When a developer combines two lots and sells them as one, the increase in value is known as what?

The increase in value that results when a developer combines two lots and sells them as one is known as plottage. This concept is rooted in the idea that the combined value of the two parcels is greater than the sum of their individual values.

When properties are merged, they often benefit from enhanced usability and improved marketability, leading to a situation where the whole is worth more than the parts. For instance, two adjacent lots may be combined to create a single, larger lot that is more suitable for development, appealing to buyers who desire a larger space without the complications of separate ownership or zoning issues.

The term “plottage” succinctly captures this phenomenon, emphasizing the added value gained through the strategic combination of parcels. This concept is important in real estate valuation and development, as it can significantly impact investment returns and property assessments.