Feasibility Analysis
The study of whether a proposed project's value upon completion exceeds its total cost, including profit. A use can be physically possible and legally permissible yet fail feasibility — the financial test within highest and best use.
Related Terms
Financially Feasible
The third test in highest and best use analysis: a use must generate sufficient income or value to justify the cost of development, including land cost, construction costs, and a market rate of return..
Highest and Best Use
HBUThe reasonably probable use of a property that results in the highest value, considering uses that are legally permissible, physically possible, financially feasible, and maximally productive..
Entrepreneurial Profit
The return a developer requires for the risk and effort of creating a property — the difference between total development cost and completed value.
More in Highest & Best Use
View allLegally Permissible
The first test in highest and best use analysis: a use must be allowed under current zoning, building codes, environmental regulations, deed restrictions, and other legal constraints to be considered..
Physically Possible
The second test in highest and best use analysis: a use must be physically achievable given the property's size, shape, topography, soil conditions, access, and available utilities..
Maximally Productive
The fourth and final test in highest and best use analysis: among all financially feasible uses, the maximally productive use is the one that produces the highest residual land value (or highest property value for improved properties)..
Interim Use
A temporary use of a property that is expected to change in the foreseeable future as market conditions evolve or when the property becomes ripe for development to a higher use..