From the outside, headlines about Portland and Seattle can sound dramatic. War-zone metaphors. Policy anxiety. Tech layoffs. Investors ask us the same question again and again:

Is the Pacific Northwest still worth leaning into, or is it time to rotate out?

At the Marcus & Millichap / IPA Multifamily Forum: Pacific Northwest 2025, local owners, developers, lenders and operators gave a very different picture from the headlines. Across the market overview, capital markets, operations and market leaders panels, a clear story emerged.

Short version: Portland and Seattle are in a messy but attractive reset. Fundamentals are healthier than the noise suggests, supply is set to tighten, and investors who understand the policies and submarkets are being paid for that homework.

Below is our recap of what matters most for investors, lenders and asset managers watching the region.

1. From “Survive to 2025” to Playing Offense in 2026

Marcus & Millichap’s John Chang opened with a macro view that struck a chord with the room: despite constant noise, 2025 into 2026 could be one of the best buying windows in years.

He walked through how:

• National multifamily transaction volume is now trending above 2021 levels, which he used as a “normal-ish” comparison point rather than the froth of 2022.
• In the Seattle–Tacoma region, transaction velocity is only down about 14 percent from the 2014–2019 average, while Portland is down just 6 percent, meaning deals are still getting done in both markets.
• Cap rates have moved up roughly 90 to 100 basis points in recent years, a shift that is “not typical” but is creating more attractive entry yields for buyers willing to step in now.

On the tax side, Chang highlighted bonus depreciation and cost segregation as underappreciated levers in today’s environment. With the right structuring, acquisitions penciled today can enjoy stronger after-tax returns than similar deals did just a few years ago.

His overarching message: yes, policy risk and rate volatility are real, but investors who stay focused on jobs, supply and structure instead of headlines may look back on 2025–2026 as a rare entry point.

2. Portland: Beyond the Memes and Into the Recovery

No city has taken more heat in the national media than Portland. That is exactly why Joel Dice handed the mic to David Tabata, Marcus & Millichap’s Portland regional manager, to reset the narrative.

Tabata openly acknowledged the city’s challenges since 2020, from political friction to downtown distress. But as someone “born and raised in Portland” and raising a young family there, he argued that the war-zone image is badly overblown.

He walked through several tangible wins that are easy to miss:

• OHSU’s $2 billion endowment from Phil Knight to build a new cancer research center, which is both a healthcare and economic engine for the region.
• The $2.1 billion Portland airport renovation, the largest mass-timber project ever undertaken in the U.S., with timber locally sourced and a visible upgrade for every traveler who passes through.
• A major redevelopment of the former Portland Public Schools site, including a completed 94-unit building, another 94 units, and roughly 1,200 more units planned. Tabata pointed to this as proof that capital still believes in the city’s long-term trajectory.

He did not sugarcoat Multnomah County’s policy and perception problems, but he reframed them as exactly why this may be the moment to enter or re-enter the market:

Portland has “certainly had its challenges” since 2020, but pricing is now “a little bit suppressed” and long-term, he is still betting on the city.

For investors and lenders, the implication is straightforward:

• Underwrite more political and operational friction in the near term.
• Align with operators who understand local ordinances and neighborhood dynamics.
• But recognize that entry basis in 2025 may look very attractive once policy stabilizes and downtown slowly normalizes

3. Seattle and Puget Sound: Resilient Jobs, Thinning Pipeline

Seattle’s story is different but complementary. Tech headlines have focused on layoffs and rightsizing, yet Chang described Seattle as “tremendously resilient”, with a deep talent pool that continues to attract employers.

Several data points from the panels stood out:

• National multifamily sales volume is above 2021, and Seattle–Tacoma’s activity is only modestly below the pre-pandemic norm.
• Building permits are down roughly 66 percent year over year, which follows a wave of peak supply that is now being absorbed.
• Market leaders see 2026 as a strong window for development, driven by resilient job growth and a much thinner pipeline beyond the current deliveries.

One panelist summed up their strategic focus as the intersection of jobs and interest rates. If the local labor market holds and rate pressure eases even modestly, the combination of strong demand and falling new supply could create a more landlord-friendly P&L again in the next cycle.

From our lens at Smart Capital Center, that aligns with what we are seeing in underwriting:

• Core and transit-served Seattle submarkets still show healthy long-term rent growth assumptions once current concessions burn off.
• Secondary nodes across the Puget Sound that are tied into light rail or major job hubs often show better risk-adjusted cash flow than headline yields suggest.

4. Policy and Rent Control: Risk, but Also a Competitive Moat

One of the most candid conversations came from the market leaders panel, where speakers compared policy environments across Oregon, Washington and neighboring states.

Key takeaways:

• Both Oregon and Washington now have forms of rent control, but the immediate impact on some portfolios is muted because many affordable and LIHTC deals are already constrained by regulatory agreements.
• The bigger concern is the direction of travel. One panelist described Washington’s legislative dynamic as “all checks, no balances,” with policies that start narrow and then expand. Rent control may not be a huge issue yet, but they expect changes “within the next three to four years” that will materially impact the ability to raise capital and start new projects.
• Policy differences between Washington and Idaho are already nudging some development toward the less regulated side of the border. However, job growth and rent growth still have to justify those moves, and fast-growing markets often end up adopting similar policies a cycle later.

