4.7. SR 12-19-2016 - Laserfiche WebLink

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HIGHEST & BEST USE Highest and best use as defined in The Appraisal of Real Estate, 13th Edition, by the Appraisal Institute is: "The reasonably probable and legal use of vacant land or an improved property, that is physically possible, legally permissible, appropriately supported, financially feasible, and that results in the highest value." Highest and best use is analyzed in two ways, site as vacant and site as improved. Since the subject is vacant land, only the site as vacant is analyzed. Typically there are four criteria in highest and best use analysis: Legally permissible use: What uses are allowed by zoning? Physically possible use: What uses are physically possible on the site? Financially feasible use: Which possible & permissible uses produce a positive return? Maximally productive use: Of the financially feasible uses, which use produces the highest return warranted by the market (the ideal improvements)? Site as Vacant: "Among all reasonable, alternative uses, the use that yields the highest present land value, after payments are made for labor, capital and coordination. The use of a property based on the assumption that the parcel of land is vacant or can be made vacant by demolishing any improvements."The Dictionary of Real Estate Appraisal 5"'Edition Legally Permissible Uses: The current BP, Business Park, zoning allows for light industrial and office uses. The subject is guided for commercial, which is more logical given the subject's proximity/visibility to US Highway 10 and small size of the site. Minimum site size is 43,560 SF. Physically Possible Uses: The physical characteristics of the site appear suitable for development. City sewer and water are assumed available. The site has average access and above average visibility/exposure. The site will allow for a number of potential uses. Financially Feasible Uses: Surrounding uses, market demand and the availability of financing typically drive financial feasibility. Surrounding Uses: The subject is located in a small commercial district that is situated at the intersection of US Highway 10 and Joplin Street. Surrounding uses include commercial to the north and west, the Sherburne County fairgrounds to the south and recreational to the east. Given the site's location, proximity to commercial and the Highway 10/Joplin Street intersection, a commercial use is considered logical. Financing: Availability of financing is currently average. Value assumes the subject has no site issues that would restrict typical financing for well qualified buyers. As market demand recovers, positive economic returns on new development should return. Market Demand: Demand for commercial in the subject area is improving. Although development in outlying locations has been more gradual, demand is rated average for locations with good appeal (convenient access, highway exposure, stable site conditions, etc.). Maximally Productive Use: Given the above discussion and keeping in mind market demand, financing, site amenity, zoning and the subject's surrounding uses, commercial development is considered most feasible. 34 Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com