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Investments in Unconsolidated Subsidiaries

12 Months Ended

Dec. 31, 2021

Equity Method Investments and Joint Ventures [Abstract]

Investments in Unconsolidated Subsidiaries

Investments in unconsolidated subsidiaries are accounted for under the equity method of accounting. Our investment ownership percentages in equity method investments vary, generally ranging up to 50.0%. The following table represents the composition of investment in unconsolidated subsidiaries (dollars in thousands):


	December 31,
Investment type	2021		2020
Real estate investments	$	453,813	$	340,248

Investment in Altus:
Class A common stock (22 million shares)	229,900		—
Alignment shares (1)	114,727		—
Private placement warrants (2)	23,741		—
Subtotal	$	368,368	$	—

Other (3)	$	373,907	$	112,117

Total investment in unconsolidated subsidiaries	$	1,196,088	$	452,365

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(1)The alignment shares, also known as Class B common shares, will automatically convert into Altus Class A common shares based on the achievement of certain total return thresholds on Altus Class A common shares as of the relevant measurement date over the seven fiscal years following the merger.

(2)These warrants entitle us to purchase one share of Altus Class A common stock at $11.00 per share, subject to adjustment.

(3)Consists of our investments in Industrious and other non-public entities.

Combined condensed financial information for the entities accounted for using the equity method is as follows (dollars in thousands):


	December 31,
	2021		2020
Combined Condensed Balance Sheets Information:
Current assets	$	7,127,598	$	6,508,718
Non-current assets	30,586,991		24,343,229
Total assets	$	37,714,589	$	30,851,947

Current liabilities	$	3,128,205	$	3,164,135
Non-current liabilities	8,875,779		6,696,352
Total liabilities	$	12,003,984	$	9,860,487

Non-controlling interests	$	588,067	$	460,904


	Year Ended December 31,
	2021		2020		2019
Combined Condensed Statements of Operations Information:
Revenue	$	2,680,675	$	2,036,818	$	1,545,424
Operating income	1,371,014		587,689		549,111
Net income (1)	3,260,051		483,224		419,966

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(1)Included in net income are realized and unrealized earnings and losses in investments in unconsolidated investment funds and realized earnings and losses from sales of real estate projects in investments in unconsolidated subsidiaries. These realized and unrealized earnings and losses are not included in revenue and operating income.

Our Real Estate Investments segment invests our own capital in certain real estate investments with clients. We provided investment management, property management, brokerage and other professional services in connection with these real estate investments and earned revenues from these unconsolidated subsidiaries of $213.5 million, $145.9 million and $97.0 million during the years ended December 31, 2021, 2020 and 2019, respectively.

During 2021 and 2020, the company contributed cash and certain assets of Hana for a 40% non-controlling interest in Industrious. This equity investment is marked to fair value on a quarterly basis using a discounted cash flow approach.

During the fourth quarter of 2021, CBRE Acquisition Holdings, Inc., ceased to be a consolidated subsidiary of the company, closed its merger with Altus, with Altus being the surviving public entity. As a result, CBRE Acquisition Holdings ceased to be a consolidated subsidiary of the company. Upon the merger, we obtained a 14.3% ownership interest in Altus Class A common shares as of December 31, 2021, along with interests in Altus alignment shares and private placement warrants, and recorded a gain of $187.5 million as “Other income” in the accompanying consolidated statements of operations. The retained investment is accounted for as an equity investment for which we have elected the fair value option.