In cases where a land owner wants to combine several adjacent pieces of property into one larger parcel of land, a land surveyor must draw a lot consolidation plat to submit to local authorities for approval. The experts at Point to Point Land Surveyors, Inc. have many years of experience in creating accurate lot consolidation plats for various projects. A lot consolidation
plat is essentially a re-mapping of two or more adjacent lots or parcels of land, combining them into one larger parcel. (This is effectively the reverse of a subdivision plat, in which a larger property is subdivided into multiple lots.) A licensed professional land surveyor will perform field work on each existing lot to determine the exact dimensions and land boundaries of each. Once this survey work is completed, a map or plat is drawn that indicates both the original parcels and “new”
combined parcel of land, which is then submitted to local zoning authorities. If approved, the consolidation plat effectively marks the new legal boundary for the consolidated piece of land. One of the benefits of doing a consolidation plat is that in many cases the survey will uncover and correct errors in older plat maps. This is important because if the information about the property is found to be inaccurate, the consolidation application may be denied, forcing the landowner to begin
the process all over again. For this reason, while some local jurisdictions may not require a survey in consolidating land, it’s still a good idea to have a professional lot consolidation plat drawn up for the landowner’s protection. There are a number of reasons why it might be expedient to consolidate two or more parcels of land. For example, if a landowner lives next to a vacant lot, or one with an abandoned home on it, the landowner
might want to purchase the lot and consolidate both into a single piece of land. Likewise, if a property owner acquires multiple lots of land and wants to develop these lots into a larger facility (for example, a resort, a campground or simply private acreage), the owner would need a lot consolidation plat in order to do so. Finally, if the property owner wants to sell multiple adjacent lots to a commercial developer, a lot consolidation would be part of the rezoning process. Because
accuracy is key in lot consolidation plats, you should only hire a land surveyor with proven experience and a working knowledge of local zoning requirements. To learn more, contact Point to Point Land Surveying today. On occasion, real estate developers can run into a tricky situation where their project plans are much bigger than the land that is available to build upon. To solve this issue, they could scale back their plans or they could attempt to assemble multiple parcels of land and keep the project plans the same. In this article, we are going to describe what a commercial real estate land assemblage is, how it benefits a potential project, and how it differs from a land plottage. By the end, readers will have the information needed to determine if a deal involving a land assemblage is a good fit for their own investment strategy. At First National Realty Partners, we typically purchase and manage existing grocery store anchored retail properties. But, we would selectively consider opportunities to assemble additional parcels if it was in the best interest of our investors. To learn more about our current investment opportunities, click here. Assemblage in Real Estate ExplainedAn assemblage of real estate is a combination of two or more adjacent parcels of property. In a commercial real estate (CRE) transaction, there are several reasons why an investor or developer may want to pursue an assemblage of property, but there are two that are common. Commercial Real Estate AssemblageFirst, and most likely, a developer may want to put together an assemblage of property to support a proposed project. For example, suppose that a planned project needed a 5 acre parcel of land, but the developer was unable to find one it in one larger parcel. Instead, they could buy one smaller parcel and, over time, buy other smaller individual parcels around it until they have the full 5 acres they need. This action could increase the total land value and give the developer the space the need to execute their planned project. This scenario is common in urban areas like New York or San Francisco, where large parcels of land are at a premium. Another common scenario is to “land bank” assembled parcels over time. For example, an investor could buy one parcel of land and then, over time, buy many surrounding parcels of land and combine them all through the required zoning and legal processes. This one, large parcel could prove to be extremely attractive to developers who are pursuing large development opportunities. Thus, they may be able to sell the one large parcel for a price that is higher than the sum of the individual parcels. These aren’t the only two scenarios in which an assemblage of land makes sense, but they are two that are common when dealing with commercial property. Assemblage vs. PlottageWhen discussing the process of combining parcels of land, there can be some confusion between the terms assemblage and plottage. As described above, assemblage refers to the process of combining parcels of land into one larger parcel. Plottage refers to the increased usability and higher value of the new, combined parcel. This term is commonly used in eminent domain cases to assign value to the added parcels. What Investors Should Know About AssemblageFor individuals interested in investing in a deal that involves an assemblage, there are three things they should know. First, it takes time. Once the initial parcel has been purchased, it can take years to acquire the surrounding parcels. Investors have to either wait for them to come up for sale or proactively approach the property owners and negotiate a deal. This takes time. Second, it requires a significant amount of capital. Because of the time it takes to assemble the land, investors may have to go years without any significant cash inflow. Finally, it can be very tricky. Regarding points one and two, there is a specific scenario that can make an assemblage very tricky. Imagine a developer who has a big shopping center project planned and has acquired eight of ten parcels needed to construct it. As the owners of the two remaining parcels learn about the project, they have incredible leverage over the developer from which to negotiate a higher sales price. They know that the developer needs their property to complete the assemblage, which also means that they can demand a very high price for it. To sort out these deals, it can take a tremendous amount of negotiation, a lot of time, and even more capital. Before committing capital to a real estate investment that involves an assemblage, investors should complete their own due diligence to ensure that the planned project is the highest and best use of the land. In addition, they should ensure that the project is adequately capitalized, that the land valuations are reasonable (as evidenced by an appraisal or independent opinion of value from a licensed real estate agent or real estate broker), and that the developer has the experience necessary to execute the planned project. These deals are at the opportunistic end of the risk/return spectrum and should be treated as such. Assemblage & Private Equity Real EstateGiven the amount of time, capital, and expertise it takes to create real estate assemblage, it stands to reason that private equity firms are uniquely well positioned to pursue investments/projects that require an assemblage strategy. Because they aren’t publicly traded, private equity firms can afford to take a long term view towards assembling land and preparing it for a major development project. But, again, this type of land acquisition strategy is a time and capital intensive process. So, investors considering committing capital to a deal should ensure that the private equity firm has plenty of both. Summary of Land AssemblageIn commercial real estate, the term land assemblage refers to the process of acquiring two or more parcels of land and combining them into a single, larger parcel. In commercial real estate, an assemblage may be necessary for large projects that have a high number of square feet or as a strategy to land bank real estate and sell it to a developer at a later time. When comparing the terms, assemblage and plottage, assemblage refers to the process of combining individual parcels while plottage refers to the increased value of the combined, larger parcel. This distinction is particularly important in transactions that involve eminent domain. Investors planning to commit capital to a deal that involves an assemblage should beware that it can take a very long time, a lot of capital, and a lot of negotiation with surrounding land owners. Given the time and resources required, some private equity firms may be uniquely well positioned to manage deals that involve an assemblage. Interested In Learning More?First National Realty Partners is one of the country’s leading private equity commercial real estate investment firms. With an intentional focus on finding world-class, multi-tenanted assets well below intrinsic value, we seek to create superior long-term, risk-adjusted returns for our investors while creating strong economic assets for the communities we invest in. If you would like to learn more about our commercial real estate investment opportunities, contact us at (800) 605-4966 or for more information. |
Which of the following terms refers to the process of combining separate adjacent parcels into one piece of land?
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