Beyond the Cap Rate 10.8.25

A Cooling Labor Market and What It Means for Apartment Investors

The U.S. labor market — long the engine of post-pandemic growth — is showing signs of fatigue. Hiring momentum has slowed, especially among smaller firms, and recent data underscores the shift. For apartment investors, this change is more than statistical: it shapes tenant behavior, migration trends, and rent growth across markets.

National Labor Trends: A Shift in Tone

In September, private employers shed approximately 32,000 jobs, marking the largest monthly decline in recent years, according to the ADP National Employment Report. Meanwhile, economists interpret the decline as a broad cooling rather than a collapse. Some sectors, such as education and healthcare, continued to post modest gains — a reminder that not all industries move in lockstep.

This softening in private employment comes at a time when official Bureau of Labor Statistics data has been delayed by the federal shutdown, leaving markets to rely on private indicators for insight. The trend supports growing expectations that the Federal Reserve will move forward with another rate cut in late October as inflation pressures continue to ease.

Sectoral Strength and Weakness

Even amid the slowdown, certain sectors remain resilient. The education and healthcare industries added roughly 33,000 positions in September, reflecting long-term demographic support and continued demand for essential services. These areas are likely to underpin stable housing demand in metros with significant medical and educational employment bases.

By contrast, more cyclical industries — including professional services, construction, and hospitality — have begun to shed jobs, contributing to a more cautious tone in business hiring and capital spending.

The Portland Reality: Intel Layoffs and Local Risk

National trends provide the backdrop, but real impacts are felt locally. In the Portland metro area, Intel’s announcement of workforce reductions totaling roughly 2,400 positions across its Hillsboro and Aloha campuses represents one of the largest private-sector contractions in Oregon this decade. Earlier WARN filings also indicated layoffs of more than 500 employees at multiple sites, underscoring the depth of the company’s restructuring.

For a region where high-wage technology jobs anchor household formation and spending power, these cuts have ripple effects. Reduced employment in the tech corridor could influence absorption rates, renewal behavior, and rent growth — particularly in Washington County submarkets tied closely to Intel’s employment base.

Smaller layoffs in financial services and logistics have also surfaced, adding to the employment drag in parts of the Portland and Vancouver area. For multifamily owners, this is a reminder that tenant composition matters. Properties concentrated in one employment sector — particularly tech — may face greater exposure to softening rents or rising concessions if hiring freezes persist.

What Apartment Investors Should Be Thinking About

The key takeaway is that tenant mix is a form of risk management. In past cycles, investors have tended to focus on rent rolls, occupancy, and comparable sales while overlooking the economic diversity of their resident base. In the current environment, that oversight could be costly.

Assets drawing primarily from high-wage corporate tenants may see short-term pressure if job losses continue, while communities with more diverse renter profiles — healthcare, education, government, and trade workers — often maintain steadier occupancy and rent collection. Understanding these demographic nuances can help investors anticipate which properties will remain resilient and which may require operational adjustments.

Using Operational Analysis to Stay Ahead

At Christensen Group, our Operational Analysis framework helps owners identify and mitigate tenant concentration risks before they affect cash flow. We evaluate:

• Employer concentration and sector exposure across the tenant base

• Rent-to-income ratios and affordability stress points

• Turnover cadence and renewal sensitivity under employment volatility

• Micro-market mapping to assess exposure to major local employers

For owners of assets near Hillsboro, Beaverton, or downtown Portland, this analysis provides a clearer picture of how recent layoffs or hiring freezes could impact stability — and where proactive management can preserve returns.

Interest Rates and the Road Ahead

The cooling employment data reinforces the likelihood of additional monetary easing from the Federal Reserve. While long-term yields remain elevated, lower short-term borrowing costs can ease pressure on tenants and small businesses, helping maintain rent collections and occupancy stability.

For investors, this is a moment to refine strategy — to stress-test assumptions, strengthen operations, and position for opportunity when capital conditions improve. The Pacific Northwest continues to benefit from structural advantages: limited new supply, a highly educated workforce, and lifestyle migration that keeps housing demand durable even through economic moderation.

Final Perspective

The national job market is cooling, not collapsing. In this phase of the cycle, disciplined investors who understand both the macro and local forces shaping renter demand will be best equipped to protect and grow value.

The Intel layoffs serve as a timely reminder: know your tenant base, understand your exposure, and plan for the next cycle before it arrives. The fundamentals of the Pacific Northwest remain sound — but success now depends on operational precision, not market momentum.

Christensen Group | Marcus & Millichap
Advising multifamily investors across the Pacific Northwest.
Data-driven. Results-focused. Always one step ahead of the market.

Related Data & Sources

• ADP National Employment Report (September 2025): Private-sector employment declined by 32,000 jobs. mediacenter.adp.com

• Bloomberg: U.S. Firms Shed 32,000 Jobs in ADP Report After Data Adjustment. bloomberg.com

• Intel to Lay Off More Than 2,400 Oregon Employees Amid Semiconductor Restructuring. opb.org

• Intel Announces 529 Additional Oregon Layoffs in WARN Filing. kptv.com

• Wells Fargo Announces Additional Downtown Portland Reductions. kptv.com

  Georgie Christensen

  Managing Director Investments

  Christensen Group

  (503) 200-2058

  GChristensen@Marcusmillichap.com