Highest and best use is defined as the use that is legally permissible, physically possible, financially feasible, and what?

• A. Maximally productive
• B. Most profitable
• C. Most expensive
• D. Most common

Answer: (A)

Highest and best use is found by looking at all uses that could legally be allowed, physically possible on the site, and financially feasible, then picking the one that is maximally productive. In practice, that means the use that delivers the greatest net return or value over time, given current market conditions. It’s not about the most profitable in the short term, the most common use, or the most expensive option. For example, a parcel that could legally be a storefront or a small apartment building might be best used as apartments if the expected net income over the holding period is higher, after considering costs, financing, and market demand.