Quantum computing could be commercial real estate’s next big tailwind

Quantum computing is rapidly nearing commercial viability, poised to generate significant new real estate demand akin to AI's impact on data centers. JLL projects quantum investments could reach $20 billion by 2030 and revenue $100 billion by 2035, anticipating a "quantum advantage breakthrough" around 2030. This necessitates specialized facilities with unique shielding, distinct from traditional data centers but accretive to existing infrastructure, with initial development concentrated near academic and government research hubs like the new Illinois Quantum and Microelectronics Park.

Analysis

The commercialization of quantum computing is poised to ignite a significant, new wave of real estate demand, creating a specialized asset class analogous to the AI-driven data center boom. A JLL report projects a substantial ramp-up from the sub-$750 million revenue generated last year, forecasting up to $20 billion in investments by 2030 and $100 billion in revenue by 2035. A key inflection point is anticipated around 2030, where a "quantum advantage breakthrough" could trigger a $50 billion investment surge, similar to the effect ChatGPT had on AI funding. This demand is for a new type of facility, distinct from traditional data centers due to unique requirements for electromagnetic shielding and physical form factors, making it an accretive, not cannibalistic, force on existing digital infrastructure. Initial development is concentrated in academic and research-oriented hubs like Chicago, Boston, and Southern California, with public-private partnerships such as the 128-acre Illinois Quantum and Microelectronics Park leading the way. Private development remains nascent, accounting for less than 20% of the market, indicating the sector is in its early stages with major tech firms like Microsoft, IBM, Google, and Amazon driving foundational investment.

Key Decisions for Investors

• Real estate and infrastructure investors should begin identifying developers and REITs with strategic land holdings or active projects in the identified quantum research hubs, as these regions are the primary early beneficiaries of this emerging asset class.
• Monitor for a 'quantum advantage breakthrough' around 2030, as this is the key catalyst projected by JLL to unlock a significant private investment cycle and dramatically accelerate real estate development in the sector.
• Investors should track the capital expenditures and strategic announcements from technology leaders like Microsoft, Alphabet, and Amazon, as their progress and commitment will serve as the leading indicators for the timing and scale of quantum-related infrastructure demand.
• Given the sector's nascent stage and uncertainty over its ultimate colocation with traditional data centers, initial exposure should be viewed as a long-term, venture-style investment, with risk managed by focusing on firms with established expertise in specialized industrial or tech real estate.