cbre-20210930

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 September 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 October 22, 2021 was 334,665,866.

Table of contents

FORM 10-Q

September 30, 2021

TABLE OF CONTENTS


PART I – FINANCIAL INFORMATION		Page

Item 1.	Financial Statements (Unaudited)

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

	Consolidated Statements of Operations for the three and nine months ended September 30, 2021 and 2020	2

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

	Consolidated Statements of Cash Flows for the nine months ended September 30, 2021 and 2020	4

	Consolidated Statements of Equity for the three and nine months ended September 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	28

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	50

Item 4.	Controls and Procedures	51

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	52

Item 1A.	Risk Factors	52

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	52

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)


	September 30, 2021		December 31, 2020
ASSETS
Current Assets:
Cash and cash equivalents	$	2,767,820	$	1,896,188
Restricted cash	108,302		143,059
Receivables, less allowance for doubtful accounts of $100,889 and $95,533 at September 30, 2021 and December 31, 2020, respectively	4,445,790		4,394,954
Warehouse receivables	1,409,038		1,411,170
Prepaid expenses	354,682		294,992
Contract assets	331,910		318,191
Income taxes receivable	182,338		93,756
Other current assets	475,548		293,321
Total Current Assets	10,075,428		8,845,631
Property and equipment, net of accumulated depreciation and amortization of $1,231,920 and $1,074,887 at September 30, 2021 and December 31, 2020, respectively	722,646		815,009
Goodwill	3,874,743		3,821,609
Other intangible assets, net of accumulated amortization of $1,696,577 and $1,556,537 at September 30, 2021 and December 31, 2020, respectively	1,345,646		1,367,913
Operating lease assets	973,335		1,020,352
Investments in unconsolidated subsidiaries (with $397,704 and $116,314 at fair value at September 30, 2021 and December 31, 2020, respectively)	845,621		452,365
Non-current contract assets	144,563		153,636
Real estate under development	396,285		277,630
Non-current income taxes receivable	27,415		43,555
Deferred tax assets, net	83,263		91,529
Investments held in trust - special purpose acquisition company	402,519		402,501
Other assets, net	838,896		747,413
Total Assets	$	19,730,360	$	18,039,143
LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable and accrued expenses	$	2,604,640	$	2,692,939
Compensation and employee benefits payable	1,466,004		1,287,383
Accrued bonus and profit sharing	1,182,150		1,183,786
Operating lease liabilities	228,421		208,526
Contract liabilities	195,145		162,045
Income taxes payable	174,522		57,892
Warehouse lines of credit (which fund loans that U.S. Government Sponsored Enterprises have committed to purchase)	1,383,772		1,383,964
Other short-term borrowings	5,311		5,330
Current maturities of long-term debt	—		1,514
Other current liabilities	195,589		160,604
Total Current Liabilities	7,435,554		7,143,983
Long-term debt, net of current maturities	1,843,849		1,380,202
Non-current operating lease liabilities	1,028,931		1,116,795
Non-current tax liabilities	122,603		87,954
Non-current income taxes payable	54,761		54,761
Deferred tax liabilities, net	156,197		124,485
Other liabilities	687,786		625,303
Total Liabilities	11,329,681		10,533,483
Commitments and contingencies	—		—
Non-controlling interest subject to possible redemption - special purpose acquisition company	402,519		385,573
Equity:
CBRE Group, Inc. Stockholders’ Equity:
Class A common stock; $0.01 par value; 525,000,000 shares authorized; 334,642,584 and 335,561,345 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively	3,346		3,356
Additional paid-in capital	938,784		1,074,639
Accumulated earnings	7,674,639		6,530,057
Accumulated other comprehensive loss	(654,176)		(529,726)
Total CBRE Group, Inc. Stockholders’ Equity	7,962,593		7,078,326
Non-controlling interests	35,567		41,761
Total Equity	7,998,160		7,120,087
Total Liabilities and Equity	$	19,730,360	$	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 September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Revenue	$	6,798,327	$	5,645,142	$	19,195,819	$	16,915,694
Costs and expenses:
Cost of revenue	5,258,947		4,564,579		14,995,252		13,676,790
Operating, administrative and other	1,025,681		794,227		2,811,224		2,355,099
Depreciation and amortization	122,564		127,725		363,727		357,903
Asset impairments	—		—		—		75,171
Total costs and expenses	6,407,192		5,486,531		18,170,203		16,464,963
Gain on disposition of real estate	18,530		52,797		19,615		75,132
Operating income	409,665		211,408		1,045,231		525,863
Equity income from unconsolidated subsidiaries	163,809		32,376		459,535		72,487
Other income	7,693		7,947		22,470		12,974
Interest expense, net of interest income	11,038		17,829		34,916		51,795

