Adaptive re-use of obsolescent properties, an evaluation of potential repurposing alternatives for tribal casino and ancillary property. Using a highest-and......
Highest and best use studies are particularly timely as real estate owners look beyond 2020 and the Covid-19 pandemic. Many real estate owners now find themselves the owners of distressed real estate, while others find new higher earning opportunities for their real estate assets.
The reasons for these circumstances are many, including the continuing impact of new BtoB and direct to consumer technologies on traditional real estate uses, the ever-evolving expectations of consumers in their out-of-home experiences, and the transformation of the workplace with “work from home” (“WFH”) sensibilities and coworking environments now increasingly embraced by all. Propelling all these factors is also the concern for personal safety from the coronavirus and sensitivity for protecting vulnerable populations.
Public sector organizations, local governments and municipalities, school districts, port authorities, and other public agencies, can find new sources of revenue in underutilized properties.
About Highest and Best Use
Highest-and-best-use is a term embraced by the real estate appraisal industry, which is generally understood to be the use of a property (vacant or already improved) that yields the highest net present value. In some instances appraisers will solve for implicit land value instead of net present value, but the highest-and-best-use evaluation process is the same.
In arriving at net present value, alternatives are considered that are physically possible, legally permissible (including zoning matters), has market and consumer support, and, is financially feasible. Generally speaking, what is considered in a highest and best use study is identical to a typical project feasibility study, expect that in highest-and-best-use studies consider alternatives seeking that which is highest yielding. Project feasibility studies are typically focused on particular project concepts.