CBRE GROUP, INC.CBRE
CBRE GROUP, INC. Fair Value Disclosure
7. 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.
The following tables present the fair value of assets and liabilities measured at fair value on a recurring basis as of December 31, 2025 and 2024 (dollars in millions):
| As of December 31, 2025 | |||||||||||||||||||||||
| Fair Value Measured and Recorded Using | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| Assets | |||||||||||||||||||||||
| Available for sale debt securities: | |||||||||||||||||||||||
| U.S. treasury securities | $ | 4 | $ | — | $ | — | $ | 4 | |||||||||||||||
| Corporate debt securities | — | 36 | — | 36 | |||||||||||||||||||
| Asset-backed securities | — | 7 | — | 7 | |||||||||||||||||||
| Total available for sale debt securities | 4 | 43 | — | 47 | |||||||||||||||||||
| Equity securities | 19 | — | — | 19 | |||||||||||||||||||
| Investments in unconsolidated subsidiaries | — | — | 19 | 19 | |||||||||||||||||||
| Warehouse receivables | — | 1,630 | — | 1,630 | |||||||||||||||||||
| — | 63 | — | 63 | ||||||||||||||||||||
| Total assets at fair value | $ | 23 | $ | 1,736 | $ | 19 | $ | 1,778 | |||||||||||||||
| Liabilities | |||||||||||||||||||||||
| Contingent consideration | — | — | 65 | 65 | |||||||||||||||||||
| — | 292 | — | 292 | ||||||||||||||||||||
| Total liabilities at fair value | $ | — | $ | 292 | $ | 65 | $ | 357 | |||||||||||||||
| As of December 31, 2024 | |||||||||||||||||||||||
| Fair Value Measured and Recorded Using | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| 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 securities | 3 | 40 | — | 43 | |||||||||||||||||||
| Equity securities | 18 | — | — | 18 | |||||||||||||||||||
| Investments in unconsolidated subsidiaries | 100 | — | 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.
During the year ended December 31, 2023, we recorded a gain of $34 million associated with remeasuring our 50% investment in a previously unconsolidated subsidiary to fair value as of the date we acquired the remaining 50% controlling interest. Fair value of this investment in unconsolidated subsidiary at acquisition date was $37 million, based upon the purchase price paid for the remaining 50% interest acquired, which falls under Level 3 of the fair value hierarchy. Such gain was reflected in other income in our Advisory Services segment in the accompanying consolidated statements of operations for the year ended December 31, 2023.
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 $130 million and $148 million related to capital investments as of December 31, 2025 and 2024, respectively in certain non-public entities as they are non-marketable equity investments accounted for under the measurement alternative, which are measured at cost, with fair value adjustments for observable market transactions, minus impairment. These investments are included in “Other assets” in the accompanying consolidated balance sheets.
The fair values of the warehouse receivables are primarily calculated based on locked-in purchase prices. At December 31, 2025 and 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 2 – Significant Accounting Policies and Note 5 – 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 December 31, 2025 and 2024, investments in unconsolidated subsidiaries at fair value using NAV were $402 million and $378 million, respectively, and investments at fair value using NAV which are not accounted for under the equity method were $23 million and $21 million, respectively. These investments fall under the 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 Subsidiaries | Other Assets | Contingent Consideration (2) | |||||||||||||||
| Balance as of December 31, 2023 | $ | 477 | $ | 16 | $ | 36 | |||||||||||
Transfer in (out) | — | — | — | ||||||||||||||
| Net change in fair value | (65) | 18 | (5) | ||||||||||||||
| Purchases/ Additions | — | 12 | 11 | ||||||||||||||
| Sales / Payments | — | — | (6) | ||||||||||||||
| Balance as of December 31, 2024 | 412 | 46 | 36 | ||||||||||||||
| Transfer in (out) | (14) | — | (3) | ||||||||||||||
| Net change in fair value | (6) | — | (14) | ||||||||||||||
| Purchases / Additions | — | — | 47 | ||||||||||||||
Sales / Payments (1) | (373) | (46) | (1) | ||||||||||||||
| Balance as of December 31, 2025 | $ | 19 | $ | — | $ | 65 | |||||||||||
(1)As disclosed in Note 4 – Acquisitions, on January 16, 2025, we acquired the remaining 60% ownership interest in Industrious.
(2)As of December 31, 2025, a Monte Carlo model was used to estimate the fair value of Contingent Consideration related to the Pearce acquisition. The unobservable input used for volatility was 17.7% and for the discount rate was 4.4%.
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 subsidiaries | Equity 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 | |||||||
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 2 – Significant Accounting Policies and Note 5 – 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 previous ownership of common shares in Altus Power, Inc. (Altus) was considered Level 1 and was measured at fair value using a quoted price in an active market. On April 16, 2025, Altus was acquired by a third-party and as a result we no longer hold any shares in Altus (see Note 11 – Investments in Unconsolidated Subsidiaries). Certain non-controlling equity investments are considered Level 3. Transfer out activities from Level 3 represents the reclassification of our alignment shares in Altus from Level 3 to Level 2.
•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 – 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 financial instruments are designated as Level 2 under the fair value hierarchy (see Note 8 – Derivatives and Hedging Activities).
•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 5 – Warehouse Receivables & Warehouse Lines of Credit and Note 12 – 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 December 31, 2025 and 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 12 – Long-Term Debt and Short-Term Borrowings).
•Notes Payable on Real Estate – As of December 31, 2025 and 2024, the carrying value of our notes payable on real estate, net of unamortized debt issuance costs, was $197 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.Estimated Fair Value | Carrying Value | ||||||||||||||||||||||
Financial instrument | December 31, 2025 | December 31, 2024 | December 31, 2025 | December 31, 2024 | |||||||||||||||||||
Senior term loans due 2028 | $ | 1,239 | $ | 708 | $ | 1,322 | $ | 718 | |||||||||||||||
5.950% senior notes due 2034 | 1,068 | 1,033 | 977 | 976 | |||||||||||||||||||
4.900% senior notes due 2033 | 755 | — | 742 | — | |||||||||||||||||||
4.875% senior notes due 2026 | — | 600 | — | 599 | |||||||||||||||||||
4.800% senior notes due 2030 | 608 | — | 591 | — | |||||||||||||||||||
5.500% senior notes due 2035 | 516 | — | 494 | — | |||||||||||||||||||
5.500% senior notes due 2029 | 519 | 509 | 496 | 496 | |||||||||||||||||||
2.500% senior notes due 2031 | 454 | 426 | 493 | 492 | |||||||||||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 12, 2026 | Showing above |
| 2024 | Feb 14, 2025 | |
| 2023 | Feb 20, 2024 | |
| 2022 | Feb 27, 2023 | |
| 2021 | Mar 1, 2022 | |
| 2020 | Feb 24, 2021 | |
| 2019 | Mar 2, 2020 | |
| 2018 | Mar 1, 2019 | |
| 2017 | Mar 1, 2018 | |
| 2016 | Mar 1, 2017 | |
| 2015 | Feb 29, 2016 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.