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, 2023

OR

☐ 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 incorporation or organization)	(I.R.S. Employer 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 24, 2023 was 309,838,091.

FORM 10-Q

June 30, 2023

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION		Page
Item 1.	Financial Statements (Unaudited)
	Consolidated Balance Sheets at June 30, 2023 and December 31, 2022	1
	Consolidated Statements of Operations for the three and six months ended June 30, 2023 and 2022	2
	Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2023 and 2022	3
	Consolidated Statements of Cash Flows for the six months ended June 30, 2023 and 2022	4
	Consolidated Statements of Equity for the three and six months ended June 30, 2023 and 2022	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	53
Item 4.	Controls and Procedures	54
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	55
Item 1A.	Risk Factors	55
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	55
Item 5.	Other Information	55
Item 6.	Exhibits	56
Signatures		57

PART I – FINANCIAL INFORMATION

Item 1.    Financial Statements

CBRE GROUP, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(Dollars in thousands, except share data)

	June 30, 2023		December 31, 2022
ASSETS
Current Assets:
Cash and cash equivalents	$	1,261,174	$	1,318,290
Restricted cash	96,152		86,559
Receivables, less allowance for doubtful accounts of $96,764 and $92,354 at    June 30, 2023 and December 31, 2022, respectively	5,552,692		5,326,807
Warehouse receivables	1,009,770		455,354
Contract assets	369,652		391,626
Prepaid expenses	352,678		311,508
Income taxes receivable	192,593		81,528
Other current assets	634,997		557,009
Total Current Assets	9,469,708		8,528,681
Property and equipment, net of accumulated depreciation and amortization of $1,529,028 and $1,386,261 at    June 30, 2023 and December 31, 2022, respectively	848,852		836,041
Goodwill	5,043,708		4,868,382
Other intangible assets, net of accumulated amortization of $2,062,216 and $1,915,725 at    June 30, 2023 and December 31, 2022, respectively	2,129,915		2,192,706
Operating lease assets	983,782		1,033,011
Investments in unconsolidated subsidiaries (with $944,505 and $973,635 at fair value at    June 30, 2023 and December 31, 2022, respectively)	1,306,769		1,317,705
Non-current contract assets	140,336		137,480
Real estate under development	212,554		172,253
Non-current income taxes receivable	65,815		51,910
Deferred tax assets, net	306,430		265,554
Other assets, net	1,224,198		1,109,666
Total Assets	$	21,732,067	$	20,513,389
LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable and accrued expenses	$	2,886,203	$	3,078,781
Compensation and employee benefits payable	1,365,963		1,459,001
Accrued bonus and profit sharing	1,013,554		1,691,118
Operating lease liabilities	242,824		229,591
Contract liabilities	263,703		276,334
Income taxes payable	168,702		184,453
Short-term borrowings:
Warehouse lines of credit (which fund loans that U.S. Government Sponsored Enterprises have committed to purchase)	997,235		447,840
Revolving credit facility	583,000		178,000
Other short-term borrowings	6,199		42,914
Total short-term borrowings	1,586,434		668,754
Current maturities of long-term debt	436,205		427,792
Other current liabilities	189,452		226,170
Total Current Liabilities	8,153,040		8,241,994
Long-term debt, net of current maturities	2,059,797		1,085,712
Non-current operating lease liabilities	1,051,341		1,080,385
Non-current income taxes payable	30,428		54,761
Non-current tax liabilities	138,668		148,806
Deferred tax liabilities, net	280,033		282,073
Other liabilities	1,125,123		1,013,926
Total Liabilities	12,838,430		11,907,657
Commitments and contingencies	—		—
Equity:
CBRE Group, Inc. Stockholders’ Equity:
Class A common stock; $0.01 par value; 525,000,000 shares authorized; 310,876,434 and 311,014,160 shares    issued and outstanding at June 30, 2023 and December 31, 2022, respectively	3,109		3,110
Additional paid-in capital	12,510		—
Accumulated earnings	9,011,227		8,832,943
Accumulated other comprehensive loss	(928,788)		(982,780)
Total CBRE Group, Inc. Stockholders’ Equity	8,098,058		7,853,273
Non-controlling interests	795,579		752,459
Total Equity	8,893,637		8,605,732
Total Liabilities and Equity	$	21,732,067	$	20,513,389

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

1

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,
	2023		2022		2023		2022
Revenue	$	7,719,863	$	7,771,278	$	15,130,977	$	15,104,211
Costs and expenses:
Cost of revenue	6,179,496		6,053,984		12,185,910		11,806,178
Operating, administrative and other	1,088,812		1,188,819		2,297,716		2,254,815
Depreciation and amortization	154,387		162,359		315,878		311,391
Asset impairments	—		26,405		—		36,756
Total costs and expenses	7,422,695		7,431,567		14,799,504		14,409,140
Gain on disposition of real estate	9,261		177,226		12,321		198,818
Operating income	306,429		516,937		343,794		893,889
Equity (loss) income from unconsolidated subsidiaries	(7,502)		119,168		134,181		162,039
Other income (loss)	5,612		(6,909)		8,086		(21,373)
Interest expense, net of interest income	42,982		18,518		71,396		31,344
Income before provision for income taxes	261,557		610,678		414,665		1,003,211
Provision for income taxes	55,404		120,762		83,439		117,024
Net income	206,153		489,916		331,226		886,187
Less: Net income attributable to non-controlling interests	4,750		2,594		12,931		6,568
Net income attributable to CBRE Group, Inc.	$	201,403	$	487,322	$	318,295	$	879,619
Basic income per share:
Net income per share attributable to CBRE Group, Inc.	$	0.65	$	1.50	$	1.02	$	2.68
Weighted average shares outstanding for basic income per share	310,857,203		325,415,305		310,662,324		328,692,585
Diluted income per share:
Net income per share attributable to CBRE Group, Inc.	$	0.64	$	1.48	$	1.01	$	2.64
Weighted average shares outstanding for diluted income per share	314,282,247		329,843,710		314,821,615		333,514,398

