A developer may bid on a key lot, which is in an important location, with the aim of building a larger piece of property to build apartments.
A key lot is a property that is in an important location and has a higher value due to the nature of the location than other properties. This term can also be applied to a long, narrow lot in a dead end, created when a developer divides lots into portions and needs to reshape one to make the others fit around it. This type of key plot may have less value due to the odd shape, which can create a situation where the plot lacks privacy and may not accommodate a very large house.
In the case of a value-added key lot, the lot is required for the buyer to extract maximum value from the adjacent property. An example can be seen in urban areas where developers buy neighboring lots to create a large structure that will span multiple lots. As they buy the lots, a lot may emerge as the key lot that the company needs to be able to develop the property. The owner may refuse to sell or may wait for a higher price, aware of the fact that the developer must have the key lot to proceed.
The key lot can be important for the position it occupies, such as sitting in the middle of the block, or for the shape of the lots in the area. The owner may know that the land is worth more for its position or shape, especially in situations where there is interest in neighboring land. Someone might bid for it with the aim of building a larger piece of property for a project like a mall or apartment building.
In a dead end, a key lot can be created where the road turns or exits the lamps. It can be difficult to fit other regularly shaped lots into the space, and having a single long, narrow lot to equalize the space can make it easier to create standardized lot shapes and sizes. This will be the key lot and may vary in shape and size. It may have less privacy than other lots because of the position and may also be in a noisy and heavily trafficked position. This will make you less desirable.
Master lot locations may change over time. Many critical things in a real estate business can become less important over time, due to changing land use patterns and development plans. Sometimes a lot can have an artificially inflated value and this can end up creating problems for the owner. If she mortgages at a high price, for example, it may be difficult to sell for that amount to pay off the remainder of the loan in the future.