3 Ways To Spot An Undervalued Asset: Lessons From Commercial Real Estate For Every Investor
September 11, 2025
In commercial real estate, the difference between an average investor and a great one often comes down to the ability to recognize value where others do not.
Over the past two decades, I’ve seen firsthand how a disciplined approach to evaluating assets can separate profitable opportunities from costly mistakes. While my work has been rooted in real estate, the principles of spotting undervalued assets extend far beyond property into private equity, corporate acquisitions and even personal investments.
Here are three proven ways to identify undervalued assets that apply across industries.
1. Look Beyond The Obvious Numbers
In real estate, the first thing most people examine is the rental income, vacancy levels or cap rate (rate of return based on a property’s annual income compared to its price). These metrics matter, but they rarely tell the full story. An office tower may look unattractive on paper because vacancy is high, but a closer look could reveal that the property sits in a desirable submarket poised for growth, or that new infrastructure, universities or medical centers are about to create long-term tenants.
The same principle applies in business more broadly. A company’s financial statements may show sluggish revenue, but are those numbers obscuring valuable intellectual property, a strong customer base or a product line that has yet to be fully commercialized? Investors who only react to surface-level numbers are likely to miss the deeper story.
Warren Buffett famously looks for intrinsic value rather than the current mood of the market. In both commercial real estate and business, that often means doing some due diligence to uncover potential value hidden in plain sight.
2. Evaluate The Management
An underperforming asset sometimes has less to do with the market and more to do with the way it’s being managed. I’ve seen properties turn around dramatically when new management comes in and invests in needed upgrades or improves the tenant experience. The building itself didn’t change overnight, but the operations did.
For investors, whether in real estate or business, it’s essential to assess leadership. Is the management team proactive or reactive? Do they have what it takes to weather downturns or look for creative solutions? Evaluating the management factor is as critical as any spreadsheet.
3. Identify External Catalysts Others Have Missed
Timing matters. In real estate, a neighborhood can be overlooked for years until a new transit line opens or a major employer relocates nearby. Investors who spot these opportunities before they become obvious to the market achieve outsized returns.
Big changes—like new laws, industry mergers or new technology—can quickly change how valuable an investment is. For example, a small healthcare company might suddenly be worth much more if new insurance rules make its treatments easier to cover. Or a shipping company that looks slow today could gain an edge when a new port opens nearby and lowers its costs.
Spotting undervalued assets means not just asking “What is this worth now?” but also “What will change to make this worth more later?”
Bringing It All Together
The common denominator across these three approaches is perspective. What is true on the surface today doesn’t have to be true tomorrow. Opportunity exists in what’s overlooked. Whether you are considering an investment in a building, a company or even your own career, the ability to spot value others miss can be transformative.
The best investors develop a mindset that balances skepticism with vision. They interrogate the data, but they also see possibilities where others don’t. They see solvable challenges where others see dead ends.
By looking beyond the numbers—at leadership, external catalysts and what can be actively changed to improve the asset—investors can create lasting value in undervalued assets.
The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.
Read this article on Forbes.com.
About Jack Mullen of Summer Street Advisors:
As Founder & Managing Director of Summer Street Advisors, Jack Mullen leverages decades of experience in valuation, underwriting, and risk management to lead multi-million and multi-billion dollar CRE transactions.
Previously with GE Capital and large institutional banks, he has shaped investment strategies for some of the industry’s largest deals. A recognized leader, his insights are featured in GlobeSt.com and CREFC Finance World, and he is a sought-after speaker at industry conferences and top universities.
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