It's only there if you are looking at it.
You would have to come up with a self consistent physics that operates in a quantized space-time, yet gives the illusion that everything is continuous when viewed at a large enough scale. We could call it ‘Quantum Physics’. While we are at it, (If we are really interested in creating simulated intelligences in this simulation) we could further simplify the computation immensely by not bothering to do detailed calculations on parts of the universe that are un-observed by those intelligences. Why simulate all the atoms under a rock on Mars if one of your intelligent beings in the simulation is not there to observe it? Just let such unobserved regions exist as vague probabilities that can be rendered in higher fidelity if and when they are observed.
This would would be one explanation for the Fermi paradox. Like a video game world where the features and inhabitants of that world are only seen when the player is in range to observe it. But I would think there would be some infintesimal measure of time where it would blink into existence that could be observed witht he right technology.