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

2

CBRE GROUP, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(Dollars in thousands)

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Net income	$	206,153	$	489,916	$	331,226	$	886,187
Other comprehensive income (loss):
Foreign currency translation gain (loss)	35,945		(303,894)		73,679		(385,179)
Amounts reclassified from accumulated other comprehensive loss to interest expense, net of tax	111		107		221		215
Unrealized holding gains (losses) on available for sale debt securities, net of tax	643		(2,116)		573		(3,847)
Other, net of tax	(1)		(100)		5,557		—
Total other comprehensive income (loss)	36,698		(306,003)		80,030		(388,811)
Comprehensive income	242,851		183,913		411,256		497,376
Less: Comprehensive income (loss) attributable to non-controlling interests	17,138		(53,280)		38,969		(71,333)
Comprehensive income attributable to CBRE Group, Inc.	$	225,713	$	237,193	$	372,287	$	568,709

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

3

CBRE GROUP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollars in thousands)

	Six Months Ended June 30,
	2023		2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	331,226	$	886,187
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortization	315,878		311,391
Amortization of financing costs	2,305		3,407
Gains related to mortgage servicing rights, premiums on loan sales and sales of other assets	(45,340)		(87,150)
Asset impairments	—		36,756
Net realized and unrealized (gains) losses, primarily from investments	(2,935)		27,251
Provision for doubtful accounts	6,412		7,781
Net compensation expense for equity awards	38,796		82,322
Equity income from unconsolidated subsidiaries	(134,181)		(162,039)
Distribution of earnings from unconsolidated subsidiaries	183,068		315,255
Proceeds from sale of mortgage loans	4,356,448		7,270,423
Origination of mortgage loans	(4,893,898)		(6,984,779)
Increase (decrease) in warehouse lines of credit	549,395		(259,502)
Tenant concessions received	6,515		4,250
Purchase of equity securities	(8,309)		(13,931)
Proceeds from sale of equity securities	7,503		25,296
(Increase) decrease in real estate under development	(36,542)		74,127
Increase in receivables, prepaid expenses and other assets (including contract and lease assets)	(101,074)		(509,350)
Decrease in accounts payable and accrued expenses and other liabilities (including contract and lease liabilities)	(313,243)		(194,236)
Decrease in compensation and employee benefits payable and accrued bonus and profit sharing	(810,852)		(573,809)
Increase in net income taxes receivable/payable	(157,326)		(60,160)
Other operating activities, net	(49,471)		(138,574)
Net cash (used in) provided by operating activities	(755,625)		60,916
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(135,012)		(96,722)
Acquisition of businesses, including net assets acquired and goodwill, net of cash acquired	(165,539)		(45,377)
Contributions to unconsolidated subsidiaries	(59,800)		(220,492)
Distributions from unconsolidated subsidiaries	20,787		42,006
Other investing activities, net	(29,754)		(8,357)
Net cash used in investing activities	(369,318)		(328,942)

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

4

CBRE GROUP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(Unaudited)

(Dollars in thousands)

	Six Months Ended June 30,
	2023		2022
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from revolving credit facility	3,206,000		310,000
Repayment of revolving credit facility	(2,801,000)		—
Proceeds from notes payable on real estate	219		15,706
Repayment of notes payable on real estate	—		(16,544)
Proceeds from issuance of 5.950% senior notes	975,253		—
Repurchase of common stock	(129,808)		(993,769)
Acquisition of businesses (cash paid for acquisitions more than three months after purchase date)	(68,239)		(28,431)
Units repurchased for payment of taxes on equity awards	(50,217)		(34,841)
Non-controlling interest contributions	1,744		713
Non-controlling interest distributions	(1,398)		(370)
Other financing activities, net	(57,777)		(12,960)
Net cash provided by (used in) financing activities	1,074,777		(760,496)
Effect of currency exchange rate changes on cash and cash equivalents and restricted cash	2,643		(180,543)
NET DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH	(47,523)		(1,209,065)
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, AT BEGINNING OF PERIOD	1,404,849		2,539,781
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, AT END OF PERIOD	$	1,357,326	$	1,330,716
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest	$	91,301	$	27,745
Income tax payments, net	$	303,394	$	336,266

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

5

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, 2023	$	3,108	$	—	$	8,809,824	$	(953,098)	$	782,576	$	8,642,410
Net income	—		—		201,403		—		4,750		206,153
Net compensation expense for equity awards	—		20,683		—		—		—		20,683
Units repurchased for payment of taxes on equity awards	—		(4,056)		—		—		—		(4,056)
Foreign currency translation gain	—		—		—		23,557		12,388		35,945
Amounts reclassified from accumulated other comprehensive loss to interest expense, net of tax	—		—		—		111		—		111
Unrealized holding gains on available for sale debt securities, net of tax	—		—		—		643		—		643
Contributions from non-controlling interests	—		—		—		—		1,177		1,177
Distributions to non-controlling interests	—		—		—		—		(1,297)		(1,297)
Other	1		(4,117)		—		(1)		(4,015)		(8,132)
Balance at June 30, 2023	$	3,109	$	12,510	$	9,011,227	$	(928,788)	$	795,579	$	8,893,637

