The real estate bust America's suburbs need

In all the banking turmoil of the past two weeks, the commercial real estate market has come into focus as another at-risk sector stressed by high interest rates. But while banks and investors sweat the potential for losses and loan defaults, there is a silver lining for certain places, including suburban enclaves that have exploded in growth and become more affluent over the past decade. Decaying but not-quite-dead-yet assets like big office complexes have been holding back transformations needed to support expanding populations. Their failure would ultimately be a benefit to their communities, which have been building toward this moment since the fallout from the 2008 recession.

The caveat in this discussion is that every place with a vacant office building won't necessarily be in a position to redevelop or transform that parcel of land. If there is no population or wealth growth in the area, a vacant building is probably going to just remain vacant. And in urban environments like downtown San Francisco or Midtown Manhattan, where there's arguably a glut of office space even though the land is valuable, it may take years for landowners and the surrounding communities to figure out how to work through a transition.

The sweet spot for the activity I'm talking about is suburban communities like you find in Dallas, northern New Jersey and Orange County, California. These have seen an influx of residents and surging home values over the past decade, while the existing property environment, particularly for commercial, is aging, low-density and relatively low-quality. They're the kinds of places that were hit hard by the 2008 recession. They muddled through for the next five years while coastal cities became the darlings of the economy, with millennials flocking to the abundance of urban amenities and well-paid...