The Best and Highest Use principle in real estate valuation requires passing four tests:

Physically Possible – The land or building must accommodate the intended use.

Legally Permissible – Must comply with zoning, environmental laws, and regulations.

Financially Feasible – Must generate enough income or benefits to justify the investment.

Maximally Productive – Must provide the highest return compared to other uses.

While strategic planning (A, C) and location (D) are important considerations, they do not meet all four criteria required for determining best and highest use​.