Site Attributes: Frontage, Size, and Land Characteristics

Site Attributes: Frontage, Size, and Land Characteristics

This chapter delves into critical site attributes – frontage, size, and land characteristics – that significantly influence real estate value❓❓ and potential. Understanding these attributes is fundamental to effective site analysis and unlocking value in real estate investments.

1. Frontage: Access and Exposure

Frontage refers to the linear dimension of a property that abuts a public or private right-of-way, waterway, or other defined boundary. It represents direct access and visibility, both crucial factors influencing property value.

• Definition and Measurement: Frontage is measured in linear units (e.g., feet, meters) along the property line that coincides with the designated feature (street, river, railroad). It is not necessarily equivalent to the property’s width, especially for irregularly shaped parcels.

• Impact on Value: Frontage significantly affects a property’s accessibility, visibility, and overall market appeal. Greater frontage generally provides better access and exposure, potentially increasing value. However, excessive frontage on busy roads can also create negative externalities, such as noise and traffic congestion, impacting value negatively for residential properties.

• Types of Frontage:

  • Street Frontage: The most common type, providing access to vehicular and pedestrian traffic.
  • Water Frontage: Provides access to a lake, river, or ocean, often associated with premium values due to recreational amenities and scenic views.
  • Railroad Frontage: May be advantageous for industrial properties requiring rail access but can be detrimental for residential properties due to noise and potential safety concerns.

• Corner Influence: Properties with frontage on two or more streets (corner lots) can have either a higher or lower unit value than neighboring properties.

  • Positive Aspects: Increased visibility, multiple access points, flexibility in building layout and subdivision. For commercial properties (e.g., gas stations, retail stores), corner locations at high-traffic intersections are generally more valuable.
  • Negative Aspects: Loss of privacy, increased noise, higher infrastructure costs (sidewalks), and stricter setback requirements. For residential properties, interior lots on cul-de-sacs are often preferred.

• Practical Applications and Experiments:

  • Comparative Analysis: Analyze sales data of similar properties, comparing those with varying frontage lengths and locations (corner vs. interior) to quantify the impact of frontage on property value.

  • Regression Analysis: Conduct a statistical analysis (regression model) with frontage as an independent variable and sale price❓ as the dependent variable, controlling for other site characteristics, to determine the quantitative impact of frontage on value. This can be expressed mathematically as:

    Sale Price = β₀ + β₁ * Frontage + β₂ * Other Factors + ε

    where β₀ is the intercept, β₁ is the coefficient representing the impact of frontage, β₂ is the coefficients representing the impact of other factors, and ε is the error term.

    2. Size: Economies of Scale and Functional Utility

Site size directly impacts the development❓ potential, functional utility, and overall value of a property. Different uses require specific size and shape characteristics to maximize their economic viability.

• Impact on Value: Generally, as site size increases, the unit price (e.g., price per square foot or acre) tends to decrease due to economies of scale. Conversely, smaller sites often command higher unit prices.

• Functional Utility: The desirability of a site is often determined by whether its size matches the optimal requirements for its intended use. Consider a residential appraisal where a large triangular lot cannot be fully utilized according to zoning and subdivision regulations.

• Plottage Potential: Plottage is the increment of value that results from combining two or more adjacent parcels into a larger, more useful site.

  • Definition: The increase in value resulting from the assemblage of smaller parcels into a larger parcel, which has greater utility than the sum of its parts. The combined value is greater than the individual values if sold separately.
  • Example: Adjacent half-acre lots, worth $1.00/sq ft. individually, may be worth $1.50/sq ft. when combined into a one-acre lot if there is demand for 1-acre lots.
  • Mathematical Representation:
    Plottage Value = (Value of Combined Parcel) - (Sum of Individual Parcel Values)

• Excess and Surplus Land

  • Excess Land: Land that is not needed to support the existing or proposed use and has the potential to be sold separately as an independent building site. It must be addressed in the highest and best use analysis. The appraisal report should display the value of the excess land, the value of the rest of the property, and the value of the two together as though sold in a single transaction.
  • Surplus Land: Land that is not currently needed to support the existing use but lacks the potential to be sold separately as an independent building site. It does not have an independent highest and best use.

• Practical Applications and Experiments:

  • Size-Value Relationship: Analyze sales data of comparable sites with varying sizes, plotting unit prices against size to visualize the relationship between size and value.
  • Plottage Analysis: Identify potential plottage scenarios in a given market area, estimating the value increase that could result from combining adjacent parcels.

3. Land Characteristics: Topography, Geology, and Environmental Factors

The physical characteristics of the land, including topography, geology, soil composition, and environmental factors, significantly influence its suitability for development and, consequently, its value.

• Topography: The surface configuration of the land, including its elevation, slope, and drainage patterns.

  • Impact on Value: Steep slopes can impede construction, while favorable drainage can enhance usability. Upland land and land with good drainage are generally more valuable.
  • Topographic Maps: Topographic maps created by the US Geological Survey show land elevations (contour lines), rivers, lakes, intermittent streams, poorly drained areas, forest, roads, highways, bridges, and buildings.
  • Application: Consider how construction costs increase with steeper slopes. A steeper slope may require terracing, retaining walls, and increased excavation, which increase development costs.

• Geology and Soil Analysis: The composition of surface and subsurface soil, including its load-bearing capacity, drainage characteristics, and suitability for specific uses.

  • Impact on Value: Unstable soil conditions, the need for special pilings, or the presence of bedrock can significantly increase construction costs.
  • Soil Triangle: The USDA soil triangle is a graphic representation of the percentages of sand, silt, and clay, which are important determinants of the soil’s texture and agricultural potential.
  • Soil Profile: Layers of soil with characteristics produced by soil-forming processes.

• Floodplain and Wetlands Analysis

  • Floodplain: Check maps prepared by the Federal Emergency Management Agency (FEMA).
  • Wetlands: Assess laws protecting the areas, the niche market, and the proper application of the approaches to value.

• Environmental Considerations:

  • Flood Zones: Proximity to flood zones can impact property insurability and development restrictions.
  • Wetlands: Designation as wetlands can significantly restrict development options.
  • Contamination: Soil contamination or the presence of hazardous materials can drastically reduce property value and necessitate costly remediation efforts.
  • Threatened and Endangered Species: Threatened and endangered species that can be present during development.
  • Stigma: The perceived potential for subsidence or a dramatic geological event can have an effect on the marketability of a site.

  • Practical Applications and Experiments:

  • Topographic Survey: Obtain a topographic survey of a subject property to assess slope, drainage, and potential development constraints.

  • Soil Testing: Conduct soil testing to determine its load-bearing capacity, drainage characteristics, and suitability for various uses.
  • Environmental Assessment: Conduct a Phase I Environmental Site Assessment (ESA) to identify potential environmental liabilities on a property.

This chapter provides a foundation for understanding the key site attributes that influence real estate value. By carefully analyzing frontage, size, and land characteristics, professionals can make informed decisions regarding site selection, development planning, and property valuation.