Along the Californian coast, nestled between Silicon Valley and Southern California, a significant industrial centre for a new kind of technological innovation is emerging. Quantum computing harnesses the principles of quantum mechanics to vastly expand upon traditional binary calculations, solving highly complex problems exponentially faster. While the technology is still in its infancy, the science behind it is being advanced in Santa Barbara and neighbouring Goleta. This is attracting some of the country's leading technology companies and employers to a region previously known primarily for tourism and a major university.
The rapid pace of development and positive forecasts for future economic impact have already influenced the commercial real estate market. Around the groundbreaking research at the University of California-Santa Barbara, property owners and investors are strategically positioning themselves within the region's specialised quantum sector. In March, for instance, Colliers assisted in the recapitalisation and sale of a 733,000 square foot technology park portfolio in Goleta to Irvine-based investment firm Praelium. This $235 million transaction was one of the largest investment sales ever recorded in Santa Barbara County.
In August, Google acquired two buildings on Castilian Drive in Goleta for $32.5 million, thereby expanding its already considerable presence in the area. Alongside a surge of big tech tenants forming a cluster of companies near cutting-edge research, such transactions illustrate how quantum computing has become a new field of investment within the technology sector.
Southern California as a Maturation Zone for Quantum Ecosystems
A JLL study assesses Southern California's quantum ecosystem, including Santa Barbara, as more mature compared to the Bay Area, tracking approximately a dozen corporate-owned quantum facilities in the region. Google's global centre for quantum research is also located in Goleta, less than 15 minutes from UC-Santa Barbara. Last year, startups in Santa Barbara raised $293 million from 35 deals, a 15 percent increase from 2024. Andrew Batson, JLL's Global Head of Data Centre Market Intelligence, noted that while it is a niche sector, Southern California is where investments will continue to be seen.
According to JLL research, the larger expansion of quantum computing technology has concentrated on approximately 25 global centres, half of which are in the United States. The US remains the leading country for quantum investment in the long term, with a relatively even split between private and public funding since the technology's inception – the federal government has invested a total of $9 billion to date. Currently, state and university-owned properties account for 61 percent of quantum real estate tracked by JLL, but analysts expect this share to decrease as private investment continues to flow into the sector.
Development and Talent Promotion in the Region
In California, the region around UC-Santa Barbara has developed into a leading research centre for quantum technology, hosting the nation's only state-funded Quantum Foundry, which develops materials and technologies for quantum computing. This critical mass of material science, physics, and computer expertise has attracted the interest of numerous technology giants. Google, Amazon Web Services, and Microsoft all have spaces on or near the university campus.
The growth of the regional quantum economy evolved over decades, according to Joshua Boswell, Vice President of Strategy and Policy at Reach Central Coast, a regional economic development agency. From the mid-20th century, regional job growth in engineering and physics boomed, both at the university and through the growth of the defence industry, including electronics and aerospace. Aerospace corporations Raytheon and Northrop Grumman both have a strong presence in the region. This skilled workforce and UC-Santa Barbara's ability to attract world-class talent have helped the region drive many key quantum developments. University professors have also received significant recognition and founded numerous startups.
Today, Santa Barbara boasts some of the world's strongest quantum experts, as explained by Ricardo Pacheco, Managing Director for Brokerage Services at Colliers' Greater Los Angeles and Santa Barbara offices, which opened last year to capitalise on market growth. This workforce is transforming a previously rather quiet, small commercial real estate market into an increasingly technology and venture-driven sector. Pacheco describes the ecosystem as very fast-growing and exciting. As the technology continues to develop and mature, achieving breakthroughs and commercialisation, it is expected to create waves of startups and business opportunities that will benefit local real estate demand.
Quantum computing-related IPOs this year amount to $2.7 billion, according to JLL. Batson believes the technology has reached a tipping point and will soon achieve greater commercial viability. Quantum computing requires only a fraction of the massive capital expenditure and build-out that data centres and artificial intelligence have needed, so there is nowhere near as much construction and development money involved, nor will it be spread across numerous rural and exurban areas.