	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, 2022	$	3,296	$	409,187	$	8,758,928	$	(701,440)	$	812,854	$	9,282,825
Net income	—		—		487,322		—		2,594		489,916
Net compensation expense for equity awards	—		45,459		—		—		—		45,459
Units repurchased for payment of taxes on equity awards	—		(3,446)		—		—		—		(3,446)
Repurchase of common stock	(75)		(449,342)		(161,892)		—		—		(611,309)
Foreign currency translation loss	—		—		—		(248,020)		(55,874)		(303,894)
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	—		—		—		(2,116)		—		(2,116)
Contributions from non-controlling interests	—		—		—		—		503		503
Distributions to non-controlling interests	—		—		—		—		(157)		(157)
Other	—		(1,858)		—		(100)		(946)		(2,904)
Balance at June 30, 2022	$	3,221	$	—	$	9,084,358	$	(951,569)	$	758,974	$	8,894,984

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

6

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, 2022	$	3,110	$	—	$	8,832,943	$	(982,780)	$	752,459	$	8,605,732
Net income	—		—		318,295		—		12,931		331,226
Net compensation expense for equity awards	—		38,796		—		—		—		38,796
Units repurchased for payment of taxes on equity awards	—		(16,622)		(33,595)		—		—		(50,217)
Repurchase of common stock	(14)		—		(114,235)		—		—		(114,249)
Foreign currency translation gain	—		—		—		47,641		26,038		73,679
Amounts reclassified from accumulated other comprehensive loss to interest expense, net of tax	—		—		—		221		—		221
Unrealized holding gains on available for sale debt securities, net of tax	—		—		—		573		—		573
Contributions from non-controlling interests	—		—		—		—		1,744		1,744
Distributions to non-controlling interests	—		—		—		—		(1,398)		(1,398)
Other	13		(9,664)		7,819		5,557		3,805		7,530
Balance at June 30, 2023	$	3,109	$	12,510	$	9,011,227	$	(928,788)	$	795,579	$	8,893,637

	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, 2021	$	3,329	$	798,892	$	8,366,631	$	(640,659)	$	830,924	$	9,359,117
Net income	—		—		879,619		—		6,568		886,187
Net compensation expense for equity awards	—		82,322		—		—		—		82,322
Units repurchased for payment of taxes on equity awards	—		(34,841)		—		—		—		(34,841)
Repurchase of common stock	(117)		(840,163)		(161,892)		—		—		(1,002,172)
Foreign currency translation loss	—		—		—		(307,278)		(77,901)		(385,179)
Amounts reclassified from accumulated other comprehensive loss to interest expense, net of tax	—		—		—		215		—		215
Unrealized holding losses on available for sale debt securities, net of tax	—		—		—		(3,847)		—		(3,847)
Contributions from non-controlling interests	—		—		—		—		713		713
Distributions to non-controlling interests	—		—		—		—		(370)		(370)
Other	9		(6,210)		—		—		(960)		(7,161)
Balance at June 30, 2022	$	3,221	$	—	$	9,084,358	$	(951,569)	$	758,974	$	8,894,984

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

7

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, 2022, which are included in our 2022 Annual Report on Form 10-K (2022 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 2022 Annual Report for further discussion of our significant accounting policies and estimates.

Considerations Related to Tightening Monetary Policy

The macroeconomic environment remains challenging as central banks have continued to rapidly raise interest rates. The rising rate environment, coupled with large bank failures in early 2023 and ongoing economic uncertainty, has limited credit availability to commercial real estate. Less available and more expensive debt capital has had pronounced effects on our capital markets (mortgage origination and property sales) businesses, making property acquisitions and dispositions harder to finance. Similar factors also impact the timing of and proceeds generated from asset sales within our investment management and development businesses and our ability to obtain debt capital to begin new development projects.

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 General Accepted Accounting Principles (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, such as weakening global macroeconomic conditions and stress in the banking system, including less available and more expensive debt capital. 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.

2.    New Accounting Pronouncements

Recent Accounting Pronouncements Pending Adoption

In June 2022, the Financial Standards Board (FASB) issued Accounting Standards Update (ASU) 2022-03, “Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions.” Topic 820, Fair Value Measurement, states that a reporting entity should consider the characteristics of the asset or liability when measuring the fair value, including restrictions on the sale of the asset or liability, if a market participant would take those characteristics into account and the key to that determination is the unit of account for the asset or liability being measured at fair value. Topic 820 contains conflicting guidance on what the unit of account is when measuring the fair value of an equity security and this has resulted in diversity in practice on whether the effects of a contractual restriction that prohibits the sale of an equity security should be considered in measuring the equity security’s fair value. To address this, the amendments in the ASU clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The ASU introduces new disclosure requirements to provide investors with information about the restriction including the nature and remaining duration of the restriction. This guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. We are

8

CBRE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

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.