Income before provision for income taxes	570,129		233,902		1,492,320		559,529
Provision for income taxes	133,507		49,062		343,279		119,047
Net income	436,622		184,840		1,149,041		440,482
Less: Net income attributable to non-controlling interests	879		708		4,459		2,258
Net income attributable to CBRE Group, Inc.	$	435,743	$	184,132	$	1,144,582	$	438,224
Basic income per share:
Net income per share attributable to CBRE Group, Inc.	$	1.30	$	0.55	$	3.41	$	1.31
Weighted average shares outstanding for basic income per share	335,364,942		335,287,245		335,621,337		335,128,531
Diluted income per share:
Net income per share attributable to CBRE Group, Inc.	$	1.28	$	0.55	$	3.37	$	1.30
Weighted average shares outstanding for diluted income per share	340,337,159		337,665,848		339,805,292		338,255,859

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 September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Net income	$	436,622	$	184,840	$	1,149,041	$	440,482
Other comprehensive (loss) income:
Foreign currency translation (loss) gain	(90,244)		106,201		(124,188)		(40,237)
Amounts reclassified from accumulated other comprehensive loss to interest expense, net of tax	110		106		324		320

Unrealized holding gains (losses) on available for sale debt securities, net of tax	215		811		(971)		1,311
Other, net	105		—		105		(13,045)
Total other comprehensive (loss) income	(89,814)		107,118		(124,730)		(51,651)
Comprehensive income	346,808		291,958		1,024,311		388,831
Less: Comprehensive income attributable to non-controlling interests	677		708		4,179		2,258
Comprehensive income attributable to CBRE Group, Inc.	$	346,131	$	291,250	$	1,020,132	$	386,573

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)


	Nine Months Ended September 30,
	2021		2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	1,149,041	$	440,482
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	363,727		357,903
Amortization of financing costs	5,080		4,632
Gains related to mortgage servicing rights, premiums on loan sales and sales of other assets	(198,131)		(179,506)
Asset impairments	—		75,171
Net realized and unrealized gains, primarily from investments	(26,898)		(12,974)
Provision for doubtful accounts	24,489		49,498
Net compensation expense for equity awards	133,308		41,841
Equity income from unconsolidated subsidiaries	(459,535)		(72,487)
Distribution of earnings from unconsolidated subsidiaries	382,831		103,796
Proceeds from sale of mortgage loans	12,767,544		11,565,281
Origination of mortgage loans	(12,712,118)		(11,727,227)
(Decrease) increase in warehouse lines of credit	(192)		214,659
Tenant concessions received	18,645		28,617
Purchase of equity securities	(5,281)		(8,932)
Proceeds from sale of equity securities	6,856		11,210
Increase in real estate under development	(123,580)		(68,178)
(Increase) decrease in receivables, prepaid expenses and other assets (including contract and lease assets)	(255,161)		610,058
Decrease in accounts payable and accrued expenses and other liabilities (including contract and lease liabilities)	(107,756)		(98,977)
Increase (decrease) in compensation and employee benefits payable and accrued bonus and profit sharing	176,413		(550,932)
Decrease in net income taxes receivable/payable	42,100		118,736
Other operating activities, net	18,739		(12,313)
Net cash provided by operating activities	1,200,121		890,358
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(121,409)		(190,546)
Acquisition of businesses, including net assets acquired, intangibles and goodwill, net of cash acquired	(71,373)		(25,923)
Contributions to unconsolidated subsidiaries	(400,967)		(72,058)
Distributions from unconsolidated subsidiaries	63,776		66,409
Other investing activities, net	(25,433)		15,631
Net cash used in investing activities	(555,406)		(206,487)

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)