Chang framed West Coast tenant protections as a double edged sword. Some investors refuse to touch the region, choosing instead to chase yield in Texas or Florida. That crowds the buyer pool in those states and pushes cap rates lower. Local investors who understand “the rules of the road” in Portland and Seattle can often buy at more attractive yields and operate profitably within those constraints.

For institutional and non-institutional capital alike, that reinforces a familiar theme:

• Policy risk is not a binary “yes or no” question.
• It is an underwriting input that can create alpha when you model it correctly and partner with the right operators.

5. Operations and AI: Back to Basics, Not Shiny Objects

The apartment operations panel pivoted from capital markets to day-to-day management. The moderator framed a simple but important question:

Does multifamily have a technology problem or a workforce opportunity?

Panelists agreed that:

• Multifamily remains a high-turnover industry, especially at entry-level leasing and maintenance. Teams are “recycling a lot of the same people,” and it is hard to attract new talent into on-site roles.
• You cannot “train someone to care about your core values.” Culture fit, not just hard skills, is central when hiring.
• Career paths and specialization matter. Entry-level staff are more likely to stay if they can see a route into sales, marketing or centralized operations rather than a flat, burnout-prone role.

On AI, one operator captured the mood well. They described being a “big proponent of AI” and fully expecting it to change multifamily, but warned that we are still in a “messy middle” where one-off tools can create more fragmentation than value if they are not integrated around NOI.

The consensus:

• Focus on back-to-basics execution first [leasing, maintenance, resident experience].
• Adopt AI and automation where they remove friction and support teams, not where they simply shift work from one screen to another.
• Use data and integrated platforms to help on-site teams prioritize the next best action instead of drowning in point solutions.

This is exactly how we think about AI at Smart Capital Center. The most effective implementations are not chatbots in isolation; they are embedded in underwriting, portfolio monitoring and exception reporting, so teams can see risk and opportunity across their assets and respond quickly.

6. Capital Flows and Product Focus: Where Are Market Leaders Leaning In?

The capital markets panel brought together a structured finance leader, a life-company lender, an institutional owner and a regional developer with deep Pacific Northwest exposure.

A few themes matter for anyone modeling deals in the region:

• Cost of capital remains bifurcated. Fannie and Freddie pricing on stabilized assets is generally in the high-5 percent range, while development financing comes in noticeably higher. In that context, creative structures and patient equity have become critical to getting new projects off the ground.
• Many developers are shifting more of their volume into affordable and senior housing, where demographic tailwinds and policy support are stronger, even as conventional market-rate deals struggle to pencil. One firm reported roughly 2,000 affordable units in its pipeline in Washington alone, with ambitions to expand into California and other markets.
• Despite noise, capital still sees Seattle in particular as “exceptionally important” and remains eager to place money in the region when the story, basis and partner line up.

For investors, that reinforces what we are seeing in live transactions on the Smart Capital platform:

• Equity is discriminating, not disappearing.
• Deals that are realistic on land basis, construction costs and lease-up assumptions, and that price in policy risk thoughtfully, still find both debt and equity.

7. What This Means for Investors, Lenders and Asset Managers

Pulling all of this together, here is how we would translate the conference conversations into actionable themes for anyone with exposure to Portland and Seattle multifamily:

1. Treat 2025–2026 as a selective buy window
   • Cap rates have reset upward while many owners are facing debt maturity and policy fatigue.
   • Transaction velocity is not frozen; it is functioning at a slightly slower, more rational pace.
2. In Portland, underwrite the mess but do not ignore the momentum
   • Downtown and policy challenges are real, but so are multi-billion-dollar bets on healthcare, infrastructure and mixed-use housing.
   • Suppressed pricing in Multnomah County may reward investors who can hold through a slow normalization.
3. In Seattle, watch the supply cliff as much as the layoffs
   • A 66 percent drop in permits after a peak delivery year sets up a tighter supply landscape later in the decade.
   • Deep talent and ongoing infrastructure investment support long-term demand, even as individual employers resize.
4. Make policy an underwritten variable, not a reason to opt out
   • Rent control and tenant protections require careful modeling, but they also reduce buyer competition and can create a moat for local expertise.
5. Invest in operating platforms that combine people, process and data
   • Turnover, staffing and culture are still the biggest risks to execution.
   • AI and automation should simplify life for your teams and drive NOI, not add another point solution to manage.  
6. Use scenario analysis before you bid
   • Test how deals perform under different interest rate paths, policy shifts and supply outcomes.
   • This is where institutional-grade analytics, like those we provide at Smart Capital Center, help level the playing field between large and mid-sized investors.

Final Thoughts

The Pacific Northwest is not the easy, low-friction growth story it was a decade ago. It is also not the doom loop you might assume from national headlines.

What came through clearly at the Marcus & Millichap / IPA Multifamily Forum: Pacific Northwest 2025 is that Portland and Seattle are evolving into markets where operational sophistication, data-driven underwriting and policy fluency are real competitive advantages.

For investors, lenders and asset managers willing to do that work, the next few years may offer exactly what smart capital looks for:

• Better entry basis
• Less crowded bidding pools
• And assets located in regions that still have deep talent, infrastructure investment and long-term economic relevance.

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