cbre-20210630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2021


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from _______________ to _______________

Commission File Number

001-32205

___________________________________________________________

CBRE GROUP, INC.

(Exact name of registrant as specified in its charter)

___________________________________________________________


Delaware		94-3391143
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)
2100 McKinney Avenue, Suite 1250
Dallas, Texas		75201
(Address of principal executive offices)		(Zip Code)
	(214) 979-6100
	(Registrant's telephone number, including area code)

_____________________________________________________________________________________

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, $0.01 par value per share	“CBRE”	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of Class A common stock outstanding at July 23, 2021 was 335,736,404.

Table of contents

FORM 10-Q

June 30, 2021

TABLE OF CONTENTS


PART I – FINANCIAL INFORMATION		Page

Item 1.	Financial Statements (Unaudited)

	Consolidated Balance Sheets at June 30, 2021 and December 31, 2020	1

	Consolidated Statements of Operations for the three and six months ended June 30, 2021 and 2020	2

	Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2021 and 2020	3

	Consolidated Statements of Cash Flows for the six months ended June 30, 2021 and 2020	4

	Consolidated Statements of Equity for the three and six months ended June 30, 2021 and 2020	6

	Notes to Consolidated Financial Statements	8

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	27

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	49

Item 4.	Controls and Procedures	50

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	51

Item 1A.	Risk Factors	51

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	51

Item 5 .	Other Information	51

Item 6.	Exhibits	53

Signatures		54

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PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

CBRE GROUP, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(Dollars in thousands, except share data)


	June 30, 2021		December 31, 2020
ASSETS
Current Assets:
Cash and cash equivalents	$	2,142,820	$	1,896,188
Restricted cash	113,989		143,059
Receivables, less allowance for doubtful accounts of $95,184 and $95,533 at June 30, 2021 and December 31, 2020, respectively	4,426,189		4,394,954
Warehouse receivables	1,117,677		1,411,170
Prepaid expenses	327,562		294,992
Contract assets	322,889		318,191
Income taxes receivable	114,417		93,756
Other current assets	321,346		293,321
Total Current Assets	8,886,889		8,845,631
Property and equipment, net	741,946		815,009
Goodwill	3,892,134		3,821,609
Other intangible assets, net of accumulated amortization of $1,656,750 and $1,556,537 at June 30, 2021 and December 31, 2020, respectively	1,345,143		1,367,913
Operating lease assets	1,001,608		1,020,352
Investments in unconsolidated subsidiaries (with $361,143 and $116,314 at fair value at June 30, 2021 and December 31, 2020, respectively)	747,608		452,365
Non-current contract assets	138,025		153,636
Real estate under development	308,431		277,630
Non-current income taxes receivable	19,287		43,555
Deferred tax assets, net	93,337		91,529
Investments held in trust - special purpose acquisition company	402,511		402,501
Other assets, net	881,433		747,413
Total Assets	$	18,458,352	$	18,039,143
LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable and accrued expenses	$	2,485,081	$	2,692,939
Compensation and employee benefits payable	1,269,837		1,287,383
Accrued bonus and profit sharing	877,204		1,183,786
Operating lease liabilities	216,879		208,526
Contract liabilities	197,402		162,045
Income taxes payable	109,586		57,892
Warehouse lines of credit (which fund loans that U.S. Government Sponsored Enterprises have committed to purchase)	1,102,156		1,383,964
Other short-term borrowings	5,561		5,330
Current maturities of long-term debt	1,181		1,514
Other current liabilities	133,094		160,604
Total Current Liabilities	6,397,981		7,143,983
Long-term debt, net of current maturities	1,854,327		1,380,202
Non-current operating lease liabilities	1,071,499		1,116,795
Non-current tax liabilities	99,807		87,954
Non-current income taxes payable	54,761		54,761
Deferred tax liabilities, net	145,928		124,485
Other liabilities	710,862		625,303
Total Liabilities	10,335,165		10,533,483
Commitments and contingencies	—		—
Non-controlling interest subject to possible redemption - special purpose acquisition company	402,511		385,573
Equity:
CBRE Group, Inc. Stockholders’ Equity:
Class A common stock; $0.01 par value; 525,000,000 shares authorized; 335,706,818 and 335,561,345 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively	3,357		3,356
Additional paid-in capital	1,001,832		1,074,639
Accumulated earnings	7,238,896		6,530,057
Accumulated other comprehensive loss	(564,564)		(529,726)
Total CBRE Group, Inc. Stockholders’ Equity	7,679,521		7,078,326
Non-controlling interests	41,155		41,761
Total Equity	7,720,676		7,120,087
Total Liabilities and Equity	$	18,458,352	$	18,039,143

