Clients often need an evaluation of the most profitable use that can reasonable be expected for a parcel of land. They use this information to decide on the nature of development to pursue of a site, to secure joint venture partners and financing, to obtain municipal planning approvals, or to complement the expert witness testimony of other experts such as appraisers and planners during disputes about valuation or the most appropriate use for a site. Clayton Research typically approaches highest and best use determination at two levels:

Initial evaluation of a wide range of potential uses to determine those with a reasonable market potential, followed by:

Detailed projections, including expected absorption and prices or rents for specific potential uses, based on market demand, site suitability and the competitive environment as input into a discounted cash flow model.

Examples of typical Clayton Research highest and best use studies include:

A Canadian financial institution was proposing to develop regional commercial uses on a 22 acre parcel of land located in the Town of East Gwillimbury. Clayton Research was commissioned to undertake a highest and best use study for these lands with regard to commercial development. Within the scope of the report the nature of the regional commercial market opportunities for these lands and the economic and market implications of permitting their development for regional commercial uses was assessed.

A large realty company was proposing to redevelop and expand its existing 322,000 sq. ft. shopping mall to include expanded retail, residential, hotel, and office space. Clayton Research was commissioned to examine the highest and best use with regard to the amount of warranted space expansion and the type of uses. Through a highest and best use market analysis coupled with a financial analysis Clayton Research was able to provide a redevelopment scenario that would contain the appropriate mix of expanded retail, residential and office uses. For the retail component Clayton Research provided an analysis on the amount of space that was warranted and the type of uses. For the residential component Clayton Research provided recommendations on the mix of units and the type of zoning that should be sought. For the office component Clayton Research recommended that the amount of space be significantly reduced in light of the market and competition.

The Ontario Realty Corporation had a 1.2 acre surplus site downtown Brantford, and commissioned Clayton Research to perform a highest and best use study for the site. In determining which type of development was most marketable for the site, considerations included the period required to absorb each type of land use and general relative returns to the developer/landlord. Consideration was also given to the current zoning and the ability of the development to help spur revitalization of downtown Brantford. Clayton Research examined a range of private and public market uses such as hotels, retail, retirement housing and museums.

“Highest and Best” Residential Use - as part of an arbitration hearing dealing with a land lease rent review for a high-rise rental apartment building constructed in the 1960s in Mississauga, Clayton Research undertook an analysis of the market support for alternative residential uses (condominium apartment, stacked townhouses and townhouses) for the site.

A large landowner wanted to explore development options for a large greenfield parcel of land in Town of Markham. At the time, industrial and office uses were the designated uses for the parcel of land. Clayton Research was asked to address whether residential development would generate larger and accelerated financial returns compared to the planned industrial/office uses.

Frank Clayton, President Robert Feldgaier, Vice President, Residential Services and their team of researchers have the knowledge, experience, and in-house resources to conduct highest and best use studies.