CaliberCos Inc.CWD

CaliberCos Inc. Fair Value Disclosure

10-KFiled Mar 31, 20252 min read
Note 14 – Fair Value of Financial Instruments
Fair Value of Financial Instruments of the Company
Fair values of financial instruments held by the Company are estimated using available market information and established valuation methodologies. Accordingly, the estimates presented are not necessarily indicative of the amounts the Company could realize on disposition of the financial instruments. The use of different market assumptions and/or valuation methodologies may have a material effect on the estimated fair value amounts.
Financial instruments that approximate fair value due to the short-term nature of the instruments consist of cash, restricted cash, accounts receivable, and accounts payable. The fair values of debt have been estimated based on current rates available for similar instruments with similar terms, maturities, and collateral. The fair value of the Company’s fixed rate debt were measured with Level 2 inputs. The estimated fair value of the Company’s real estate loan was determined by management based on a discounted future cash-flow model. As of December 31, 2024 the Company’s real estate loan had a carrying value of $15.9 million and a fair value of $12.6 million. As of December 31, 2023, the Company’s real estate loan had a carrying value of $16.2 million and a fair value of $9.5 million.
Fair Value of Financial Instruments of the Consolidated Funds
Fair values of financial instruments held by consolidated funds are estimated using available market information and established valuation methodologies. Accordingly, the estimates presented are not necessarily indicative of the amounts the consolidated funds could realize on disposition of the financial instruments. The use of different market assumptions and/or valuation methodologies may have a material effect on the estimated fair value amounts.
Financial instruments that approximate fair value due to the short-term nature of the instruments consist of cash, restricted cash, accounts receivable, and accounts payable. The fair values of debt, advance key money, and interest rate caps have been estimated based on current rates available for similar instruments with similar terms, maturities, and collateral. The carrying values of the consolidated funds’ variable rate debt and advance key money as of December 31, 2024 and 2023 approximated fair value. The fair value of the consolidated funds’ fixed rate debt were measured with Level 2 inputs. The estimated fair values for the instruments below were determined by management based on a discounted future cash-flow model (in thousands).
December 31, 2024December 31, 2023
Note PayableCarrying
Value		Fair ValueCarrying
Value		Fair Value
Hampton Inn & Suites Hotel (1)
$— $— $5,939 $4,762 
Southpointe Fundco, LLC1,050 1,023 1,050 1,050 
Tucson East, LLC (1)
— — 11,901 11,067 
West Frontier, LLC4,796 3,701 4,636 3,795 
______________________________
(1)     During the year ended December 31, 2024, the Company deconsolidated Caliber Hospitality, LP and the Caliber Hospitality Trust, which included activity from six hospitality funds, and Caliber Fixed Income Fund III.
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Historical Timeline

Fiscal YearFiled
2024Mar 31, 2025Showing above
2023Apr 16, 2024

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.

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