Investments

9 Months Ended

Sep. 30, 2019

Equity Method Investments And Joint Ventures [Abstract]

Investments

(8) Investments

Newmark has a 27% ownership in Real Estate LP, a joint venture with Cantor in which Newmark has the ability to exert significant influence over the operating and financial policies. Accordingly, Newmark accounts for this investment under the equity method of accounting. Newmark recognized equity income of $1.3 million for the three months ended September 30, 2019 and $6.0 million and $5.0 million for the nine months ended September 30, 2019 and 2018, respectively. Newmark did not recognize equity income for the three months ended September 30, 2018. These amounts were included in “Other income, net” on the accompanying unaudited condensed consolidated statements of operations. Newmark received distributions of $7.3 million for the three and nine months ended September 30, 2019. As of September 30, 2019 and December 31, 2018, Newmark had $100.0 million and $101.3 million in Equity method investments, respectively, included in “Other assets” on the accompanying unaudited condensed consolidated balance sheets.

Investments Carried Under Measurement Alternative

Newmark had previously acquired investments in entities for which it does not have the ability to exert significant influence over operating and financial policies. Prior to January 1, 2018, the investments were generally accounted for using the cost method of accounting in accordance with U.S. GAAP guidance, Investments—Other. Effective January 1, 2018, these investments are accounted for using the measurement alternative in accordance with the new guidance on recognition and measurement. The carrying value of these investments was $102.4 million and $53.5 million and is included in “Other assets” on the accompanying unaudited condensed consolidated balance sheets as of September 30, 2019 and December 31, 2018, respectively.

Certain of these entities issued and sold additional shares in the nine months ended September 30, 2019. Newmark recognized realized and unrealized gains of, net of $17.1 million and $21.0 million for the three and nine months ended September 30, 2019, respectively, to reflect observable transactions for these shares. The realized and unrealized gains, net are included on “Other income, net” on the accompanying unaudited condensed consolidated statements of operations.