Quantum Computers Show Promise to Power Up Real Estate Demand

US regions look to become 'Quantum Valley' hubs for next wave of tech expansion

Across the country, parcels of underused real estate are setting the stage for a new wave of development sprouting up on the heels of artificial intelligence.

In Chicago, a sprawling steel mill complex is set to be transformed to house tenants across industries vying to boost technological breakthroughs. A weed-choked industrial site near Denver is targeted as a research facility with labs. In New York, a just-opened IBM building houses its most sophisticated computer, while tech giant Google plans to turn a vacant 8-acre California lot into a computing center to support its most cutting-edge software to date.

The projects are taking root in the service of quantum computing, a field using subatomic particles existing in more than one state to calculate at speeds far faster than traditional technology — and with a lower margin for error. Quantum processing is expected to lead to breakthroughs in how major tech firms from Google to IBM use artificial intelligence, as well as in such fields as cryptography, drug development and climate science.

'ChatGPT moment'

Companies are just starting to ask questions about how they can use quantum computers amid heady projections about the revolutionary changes the technology could bring to solving business problems, Michael Marrion, senior vice president with tenant representative brokerage Cresa in Chicago, said in an interview.

"Quantum is really just starting in the U.S. and hasn’t had its kind of ‘ChatGPT moment' that puts the technology in the public eye — where people understand that this is a computer that can literally run a million times faster than classical computers,” Marrion said.

Regions with a strong tech company presence and talent pool, with universities clustered around federal laboratories and private research centers, will see the earliest benefits from quantum technology, Kolar and other real estate professionals told CoStar News.

Quantum computers operate on the principles of quantum mechanics, a subfield of physics that studies matter and its interactions with energy on the scale of photons, electrons, neutrons and other atomic and subatomic particles.

Quantum computing and generative artificial intelligence research is already helping to dramatically reshape the real estate footprints of large tech firms such as Google and IBM as they convert millions of square feet of traditional office space into laboratory and research facilities to test and prepare new products for commercial use, said JLL's Kolar, who has worked with the brokerage's tech-sector clients for two decades.

The world’s biggest tech companies have led research and development of quantum technology that could replace today’s silicon-based supercomputers, including the development of encryption protocols to defend their devices, operating systems and networks against future quantum computing attacks.

Google bought land last year in California’s Santa Barbara County that could include a research and development facility related to quantum computers. The property is expected to expand upon Google's Quantum AI facility located about 3 miles away that has a data center, research labs and what the search giant calls the "first quantum computer to ever demonstrate beyond-classical computational ability," according to the company's website. The large-scale, error-free quantum processors operate in extremely cold environments and could help with AI, machine learning and other difficult computer science problems.

On the startup front, prominent firms include D-Wave Systems, a developer of quantum systems for Volkswagen, Google and other notable companies. The firm has a 42,000-square-foot headquarters near Vancouver, British Columbia, and a smaller facility in the Silicon Valley city of Palo Alto, California. Quantinuum, a maker of trapped-ion quantum computers, has three locations totaling about 26,000 square feet, including its headquarters in Broomfield, Colorado, and an office in the United Kingdom’s Cambridge.

Read the article in its entirety on CoStar News.