What is plottage in real estate terms?

Plottage refers specifically to the increase in value that can occur when multiple adjacent parcels of land are combined into a single larger parcel. This concept is rooted in the idea that larger parcels can have a higher utility and are often more desirable than smaller, individual lots. When parcels are aggregated, they may offer a variety of benefits such as improved development potential, better layout options, and the possibility of economies of scale. This phenomenon can enhance the overall value of the combined property compared to the sum of the individual values of the separate parcels.

The notion of plottage is a significant consideration in real estate development and appraisal, as it can influence investment decisions and property development strategies. Understanding plottage helps real estate professionals assess the value proposition of buying multiple adjacent properties for development or other investment purposes.