Highest & Best Use (HBU) Study Services

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Two Purpose-Built Offerings

Wert-Berater, Inc. provides two distinct HBU services, each organized for its specific audience and decision context:

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1. Client-Focused Internal Use Highest & Best Use Study — a decision-support analysis to guide acquisition, entitlement strategy, program selection, capital allocation, and portfolio planning.

2. Municipal Review Highest & Best Use Study — a public-facing submission prepared for planning staff, commissions, and councils. This version integrates an Economic Impact Study for relevant uses to support findings and includes optional testimony services for hearings.

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Shared Analytical Framework (applies to both services)

We follow a sequential, evidence-based process. For every legally permissible use, we run scenarios and rank each alternative by (i) project IRR, (ii) equity IRR, (iii) land residual value, (iv) sustained demand, and (v) overall risk (entitlement, construction, lease-up, exit). Results are presented side-by-side to support a transparent Highest & Best Use conclusion.

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Legal Permissibility
Review base zoning, overlays, specific plans, covenants, and entitlement pathways. When conditional or discretionary approvals are relevant, we assess practical likelihood and entitlement risk—not just theoretical permissibility.

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Physical Possibility
Evaluate site size and configuration, access/frontage, visibility, utilities and capacity, topography, parking/loading, and functional program fit. Uses that cannot be reasonably accommodated are removed from consideration.

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Market & Economic Feasibility
Analyze demand drivers, competitive supply/pipeline, absorption, achievable rents/prices, and market depth within the relevant trade area. Alternatives lacking durable market support are excluded prior to financial modeling. Sustained demand scoring is assigned to each remaining alternative.

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Cost & Financial Feasibility
Develop side-by-side development/operating cases with hard, soft, and financing costs; stabilization timing; and market-supported investor hurdles (e.g., IRR, yield-on-cost). Only alternatives that clear these thresholds proceed. Project IRR and Equity IRR are computed consistently across scenarios.

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Maximum Productivity (Land Residual)
For financially feasible cases, calculate supported land residual value. The alternative with the highest supportable residual that also passes the prior tests—and shows superior risk-adjusted performance on the IRR, equity IRR, sustained demand, and overall risk screens—is concluded as Highest & Best Use.

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1) Client-Focused Internal Use Highest & Best Use Study

Purpose
Provide management and investment teams with a clear, defensible HBU conclusion to guide go/no-go, program sizing, land pricing, and sequencing.

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Audience & Style
Internal decision makers, lenders, and investment committees. Technical, concise, and action-oriented.

Deliverables

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• Complete Highest & Best Use Study — Full narrative for as-if-vacant and as-improved conditions; application of the four tests; alternative screening and comparative exhibits; supported land-residual ranking and conclusion.

• Executive Brief — One-to-two-page summary of conclusions, key determinants, and secondary feasible uses with reasons they are inferior in maximum productivity.

• Regulatory Snapshot — Zoning summary, overlays, entitlement pathway, and permitting considerations with practical likelihood commentary.

• Site Fit & Constraints — Parcel configuration, access/visibility, utilities, and functional program notes driving inclusion/exclusion of uses.

• Market Evidence — Trade-area definition, demand/supply balance, competitive context, achievable rents/prices, and absorption indicators.

• Financial Screens — Cost ranges, stabilized performance metrics, investor return screens (project IRR and equity IRR), and residual ordering across alternatives.

• Risk & Sensitivity Notes — Key risk flags (entitlement, construction, lease-up, exit) and directional sensitivities to inform contingencies and phasing.

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Common Use Cases

• Pre-acquisition underwriting and land pricing

• Entitlement strategy and concept programming

• Repositioning/redevelopment options

• Portfolio and exit planning

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Engagement Structure & Fees

Highest and Best Use Study engagements are typically structured on a fixed-fee basis, reflecting the analytical depth and defensibility required for land use, entitlement, investment, and financing decisions.