The accompanying notes are an integral part of these consolidated financial statements.

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CBRE GROUP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(Dollars in thousands, except share and per share data)


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Revenue	$	6,458,613	$	5,381,384	$	12,397,492	$	11,270,552
Costs and expenses:
Cost of revenue	5,016,759		4,399,537		9,736,305		9,112,211
Operating, administrative and other	957,216		770,806		1,785,543		1,560,872
Depreciation and amortization	119,085		116,384		241,163		230,178
Asset impairments	—		—		—		75,171
Total costs and expenses	6,093,060		5,286,727		11,763,011		10,978,432
Gain (loss) on disposition of real estate	929		(492)		1,085		22,335
Operating income	366,482		94,165		635,566		314,455
Equity income from unconsolidated subsidiaries	212,132		19,480		295,726		40,111
Other income	12,045		5,220		14,777		5,027
Interest expense, net of interest income	13,772		17,950		23,878		33,966

Income before provision for income taxes	576,887		100,915		922,191		325,627
Provision for income taxes	133,445		18,803		209,772		69,985
Net income	443,442		82,112		712,419		255,642
Less: Net income attributable to non-controlling interests	805		215		3,580		1,550
Net income attributable to CBRE Group, Inc.	$	442,637	$	81,897	$	708,839	$	254,092
Basic income per share:
Net income per share attributable to CBRE Group, Inc.	$	1.32	$	0.24	$	2.11	$	0.76
Weighted average shares outstanding for basic income per share	335,643,233		335,126,126		335,751,530		335,048,115
Diluted income per share:
Net income per share attributable to CBRE Group, Inc.	$	1.30	$	0.24	$	2.09	$	0.75
Weighted average shares outstanding for diluted income per share	339,502,871		337,361,419		339,541,354		338,549,805

The accompanying notes are an integral part of these consolidated financial statements.

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CBRE GROUP, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(Dollars in thousands)


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Net income	$	443,442	$	82,112	$	712,419	$	255,642
Other comprehensive income (loss):
Foreign currency translation gain (loss)	18,402		25,936		(33,944)		(146,438)
Amounts reclassified from accumulated other comprehensive loss to interest expense, net of tax	107		100		214		214

Unrealized holding (losses) gains on available for sale debt securities, net of tax	(508)		(409)		(1,186)		500
Other, net	—		(13,045)		—		(13,045)
Total other comprehensive income (loss)	18,001		12,582		(34,916)		(158,769)
Comprehensive income	461,443		94,694		677,503		96,873
Less: Comprehensive income attributable to non-controlling interests	835		275		3,502		1,550
Comprehensive income attributable to CBRE Group, Inc.	$	460,608	$	94,419	$	674,001	$	95,323

The accompanying notes are an integral part of these consolidated financial statements.