In March 2023, the FASB issued ASU 2023-01, “Leases (Topic 842): Common Control Arrangements.” This update requires that leasehold improvements associated with common control leases be amortized over the useful life of the leasehold improvements to the common control group (regardless of the lease term) and accounted for as a transfer between entities under common control through an adjustment to equity if, and when, the lessee no longer controls the use of the underlying asset. This update also provides a practical expedient for private companies and not-for-profit entities to use written terms and conditions of a common control arrangement to determine if a lease exists and the classification and accounting for that lease. This guidance is effective for fiscal years beginning after December 15, 2023, 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.

In March 2023, the FASB issued ASU 2023-02, “Investments – Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization method.” This update permits an accounting election to account for tax equity investments, regardless of the tax credit program from which the income tax credits are received, using the proportional amortization method if certain conditions are met. This guidance is effective for fiscal years beginning after December 15, 2023, 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 June 30, 2023 and December 31, 2022, 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, 2022	$	455,354
Origination of mortgage loans	4,893,898
Gains (premiums on loan sales)	12,185
Proceeds from sale of mortgage loans:
Sale of mortgage loans	(4,344,263)
Cash collections of premiums on loan sales	(12,185)
Proceeds from sale of mortgage loans	(4,356,448)
Net increase in mortgage servicing rights included in warehouse receivables	4,781
Ending balance at June 30, 2023	$	1,009,770

9

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, 2023 and December 31, 2022 (dollars in thousands):

			June 30, 2023				December 31, 2022
Lender	Current Maturity	Pricing	Maximum Facility Size		Carrying Value		Maximum Facility Size		Carrying Value
JP Morgan Chase Bank, N.A. (JP Morgan)	12/15/2023	daily floating rate Secured Overnight Financing Rate (SOFR) rate plus 1.60%, with a SOFR adjustment rate of 0.05%	$	1,335,000	$	721,573	$	1,335,000	$	330,509
JP Morgan (Business Lending Activity)	12/15/2023	daily floating rate SOFR rate plus 2.75%, with a SOFR adjustment rate of 0.05%	15,000		1,520		15,000		—
Fannie Mae Multifamily As Soon As Pooled Plus Agreement and Multifamily As Soon As Pooled Sale Agreement (ASAP) Program	Cancelable anytime	daily one-month LIBOR plus 1.45%, with a LIBOR floor of 0.25%	650,000		16,295		650,000		—
TD Bank, N.A. (TD Bank) (1)	7/15/2023	daily floating rate SOFR rate 1.30%, with a SOFR adjustment rate of 0.10%	800,000		59,516		800,000		—
Bank of America, N.A. (BofA) (2)	5/22/2024	daily floating rate SOFR rate plus 1.35%, with a SOFR adjustment rate of 0.10%	350,000		198,331		350,000		115,206
BofA (3)	5/22/2024	daily floating rate SOFR rate 1.35%, with a SOFR adjustment rate of 0.10%	250,000		—		250,000		—
MUFG Union Bank, N.A. (Union Bank) (4)			—		—		200,000		2,125
			$	3,400,000	$	997,235	$	3,600,000	$	447,840

_______________________________

(1)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 July 15, 2022, this facility was amended with a revised interest rate of daily floating rate SOFR rate plus 1.30%, with a SOFR adjustment rate of 0.10% and a maturity date of July 15, 2023. Effective July 15, 2023, this facility was renewed and amended to a maximum aggregate principal amount of $300.0 million, with an uncommitted $300.0 million temporary line of credit and a maturity date of July 15, 2024. There were no changes to the SOFR rate or the SOFR adjustment rate at renewal. As of June 30, 2023, the uncommitted $400.0 million temporary line of credit was not utilized.

(2)Effective May 24, 2023, this facility was renewed with a revised interest rate of daily floating rate SOFR plus 1.35%, with a SOFR adjustment rate of 0.10% and a maturity date of May 22, 2024.

(3)Effective May 24, 2023, the advised consent line was renewed for $250.0 million of capacity with a revised interest rate of daily floating rate SOFR plus 1.35%, with a SOFR adjustment rate of 0.10%, and a maturity date of May 22, 2024.

(4)This facility expired on June 27, 2023, and was not renewed.

During the six months ended June 30, 2023, we had a maximum of $1.1 billion of warehouse lines of credit principal outstanding.

10

CBRE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

4.    Variable Interest Entities (VIEs)

We hold variable interests in certain VIEs primarily 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, 2023 and December 31, 2022, our maximum exposure to loss related to VIEs which are not consolidated was as follows (dollars in thousands):

	June 30, 2023		December 31, 2022
Investments in unconsolidated subsidiaries	$	169,286	$	152,762
Co-investment commitments	65,337		83,835
Maximum exposure to loss	$	234,623	$	236,597

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 2022 Annual Report, except as described below.

