A key lot is a prime location with higher value due to its position or shape. It can be necessary for developers to obtain maximum value from adjoining properties. Key lot locations may change over time, and artificially inflated values can create problems for owners.
A key lot is real estate that is in a prime location and has a higher value due to the nature of the location relative to other properties. This term can also apply to a long, narrow cul-de-sac lot, created when a developer divides lots into portions and needs to reshape one lot to fit the others around it. This type of key lot may have less value due to the odd shape, which can create a situation where the land lacks privacy and may not accommodate a very large home.
In the case of a value-added key lot, the lot is necessary for a buyer to obtain maximum value from the adjoining property. An example can be seen in urban areas where developers purchase neighboring lots to create one large structure spanning multiple lots. As lots are purchased, one lot may emerge as the key lot the company needs in order to develop the property. The owner may refuse to sell or may wait for a higher price, mindful of the fact that the developer must have the key lot to proceed.
The key lot can be important because of the position it occupies, such as sitting in the middle of the block, or because of the shape of the lots in the area. The owner may be aware that the land is worth more because of its position or shape, especially in situations where there is interest in neighboring lots. Someone may make an offer with the goal of building a larger property for a project such as a shopping mall or apartment building.
At a dead end, a key lot can be created where the road is rounded or pumped. It can be difficult to fit other regularly shaped batches into the space, and having a single long, narrow batch to match the space can make it easier to create standardized batch sizes and shapes. This will be the key lot, and it can vary in shape and size. It may have less privacy than other lots due to the position and could also be in a noisy and busy position. This will make it less desirable.
Key lot locations may change over time. A critically important lot in a real estate business may become less over time, due to changes in land use patterns and development plans. Sometimes a lot can have an artificially inflated value and this could end up creating problems for the owner. If the mortgage is priced high, for example, it may be difficult to sell at this value to pay off the rest of the loan in the future.
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