Legal Definitions - most-suitable-use value

Most-suitable-use value refers to the highest potential monetary worth a property could achieve if it were developed or utilized in the most advantageous way possible. This assessment considers all legally permissible, physically possible, financially viable, and maximally productive uses for the property, even if it is not currently being used in that manner. It's about identifying the use that would generate the greatest return or benefit, thereby maximizing the property's value.

Here are some examples:

• Imagine a 50-acre plot of land currently used for growing corn, located on the rapidly expanding outskirts of a major city. While its current agricultural use yields a certain income, an appraisal for its most-suitable-use value would likely determine that its worth is significantly higher if it were rezoned and developed into a residential subdivision with homes, parks, and supporting infrastructure. This is because the demand for housing in the growing urban area makes residential development the most financially productive and highest-value use for that specific parcel of land, despite its current function.

• Consider an aging, multi-story industrial building situated in a trendy, revitalized downtown district known for its arts and entertainment scene. The building is currently underutilized, housing a few small workshops. An assessment of its most-suitable-use value might conclude that its highest value would be realized by converting it into luxury loft apartments or a boutique hotel. Given the high demand for residential living and hospitality options in that specific urban core, these alternative uses would generate a far greater return and maximize the property's worth compared to its existing industrial purpose.

• Picture a large, undeveloped parcel of land directly adjacent to a major interstate highway interchange in a growing industrial corridor. Although it might technically be possible to build a small retail strip mall or even a single-family home on this land, its most-suitable-use value would almost certainly be determined by its potential as a logistics hub, a large-scale distribution center, or a commercial truck stop. The property's size and prime access to transportation infrastructure make these industrial and commercial uses the most productive and economically valuable options, far surpassing the value of less intensive developments.