The Quantum Coast: Meet America’s Top New Tech Hub

Along the coast between Silicon Valley and Southern California, another major industry hub is forming for a new kind of technological innovation.

Quantum computing utilizes quantum mechanics to vastly expand on traditional binary computing, solving devilishly complex problems exponentially quicker. And, while the technology is in its early stages, the science behind it is in development in Santa Barbara and neighboring Goleta, which are drawing some of the nation’s top tech companies and employers to an area that was known far more for tourism and a large university.

And the rapid pace of development and rosy forecasts for eventual economic effects have already spilled into commercial real estate.

Centered around the groundbreaking research at the University of California-Santa Barbara, landlords and investors are positioning themselves around the specialized quantum sector in the region.

In March, Colliers helped broker a recapitalization and sale of a 733,000-square-foot tech park portfolio in Goleta to Irvine-based investment firm Praelium. The $235 million trade was one of the largest investment sales ever for Santa Barbara County. In August, Google spent $32.5 million acquiring a pair of buildings on Castilian Drive in Goleta, further expanding its sizable footprint in the area.

Along with a flood of Big Tech tenancy creating a cluster of companies near cutting-edge research, these kinds of deals underscore how quantum has become a new type of tech investment play.

JLL research rates the Southern California quantum ecosystem, including Santa Barbara, as a more mature one versus that of the Bay Area, and tracks roughly a dozen corporate-owned quantum facilities in the region. Google’s global center for quantum research is also in Goleta, less than 15 minutes from UC-Santa Barbara. Last year, Santa Barbara startups raised $293 million across 35 deals, a 15 percent jump from 2024.

“This is a pretty niche sector,” said Andrew Batson, JLL’s global head of data center market intelligence. “It’s not as though you can buy a corner anywhere in America, like fast food or a gas station, to get exposure. But, if you want it, Southern California is the place where you’re going to continue to see investment.”

The larger buildout of quantum computer technology has centered around roughly 25 global hubs, according to JLL research, with about half in the United States. It helps that the U.S. remains the top country for quantum investment over time, with a relatively even split between private and public funding since investments were first made to help foster the technology (the federal government has invested $9 billion in total thus far).

Currently, government- and university-owned parcels comprise 61 percent of the quantum real estate JLL is tracking, but analysts expect that share will decrease as private investment continues flowing into the space.

In California, the UC-Santa Barbara area has become a preeminent quantum research center, site of the nation’s only federally funded Quantum Foundry, which develops the materials and technologies needed for quantum computing. The critical mass of material science, physics and computing expertise has attracted interest from a bevy of tech giants. Google, Amazon Web Services and Microsoft all have space on or near the university campus.

The growth of the region’s quantum economy happened over decades, according to Joshua Boswell, vice president of strategy and policy for Reach Central Coast, a regional economic development agency. Starting in the mid-20th century, regional job growth in engineering and physics boomed, both at the university and due to defense industry growth, including electronics and aeronautics. Aerospace and defense giants Raytheon and Northrop Grumman both have a large presence in the area.

Fast forward to the 21st century, and that trained workforce and UC-Santa Barbara’s ability to attract world class-talent has helped the region pioneer many key quantum developments. University professors have gone on to significant acclaim, too, and to launch more startups. Last year, Santa Barbara physics professors John Martinis, John Clarke and Michel Devoret won the Nobel Prize for their work in quantum processing. And, earlier this year, Martinis’s startup, Qolab, raised $54 million in venture capital funding.

Today, Santa Barbara has some of the strongest quantum talent in the world, said Ricardo Pacheco, managing director of brokerage for Colliers’ Greater Los Angeles and Santa Barbara offices, the latter of which opened last year to tap into the market growth. That workforce is transforming what had been a relatively sleepy, small commercial real estate market into one that increasingly resembles a more tech- and venture-driven one.

“It’s a very fast-growing and exciting ecosystem,” said Pacheco.

And, as the technology evolves and matures, and achieves breakthroughs and commercialization, it’s expected to create waves of startups and business opportunities that benefit local real estate demand. Quantum-related initial public offerings so far this year total $2.7 billion, according to JLL. Batson says the technology has hit a tipping point and will reach greater commercial viability soon.

Quantum computing requires a fraction of the massive capital expenditures and buildout that data centers and artificial intelligence have required, so there isn’t nearly as much construction and development dollars at stake, nor will it get spread out across numerous rural and exurban areas. Similar to the wave of startups, IPOs and tech HQs that came in the 2010s, this expected path of technological growth will cluster in high-demand, high-cost urban markets with the right mix of sought-after talent.

Batson foresees slow, methodical growth, not massive investment surges or boom-bust cycles.

“We don’t see quantum computing as being disruptive or destructive to the data center trend,” he said. “It’s an additive layer on top. It’s just a new, higher-powered type of computer that fits into the existing stack.”

There already has been growing commercialization, said Batson, such as D-Wave, which sells advanced computing systems, and Amazon Braket, which provides quantum access to researchers and developers. The exceptional computing power expected from quantum development is expected to significantly impact sectors such as codebreaking, encryption and finance, and also help speed discoveries in chemistry and material sciences.

In 2024, Google’s Willow chip completed a benchmark random sampling task in under five minutes. A classical supercomputer would have taken 10 septillion years, longer than the predicted age of the universe. That chip currently sits in a secure, state-of-the-art Google facility in Santa Barbara, kept at temperatures hovering just above absolute zero.

Expectations for more breakthroughs have given quantum technology and research a new role as core tenants for future mixed-use developments nationally, serving as the magnet to attract office tenants, jobs and retail.

In Chicago, the ongoing transformation of the 128-acre former U.S. Steel plant on the city’s South Side into the Illinois Quantum and Microelectronics Park has attracted nearly $1 billion in public and private funds, including $700 million in state investment. Tech firm PsiQuantum will anchor the site alongside tenants like DARPA and IBM, and academic institutions such as Northwestern University, the University of Chicago and the Argonne National Laboratory will also be on campus.

The activity centered around UC-Santa Barbara also helps support a larger, regional tech ecosystem, Boswell of Reach Central Coast says. Last fall, the university signed a lease for a 105,000-square-foot research facility in Goleta called OASIS, aiming to set up a shared incubation space for companies and academic researchers.

Tech and venture capital activity has already clustered in the Central Coast of California due to the presence of Vandenberg Space Force Base, a key SpaceX launch site with plans for continued expansion and commercial buildout. The facility’s Spaceport 2036 plan envisions hitting 100 annual space launches every year.

Down the coast, both UCLA and Caltech also have significant quantum research programs, and the state recently invested nearly $10 million in workforce training for Southern California’s quantum sector. In March, UC-Santa Barbara hosted the second-ever Quantum California convention, hoping to attract more funding, researchers, and startups to the region.

“It’s not just one story,” Boswell said, “but a whole bunch of stories happening at the same time, all up and down the coast.”