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Fair Value Measurements
 3 Months Ended
Mar. 31, 2025
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
FASB ASC Topic 820, “Fair Value Measurements and Disclosures,” (Topic 820) defines fair value as the price that would be received to sell an asset or paid to transfer a 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:
•Level 1 – Quoted prices in active markets for identical assets or liabilities.
•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.
•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 have been no significant changes to the valuation techniques and inputs used to develop the recurring fair value measurements from those disclosed in our 2024 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, 2025 and December 31, 2024 (dollars in millions):
As of March 31, 2025
Fair Value Measured and Recorded Using
Level 1Level 2Level 3Total
Assets
Available for sale debt securities:
U.S. treasury securities$3 $— $— $3 
Corporate debt securities— 34 — 34 
Asset-backed securities— 7 — 7 
Total available for sale debt securities3 41 — 44 
Equity securities17 — — 17 
Investments in unconsolidated subsidiaries122 14 24 160 
Warehouse receivables— 1,192 — 1,192 
Derivative assets— 28 — 28 
Total assets at fair value$142 $1,275 $24 $1,441 
Liabilities
Contingent consideration— — 26 26 
Derivative liabilities— 23 — 23 
Total liabilities at fair value$— $23 $26 $49 
As of December 31, 2024
Fair Value Measured and Recorded Using
Level 1Level 2Level 3Total
Assets
Available for sale debt securities:
U.S. treasury securities$3 $— $— $3 
Corporate debt securities— 33 — 33 
Asset-backed securities— 7 — 7 
Total available for sale debt securities3 40 — 43 
Equity securities18 — — 18 
Investments in unconsolidated subsidiaries100 — 412 512 
Warehouse receivables— 561 — 561 
Derivative assets— 43 — 43 
Other assets— — 46 46 
Total assets at fair value$121 $644 $458 $1,223 
Liabilities
Contingent consideration— — 36 36 
Total liabilities at fair value$— $— $36 $36 
Fair value measurements for our available for sale debt securities are obtained from independent pricing services which utilize observable market data that may include quoted market prices, dealer quotes, market spreads, cash flows, the U.S. treasury yield curve, trading levels, market consensus prepayment speeds, credit information and the instrument’s terms and conditions.
The equity securities are generally valued at the last reported sales price on the day of valuation or, if no sales occurred on the valuation date, at the mean of the bid and ask prices on such date. The above tables do not include $148 million related to capital investments as of both March 31, 2025 and December 31, 2024, respectively, in certain non-public entities as they are non-marketable equity investments accounted for under the measurement alternative, defined as cost minus impairment. These investments are included in “Other assets, net” in the accompanying consolidated balance sheets.
The fair values of the warehouse receivables are primarily calculated based on locked-in purchase prices. At March 31, 2025 and December 31, 2024, all of the warehouse receivables included in the accompanying consolidated balance sheets were either under commitment to be purchased by Freddie Mac or had confirmed forward trade commitments for the issuance and purchase of Fannie Mae or Ginnie Mae mortgage backed securities that will be secured by the underlying loans (see Note 4 – Warehouse Receivables & Warehouse Lines of Credit). These assets are classified as Level 2 in the fair value hierarchy as a substantial majority of inputs are readily observable.
As of March 31, 2025 and December 31, 2024, investments in unconsolidated subsidiaries at fair value using NAV were $405 million and $378 million, respectively, and investments at fair value using NAV which are not accounted for under the equity method were $21 million as of both March 31, 2025 and December 31, 2024, respectively. These investments fall under practical expedient rules that do not require them to be included in the fair value hierarchy and as a result have been excluded from the tables above.
The tables below present a reconciliation for assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) (dollars in millions):
Investment in Unconsolidated SubsidiariesOther AssetsContingent Consideration
Balance as of December 31, 2024$412 $46 $36 
Transfer in (out)(14)— (2)
Net change in fair value(1)— (8)
Purchases / Additions— — — 
Sales / Payments (1)
(373)(46)— 
Balance as of March 31, 2025$24 $— $26 
________________________________________________________________________________________________________________________________________
(1)As disclosed in Note 3 – Acquisitions, on January 16, 2025, we acquired the remaining 60% ownership interest in Industrious.
