What does plottage refer to in real estate?

Plottage refers to the increase in property value that occurs when two or more adjacent parcels of land are combined into a larger single parcel. This concept is significant in real estate because the value of the combined property can be greater than the sum of the individual parcels. Combining smaller lots can lead to more efficient use of space, improvements in development potential, or enhancement of utility, which all contribute to the increase in overall value. Thus, when properties are assembled and developed together, it often results in a more profitable situation for the owner than if each parcel were developed separately. This understanding of plottage is essential for developers and real estate investors as they consider land acquisition strategies.