The following tables present the fair value of assets and liabilities measured at fair value on a recurring basis as of June 30, 2023 and December 31, 2022 (dollars in thousands):

	As of June 30, 2023
	Fair Value Measured and Recorded Using
	Level 1		Level 2		Level 3		Total
Assets
Available for sale debt securities:
U.S. treasury securities	$	12,389	$	—	$	—	$	12,389
Debt securities issued by U.S. federal agencies	—		11,360		—		11,360
Corporate debt securities	—		44,634		—		44,634
Asset-backed securities	—		1,942		—		1,942
Total available for sale debt securities	12,389		57,936		—		70,325
Equity securities	37,030		—		—		37,030
Investments in unconsolidated subsidiaries	132,602		—		452,887		585,489
Warehouse receivables	—		1,009,770		—		1,009,770
Other assets	—		—		23,535		23,535
Total assets at fair value	$	182,021	$	1,067,706	$	476,422	$	1,726,149

11

CBRE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

	As of December 31, 2022
	Fair Value Measured and Recorded Using
	Level 1		Level 2		Level 3		Total
Assets
Available for sale debt securities:
U.S. treasury securities	$	6,164	$	—	$	—	$	6,164
Debt securities issued by U.S. federal agencies	—		8,249		—		8,249
Corporate debt securities	—		44,091		—		44,091
Asset-backed securities	—		3,201		—		3,201
Total available for sale debt securities	6,164		55,541		—		61,705
Equity securities	33,724		—		—		33,724
Investments in unconsolidated subsidiaries	160,093		—		460,540		620,633
Warehouse receivables	—		455,354		—		455,354
Other assets	—		—		14,452		14,452
Total assets at fair value	$	199,981	$	510,895	$	474,992	$	1,185,868

There were no liabilities measured at fair value on a recurring basis as of June 30, 2023 and December 31, 2022.

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 above tables do not include our $122.7 million capital investment in certain non-public entities as they are non-marketable equity investment accounted for under the measurement alternative, defined as cost minus impairment. These investments are included in “other assets, net” in the accompanying consolidated balance sheets.

The fair values of the warehouse receivables are primarily calculated based on already locked in purchase prices. At June 30, 2023 and December 31, 2022, 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 3). These assets are classified as Level 2 in the fair value hierarchy as a substantial majority of inputs are readily observable.

As of June 30, 2023 and December 31, 2022, investments in unconsolidated subsidiaries at fair value using NAV were $359.0 million and $353.0 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.

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 thousands):

	Investment in Unconsolidated Subsidiaries		Other assets
Balance as of March 31, 2023	$	456,556	$	20,445
Transfer in (out)	—		—
Net change in fair value	(3,669)		100
Purchases / Additions	—		2,990
Balance as of June 30, 2023	$	452,887	$	23,535
Balance as of December 31, 2022	$	460,540	$	14,452
Transfer in (out)	(230)		—
Net change in fair value	(7,423)		3,500
Purchases / Additions	—		5,583
Balance as of June 30, 2023	$	452,887	$	23,535

12

CBRE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

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 Statements of Operations
Investments in unconsolidated subsidiaries	Equity income from unconsolidated subsidiaries
Other assets (liabilities)	Other income (loss)

The table below presents information about the significant unobservable inputs used for recurring fair value measurements for certain Level 3 instruments as of June 30, 2023:

	Valuation Technique	Unobservable Input	Range		Weighted Average
Investment in unconsolidated subsidiaries	Discounted cash flow	Discount rate	24.0	%	—
	Monte Carlo	Volatility	40.0% - 69.0%		42.6	%
		Risk free interest rate	4.0	%
		Discount Yield	25.0	%	—
Other assets	Discounted cash flow	Discount rate	24.0	%	—

There were no asset impairment charges or adjustments recorded during the three and six months ended June 30, 2023.

During the three and six months ended June 30, 2022, we recorded $26.4 million and $10.4 million in non-cash asset impairment charges related to inflationary impact on certain parts of the business and also due to exit of our Advisory Services segment from Russia.

There were no other significant non-recurring fair value measurements recorded during the three and six months ended June 30, 2023 and 2022.

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 3).

•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 Power Inc. (Altus) is considered level 1 and is measured at fair value using a quoted price 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 Monte Carlo and discounted cash flows. The valuation of Altus’ common shares and alignment shares are dependent on its stock price which could be volatile and subject to wide fluctuations in response to various market conditions. Transfer out activities from level 3, as shown in the table above, represent annual conversion of a portion of our alignment shares in Altus to its common shares.

•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.

13

CBRE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

•Other assets / liabilities – Represents the fair value of the unfunded commitment related to a revolving facility. 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. It also includes approximately $10 million of investment in a non-public entity designated as trading debt security that the company purchased in the fourth quarter of 2022 for which cost approximated fair value at June 30, 2023.

•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 3 and 7).

•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 $434.6 million and $424.6 million at June 30, 2023 and December 31, 2022, respectively. Their actual carrying value, net of unamortized debt issuance costs, totaled $436.2 million and $427.8 million at June 30, 2023 and December 31, 2022, respectively (see Note 7).

•Senior Notes – Based on dealers’ quotes (which falls within Level 2 of the fair value hierarchy), the estimated fair value of our 5.950% senior notes was $987.1 million at June 30, 2023. The actual carrying value of our 5.950% senior notes, net of unamortized debt issuance costs and discount, totaled $973.0 million at June 30, 2023. The estimated fair value of our 4.875% senior notes was $581.9 million and $595.2 million at June 30, 2023 and December 31, 2022, respectively. The actual carrying value of our 4.875% senior notes, net of unamortized debt issuance costs and discount, totaled $597.0 million and $596.4 million at June 30, 2023 and December 31, 2022, respectively. The estimated fair value of our 2.500% senior notes was $400.4 million and $396.8 million at June 30, 2023 and December 31, 2022, respectively. The actual carrying value of our 2.500% senior notes, net of unamortized debt issuance costs and discount, totaled $489.8 million and $489.3 million at June 30, 2023 and December 31, 2022, respectively (See Note 7).

