Page 18 - SBR Integrated Workbook STUDENT S18-J19
P. 18
Chapter 1
Example 3
Highest and best use
Beeb acquires some land through a business combination. The land is the site
for an industrial factory. The fair value of the land as an industrial site is $3
million.
Nearby plots of land have been developed for residential use as the site for
high-rise apartments.
Beeb believes that it could sell the land to residential property developers for
$5 million if the site was vacant. It would cost $0.5 million to demolish the
factory.
What is the fair value of the land?
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