What is plottage in property valuation?

Plottage refers to the additional value created when multiple adjacent parcels of land are assembled or consolidated into one larger parcel under a single ownership. This increase in value occurs because the larger parcel can often be developed more efficiently than the individual smaller parcels could be. For instance, a developer might be able to create a more attractive and marketable property by combining multiple lots than by trying to develop each one separately, leading to a synergistic effect where the total value of the assembled land exceeds the sum of the individual values.

The concept is significant in property appraisal, as it helps assessors and appraisers understand the potential economic benefits of land consolidation in urban planning and development scenarios. By recognizing plottage, appraisers can provide a more accurate property valuation that reflects the true market potential of the larger, combined parcel. This understanding is essential for buyers and investors who seek to maximize the profitability of their real estate investments through strategic land acquisition.