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HIGHEST AND BEST USE <br />Highest and best use as defined in The Appraisal of Real Estate, Twelfth Edition, by the <br />Appraisal Institute, 2001 is: "The reasonably probable and legal use of vacant land or an <br />improved property, that is physically possible, legally permissible, appropriately supported, <br />financially feasible, and that results in the highest value." Highest and best use is analyzed in <br />two ways, site as vacant and site as improved. Since the subject is being appraised as land <br />only, only site as vacant is considered applicable. <br />Typically, there are four criteria in the Highest ~ Best Use analysis <br />Legally permissible uses: What uses are allowed by the zoning? <br />Physically possible uses: What uses are physically possible on the site: <br />Financially feasible uses: Which possible & permissible uses will produce a positive return? <br />Maximally productive use: Of the financially feasible uses, which use produces the Highest <br />return warranted b the market (the ideal im rovements . <br />Site as Vacant <br />Legally Permissible Uses: The current BP, Business Park, zoning allows for a variety of <br />uses. Primary permitted uses include light manufacturing, R8~D, office, showroom and <br />warehouse. City indicated that although the traditional Business Park zoning emphasizes a <br />more industrial-related use, the subject, given its location and surroundings, would likely be <br />used for "upscale highway commercial." <br />Physically Possible Uses: The physical characteristics of the site appear suitable for <br />development. Utilities are available. The site has average access and good visibility <br />(Highway 169). The site will allow for a number of potential uses. <br />Financially Feasible Uses: Surrounding uses include new commercial to the north, south <br />and east with older commercial and apartments to the west. Given the subject's surrounding <br />uses and proximity to Highway 169, a commercial related use is considered logical. The <br />subject has good visibility, which is typical of commercial uses. <br />Maximally Productive Use: Given the above discussion and keeping in mind market <br />demand, site size, area growth, zoning and location, it appears logical to develop with <br />commercial use. <br />Conclusion Site as Vacant: Based on the above discussion, the highest and best use for <br />the subject site as vacant would be for commercial development. <br />Nagel) Appraisal 8 Consulting ~ 952-544-8966 ~ www.callnagell.com <br />17 <br />