What is "plottage" in relation to property value?

Plottage refers to the increase in value that occurs when two or more adjacent properties are combined into a single, larger parcel. This concept is rooted in the idea that by merging properties, the resultant larger site can be more beneficially utilized, typically leading to enhanced development potential or efficiency in use. This combined use often results in increased marketability and may yield a higher overall value than the sum of the individual properties if sold separately.

For instance, a developer can create a larger commercial space or a more extensive residential community than could be achieved with the smaller, individual parcels, thereby maximizing the usage potential and investment returns. This synergy can result in a property that is worth significantly more than the simple addition of the individual values of the separate properties, exemplifying the principle of plottage.