INFORMATION 09-05-1995 - Laserfiche WebLink

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• • • Riverside Appraisals HIGHEST AND BEST USE (continued) EIk River, Minnesota (8) Financial feasibility is best measured by determining whether the income which will be generated from the subject property is consistent with current market expectations and investment parameters, as well as successfully maintaining the subject property. as a competitive and operating enterprise within the market. (9) With respect to alternative highest and best use, the use category selected for the subject property reflects. the highest land value based upon current available market data and conditions. For the reasons stated, the highest and best use of all the subject property is considered to be single family residential use reflecting competitive locational property characteristics. Subject land zoned industrial is considered land locked by the existing railtivay service and it is unlikely that a industrial site would be the highest and best. use for this parcel. Based on the market data and site information it is the appraisers opinion that the highest and best use of the entire site be S.F.R. Mixed use as zoned is unlikely due to the contrast of single residential housing and Industrial use in this close proximity to each other. Subjects existing use is green acres agricultural farming and is expected to remain until demand for single family vacant land exceeds the demand for agricultural use. The definition of highest and best use, as found in the "Real Estate Appraisal Terminology" handbook, is as follows: Highest and Best Use: That reasonable and probable use that will support the highest present value, as defined, as of the effective date of the appraisal. Alternately, that use, from among reasonably probable and legal alternative uses, found to be physically possible, appropriately supported, financially feasible, and which results in highest land value. The definition immediately above applies specifically to the highest and best use of land. It is to be recognized that in cases where a site has existing improvements on it, the highest and best use may very well be determined to be different from the existing use. The existing use will continue however, unless and until land value in its highest and best use exceeds the total value of the property in its existing use. Implied within these definitions is recognition of the contribution of that specific use to community environment or to community development goals in addition to wealth maximization of individual property owners. Also implied is that the .determination of highest and best use results from the appraisers' judgement and analytical skill, i.e., that the use determined from analysis represents an opinion, not a fact to be found. In appraisal practice, the concept of highest and best use represents the premise upon which value is based. In the context of most probable selling price. (market value), another appropriate term to reflect highest and best use would be the most probable use. 33