•Notes Payable on Real Estate - As of June 30, 2023 and December 31, 2022, the carrying value of our notes payable on real estate, net of unamortized debt issuance costs, was $32.2 million and $52.7 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.

14

CBRE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

6.    Investments in Unconsolidated Subsidiaries

Investments in unconsolidated subsidiaries are accounted for under the equity method of accounting. Our investment ownership percentages in equity method investments vary, generally ranging from 1.0% to 50.0%. The following table represents the composition of investment in unconsolidated subsidiaries under equity method of accounting and fair value option (dollars in thousands):

Investment type	June 30, 2023		December 31, 2022
Real estate investments (in projects and funds)	$	648,537	$	622,826
Investment in Altus:
Class A common stock (1)	132,602		160,093
Alignment shares (2)	42,294		59,530
Subtotal	174,896		219,624
Other (3)	483,336		475,256
Total investment in unconsolidated subsidiaries	$	1,306,769	$	1,317,705

_______________

(1)CBRE held 24,556,012 and 24,554,201 shares of Altus Class A common stock as of June 30, 2023 and December 31, 2022, respectively.

(2)The alignment shares, also known as Class B common shares, will automatically convert into Altus Class A common shares based on the achievement of certain total return thresholds on Altus Class A common shares as of the relevant measurement date over the seven fiscal years following the merger. As of March 31, 2023 (the second measurement date), 201,250 alignment shares automatically converted into 2,011 shares of Class A common stock, of which CBRE was entitled to 1,811 shares.

(3)Consists of our investments in Industrious and other non-public entities.

Combined condensed financial information for the entities accounted for using the equity method is as follows (dollars in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Revenue	$	559,330	$	646,576	$	4,657,503	$	1,227,692
Operating (loss) income	(58,732)		191,693		3,568,771		465,386
Net (loss) income (1)	(1,114,489)		1,499,234		571,846		2,952,081

_______________

(1)Included in net income are realized and unrealized earnings and losses in investments in unconsolidated investment funds and realized earnings and losses from sales of real estate projects in investments in unconsolidated subsidiaries. These realized and unrealized earnings and losses are not included in revenue and operating income.

15

CBRE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

7.    Long-Term Debt and Short-Term Borrowings

Long-Term Debt

Long-term debt consists of the following (dollars in thousands):

	June 30, 2023		December 31, 2022
Senior Euro term loan, with interest of 0.75% plus Euro Interbank Offered Rate (EURIBOR) adj	$	436,205	$	427,792
5.950% senior notes due in 2034, net of unamortized discount	975,253		—
4.875% senior notes due in 2026, net of unamortized discount	598,613		598,374
2.500% senior notes due in 2031, net of unamortized discount	493,829		493,476
Total long-term debt	2,503,900		1,519,642
Less: current maturities of long-term debt	436,205		427,792
Less: unamortized debt issuance costs	7,898		6,138
Total long-term debt, net of current maturities	$	2,059,797	$	1,085,712

We maintain credit facilities with third-party lenders, which we use for a variety of purposes. On July 9, 2021, CBRE Services, Inc. (CBRE Services) entered into an incremental assumption agreement with respect to its credit agreement, dated October 31, 2017 (such agreement, as amended by a December 20, 2018 incremental term loan assumption agreement, and such, a March 4, 2019 incremental assumption agreement and such, a July 9, 2021 incremental assumption agreement, collectively, the 2021 Credit Agreement) for purposes of increasing the revolving credit commitments previously available under the 2021 Credit Agreement by an aggregate principal amount of $350.0 million.

On December 10, 2021, CBRE Services and certain of the other borrowers entered into a first amendment of the 2021 Credit Agreement which (i) changed the interest rate applicable to revolving borrowings denominated in Sterling from a LIBOR-based rate to a rate based on the Sterling Overnight Index Average (SONIA) and (ii) changed the interest rate applicable to revolving borrowings denominated in Euros from a LIBOR-based rate to a rate based on EURIBOR. The revised interest rates described above went into effect on January 1, 2022.

On August 5, 2022, CBRE Group, Inc., as Holdings, and CBRE Global Acquisition Company, as the Luxembourg Borrower, entered into a second amendment to the 2021 Credit Agreement which, among other things (i) amended certain of the representations and warranties, affirmative covenants, negative covenants and events of default in the 2021 Credit Agreement in a manner consistent with the new 5-year senior unsecured Revolving Credit Agreement (as described below), (ii) terminated all revolving commitments previously available to the subsidiaries of the company thereunder and (iii) reflected the resignation of the previous administrative agent and the appointment of Wells Fargo Bank, National Association as the new administrative agent (the 2021 Credit Agreement, as amended by the first amendment and second amendment is referred to in this Quarterly Report as the 2022 Credit Agreement).

The 2022 Credit Agreement is a senior unsecured credit facility that is guaranteed by CBRE Group, Inc. and CBRE Services. As of June 30, 2023, the 2022 Credit Agreement provided for a €400.0 million term loan facility due and payable in full at maturity on December 20, 2023. A $3.15 billion revolving credit facility, which included the capacity to obtain letters of credit and swingline loans and would have terminated on March 4, 2024, was previously provided under this agreement and was replaced with a new $3.5 billion 5-year senior unsecured Revolving Credit Agreement entered into on August 5, 2022 (as described below).

