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 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.


	December 31, 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	$	7,002	$	—	$	—	$	7,002
Debt securities issued by U.S. federal agencies	—		9,276		—		9,276
Corporate debt securities	—		50,897		—		50,897
Asset-backed securities	—		3,428		—		3,428
Collateralized mortgage obligations	—		725		—		725
Total available for sale debt securities	7,002		64,326		—		71,328
Equity securities	69,880		—		—		69,880
Investments in unconsolidated subsidiaries	229,900		23,741		406,690		660,331
Warehouse receivables	—		1,303,717		—		1,303,717
Total assets at fair value	$	306,782	$	1,391,784	$	406,690	$	2,105,256

Liabilities

Other liabilities	—		—		10,700		10,700
Total liabilities at fair value	$	—	$	—	$	10,700	$	10,700


	December 31, 2020
	Fair Value Measured and Recorded Using
	Level 1		Level 2		Level 3		Total
Assets
Available for sale securities:
Debt securities:
U.S. treasury securities	$	7,270	$	—	$	—	$	7,270
Debt securities issued by U.S. federal agencies	—		10,216		—		10,216
Corporate debt securities	—		51,244		—		51,244
Asset-backed securities	—		3,801		—		3,801
Collateralized mortgage obligations	—		1,369		—		1,369
Total available for sale debt securities	7,270		66,630		—		73,900
Equity securities	43,334		—		—		43,334
Investments in unconsolidated subsidiaries	—		—		50,000		50,000
Warehouse receivables	—		1,411,170		—		1,411,170
Total assets at fair value	$	50,604	$	1,477,800	$	50,000	$	1,578,404

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 fair values of the warehouse receivables are primarily calculated based on already locked in purchase prices. At December 31, 2021 and 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 (See Notes 2 and 5). These assets are classified as Level 2 in the fair value hierarchy as a substantial majority of inputs are readily observable.

As of December 31, 2021 and 2020, investments in unconsolidated subsidiaries at fair value using NAV were $152.7 million and $66.3 million, 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.


	Investment in Unconsolidated Subsidiaries		Other liabilities






Balance as of December 31, 2020	$	50,000	$	—
Transfer in	5,174		—
Net change in fair value	36,432		10,700
Purchases/ Additions	315,084		—
Balance as of December 31, 2021	$	406,690	$	10,700


Category of Assets/Liabilities using Unobservable Inputs						Consolidated Statements of Operations
Investments in unconsolidated subsidiaries						Equity income from unconsolidated subsidiaries
Other liabilities						Other income

Valuation Technique

Unobservable Input

Range

Investment in unconsolidated subsidiaries

Discounted cash flow

Discount rate

14% - 26%

Monte Carlo

Volatility

Risk free interest rate

1.4

Other liabilities

Discounted cash flow

Discount rate

25.5

There were no significant non-recurring fair value measurements recorded during the year ended December 31, 2021. The following non-recurring fair value measurements were recorded for the year ended December 31, 2020 (dollars in thousands):


	Net Carrying Value as of December 31, 2020		Fair Value Measured and Recorded Using						Total Impairment Charges for the Year Ended December 31, 2020
			Level 1		Level 2		Level 3
Property and equipment	$	12,870	$	—	$	12,870	$	—	$	29,168
Goodwill	443,305		—		—		443,305		25,000
Other intangible assets	12,562		—		—		12,562		34,508
Total	$	468,737	$	—	$	12,870	$	455,867	$	88,676

During the year ended December 31, 2020, we recorded $50.2 million of non-cash asset impairment charges in our Global Workplace Solutions segment; a non-cash goodwill impairment charge of $25.0 million and certain non-cash asset impairment charges of $13.5 million in our Real Estate Investments segment. Primarily as a result of the recent global economic disruption and uncertainty due to Covid-19, we deemed there to be triggering events during 2020 that required testing of goodwill and certain assets for impairment. Based on these events, we recorded the aforementioned non-cash impairment charges, which were primarily driven by lower anticipated cash flows in certain businesses directly resulting from a downturn in forecasts as well as increased forecast risk due to Covid-19 and changes in our business going forward.


	Net Carrying Value as of December 31, 2019		Fair Value Measured and Recorded Using						Total Impairment Charges for the Year Ended December 31, 2019
	Net Carrying Value as of December 31, 2019		Level 1		Level 2		Level 3
Other intangible assets	$	14,753	$	—	$	—	$	14,753	$	89,787

During the year ended December 31, 2019, we recorded an intangible asset impairment of $89.8 million in our Real Estate Investments segment. This non-cash write-off resulted from a review of the anticipated cash flows and the decrease in assets under management in our public securities business driven in part by continued industry-wide shift in investor preference for passive investment programs.

All of the above-mentioned asset impairment charges were included within the line item “Asset impairments” in the accompanying consolidated statements of operations. The fair value measurements employed for our impairment evaluations were based on a discounted cash flow approach. Inputs used in these evaluations included risk-free rates of return, estimated risk premiums, terminal growth rates, working capital assumptions, income tax rates as well as other economic variables.

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.

•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 Notes 2 and 5).

•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 is considered level 1 and is measured at fair value using a quoted price in an active market. Private placement warrants related to Altus are considered level 2 and measured at fair value using observable inputs for similar assets in an active market. Our ownership of alignment shares of Altus and our investment in Industrious and certain other non-controlling equity investments are considered level 3 which are measured at fair value using a Monte Carlo and a discounted cash flow approach, respectively. The valuation of Altus’ common shares, private placement warrants and alignment shares are dependent on its stock price which could be volatile and subject to wide fluctuations in response to various market conditions.

•Investments Held in Trust – special purpose acquisition company – Funds received as part of the initial public offering of CBRE Acquisition Holdings were deposited in an interest-bearing U.S. based trust account. The funds were invested in specified U.S. government treasury bills with a maturity of 180 days or less or in money market funds. The carrying amount approximates fair value due to the short-term maturities of these instruments as of December 31, 2020. As a result of the SPAC Merger, the Investments Held in Trust were derecognized. (See Note 2).

•Other liabilities – Represents the fair value of the unfunded commitment related to a revolving facility in our Advisory Services segment. 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.

•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 5 and 11).

•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 $451.8 million and $772.2 million at December 31, 2021 and 2020, respectively. Their actual carrying value, net of unamortized debt issuance costs, totaled $454.5 million and $785.7 million at December 31, 2021 and 2020, respectively (see Note 11).

•Senior Notes – Based on dealers’ quotes (which falls within Level 2 of the fair value hierarchy), the estimated fair value of our 4.875% senior notes was $671.7 million and $702.5 million at December 31, 2021 and 2020, respectively. The actual carrying value of our 4.875% senior notes, net of unamortized debt issuance costs and unamortized discount, totaled $595.5 million and $594.5 million at December 31, 2021 and 2020, respectively. The estimated fair value of our 2.500% senior notes was $502.1 million as of December 31, 2021. The actual carrying value of our 2.500% senior notes, net of unamortized debt issuance costs and discount, totaled $488.1 million at December 31, 2021. On December 28, 2020, we redeemed the $425.0 million aggregate outstanding principal amount of our 5.25% senior notes in full (See Note 11).

•Notes Payable on Real Estate – As of December 31, 2021 and 2020, the carrying value of our notes payable on real estate, net of unamortized debt issuance costs, was $48.2 million and $79.6 million, respectively. These notes payable were not recourse to CBRE Group, Inc., except for being recourse to the single-purpose entities that held the real estate assets and were the primary obligors on the notes payable. 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.