Highest & Best Use refers to the process of appraising the most appropriate function for a property, either for development or valuation.
Conventionally
Appraisers draw on their personal experience in the industry to assess a property, without systematic tools to analyze the highest and best use. Most highest and best use determinations do not consider the natural disaster and climate exposure of a property, but we think it’s time to bring the science of risk analysis into the highest and best use decision process.
Challenge
The highest and best use assessment process does not currently consider the external networks that a building relies on, or how the changes brought on by climate change might impact a property. Current approaches to highest and best use analysis rely on an incomplete picture of reality, leaving investors and asset managers vulnerable to losing capital on misunderstood investments.
The process of selecting the use for a property is often driven by assumptions about the market, the individual experience of the assessor, and client or purchaser preferences, rather than a systematic, comparative process which leads to the best return on investment.
If the process of analyzing highest and best use isn’t modernized to meet the challenges of the rapidly accelerating climate crisis, all stakeholders in the real estate lifecycle will suffer, including investors, owner-operators, insurers and even tenants. Suboptimal use of a property could lead to property valuation gaps, hidden costs or liabilities for insurers, and ultimately financial loss.
Solution
One Concern’s technology transforms highest and best use assessment from a qualitative process to a quantitative analysis, enabling climate-adapted real estate development that protects business interests and sustainably transforms communities.
Our advanced risk analysis platform, driven by cutting-edge AI/ML and comprehensive data inputs, enables users to compare different functions for a property to determine which is the most resilient to building damage and network disruption. The 1C DNA Downtime Statistic™ and other resilience metrics allow users to imagine multiple realities for a property and select the one which maximizes value and minimizes the costs of mitigation while maintaining effective protection against hazards.