Assemblage | Propertylogy

Assemblage

By on September 21, 2018

Assemblage refers to the process of purchasing, or securing the options for purchase, of 2 or more parcels of land from various different owners, to create a larger parcel of land with a single owner.

The process of assemblage is most often carried out by investors who intend to sell the bigger piece of combined land at a profit, or buy developers who intend to building buildings on the land.

For example, investors might buy 4 adjacent buildings for $$500,000 each. But by demolishing all of them after acquisition at a cost of $100,000, the land might now be worth $3 million as builders find the plot desirable for a major condominium development.

The increase in value of $900,000 is called the plottage value.

From the perspective of sellers, this group sale is sometimes referred to as an en bloc sale.

During such group acquisitions activities, it is common for the buyers to encounter property owners who try to holdout for larger price offers.

Sometimes homeowners are forced out of their homes even when they refuse to sell as their properties belong to a community.

Thus, a community of willing sellers can enforce a sale as long as enough stakeholders agree to it.

In this case, a seller holding out will have little choice but to accept the offer from the buyer.

However, the transaction prices are usually very attractive.



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