6.	Fair Value Measurements

Topic 820 of the FASB Accounting Standards Codification defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Topic 820 also establishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:

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Level 1 – Quoted prices in active markets for identical assets or liabilities.

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Level 2 – Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

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Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

There were no significant transfers in or out of Level 1 and Level 2 during the three months ended March 31, 2018 and 2017. There have been no significant changes to the valuation techniques and inputs used to develop the recurring fair value measurements from those disclosed in our 2017 Annual Report.

The following tables present the fair value of assets and liabilities measured at fair value on a recurring basis as of March 31, 2018 and December 31, 2017 (dollars in thousands):

	As of March 31, 2018
	Fair Value Measured and Recorded Using
	Level 1		Level 2		Level 3		Total
Assets
Available for sale debt securities:
U.S. treasury securities	$	4,520	$	—	$	—	$	4,520
Debt securities issued by U.S. federal agencies		—		7,652		—		7,652
Corporate debt securities		—		25,566		—		25,566
Asset-backed securities		—		3,206		—		3,206
Collateralized mortgage obligations		—		2,311		—		2,311
Total available for sale debt securities		4,520		38,735		—		43,255
Equity securities		136,871		—		—		136,871
Warehouse receivables		—		1,161,668		—		1,161,668
Total assets at fair value	$	141,391	$	1,200,403	$	—	$	1,341,794
Liabilities
Interest rate swaps	$	—	$	3,095	$	—	$	3,095
Securities sold, not yet purchased		3,491		—		—		3,491
Total liabilities at fair value	$	3,491	$	3,095	$	—	$	6,586

	As of December 31, 2017
	Fair Value Measured and Recorded Using
	Level 1		Level 2		Level 3		Total
Assets
Available for sale debt securities:
U.S. treasury securities	$	3,820	$	—	$	—	$	3,820
Debt securities issued by U.S. federal agencies		—		4,901		—		4,901
Corporate debt securities		—		20,023		—		20,023
Asset-backed securities		—		3,577		—		3,577
Collateralized mortgage obligations		—		2,366		—		2,366
Total available for sale debt securities		3,820		30,867		—		34,687
Equity securities		133,595		—		—		133,595
Warehouse receivables		—		928,038		—		928,038
Total assets at fair value	$	137,415	$	958,905	$	—	$	1,096,320
Liabilities
Interest rate swaps	$	—	$	4,766	$	—	$	4,766
Securities sold, not yet purchased		3,431		—		—		3,431
Foreign currency exchange forward contracts		—		55		—		55
Total liabilities at fair value	$	3,431	$	4,821	$	—	$	8,252

There were no significant non-recurring fair value measurements recorded during the three months ended March 31, 2018 and 2017.

FASB ASC Topic 825, “Financial Instruments” requires disclosure of fair value information about financial instruments, whether or not recognized in the accompanying consolidated balance sheets. Our financial instruments are as follows:

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Cash and Cash Equivalents and Restricted Cash – These balances include cash and cash equivalents as well as restricted cash with maturities of less than three months. The carrying amount approximates fair value due to the short-term maturities of these instruments.

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Receivables, less Allowance for Doubtful Accounts – Due to their short-term nature, fair value approximates carrying value.

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Warehouse Receivables – These balances are carried at fair value based on market prices at the balance sheet date.

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Debt & Equity Securities – These investments are carried at their fair value.

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Foreign Currency Exchange Forward Contracts – These assets and liabilities are carried at their fair value as calculated by using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative.

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Securities Sold, not yet Purchased – These liabilities are carried at their fair value.

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Short-Term Borrowings – The majority of this balance represents outstanding amounts under our warehouse lines of credit of our wholly-owned subsidiary, CBRE Capital Markets, and our revolving credit facility. Due to the short-term nature and variable interest rates of these instruments, fair value approximates carrying value (see Notes 4 and 8).

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Senior Term Loans – Based upon information from third-party banks (which falls within Level 2 of the fair value hierarchy), the estimated fair value of our senior term loans was approximately $750.5 million at March 31, 2018 and $199.9 million at December 31, 2017. Their actual carrying value, net of unamortized debt issuance costs, totaled $743.5 million and $193.5 million at March 31, 2018 and December 31, 2017, respectively (see Note 8).

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Interest Rate Swaps – These liabilities are carried at their fair value as calculated by using widely-accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative.

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Senior Notes – Based on dealers’ quotes (which falls within Level 2 of the fair value hierarchy), the estimated fair values of our 4.875% senior notes and 5.25% senior notes were $633.0 million and $455.5 million, respectively, at March 31, 2018 and $645.7 million and $468.0 million, respectively, at December 31, 2017. The actual carrying value of our 4.875% senior notes and 5.25% senior notes, net of unamortized debt issuance costs as well as unamortized discount or premium, if applicable, totaled $592.2 million and $422.5 million, respectively, at March 31, 2018 and $592.0 million and $422.4 million, respectively, at December 31, 2017. In March 2018, we redeemed our 5.00% senior notes in full (see Note 8). At December 31, 2017, the estimated fair value (based on dealers’ quotes) and actual carrying value (net of unamortized debt issuance costs) of our 5.00% senior notes was $823.8 million and $791.7 million, respectively.