Illinois Is Investing Huge In A Quantum Future. Why Should CRE Care?

Illinois is racing to establish itself as a global hub for quantum research and ponying up the big bucks in a quest to beat out other states to become what Illinois Gov. J.B. Pritzker has touted as the “Silicon Valley of quantum development.”

The stakes are high, the dollar figures going into the tech’s development are dizzying, and for commercial real estate, it could be the next big thing, akin to the semiconductor, life sciences and data center booms. 

Another salient point: Remote work is not an option in the quantum industry, meaning built-out spaces should remain stable for years.

The state’s push to lead the way on quantum research kicked into full gear when state leaders unveiled plans for a massive quantum campus on the site of the former U.S. Steel South Works site in South Chicago in late July. The Illinois Quantum and Microelectronics Park aims to be “up and running” by 2027, said Curt Bailey, president of Related Midwest, the developer leading the charge on the site. 

PsiQuantum, a Silicon Valley startup angling to build the first “utility-scale” quantum computer, is the campus’ anchor tenant. PsiQuantum will occupy 300K SF at the campus and hire at least 150 new people to fill positions to operate the facility.

The campus has 128 acres ready for immediate development and an additional 312 acres available for expansion. 

“Right here beneath our feet will be a catalyst for a potential revolution in science and technology and the betterment of life for all humankind,” Pritzker said at the anchor tenant announcement.

The state has a lot riding on that revolution coming to fruition. Illinois is offering $200M to PsiQuantum in grants, workforce development assistance, a low-interest loan and other incentives in exchange for a minimum investment of $1B by the company.

The hope is the investment brings commercialization opportunities for Illinois entrepreneurs and attracts leading global technology companies and startups to the state, all of which will need space for research and development. 

Before CRE and others can cash in, though, they’ll have to understand what quantum is and the economic opportunities it represents.

Quantum computing is a next-generation computing technology that enables solving problems too advanced for supercomputers that exist now, said Brian DeMarco, associate director for the IQMP. This could include everything from determining how Amazon should distribute its trucks across Chicago to minimize fuel costs to simulating the design of pharmaceuticals, he said. 

The rapidly evolving science applies the laws of quantum mechanics to solve the most complex problems and is still in its infancy. A workable quantum computer doesn’t exist — yet. But many are trying, and state leaders hope they'll all be trying in Illinois.

DeMarco said the major immediate challenge is creating a large-scale quantum computer that is useful, creates market value and has an industry grow around it. The state is investing significant resources to enable its partners to scale up to what those in the field call “utility scale,” or a quantum computer that is usable and can demonstrate abilities a supercomputer can’t, he said. 

“We don't know the engineering pathway yet, but we want to get there as fast as we can and faster than compared to competing countries, for example, because not only will it revolutionize society overnight, but it has really significant national security implications to have a large-scale quantum computer,” DeMarco said. 

When Springfield passed a state budget in May, lawmakers carved out $500M to support the development of the regional quantum information science and technology campus aimed at luring high-tech firms to the state. This includes a significant chunk allocated for a cryogenic facility, which is needed to keep quantum computing systems cool.

“This is huge,” said Andrew Scott, a member attorney at law firm Dykema Gossett specializing in commercial real estate. “It's going to be such a vast campus and going to have such an impact — primary, secondary and tertiary impacts on real estate development [and] job creation.”

Quantum shares some similarities with another commercial real estate darling — data centers. Both asset types need a significant amount of power and utility infrastructure to operate, Scott said. 

But a key difference is in the nature of the development and economic activity that surrounds both asset types. 

“A data center, it’s great. We're going to invest hundreds of millions of dollars, and, oh, by the way, we're going to create five jobs,” Scott said. “[Quantum is] the complete opposite. It is labor intensive, and so it is going to create a lot of job opportunities, and then going to have that multiplier effect. You're going to have other businesses that are going to be needed to support the primary business here.”

Scott said he thinks there is going to be an almost immediate impact for support infrastructure as construction workers file in to work on the project that will gradually solidify as primary operators of the campus begin work.

The burgeoning industry will need a network of suppliers. Fast-casual service businesses, like Starbucks, may look at their pipelines and analyze if there are a sufficient number of people to support new locations. 

The massive campus could also fuel housing demand, Scott said. 

“It’s the impact that a project of this size and nature, it's got so many tentacles to it because you're going to have this huge campus, and people want to be close to work,” he said. 

The target for the park is to have several anchor tenants and build out an ecosystem similar to a tech park for quantum, adding device manufacturers and key suppliers, DeMarco said.

While remote work has established itself as a mainstay in the modern work environment, the physical nature of building and testing quantum hardware requires workers to be in person, said Elina Kasman, vice president of business development for Great Lakes Crystal Technologies, which manufactures specialized diamonds for quantum applications.

When everyone is in the same space, it leads to symbiotic developments, she said.

“The software people talk to the hardware because they're literally in the same building or maybe across the street from each other,” Kasman said. “You have the flow of talent. So there's a lot of benefit in focusing geographically and putting everyone in the same room.”

Another benefit of the campus is its proximity to top-level, qualified talent in the field from area universities like The University of Chicago, Northwestern University, the University of Illinois at Urbana-Champaign and others, Kasman said. Powerhouse research facilities like Argonne National Laboratory and Fermilab offer another pool of talent, she said. 

But Illinois isn’t the only state vying to be the king of quantum.

In early July, Colorado beat out the Land of Lincoln for a $40.5M quantum technology grant from the federal government to help turn Colorado into a worldwide hub in the emerging field. President Joe Biden’s administration has been at the front line pushing investment in quantum, passing The CHIPS and Science Act in 2022, which allocated $174B toward public sector research, including quantum. 

On the East Coast, the University of Maryland and College Park-based quantum computing company IonQ announced plans this week to partner on a project to make a quantum computing system for the Department of Defense. Though the investment pales in comparison to Illinois’ quantum park, the contract is worth $5.7M for initial work, with the potential for a second phase worth up to $12M, DC Inno reports.

Still, Illinois is so far setting the mark to beat with its quantum campus. 

“This is a one-of-its-kind tech park,” DeMarco said. “I don't know anywhere else in the world that's doing something at this scale … It positions Illinois right at the front of the pack in the world for being able to support the industry, but then also bring those jobs and bring those companies to the state.”