The highest and best use analysis should dictate the methods and approaches applied in valuation analysis, according to a study published this week in The Appraisal Journal.

The Appraisal Journal is the quarterly technical and academic publication of the Appraisal Institute, the nation’s largest professional association of real estate appraisers. The materials presented in the publication represent the opinions and views of the authors and not necessarily those of the Appraisal Institute.

“Highest and Best Use and Property Rights—Does It Make a Difference?” by Stephen F. Fanning, MAI, AI-GRS; Larry T. Wright, MAI, SRA, AI-GRS; and Rick J. Muenks, JD, MAI, uses a big-box retail property as an example to demonstrate that the highest and best use process is the basis for retail property valuation, and this analysis is the same regardless of which property rights school of thought is utilized and regardless of whether there is a vacant or occupied assumption.

Read “Highest and Best Use and Property Rights—Does It Make a Difference?” in the Summer 2018 issue of The Appraisal Journal.

Also in The Appraisal Journal’s Summer 2018 issue:

“Land Value Differentials Resulting from Variability between the Sales Comparison and Income Approaches in Timberland Valuation,” by Austin B. Harris, Christopher N. Singleton, MAI, and Thomas J. Straka, Ph.D., uses actual data to evaluate the various parameters used in timberland appraisal and to determine which factors account for variances in land value when different valuation methods are applied. The findings allow appraisers to better understand the importance of the factors in the adjustment process when valuing large timberland properties.

“Market Value: What Does It Really Mean?,” by Michael V. Sanders, MAI, SRA, explores the various definitions of the terms market value and fair market value and why this impacts valuations. The article offers suggestions that will help to clarify the term market value for future use.