What is the primary factor that defines the highest and best use of a property?

The primary factor that defines the highest and best use of a property is financial feasibility. The highest and best use refers to the most profitable legal use of a property that is physically possible, reasonably probable, and legally permissible. While legal use establishes what the property can be used for under zoning laws, and physical use considers the characteristics of the land and its surroundings, it is ultimately financial feasibility that determines whether the use is viable.

Financial feasibility assesses whether the potential use of the property will generate sufficient income to justify the investment. This includes analyzing the expected returns, costs associated with the development or use, and the overall market conditions that would affect the profitability of that use. Even if a use is legally permissible and physically suitable, if it does not make financial sense, it would not qualify as the highest and best use. Hence, financial feasibility stands out as the most critical and defining factor in determining the highest and best use of a property.