What does plottage refer to in real estate appraisal?

Plottage refers to the increase in value that results from combining multiple adjacent parcels of land into a larger single parcel. This concept is rooted in the principle of highest and best use, where the combined land can now be developed or used more efficiently as one cohesive unit rather than as separate, smaller parcels. When two or more parcels are consolidated, their overall utility can be enhanced, leading to increased value greater than the sum of the individual parcels.

For example, if a developer purchases two neighboring lots that were previously of limited use individually, the consolidated lot may allow for greater development opportunities, such as a larger building or improved access, which can drive up its market value significantly. Understanding plottage is essential for appraisers when assessing land value and potential development scenarios.