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CBRE GROUP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollars in thousands)


	Six Months Ended June 30,
	2021		2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	712,419	$	255,642
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	241,163		230,178
Amortization of financing costs	3,317		3,082
Gains related to mortgage servicing rights, premiums on loan sales and sales of other assets	(132,004)		(105,697)
Asset impairments	—		75,171
Net realized and unrealized gains, primarily from investments	(14,777)		(5,027)
Provision for doubtful accounts	12,789		29,923
Net compensation expense for equity awards	85,233		19,704
Equity income from unconsolidated subsidiaries	(295,726)		(40,111)
Distribution of earnings from unconsolidated subsidiaries	232,627		52,664
Proceeds from sale of mortgage loans	7,902,512		7,421,127
Origination of mortgage loans	(7,578,056)		(7,162,747)
Decrease in warehouse lines of credit	(281,808)		(223,281)
Tenant concessions received	12,874		23,384
Purchase of equity securities	(3,896)		(6,627)
Proceeds from sale of equity securities	5,488		8,909
(Increase) decrease in real estate under development	(27,894)		701
(Increase) decrease in receivables, prepaid expenses and other assets (including contract and lease assets)	(100,368)		276,065
Decrease in accounts payable and accrued expenses and other liabilities (including contract and lease liabilities)	(275,591)		(112,173)
Decrease in compensation and employee benefits payable and accrued bonus and profit sharing	(359,365)		(816,621)
Decrease in net income taxes receivable/payable	83,325		125,361
Other operating activities, net	4,856		(25,473)
Net cash provided by operating activities	227,118		24,154
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(75,944)		(134,149)
Acquisition of businesses, including net assets acquired, intangibles and goodwill, net of cash acquired	(57,920)		(25,911)
Contributions to unconsolidated subsidiaries	(245,714)		(51,168)
Distributions from unconsolidated subsidiaries	36,207		63,972
Other investing activities, net	(1,120)		11,314
Net cash used in investing activities	(344,491)		(135,942)

The accompanying notes are an integral part of these consolidated financial statements.

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CBRE GROUP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(Unaudited)

(Dollars in thousands)


	Six Months Ended June 30,
	2021		2020
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from revolving credit facility	—		835,671
Repayment of revolving credit facility	—		(384,671)
Proceeds from notes payable on real estate	48,548		22,705
Proceeds from issuance of 2.500% senior notes	492,255		—
Repurchase of common stock	(88,275)		(50,028)
Acquisition of businesses (cash paid for acquisitions more than three months after purchase date)	(3,421)		(6,839)
Units repurchased for payment of taxes on equity awards	(36,275)		(37,358)
Non-controlling interest contributions	527		1,428
Non-controlling interest distributions	(3,377)		(1,092)
Other financing activities, net	(30,958)		(20,944)
Net cash provided by financing activities	379,024		358,872
Effect of currency exchange rate changes on cash and cash equivalents and restricted cash	(44,089)		(27,095)
NET INCREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH	217,562		219,989
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, AT BEGINNING OF PERIOD	2,039,247		1,093,745
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, AT END OF PERIOD	$	2,256,809	$	1,313,734
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest	$	16,212	$	31,145
Income tax payments (refunds), net	$	131,156	$	(53,829)

The accompanying notes are an integral part of these consolidated financial statements.

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CBRE GROUP, INC.

CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)

(Dollars in thousands)


	CBRE Group, Inc. Stockholders'
	Class A common stock		Additional paid-in capital		Accumulated earnings		Accumulated other comprehensive loss		Non- controlling interests		Total
Balance at March 31, 2021	$	3,359	$	1,013,287	$	6,796,259	$	(582,535)	$	41,014	$	7,271,384
Net income	—		—		442,637		—		805		443,442
Net compensation expense for equity awards	—		49,447		—		—		—		49,447
Units repurchased for payment of taxes on equity awards	—		(1,392)		—		—		—		(1,392)
Repurchase of common stock	(3)		(24,130)		—		—		—		(24,133)
Foreign currency translation gain	—		—		—		18,372		30		18,402
Amounts reclassified from accumulated other comprehensive loss to interest expense, net of tax	—		—		—		107		—		107
Unrealized holding losses on available for sale debt securities, net of tax	—		—		—		(508)		—		(508)
Contributions from non-controlling interests	—		—		—		—		455		455
Distributions to non-controlling interests	—		—		—		—		(725)		(725)
Other	1		(35,380)		—		—		(424)		(35,803)
Balance at June 30, 2021	$	3,357	$	1,001,832	$	7,238,896	$	(564,564)	$	41,155	$	7,720,676


