Quantum Computing and AI-Powered Retrofits: The Next Big Tailwinds for Commercial Real Estate

Toronto, August 12, 2025 – As the commercial real estate (CRE) sector navigates a complex landscape of high interest rates, maturing debt, and shifting tenant demands, two emerging forces—quantum computing and AI-powered retrofit planning—are poised to become significant tailwinds driving growth and transformation in the industry.

Quantum Computing: A New Frontier for CRE

Quantum computing, once a theoretical concept, is rapidly becoming commercially viable and is set to reshape the CRE market. According to industry reports, the technology’s advancement is driving demand for specialized real estate to house quantum computing infrastructure, such as data centers with advanced cooling systems and high-security requirements. These facilities require significant space and energy, creating new opportunities for developers and investors.

“Quantum computing is advancing quickly and becoming commercially viable. As a result, it now needs its own real estate,” notes a recent analysis. This demand is expected to spur development in industrial and data center sectors, particularly in tech hubs like Silicon Valley, Toronto, and Boston, where proximity to innovation ecosystems is critical. The rise of quantum computing could lead to a surge in purpose-built facilities, offering CRE investors a chance to capitalize on a high-growth niche.

AI-Powered Retrofit Planning: Unlocking Value

AI is also transforming CRE through retrofit planning, enabling asset managers to model the impact of capital expenditures on costs, asset value, leasing velocity, and environmental performance. “AI-powered retrofit planning lets asset managers instantly model how capital spending affects costs, asset value, leasing, and environmental performance,” says Ali Hoss, Chief Sustainability Officer at Triovest. This technology is driving a shift toward sustainable, decarbonized buildings, which command rental premiums of 6% to 12% globally while avoiding the “brown discount” faced by inefficient properties.

With buildings responsible for 37% of global energy-related carbon emissions, AI-driven platforms are helping investors meet stricter regulations, such as the U.S. SEC’s climate disclosure rules and the EU’s Corporate Sustainability Reporting Directive. By synthesizing data on energy usage, occupancy trends, and materials, AI enables precise forecasting of net operating income (NOI) and enhances asset desirability for sustainability-conscious tenants. In markets like New York, London, and Sydney, where demand for low-carbon office space is projected to outstrip supply by 2030, AI-driven retrofits are becoming a competitive differentiator.

Other Tailwinds Bolstering CRE

Beyond quantum computing and AI, several other trends are supporting CRE’s recovery:

• Legislative Support: The recently enacted “One Big Beautiful Bill” (H.R. 1) in the U.S. restores 100% bonus depreciation through 2029, makes the Qualified Business Income deduction permanent, and boosts affordable housing incentives, spurring investor activity in multifamily and value-add projects.
• E-commerce and Industrial Growth: The continued rise of e-commerce is fueling demand for logistics and industrial properties, particularly in urban areas where last-mile delivery is critical. California’s industrial lease rates are projected to rise to $1.40 per square foot by 2025, driven by ports like Los Angeles and Long Beach.
• Office-to-Residential Conversions: With office vacancy rates at 14.2% in some markets, conversions to residential units are gaining steam, revitalizing urban cores. CBRE reports 73 office conversions completed in the U.S. by Q3 2024, with 279 more projected for 2025 and beyond.
• Demographic Shifts: Growth in Sun Belt states, which now hold 50% of the U.S. population, is driving demand for retail, multifamily, and industrial properties, with 75% of U.S. population growth over the past decade concentrated in these regions.

Challenges Remain

Despite these tailwinds, CRE faces headwinds, including nearly $1 trillion in maturing mortgages in 2025 and tighter lending standards. Rising insurance costs due to climate risks and high interest rates could also temper investment activity. However, experts suggest that falling interest rates and strong fundamentals in sectors like industrial and multifamily could stimulate deal flow.

Looking Ahead

The convergence of quantum computing and AI-driven retrofits, alongside legislative and demographic tailwinds, positions CRE for a dynamic recovery. Investors who leverage these technologies and focus on sustainable, flexible assets are likely to capture significant opportunities. As one industry expert noted, “A thoughtful allocation paired with strong active management may capture plenty of unique opportunities going forward.” The CRE sector is poised to evolve, with innovation and adaptability at its core.