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Typical fee range:
$15,000 – $40,000, depending on:

• Property size, location, and overall development complexity

• Breadth of alternative use scenarios evaluated, including legally permissible, physically possible, financially feasible, and maximally productive uses

• Depth of market, zoning, entitlement, and regulatory analysis

• Level of financial modeling, including comparative residual land value analysis and sensitivity testing

• Number of development scenarios, stakeholder iterations, and revisions required

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All Highest and Best Use studies are prepared on a professional, defensible basis and are suitable for lender review, investor evaluation, public agency submission, and expert-level scrutiny.

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2) Municipal Review Highest & Best Use Study (with Economic Impact)

Purpose
Provide a public-facing HBU analysis structured for planning staff and hearing bodies, demonstrating that the proposed use is legally permissible, physically possible, financially feasible, and maximally productive for the community.

 

Added Components for Public Review

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• Economic Impact Study — For relevant use alternatives, quantify construction and ongoing impacts such as jobs (direct/indirect/induced), payroll, tax revenues, local spending, and multiplier effects.

• Findings-Ready Formatting — Clear nexus between evidence and approval criteria, with graphics and summaries suitable for staff reports and hearing packets.

• Optional Testimony Services — Expert attendance and sworn testimony at planning commission and council hearings; response memos to staff and peer-review comments.

• Traffic impact analysis  — to provide estimated traffic considerations, if item such as deceleration lanes are needed  for the proposed highest and best use.

• Utilities demand analysis — to assist planners with capacitie issues and potential offsite improvements.

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Deliverables

• Municipal Review HBU Study — Full narrative aligned to local code and policy language; four-test application; scenario ranking by project IRR, equity IRR, land residual, sustained demand, and overall risk; and a public-facing HBU conclusion.

• Economic Impact Report — Methodology, assumptions, impact tables/charts, and summary suitable for inclusion in staff reports.

• Community Benefits Summary — Readable exhibits highlighting fiscal benefits, jobs, and place-making outcomes.

• Agency Coordination Packet — Citations, exhibits, and appendices organized for staff distribution; optional response memos to peer review.

• Hearing Support (Optional) — Expert testimony, Q&A, and post-hearing follow-up.

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When to Use

• Discretionary approvals (CUP, variances, specific plans, PDs)

• Projects with material fiscal/community interest

• Competitive RFP/RFQ or development agreement negotiations

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Qualifications

Wert-Berater, Inc. conducts HBU and feasibility analyses for assets subject to institutional and public review. Leadership and senior reviewers hold Appraisal Institute qualifications, including the MAI designation, with MAI engagement experience dating to 1987. Documentation is structured to withstand reviewer challenge and to align with lender, agency, and municipal expectations.

 

Scope Note

HBU is a decision-support analysis. Unless specifically scoped with appraisal services, it is not an opinion of market value.

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Engagement Structure & Fees

Highest and Best Use Study engagements are typically structured on a fixed-fee basis, reflecting the analytical depth and defensibility required for land use, entitlement, investment, and financing decisions.

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Typical fee range:
$10,000 – $50,000, depending on:

• Property size, location, and overall development complexity

• Breadth of alternative use scenarios evaluated, including legally permissible, physically possible, financially feasible, and maximally productive uses

• Depth of market, zoning, entitlement, and regulatory analysis

• Level of financial modeling, including comparative residual land value analysis and sensitivity testing

• Number of development scenarios, stakeholder iterations, and revisions required

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All Highest and Best Use studies are prepared on a professional, defensible basis and are suitable for lender review, investor evaluation, public agency submission, and expert-level scrutiny.

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Getting Started

Provide the site address, current zoning designation, and objectives. We will define the relevant alternative set, document the four tests, run scenarios across all legally permissible uses, and deliver either (a) an internal decision-focused HBU study or (b) a municipal review package with Economic Impact and optional testimony support.

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