	CBRE Group, Inc. Stockholders'
	Class A common stock		Additional paid-in capital		Accumulated earnings		Accumulated other comprehensive loss		Non- controlling interests		Total
Balance at March 31, 2020	$	3,351	$	1,026,768	$	5,950,263	$	(851,039)	$	40,204	$	6,169,547
Net income	—		—		81,897		—		215		82,112
Net compensation expense for equity awards	—		20,943		—		—		—		20,943
Units repurchased for payment of taxes on equity awards	—		(485)		—		—		—		(485)

Foreign currency translation gain	—		—		—		25,876		60		25,936
Amounts reclassified from accumulated other comprehensive loss to interest expense, net of tax	—		—		—		100		—		100

Unrealized holding losses on available for sale debt securities, net of tax	—		—		—		(409)		—		(409)
Contributions from non-controlling interests	—		—		—		—		806		806
Distributions to non-controlling interests	—		—		—		—		(595)		(595)

Other	1		(227)		—		(13,045)		367		(12,904)
Balance at June 30, 2020	$	3,352	$	1,046,999	$	6,032,160	$	(838,517)	$	41,057	$	6,285,051

The accompanying notes are an integral part of these consolidated financial statements.

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CBRE GROUP, INC.

CONSOLIDATED STATEMENTS OF EQUITY (Continued)

(Unaudited)

(Dollars in thousands)


	CBRE Group, Inc. Stockholders'
	Class A common stock		Additional paid-in capital		Accumulated earnings		Accumulated other comprehensive loss		Non- controlling interests		Total
Balance at December 31, 2020	$	3,356	$	1,074,639	$	6,530,057	$	(529,726)	$	41,761	$	7,120,087
Net income	—		—		708,839		—		3,580		712,419
Net compensation expense for equity awards	—		85,233		—		—		—		85,233
Units repurchased for payment of taxes on equity awards	—		(36,275)		—		—		—		(36,275)
Repurchase of common stock	(11)		(88,264)		—		—		—		(88,275)
Foreign currency translation loss	—		—		—		(33,866)		(78)		(33,944)
Amounts reclassified from accumulated other comprehensive loss to interest expense, net of tax	—		—		—		214		—		214
Unrealized holding losses on available for sale debt securities, net of tax	—		—		—		(1,186)		—		(1,186)
Contributions from non-controlling interests	—		—		—		—		527		527
Distributions to non-controlling interests	—		—		—		—		(3,377)		(3,377)
Other	12		(33,501)		—		—		(1,258)		(34,747)
Balance at June 30, 2021	$	3,357	$	1,001,832	$	7,238,896	$	(564,564)	$	41,155	$	7,720,676


	CBRE Group, Inc. Stockholders'
	Class A common stock		Additional paid-in capital		Accumulated earnings		Accumulated other comprehensive loss		Non- controlling interests		Total
Balance at December 31, 2019	$	3,348	$	1,115,944	$	5,793,149	$	(679,748)	$	40,419	$	6,273,112
Net income	—		—		254,092		—		1,550		255,642
Net compensation expense for equity awards	—		19,704		—		—		—		19,704
Units repurchased for payment of taxes on equity awards	—		(37,358)		—		—		—		(37,358)
Repurchase of common stock	(11)		(50,017)		—		—		—		(50,028)
Foreign currency translation loss	—		—		—		(146,438)		—		(146,438)
Amounts reclassified from accumulated other comprehensive loss to interest expense, net of tax	—		—		—		214		—		214

