Plottage
The increase in value that results from combining two or more adjacent parcels into a single, larger parcel. The combined value exceeds the sum of the individual parcel values.
Plottage value arises when the larger assembled parcel enables a use or development that was not possible with the individual smaller parcels. For example, two 50-foot-wide lots that individually cannot support commercial development might be worth $100,000 each ($200,000 total), but when combined into a single 100-foot-wide parcel suitable for commercial use, the assemblage might be worth $300,000 — the additional $100,000 is plottage value. The appraiser must consider plottage when the highest and best use of a site would benefit from additional land area.
Related Terms
Land Value
The market value of a parcel of land as if vacant and available for development to its highest and best use.
Highest and Best Use
HBUThe reasonably probable use of a property that results in the highest value, considering uses that are legally permissible, physically possible, financially feasible, and maximally productive..
Site Value
The market value of the land as if vacant and available for development to its highest and best use.
Assemblage
The process of combining two or more adjacent parcels of land into a single ownership for a unified use.
More in Land & Site Valuation
View allAllocation Method
A land valuation technique that estimates land value by applying the typical ratio of land value to total property value observed in the market.
Extraction Method
A land valuation technique that estimates land value by subtracting the depreciated cost of improvements from the total sale price of an improved property.
Land Residual Technique
A land valuation method that estimates land value by capitalizing the net income remaining after deducting the return attributable to the improvements from the property's total net operating income..
Ground Rent Capitalization
A land valuation method that estimates land value by capitalizing the ground rent (the rent paid for the use of land only, without improvements) at an appropriate capitalization rate..