Property Valuation
In Minnesota, the 'highest and best use' analysis for an improved property differs from vacant land analysis in that it must also consider:
AWhether the existing improvements should be retained, modified, or demolished✓ Correct
BOnly the zoning designation
COnly the purchase price paid by the current owner
DWhether the improvements are in compliance with building codes
Explanation
For improved property, the highest and best use analysis must evaluate both: (1) the highest and best use as if the land were vacant, and (2) whether the existing improvements contribute to value or whether demolition and redevelopment would be more productive. If the land's highest and best use exceeds the value of the improved property, demolition may be warranted.
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