Borrowings under the euro term loan facility under the 2022 Credit Agreement bear interest at a minimum rate of 0.75% plus EURIBOR and revolving borrowings bear interest, based at our option, on either (1) the applicable fixed rate plus 0.68% to 1.075% or (2) the daily rate plus 0.0% to 0.075% in each case as determined by reference to our Credit Rating (as defined in the 2022 Credit Agreement). As of June 30, 2023, we had $436.2 million of euro term loan borrowings outstanding under the 2022 Credit Agreement (at an interest rate of 0.75% plus EURIBOR), net of unamortized debt issuance costs, included as current maturities of long-term debt in the accompanying consolidated balance sheets.

16

CBRE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Our 2022 Credit Agreement also requires us to maintain a minimum coverage ratio of consolidated EBITDA (as defined in the 2022 Credit Agreement) to consolidated interest expense of 2.00x and a maximum leverage ratio of total debt less available cash to consolidated EBITDA (as defined in the 2022 Credit Agreement) of 4.25x (and in the case of the first four full fiscal quarters following consummation of a qualified acquisition (as defined in the 2022 Credit Agreement), 4.75x) as of the end of each fiscal quarter.

On July 10, 2023, CBRE Group, Inc., CBRE Services and Relam Amsterdam Holdings B.V., a wholly-owned subsidiary of CBRE Services, entered into a new five year senior unsecured Credit Agreement (the 2023 Credit Agreement). The 2023 Credit Agreement provides for a senior unsecured term loan credit facility comprised of (i) tranche A Euro-denominated term loans in an aggregate principal amount of €366.5 million and (ii) tranche A U.S. Dollar-denominated term loans in an aggregate principal amount of $350.0 million. The proceeds of the term loans under the 2023 Credit Agreement were applied to the repayment of all remaining outstanding loans under the 2022 Credit Agreement, the payment of related fees and expenses and other general corporate purposes. We entered into a cross currency swap to hedge the associated foreign currency exposure related to this transaction.

Borrowings denominated in euros under the 2023 Credit Agreement bear interest at a rate equal to (i) the applicable percentage plus (ii) at our option, either (1) the EURIBOR rate for the applicable interest period or (2) a rate determined by reference to Daily Simple Euro Short-Term Rate (ESTR). Borrowings denominated in dollars under the 2023 Credit Agreement bear interest at a rate equal to (i) the applicable percentage, plus (ii) at our option, either (1) the Term SOFR rate for the applicable interest period plus 10 basis points or (2) a base rate determined by the reference to the greatest of (x) the prime rate, (y) the federal funds rate plus 1/2 of 1% and (z) the sum of (A) Term SOFR rate published by CME Group Benchmark Administration Limited for an interest period of one month and (B) 1.00%. The applicable rate for borrowings under the 2023 Credit Agreement are determined by reference to our Credit Rating (as defined in the 2023 Credit Agreement).

The term loan borrowings under the 2023 Credit Agreement are guaranteed on a senior basis by CBRE Group, Inc. and CBRE Services.

The 2023 Credit Agreement also requires us to maintain a minimum coverage ratio of consolidated EBITDA (as defined in the 2023 Credit Agreement) to consolidated interest expense of 2.00x and a maximum leverage ratio of total debt less available cash to consolidated EBITDA (as defined in the 2023 Credit Agreement) of 4.25x (and in the case of the first four full fiscal quarters following consummation of a qualified acquisition (as defined in the 2023 Credit Agreement), 4.75x) as of the end of each fiscal quarter. In addition, the 2023 Credit Agreement also contains other customary affirmative and negative covenants and events of default.

On June 23, 2023, CBRE Services issued $1.0 billion in aggregate principal amount of 5.950% senior notes due August 15, 2034 (the 5.950% senior notes) at a price equal to 98.174% of their face value. The 5.950% senior notes are unsecured obligations of CBRE Services, senior to all of its current and future subordinated indebtedness, but effectively subordinated to its current and future secured indebtedness (if any) to the extent of the value of the assets securing such indebtedness. The 5.950% senior notes are guaranteed on a senior basis by CBRE Group, Inc. Interest accrues at a rate of 5.950% per year and is payable semi-annually in arrears on February 15 and August 15 of each year, beginning on February 15, 2024. The 5.950% senior notes are redeemable at our option, in whole or in part, on or after May 15, 2034 at a redemption price of 100% of the principal amount on that date, plus accrued and unpaid interest, if any, to, but excluding the date of redemption. At any time prior to May 15, 2034, we may redeem all or a portion of the notes at a redemption price equal to the greater of (1) 100% of the principal amount of the notes to be redeemed and (2) the sum of the present value at the date of redemption of the remaining scheduled payments of principal and interest thereon to May 15, 2034, assuming the notes matured on May 15, 2034, discounted to the date of redemption on a semi-annual basis at an adjusted rate equal to the treasury rate plus 40 basis points, minus accrued interest to the date of redemption, plus, in either case, accrued and unpaid interest, if any, to the redemption date. The amount of the 5.950% senior notes, net of unamortized discount and unamortized debt issuance costs, included in the accompanying consolidated balance sheet was $973.0 million at June 30, 2023.