	Nine Months Ended September 30,
	2021		2020
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from revolving credit facility	—		835,671
Repayment of revolving credit facility	—		(835,671)
Proceeds from notes payable on real estate	71,157		40,263
Repayment of notes payable on real estate	(13,944)		(24,704)
Proceeds from issuance of 2.500% senior notes	492,255		—
Repurchase of common stock	(188,285)		(50,028)
Acquisition of businesses (cash paid for acquisitions more than three months after purchase date)	(3,421)		(34,400)
Units repurchased for payment of taxes on equity awards	(36,747)		(41,627)
Non-controlling interest contributions	652		1,977
Non-controlling interest distributions	(4,026)		(2,471)
Other financing activities, net	(42,767)		(30,050)
Net cash provided by (used in) financing activities	274,874		(141,040)
Effect of currency exchange rate changes on cash and cash equivalents and restricted cash	(82,714)		9,981
NET INCREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH	836,875		552,812
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	$	2,876,122	$	1,646,557
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest	$	29,131	$	60,415
Income tax payments, net	$	220,955	$	4,137

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 June 30, 2021	$	3,357	$	1,001,832	$	7,238,896	$	(564,564)	$	41,155	$	7,720,676
Net income	—		—		435,743		—		879		436,622
Net compensation expense for equity awards	—		48,075		—		—		—		48,075
Units repurchased for payment of taxes on equity awards	—		(472)		—		—		—		(472)
Repurchase of common stock	(11)		(99,999)		—		—		—		(100,010)
Foreign currency translation loss	—		—		—		(90,042)		(202)		(90,244)
Amounts reclassified from accumulated other comprehensive loss to interest expense, net of tax	—		—		—		110		—		110
Unrealized holding gains on available for sale debt securities, net of tax	—		—		—		215		—		215
Contributions from non-controlling interests	—		—		—		—		125		125
Distributions to non-controlling interests	—		—		—		—		(649)		(649)
Other	—		(10,652)		—		105		(5,741)		(16,288)
Balance at September 30, 2021	$	3,346	$	938,784	$	7,674,639	$	(654,176)	$	35,567	$	7,998,160


	CBRE Group, Inc. Stockholders'
	Class A common stock		Additional paid-in capital		Accumulated earnings		Accumulated other comprehensive loss		Non- controlling interests		Total
Balance at June 30, 2020	$	3,352	$	1,046,999	$	6,032,160	$	(838,517)	$	41,057	$	6,285,051
Net income	—		—		184,132		—		708		184,840
Net compensation expense for equity awards	—		22,137		—		—		—		22,137
Units repurchased for payment of taxes on equity awards	—		(4,269)		—		—		—		(4,269)

Foreign currency translation gain	—		—		—		106,201		—		106,201
Amounts reclassified from accumulated other comprehensive loss to interest expense, net of tax	—		—		—		106		—		106

Unrealized holding gains on available for sale debt securities, net of tax	—		—		—		811		—		811
Contributions from non-controlling interests	—		—		—		—		549		549
Distributions to non-controlling interests	—		—		—		—		(1,379)		(1,379)

Other	2		(18)		—		—		271		255
Balance at September 30, 2020	$	3,354	$	1,064,849	$	6,216,292	$	(731,399)	$	41,206	$	6,594,302

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	—		—		1,144,582		—		4,459		1,149,041
Net compensation expense for equity awards	—		133,308		—		—		—		133,308
Units repurchased for payment of taxes on equity awards	—		(36,747)		—		—		—		(36,747)
Repurchase of common stock	(22)		(188,263)		—		—		—		(188,285)
Foreign currency translation loss	—		—		—		(123,908)		(280)		(124,188)
Amounts reclassified from accumulated other comprehensive loss to interest expense, net of tax	—		—		—		324		—		324
Unrealized holding losses on available for sale debt securities, net of tax	—		—		—		(971)		—		(971)
Contributions from non-controlling interests	—		—		—		—		652		652
Distributions to non-controlling interests	—		—		—		—		(4,026)		(4,026)
Other	12		(44,153)		—		105		(6,999)		(51,035)
Balance at September 30, 2021	$	3,346	$	938,784	$	7,674,639	$	(654,176)	$	35,567	$	7,998,160


	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	—		—		438,224		—		2,258		440,482
Net compensation expense for equity awards	—		41,841		—		—		—		41,841
Units repurchased for payment of taxes on equity awards	—		(41,627)		—		—		—		(41,627)
Repurchase of common stock	(11)		(50,017)		—		—		—		(50,028)
Foreign currency translation loss	—		—		—		(40,237)		—		(40,237)
Amounts reclassified from accumulated other comprehensive loss to interest expense, net of tax	—		—		—		320		—		320

Unrealized holding gains on available for sale debt securities, net of tax	—		—		—		1,311		—		1,311
Contributions from non-controlling interests	—		—		—		—		1,977		1,977
Distributions to non-controlling interests	—		—		—		—		(2,471)		(2,471)

Other	17		(1,292)		(15,081)		(13,045)		(977)		(30,378)
Balance at September 30, 2020	$	3,354	$	1,064,849	$	6,216,292	$	(731,399)	$	41,206	$	6,594,302

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 initially put transactions on hold and withdrew existing mandates, sharply reducing sales and leasing volumes. The effects of Covid-19 have eased significantly in 2021 as global economic conditions have improved. Nevertheless Covid-19 continues to pose public health challenges that impact our operations, particularly as new strains 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 reported amounts of assets, liabilities, revenues 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.