Unrealized holding gains on available for sale debt securities, net of tax	—		—		—		500		—		500
Contributions from non-controlling interests	—		—		—		—		1,428		1,428
Distributions to non-controlling interests	—		—		—		—		(1,092)		(1,092)

Other	15		(1,274)		(15,081)		(13,045)		(1,248)		(30,633)
Balance at June 30, 2020	$	3,352	$	1,046,999	$	6,032,160	$	(838,517)	$	41,057	$	6,285,051

The accompanying notes are an integral part of these consolidated financial statements.

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CBRE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Basis of Presentation

Readers of this Quarterly Report on Form 10-Q (Quarterly Report) should refer to the audited financial statements and notes to consolidated financial statements of CBRE Group, Inc., a Delaware corporation (which may be referred to in these financial statements as “the company,” “we,” “us” and “our”), for the year ended December 31, 2020, which are included in our 2020 Annual Report on Form 10-K (2020 Annual Report), filed with the United States Securities and Exchange Commission (SEC) and also available on our website (www.cbre.com), since we have omitted from this Quarterly Report certain footnote disclosures which would substantially duplicate those contained in such audited financial statements. You should also refer to Note 2, Significant Accounting Policies, in the notes to consolidated financial statements in our 2020 Annual Report for further discussion of our significant accounting policies and estimates.

Considerations Related to the Covid-19 Pandemic

The Covid-19 pandemic has primarily impacted the property sales and leasing lines of business in the Advisory Services segment. Many property owners and occupiers put transactions on hold and withdrew existing mandates, sharply reducing sales and leasing volumes. The effects of Covid-19 have eased in parts of the world where progress has been made with vaccine distribution and global economic conditions have improved. Nevertheless Covid-19 continues to pose public health challenges that impact our operations, particularly as new strains emerge and spread and vaccine administration is slow in parts of the world. As of the date of this Quarterly Report, the majority of workers remain out of their offices and occupier confidence in making long-term office leasing decisions has not returned to pre-pandemic levels.

See Note 5 (Fair Value Measurements) and Note 10 (Commitments and Contingencies) for further discussion of Covid-19 considerations.

Financial Statement Preparation

The accompanying consolidated financial statements have been prepared in accordance with the rules applicable to quarterly reports on Form 10-Q and include all information and footnotes required for interim financial statement presentation, but do not include all disclosures required under accounting principles generally accepted in the United States (U.S.), or GAAP, for annual financial statements. In our opinion, all adjustments (consisting of normal recurring adjustments, except as otherwise noted) considered necessary for a fair presentation have been included. The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions about future events, including the impact Covid-19 may have on our business. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported and reported amounts of revenue and expenses. Such estimates include the value of goodwill, intangibles and other long-lived assets, real estate assets, accounts receivable, contract assets, operating lease assets, investments in unconsolidated subsidiaries and assumptions used in the calculation of income taxes, retirement and other post-employment benefits, among others. These estimates and assumptions are based on our best judgment. We evaluate our estimates and assumptions on an ongoing basis using historical experience and other factors, including consideration of the current economic environment, and adjust such estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Changes in these estimates resulting from continuing changes in the economic environment will be reflected in the financial statements in future periods.

Certain reclassifications have been made to the 2020 financial statements to conform with the 2021 presentation.

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CBRE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

2. New Accounting Pronouncements

Recent Accounting Pronouncements Pending Adoption

In March 2020 and January 2021, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” and ASU 2021-01, “Reference Rate Reform: Scope,” respectively. Together, the ASUs provide temporary optional expedients and exceptions to the U.S. GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. This guidance is effective for a limited time for all entities through December 31, 2022. We are evaluating the effect that this guidance will have on our consolidated financial statements and related disclosures.

