or improvements to be repositioned, our Highest and Best Use Analysis will provide you with a professional and rigorous land use analysis that is unparalleled in the industry.
Our team of experts takes a comprehensive approach to analyze your property and determine the ideal use case.
We'll provide you with a detailed report that can be used to make informed decisions about your property.
What is Highest and Best Use
According to The Appraisal Institute the highest and best use of a property is defined as:
"The reasonably probable and legal use of vacant land or an improved property that is physically possible, appropriately supported, and financially feasible and that results in the highest value."
The Appraisal Institute has also defined a set of tests, known as "The Four Tests", that comprise the factors an analysts must consider when determining the highest and best use of a property.
Each of these tests can potentially be a complex and detailed process, The Four Tests are given below with brief explanations of each.
The Four Tests
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Legally permissible: Which use cases are permissible by law, zoning, and other land use regulations.
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Physically possible: Constructing buildings on the side of a mountain or in a swamp probably aren’t possible
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Financially feasible: Does the use case of the property suit the demographics and market of the area well?
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Maximally productive: Does the intended use optimize the potential of the land?
Investment Analysis
At Feasibility-Study.com we understand the importance of conducting a thorough market analysis when evaluating the financial feasibility of a property.
We specialize in highest and best use analysis, drawing on the Feasibility-Study.com team's expertise to provide clients with comprehensive reports that include market trends, demand analysis, and financial projections. We take pride in providing customized, actionable solutions designed to meet our clients' needs.
Factors evaluated are as follows:
Legally Permissibility
Physical Attributes
This simple questions involves identifying the zoning jurisdiction, understanding base zoning, zoning overlay districts, and future district plans.
Normally, the jurisdiction is city or county. However, local governments may has plans for annexation which could include your site.
Zoning normally provides for the percentage of the site that can be used for structures and other improvements, yet is subject to engineering that must be approved by the jurisdiction planning and building department. In the scope of a highest and best use study, unless an approved site plan is provided, then the analyst must compare similar parcels nearby to measure how they were allowed to be used.
Zoning often allows for a large number of legal uses. The process of elimination of all legal uses can be carried out which is a time consuming process of creating.
Thus, the client can instruct us as to which uses they prefer to test, thereby making the study customized.
If it is a parcel of land that is being evaluated for highest and best use, items such as Phase I or Phase II environmental reports are useful, land surveys and topographical maps.
Establishing which parts of the land are useable, surplus or excess land can be difficult. Observation does not always detect wetlands for instance. Thus, tools are used to carefully estimate the useable site envelope for development.
Moreover, the concern about utilities and their capacities and availabilities is crucial to the future development of a site.
The highly trained and experienced staff at Wert-Berater Feasibility Studies, LLC understand these challenges and implement critical review of each item and more.
Market Trends
Every land use has demand drivers. Understanding unmet demand is the key to success when evaluating the market trends.
For instance, without new demand drivers, just because all of the hotels in the market are at 75 percent occupancy, that does not mean introducing a new hotel will also achieve the same occupancy level. Adding more rooms to the market, may only reduce the overall market occupancy, and the same can be said for rents.
A careful well-developed market analysis is focused on unmet demand and demand drivers.
Current vs. Potential Performance
It’s also a good idea to analyze trends for multiple different property types to determine whether or not there’s divergence between them.
Market saturation is an important element of highest and best use. Historical performance alone is not the only indicator or potential performance.
Area economic factors including job and demographic trends, consumer spending patterns, competitive supply existing, in-planning and under construction must be paired to understand if a new project will be absorbed and in what time frame.
Competitive (or potentially competitive) sites
Cost of Modification vs. Existing Use
At Wert-Berater Feasibility Studies, LLC., we recognize the importance of conducting an accurate and detailed highest and best use analysis. It's crucial to not only consider existing properties in the market, but also to explore the potential of vacant land and existing properties for their highest and best use.
Our team of experienced professionals can assist you in making strategic decisions based on our findings.
The previous factors (with the exception of market trends) could require a significant monetary outlay for redevelopment or repositioning of a property.
An analyst will have to determine whether the potential increase in value would exceed the cost of the modifications necessary to achieve the highest and best use of a property.
In the case that the cost of modifications would exceed the increase in value, the current use would likely remain the highest and best use of the property.
Financial Pro Forma
At Wert-Berater Feasibility Studies, LLC., we help our clients analyze the highest and best use of their properties before making any significant decisions.
Our approach is to collect all relevant information about a property, including its physical characteristics, market conditions, and zoning regulations.
Our team of experts then constructs and analyzes discounted cash flows to determine the potential value of the property. By doing so, we can guide our clients to make informed decisions that align with their goals and objectives.
Conclusion
Ending normally with a Land Residual analysis, compared to land market values, if the final test of highest and best use analysis.
With over 25 years of experience in the industry, Wert-Berater Feasibility Studies, LLC. has developed a reputation for providing clients with the most accurate and reliable highest and best use analyses.
Our team of highly skilled analysts utilizes state-of-the-art technology and the latest industry trends to provide our clients with the most comprehensive analysis possible. We are committed to providing superior service and value to our clients and continuously strive to exceed their expectations.
Get to Know Us
At Feasibility-Study.com, we are dedicated to providing our clients with the most accurate and comprehensive Highest and Best Use Studies available. We understand the importance of having a thorough analysis of your real estate investment, and our team of experts will ensure that all aspects of your property are taken into consideration. We pride ourselves on being your go-to resource for all your real estate needs, and are committed to delivering an unparalleled level of service and professionalism.