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Fair Value of Financial Assets and Liabilities
 3 Months Ended
Mar. 31, 2021
Fair Value Disclosures [Abstract]  
Fair Value of Financial Assets and Liabilities Fair Value of Financial Assets and Liabilities
U.S. GAAP guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets and liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:
•Level 1 measurements—Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
•Level 2 measurements—Quoted prices in markets that are not active or financial instruments for which all significant inputs are observable, either directly or indirectly.
•Level 3 measurements—Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.
As required by U.S. GAAP guidance, assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The following table sets forth by level within the fair value hierarchy financial assets and liabilities accounted for at fair value under U.S. GAAP guidance (in thousands):
 As of March 31, 2021
 Level 1Level 2Level 3Total
Assets:    
Marketable securities$4,001 $— $— $4,001 
Loans held for sale, at fair value— 821,194 — 821,194 
Rate lock commitments— — 9,048 9,048 
Nasdaq Forwards— — 7,220 7,220 
Forward sale contracts— — 9,239 9,239 
Total $4,001 $821,194 $25,507 $850,702 
Liabilities:
Contingent consideration$— $— $19,527 $19,527 
Rate lock commitments— — 5,471 5,471 
Forward sale contracts— — 6,482 6,482 
Total $— $— $31,480 $31,480 
 As of December 31, 2020
 Level 1Level 2Level 3Total
Assets:    
Marketable securities$33,283 $— $— $33,283 
Loans held for sale, at fair value— 1,086,805 — 1,086,805 
Debt securities— 12,754 — 12,754 
Rate lock commitments— — 21,034 21,034 
Nasdaq Forwards— — 12,822 12,822 
Forward sale contracts— — 7,632 7,632 
Total $33,283 $1,099,559 $41,488 $1,174,330 
Liabilities:
Contingent consideration$— $— $31,481 $31,481 
Rate lock commitments— — 2,977 2,977 
Forwards sale contracts— — 14,971 14,971 
Total $— $— $49,429 $49,429 

There were no transfers among Level 1, Level 2 and Level 3 for the three months ended March 31, 2021 and 2020, respectively.
Level 3 Financial Assets and Liabilities: Changes in Level 3 Nasdaq Forwards, rate lock commitments, forward sale contracts and contingent consideration measured at fair value on recurring basis were as follows (in thousands):
 As of March 31, 2021
 Opening
Balance		Total realized
and unrealized
gains (losses)
included in
Net income		IssuancesSettlementsClosing
Balance		Unrealized
gains (losses)
outstanding
Assets:      
Rate lock commitments$21,034 $9,048 $— $(21,034)$9,048 $9,048 
Forward sale contracts7,632 9,239 — (7,632)9,239 9,239 
Nasdaq Forwards12,822 (5,602)— — 7,220 7,220 
Total $41,488 $12,685 $— $(28,666)$25,507 $25,507 
 Opening
Balance		Total realized
and unrealized
gains (losses)
included in
Net income		IssuancesSettlementsClosing
Balance		Unrealized
gains (losses)
outstanding
Liabilities:      
Contingent consideration$31,481 $413 $— $(12,367)$19,527 $19,527 
Rate lock commitments2,977 5,471 — (2,977)5,471 5,471 
Forward sale contracts14,971 6,482 — (14,971)6,482 6,482 
Total $49,429 $12,366 $— $(30,315)$31,480 $31,480 
 
 As of December 31, 2020
 Opening
Balance		Total realized
and unrealized
gains (losses)
included in
Net income		IssuancesSettlementsClosing
Balance		Unrealized
gains (losses)
outstanding
Assets:      
Rate lock commitments$32,035 $21,034 $— $(32,035)$21,034 $21,034 
Forward sale contracts14,389 7,632 — (14,389)7,632 7,632 
Nasdaq Forwards26,502 (13,680)— — 12,822 12,822 
Total $72,926 $14,986 $— $(46,424)$41,488 $41,488 
 Opening
Balance		Total realized
and unrealized
gains (losses)
included in
Net income		IssuancesSettlementsClosing
Balance		Unrealized
gains (losses)
outstanding
Liabilities:      
Contingent consideration$45,172 $(11,063)$2,221 $(4,849)$31,481 $(408)
Rate lock commitments12,124 2,977 (12,124)2,977 2,977 
Forward sale contracts13,537 14,971 (13,537)14,971 14,971 
Total $70,833 $6,885 $2,221 $(30,510)$49,429 $17,540 
 
Quantitative Information About Level 3 Fair Value Measurements
The following tables present quantitative information about the significant unobservable inputs utilized by Newmark in the fair value measurement of Level 3 assets and liabilities measured at fair value on a recurring basis:
March 31, 2021
Level 3 assets and liabilitiesAssetsLiabilitiesSignificant Unobservable
Inputs		RangeWeighted
Average
Accounts payable, accrued expenses and other liabilities:
     