On March 18, 2021, CBRE Services issued $500.0 million in aggregate principal amount of 2.500% senior notes due April 1, 2031 (the 2.500% senior notes) at a price equal to 98.451% of their face value. The 2.500% senior notes are unsecured obligations of CBRE Services, senior to all of its current and future subordinated indebtedness. The 2.500% senior notes are guaranteed on a senior basis by CBRE Group, Inc. Interest accrues at a rate of 2.500% per year and is payable semi-annually in arrears on April 1 and October 1 of each year.

On August 13, 2015, CBRE Services issued $600.0 million in aggregate principal amount of 4.875% senior notes due March 1, 2026 (the 4.875% senior notes) at a price equal to 99.24% of their face value. The 4.875% senior notes are unsecured obligations of CBRE Services, senior to all of its current and future subordinated indebtedness. The 4.875% senior notes are

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

guaranteed on a senior basis by CBRE Group, Inc. Interest accrues at a rate of 4.875% per year and is payable semi-annually in arrears on March 1 and September 1 of each year.

The indentures governing our 5.950% senior notes, 4.875% senior notes and 2.500% senior notes (1) contain restrictive covenants that, among other things, limit our ability to create or permit liens on assets securing indebtedness, enter into sale/leaseback transactions and enter into consolidations or mergers, and (2) require that the notes be jointly and severally guaranteed on a senior basis by CBRE Group, Inc. and any domestic subsidiary that guarantees the 2022 Credit Agreement, the 2023 Credit Agreement, or the Revolving Credit Agreement. The indentures also contain other customary affirmative and negative covenants and events of default. We were in compliance with the covenants under our debt instruments as of June 30, 2023.

Short-Term Borrowings

Revolving Credit Agreement

On August 5, 2022, we entered into a new 5-year senior unsecured Revolving Credit Agreement (the “Revolving Credit Agreement”). The Revolving Credit Agreement provides for a senior unsecured revolving credit facility available to CBRE Services with a capacity of $3.5 billion and a maturity date of August 5, 2027. Borrowings bear interest at (i) CBRE Services’ option, either (a) a Term SOFR rate published by CME Group Benchmark Administration Limited for the applicable interest period or (b) a base rate determined by reference to the greatest of (1) the prime rate determined by Wells Fargo, (2) the federal funds rate plus 1/2 of 1% and (3) the sum of (x) a Term SOFR rate published by CME Group Benchmark Administration Limited for an interest period of one month and (y) 1.00% plus (ii) 10 basis points, plus (iii) a rate equal to an applicable rate (in the case of borrowings based on the Term SOFR rate, 0.630% to 1.100% and in the case of borrowings based on the base rate, 0.0% to 0.100%, in each case, as determined by reference to our Debt Rating (as defined in the Revolving Credit Agreement). The applicable rate is also subject to certain increases and/or decreases specified in the Revolving Credit Agreement linked to achieving certain sustainability goals.

The Revolving Credit Agreement requires us to pay a fee based on the total amount of the revolving credit facility commitment (whether used or unused). In addition, the Revolving Credit Agreement also includes capacity for letters of credit not to exceed $300.0 million in the aggregate.

The Revolving Credit Agreement also requires us to maintain a minimum coverage ratio of consolidated EBITDA (as defined in the Revolving Credit Agreement) to consolidated interest expense of 2.00x and a maximum leverage ratio of total debt less available cash to consolidated EBITDA (as defined in the Revolving Credit Agreement) of 4.25x (and in the case of the first four full fiscal quarters following consummation of a qualified acquisition (as defined in the Revolving Credit Agreement), 4.75x) as of the end of each fiscal quarter. In addition, the Revolving Credit Agreement also contains other customary affirmative and negative covenants and events of default. We were in compliance with the covenants under this agreement as of June 30, 2023.

As of June 30, 2023, $583.0 million was outstanding under the Revolving Credit Agreement. No letters of credit were outstanding as of June 30, 2023. Letters of credit are issued in the ordinary course of business and would reduce the amount we may borrow under the Revolving Credit Agreement.

Turner & Townsend Revolving Credit Facilities

Turner & Townsend has a revolving credit facility with a capacity of £120.0 million and an additional accordion option of £20.0 million that matures on March 31, 2027. As of June 30, 2023, no amount was outstanding under this revolving credit facility.

Warehouse Lines of Credit

CBRE Capital Markets has warehouse lines of credit with third-party lenders for the purpose of funding mortgage loans that will be resold, and a funding arrangement with Fannie Mae for the purpose of selling a percentage of certain closed multifamily loans to Fannie Mae. These warehouse lines are recourse only to CBRE Capital Markets and are secured by our related warehouse receivables. See Note 3 for additional information.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

8.    Leases

We are the lessee in contracts for our office space tenancies and for leased vehicles. These arrangements account for the significant portion of our lease liabilities and right-of-use assets. We monitor our service arrangements to evaluate whether they meet the definition of a lease. 

Supplemental balance sheet information related to our leases is as follows (dollars in thousands):

Category	Classification	June 30, 2023		December 31, 2022
Assets
Operating	Operating lease assets	$	983,782	$	1,033,011
Financing	Other assets, net	98,956		91,028
Total leased assets		$	1,082,738	$	1,124,039
Liabilities
Current:
Operating	Operating lease liabilities	$	242,824	$	229,591
Financing	Other current liabilities	35,595		33,039
Non-current:
Operating	Non-current operating lease liabilities	1,051,341		1,080,385
Financing	Other liabilities