In July 2021, the FASB issued ASU 2021-05, “Leases (Topic 842): Lessors-Certain Leases with Variable Lease Payments (Topic 842).” The ASU amends the lease classification requirements for lessors to align them with practice under Topic 840. Lessors should classify and account for a lease with variable lease payments that do not depend on a reference index or a rate as an operating lease if certain criteria are met. This guidance is effective for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. We are evaluating the effect that this guidance will have on our consolidated financial statements and related disclosures, but do not expect it to have a material impact.

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 September 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	12,712,118
Gains (premiums on loan sales)	61,870
Proceeds from sale of mortgage loans:
Sale of mortgage loans	(12,705,674)
Cash collections of premiums on loan sales	(61,870)
Proceeds from sale of mortgage loans	(12,767,544)
Net decrease in mortgage servicing rights included in warehouse receivables	(8,576)
Ending balance at September 30, 2021	$	1,409,038

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

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


			September 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)	10/17/2022	daily floating rate SOFR rate plus 1.60%	$	985,000	$	734,815	$	1,585,000	$	561,726
JP Morgan	10/17/2022	daily floating rate SOFR rate plus 2.75%	15,000		3,003		15,000		—
Fannie Mae Multifamily As Soon As Pooled Plus Agreement and Multifamily As Soon As Pooled Sale Agreement (ASAP) Program (2)	Cancelable anytime	daily one-month LIBOR plus 1.45%, with a LIBOR floor of 0.25%	650,000		31,485		450,000		132,692
TD Bank, N.A. (TD Bank) (3)	7/15/2022	daily floating rate LIBOR plus 1.30%	800,000		222,311		800,000		401,849
Bank of America, N.A. (BofA) (4)	5/25/2022	daily floating rate LIBOR plus 1.30%, with a LIBOR floor of 0.30%	350,000		265,368		350,000		175,862
BofA (5)	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) (6)	6/28/2022	daily floating rate LIBOR plus 1.30%	200,000		126,790		300,000		111,835
			$	3,250,000	$	1,383,772	$	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. Effective October 18, 2021, this facility was renewed and amended and the maximum facility size was increased to $1,335.0 million. This facility has a revised maturity date of October 17, 2022 and a revised interest rate to a Secured Overnight Finance Rate ("SOFR") term plus 1.60%, noting the Business Lending sublimit has a revised interest rate of daily adjusted term SOFR plus 2.75%.

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

(3)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 September 30, 2021, the uncommitted $400.0 million temporary line of credit was not utilized.

(4)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 September 30, 2021, the sublimit borrowing has not been utilized.

(5)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.

(6)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, this facility was renewed with a revised interest rate of daily floating rate LIBOR plus 1.30%, removing the LIBOR floor, and a maturity date of June 28, 2022.

During the nine months ended September 30, 2021, we had a maximum of $2.5 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 September 30, 2021 and December 31, 2020, our maximum exposure to loss related to VIEs which are not consolidated was as follows (dollars in thousands):


	September 30, 2021		December 31, 2020
Investments in unconsolidated subsidiaries	$	78,561	$	66,947
Other current assets	4,219		4,219
Co-investment commitments	91,865		47,957
Maximum exposure to loss	$	174,645	$	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 September 30, 2021 and December 31, 2020 (dollars in thousands):


	As of September 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	$	7,108	$	—	$	—	$	7,108
Debt securities issued by U.S. federal agencies	—		9,825		—		9,825
Corporate debt securities	—		50,551		—		50,551
Asset-backed securities	—		3,669		—		3,669
Collateralized mortgage obligations	—		776		—		776
Total available for sale debt securities	7,108		64,821		—		71,929
Equity securities	69,539		—		—		69,539
Investments in unconsolidated subsidiaries	—		—		283,965		283,965
Warehouse receivables	—