Market Rent and Highest and Best Use: Joined at the Hip?

Summary

It is well established that market value must be premised on the property’s highest and best use. What about market rent? This article investigates the relationships between highest and best use and market value and market rent and presents evidence and the rationale for a conclusion that as with market value, market rent also must be based on the property’s highest and best use. As a part of the investigation, three mini case studies are presented to illustrate the importance of carefully labeling and developing the appropriate rent. In conjunction with this investigation, use value will be redefined and a new definition of use rent proffered as an aid in diminishing confusion among the different types of rent.