Net change in fair value, included in the table above, is reported in Net income as follows:
Category of Assets/Liabilities using Unobservable Inputs
Consolidated Financial Statements
Investments in unconsolidated subsidiariesEquity income (loss) from unconsolidated subsidiaries
Other assets (liabilities)Other income
Contingent consideration (short-term)
Accounts payable and accrued expenses
Contingent consideration (long-term)
Other liabilities
There were no asset impairment charges or other significant non-recurring fair value measurement adjustments recorded during the three months ended March 31, 2025 and 2024.
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:
•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.
•Receivables, less Allowance for Doubtful Accounts – Due to their short-term nature, fair value approximates carrying value.
•Warehouse Receivables – These balances are carried at fair value. The primary source of value is either a contractual purchase commitment from Freddie Mac or a confirmed forward trade commitment for the issuance and purchase of a Fannie Mae or Ginnie Mae MBS (see Note 4 – Warehouse Receivables & Warehouse Lines of Credit).
•Investments in Unconsolidated Subsidiaries – A portion of these investments are carried at fair value as discussed above. It includes our equity investment and related interests in both public and non-public entities. Our ownership of common shares in Altus Power, Inc. (Altus) is considered Level 1 and is measured at fair value using a quoted price in an active market. Certain non-controlling equity investments are considered Level 3. The valuation of Altus’ common shares and alignment shares is dependent on Altus’ public stock price, which can be volatile and subject to wide fluctuations in response to various market conditions. As of March 31, 2025, transfer out activities from Level 3 represents the reclassification of our alignment shares in Altus from Level 3 to Level 2. On April 16, 2025, Altus was acquired by a third-party. As a result, the value ascribed to these shares at March 31, 2025 was based on the per share acquisition price and classified as Level 2 (see Note 8 – Investments in Unconsolidated Subsidiaries).
•Available for Sale Debt Securities – Primarily held by our wholly-owned captive insurance company, these investments are carried at their fair value.
•Equity Securities – Primarily held by our wholly-owned captive insurance company, these investments are carried at their fair value.
•Other Assets and Liabilities – Includes the fair value of the unfunded commitment related to a revolving facility designated as Level 3. Valuations are based on discounted cash flow techniques, for which the significant inputs are the amount and timing of expected future cash flows, market comparables and recovery assumptions.
•Derivative assets and liabilities – The fair value of cross-currency swaps reflects the net present value of expected payments and receipts under the swap agreement based on the market’s expectation of future spot foreign currency exchange rates. Additional inputs to the net present value calculation may include the contract terms, counterparty credit risk and discount rates. These are designated as Level 2.
•Contingent Consideration – The fair values of contingent consideration related to business acquisitions are estimated using Monte Carlo simulations or the probability-weighted present value of estimated future payments resulting from the achievement levels of financial targets.
•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, our commercial paper program, and our revolving credit facilities. Due to the short-term nature and/or variable interest rates of these instruments, fair value approximates carrying value (see Note 4 – Warehouse Receivables & Warehouse Lines of Credit and Note 9 – Long-Term Debt and Short-Term Borrowings).
•Senior Term Loans and Senior Notes – The table below presents the estimated fair value and actual carrying value of our long-term debt (net of unamortized discount and unamortized debt issuance costs) as of March 31, 2025 and December 31, 2024 (dollars in millions). The estimated fair value is determined based on dealers’ quotes (which falls within Level 2 of the fair value hierarchy). The actual carrying value is presented net of unamortized debt issuance costs and discount (see Note 9 – Long-Term Debt and Short-Term Borrowings).
Estimated Fair Value
Carrying Value
Financial instrument
March 31, 2025December 31, 2024March 31, 2025December 31, 2024
Senior term loans
$1,276 $708 $1,305 $718 
5.950% senior notes
1,046 1,033 976 976 
4.875% senior notes
600 600 599 599 
5.500% senior notes
513 509 496 496 
2.500% senior notes
436 426 492 492 
•Notes Payable on Real Estate – As of March 31, 2025 and December 31, 2024, the carrying value of our notes payable on real estate, net of unamortized debt issuance costs, was $208 million and $196 million, respectively. These borrowings have either fixed interest rates or floating interest rates at spreads added to a market index. Although it is possible that certain portions of our notes payable on real estate may have fair values that differ from their carrying values, based on the terms of such loans as compared to current market conditions, or other factors specific to the borrower entity, we do not believe that the fair value of our notes payable is significantly different than their carrying value.