3. Warehouse Receivables & Warehouse Lines of Credit

Our wholly-owned subsidiary CBRE Capital Markets, Inc. (CBRE Capital Markets) is a Federal Home Loan Mortgage Corporation (Freddie Mac) approved Multifamily Program Plus Seller/Servicer and an approved Federal National Mortgage Association (Fannie Mae) Aggregation and Negotiated Transaction Seller/Servicer. In addition, CBRE Capital Markets’ wholly-owned subsidiary CBRE Multifamily Capital, Inc. (CBRE MCI) is an approved Fannie Mae Delegated Underwriting and Servicing (DUS) Seller/Servicer and CBRE Capital Markets’ wholly-owned subsidiary CBRE HMF, Inc. (CBRE HMF) is a U.S. Department of Housing and Urban Development (HUD) approved Non-Supervised Federal Housing Authority (FHA) Title II Mortgagee, an approved Multifamily Accelerated Processing (MAP) lender and an approved Government National Mortgage Association (Ginnie Mae) issuer of mortgage-backed securities (MBS). Under these arrangements, before loans are originated through proceeds from warehouse lines of credit, we obtain either a contractual loan purchase commitment from either Freddie Mac or Fannie Mae or a confirmed forward trade commitment for the issuance and purchase of a Fannie Mae or Ginnie Mae MBS that will be secured by the loans. The warehouse lines of credit are generally repaid within a one-month period when Freddie Mac or Fannie Mae buys the loans or upon settlement of the Fannie Mae or Ginnie Mae MBS, while we retain the servicing rights. Loans are funded at the prevailing market rates. We elect the fair value option for all warehouse receivables. At June 30, 2021 and December 31, 2020, 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.

A rollforward of our warehouse receivables is as follows (dollars in thousands):


Beginning balance at December 31, 2020	$	1,411,170
Origination of mortgage loans	7,578,056
Gains (premiums on loan sales)	41,855
Proceeds from sale of mortgage loans:
Sale of mortgage loans	(7,860,657)
Cash collections of premiums on loan sales	(41,855)
Proceeds from sale of mortgage loans	(7,902,512)
Net decrease in mortgage servicing rights included in warehouse receivables	(10,892)
Ending balance at June 30, 2021	$	1,117,677

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CBRE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

The following table is a summary of our warehouse lines of credit in place as of June 30, 2021 and December 31, 2020 (dollars in thousands):


			June 30, 2021				December 31, 2020
Lender	Current Maturity	Pricing	Maximum Facility Size		Carrying Value		Maximum Facility Size		Carrying Value
JP Morgan Chase Bank, N.A. (JP Morgan) (1)	10/18/2021	daily floating rate LIBOR plus 1.60%	$	985,000	$	719,747	$	1,585,000	$	561,726
JP Morgan	10/18/2021	daily floating rate LIBOR plus 2.75%	15,000		—		15,000		—
Fannie Mae Multifamily As Soon As Pooled Plus Agreement and Multifamily As Soon As Pooled Sale Agreement (ASAP) Program (5)	Cancelable anytime	daily one-month LIBOR plus 1.45%, with a LIBOR floor of 0.25%	650,000		29,739		450,000		132,692
TD Bank, N.A. (TD Bank) (2)	7/15/2022	daily floating rate LIBOR plus 1.30%	800,000		87,916		800,000		401,849
Bank of America, N.A. (BofA) (3)	5/25/2022	daily floating rate LIBOR plus 1.30%, with a LIBOR floor of 0.30%	350,000		138,866		350,000		175,862
BofA (6)	5/25/2022	daily floating rate LIBOR plus 1.30%, with a LIBOR floor of 0.30%	250,000		—		—		—
MUFG Union Bank, N.A. (Union Bank) (4)	7/28/2021	daily floating rate LIBOR plus 1.50% with a LIBOR floor of 0.25%	200,000		125,888		300,000		111,835
			$	3,250,000	$	1,102,156	$	3,500,000	$	1,383,964

_______________________________

(1)Effective October 19, 2020, this facility was amended and the maximum facility size was temporarily increased to $1,585.0 million, and reverted back to $985.0 million on January 18, 2021.

