What does 'plottage' refer to in real estate?

Plottage refers to the increase in value that occurs when two or more adjacent parcels of land are combined into a single property. This phenomenon is based on the idea that the whole is greater than the sum of its parts; the combined property often has a higher market value than the individual parcels would have if sold separately.

When parcels are combined, they can be developed more effectively, or their utility may increase, leading to enhanced desirability and potential profitability. This concept is critical for real estate professionals and appraisers, as understanding plottage can significantly impact property valuation and development decisions.

The other options, while related to real estate, do not accurately describe plottage. The legal issues regarding property ownership and physical deterioration pertain to different aspects of property management and valuation, while the breakdown of property value over time relates more to depreciation rather than the value enhancement that comes from combining parcels.