Contingent consideration$— $19,527 Discount rate
0.3% - 10.4%
(1)
9.5%
 Probability of meeting earnout and contingencies
0%- 99%
(1)
91.3%
 Financial forecast information
Derivative assets and liabilities:
Nasdaq Forwards$7,220 $— Implied volatility
42.9% - 42.9%
(2)
42.9%
Forward sale contracts$9,239 $6,482 Counterparty credit riskN/AN/A
Rate lock commitments$9,048 $5,471 Counterparty credit riskN/AN/A

December 31, 2020
Level 3 assets and liabilitiesAssetsLiabilitiesSignificant Unobservable
Inputs		RangeWeighted
Average
Accounts payable, accrued expenses and other liabilities:
     
Contingent consideration$— $31,481 Discount rate
0.3% - 10.4%
7.1%
 Probability of meeting earnout and contingencies
0% - 100%
(1)
93.9%
 Financial forecast information
Derivative assets and liabilities:
Nasdaq Forwards$12,822 $— Implied volatility
42.4% - 42.6%
(2)
42.5%
Forward sale contracts$7,632 $14,971 Counterparty credit riskN/AN/A
Rate lock commitments$21,034 $2,977 Counterparty credit riskN/AN/A
(1)Newmark’s estimate of contingent consideration as of March 31, 2021 and December 31, 2020 was based on the acquired business’ projected future financial performance, including revenues.
(2)The volatility of Newmark’s Nasdaq Forwards is primarily based on the volatility of the underlying Nasdaq stock price.

Valuation Processes - Level 3 Measurements
Both the rate lock commitments to borrowers and the forward sale contracts to investors are derivatives and, accordingly, are marked to fair value on the accompanying unaudited condensed consolidated statements of operations. The fair value of Newmark’s rate lock commitments to borrowers and loans held for sale and the related input levels includes, as applicable:
•The assumed gain loss of the expected loan sale to the investor, net of employee benefits;
•The expected net future cash flows associated with servicing the loan;
•The effects of interest rate movements between the date of the rate lock and the balance sheet date; and
•The nonperformance risk of both the counterparty and Newmark.
The fair value of Newmark’s forward sales contracts to investors considers effects of interest rate movements between the trade date and the balance sheet date. The market price changes are multiplied by the notional amount of the forward sales contracts to measure the fair value.

The fair value of Newmark’s rate lock commitments and forward sale contracts is adjusted to reflect the risk that the agreement will not be fulfilled. Newmark’s exposure to nonperformance in rate lock and forward sale contracts is represented by the contractual amount of those instruments. Given the credit quality of Newmark’s counterparties, the short duration of rate lock commitments and forward sales contracts, and Newmark’s historical experience with the agreements, management does not believe the risk of nonperformance by Newmark’s counterparties to be significant.
The Nasdaq Forwards are derivatives and, accordingly, are marked to fair value on the accompanying unaudited condensed consolidated statements of operations. The fair value of the Nasdaq Forwards are determined utilizing the following inputs, as applicable:
•The underlying number of shares and the related strike price;
•The maturity date; and
•The implied volatility of Nasdaq’s stock price.

The fair value of Newmark’s Nasdaq Forwards considers the effects of Nasdaq’s stock price volatility between the balance sheet date and the maturity date. The fair value is determined by the use of a Black-Scholes put option valuation model.

Information About Uncertainty of Level 3 Fair Value Measurements
The significant unobservable inputs used in the fair value of Newmark’s contingent consideration are the discount rate and forecasted financial information. Significant increases (decreases) in the discount rate would have resulted in a significantly lower (higher) fair value measurement. Significant increases (decreases) in the forecasted financial information would have resulted in a significantly higher (lower) fair value measurement. As of March 31, 2021 and December 31, 2020, the present value of expected payments related to Newmark’s contingent consideration was $19.5 million and $31.5 million, respectively (see Note 31 — “Commitments and Contingencies”). As of March 31, 2021 and December 31, 2020, the undiscounted value of the payments, assuming that all contingencies are met, would be $39.0 million and $51.3 million, respectively.

Fair Value Measurements on a Non-Recurring Basis
Equity investments carried under the measurement alternative are remeasured at fair value on a non-recurring basis to reflect observable transactions which occurred during the period. Newmark applied the measurement alternative to equity securities with the fair value of $24.2 million and $9.9 million, which were included in “Other assets” on the accompanying unaudited condensed consolidated balance sheets as of March 31, 2021 and December 31, 2020, respectively. These investments are classified within Level 2 in the fair value hierarchy, because their estimated fair value is based on valuation methods using the observable transaction price at the transaction date.