(2)Effective July 1, 2020, this facility was amended and provides for a maximum aggregate principal amount of $400.0 million, in addition to an uncommitted $400.0 million temporary line of credit. Effective June 28, 2021, this facility was renewed with a revised interest rate of daily floating rate LIBOR plus 1.30% and a maturity date of July 15, 2022. As of June 30, 2021, the uncommitted $400.0 million temporary line of credit was not utilized.

(3)The total commitment amount of $350.0 million includes a separate sublimit borrowing in the amount of $100.0 million, which can be utilized for specific purposes as defined within the agreement. Effective June 30, 2021, this facility was renewed with a revised interest rate of daily floating LIBOR plus 1.30% and a maturity date of May 25, 2022. The sublimit is subject to an interest rate of daily floating LIBOR plus 1.30%, with a LIBOR floor of 0.30%. As of June 30, 2021, the sublimit borrowing has not been utilized.

(4)On June 28, 2019, we added a new warehouse facility for $200.0 million that contains an accordion feature which allowed for temporary increases not to exceed an additional $150.0 million. If utilized, the additional borrowings must be in predefined multiples and are not to occur more than 3 times within 12 consecutive months. Effective August 4, 2020, this facility was amended and decreased the accordion feature from $150.0 million to $100.0 million, with no changes to the predefined borrowing multiples. On September 22, 2020, the temporary increase of $100.0 million was utilized and expired on January 20, 2021. Effective June 28, 2021, the facility maturity date was extended to July 28, 2021.

(5)Effective January 15, 2021, the maximum facility was temporarily increased to $650.0 million.

(6)Effective June 30, 2021, the advised consent line was renewed for $250.0 million of capacity with a revised interest rate of daily floating LIBOR plus 1.30%, with a LIBOR floor of 0.30%, and a maturity date of May 25, 2022.

During the six months ended June 30, 2021, we had a maximum of $2.1 billion of warehouse lines of credit principal outstanding.

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CBRE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

4. Variable Interest Entities (VIEs)

We hold variable interests in certain VIEs in our Real Estate Investments segment which are not consolidated as it was determined that we are not the primary beneficiary. Our involvement with these entities is in the form of equity co-investments and fee arrangements.

As of June 30, 2021 and December 31, 2020, our maximum exposure to loss related to VIEs which are not consolidated was as follows (dollars in thousands):


	June 30, 2021		December 31, 2020
Investments in unconsolidated subsidiaries	$	81,250	$	66,947
Other current assets	4,219		4,219
Co-investment commitments	80,133		47,957
Maximum exposure to loss	$	165,602	$	119,123

5. Fair Value Measurements

Topic 820 of the FASB ASC 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 2020 Annual Report.

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CBRE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

The following tables present the fair value of assets and liabilities measured at fair value on a recurring basis as of June 30, 2021 and December 31, 2020 (dollars in thousands):


	As of June 30, 2021
	Fair Value Measured and Recorded Using
	Level 1		Level 2		Level 3		Total
Assets
Available for sale securities:
Debt securities:
U.S. treasury securities	$	7,094	$	—	$	—	$	7,094
Debt securities issued by U.S. federal agencies	—		8,689		—		8,689
Corporate debt securities	—		51,177		—		51,177
Asset-backed securities	—		3,778		—		3,778
Collateralized mortgage obligations	—		1,314		—		1,314
Total available for sale debt securities	7,094		64,958		—		72,052
Equity securities	45,395		—		—		45,395
Investments in unconsolidated subsidiaries	—		—		265,531		265,531
Warehouse receivables	—		1,117,677		—		1,117,677
Total assets at fair value	$	52,489	$	1,182,635	$	265,531	$	1,500,655