The legally permissible, physically possible, financially feasible, and maximally productive use of a site.
Related terms
- Illiquidity
The difficulty of converting real estate to cash quickly without a price concession.
- Leasehold
The right to use a property for a fixed term under a lease, after which it reverts to the freeholder.
- Liquidity
How quickly an asset can be sold near its fair value without a price concession; real estate is inherently illiquid, and thin, opaque emerging markets make it…
- Location premium
The additional value a property commands due to its position and access to amenities.
- Owner-occupier
A party that buys or leases property to use it themselves rather than as an investment.
- Portfolio
A collection of assets held together to balance risk and return; diversifying a property portfolio across cities, sectors, and currencies limits exposure to an…
- Primary market
New property sold directly by a developer, typically off-plan.
- Primary vs secondary vs tertiary location
A tiering of locations by demand strength and desirability, from prime primary to fringe tertiary; the tier drives yield, liquidity, and risk premium.