Fair Value of Financial Assets and Liabilities (Tables)

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

Summary of Fair Value Hierarchy of Financial Assets and Liabilities under U.S. GAAP Guidance

The following table sets forth by level within the fair value hierarchy financial assets and liabilities accounted for at fair value under U.S. GAAP guidance (in thousands):

	As of September 30, 2023
	Level 1		Level 2		Level 3		Total
Assets:
Marketable securities	$	239	$	—	$	—	$	239
Loans held for sale, at fair value	—		616,420		—		616,420
Rate lock commitments	—		—		5,651		5,651
Forward sale contracts	—		—		12,832		12,832
Total	$	239	$	616,420	$	18,483	$	635,142
Liabilities:
Contingent consideration	—		—		20,056		20,056
Rate lock commitments	—		—		2,431		2,431
Forward sale contracts	—		—		2,825		2,825
Total	$	—	$	—	$	25,312	$	25,312

	As of December 31, 2022
	Level 1		Level 2		Level 3		Total
Assets:
Marketable securities	$	788	$	—	$	—	$	788
Loans held for sale, at fair value	—		138,345		—		138,345
Rate lock commitments	—		—		3,181		3,181
Forward sale contracts	—		—		11,139		11,139
Total	$	788	$	138,345	$	14,320	$	153,453
Liabilities:
Contingent consideration	$	—	$	—	$	8,343	$	8,343
Rate lock commitments	—		—		8,754		8,754
Forwards sale contracts	—		—		624		624
Total	$	—	$	—	$	17,721	$	17,721

Schedule of Changes in Level 3 RBC Forwards, Rate Lock Commitments, Forwards and Contingent Consideration Measured at Fair Value on Recurring Basis

Changes in Level 3 rate lock commitments, forward sale contracts and contingent consideration measured at fair value on recurring basis were as follows (in thousands):

	As of September 30, 2023
	Opening Balance		Total realized and unrealized gains (losses) included in Net income		Additions		Settlements		Closing Balance		Unrealized gains (losses) outstanding
Assets:
Rate lock commitments	$	3,181	$	5,651	$	—	$	(3,181)	$	5,651	$	5,651
Forward sale contracts	11,139		12,832		—		(11,139)		12,832		12,832
Total	$	14,320	$	18,483	$	—	$	(14,320)	$	18,483	$	18,483
	Opening Balance		Total realized and unrealized gains (losses) included in Net income		Additions		Settlements		Closing Balance		Unrealized gains (losses) outstanding
Liabilities:
Contingent consideration	$	8,343	$	508	$	12,189	$	(984)	$	20,056	$	508
Rate lock commitments	8,754		2,431		—		(8,754)		2,431		2,431
Forward sale contracts	624		2,825		—		(624)		2,825		2,825
Total	$	17,721	$	5,764	$	12,189	$	(10,362)	$	25,312	$	5,764

	As of December 31, 2022
	Opening Balance		Total realized and unrealized gains (losses) included in Net income		Additions		Settlements		Closing Balance		Unrealized gains (losses) outstanding
Assets:
Rate lock commitments	$	3,957	$	3,181	$	—	$	(3,957)	$	3,181	$	3,181
Forward sale contracts	4,544		11,139		—		(4,544)		11,139		11,139
Total	$	8,501	$	14,320	$	—	$	(8,501)	$	14,320	$	14,320
	Opening Balance		Total realized and unrealized gains (losses) included in Net income		Additions		Settlements		Closing Balance		Unrealized gains (losses) outstanding
Liabilities:
Contingent consideration	$	12,338	$	(1,893)	$	6,226	$	(8,328)	$	8,343	$	(1,893)
Rate lock commitments	2,836		8,754		—		(2,836)		8,754		8,754
Forward sale contracts	2,180		624		—		(2,180)		624		624
Total	$	17,354	$	7,485	$	6,226	$	(13,344)	$	17,721	$	7,485

Summary of Quantitative Information about Level 3 Fair Value Measurements

The following tables present quantitative information about the significant unobservable inputs utilized by Newmark in the fair value measurement of Level 3 assets and liabilities measured at fair value on a recurring basis:

September 30, 2023
Level 3 assets and liabilities	Assets		Liabilities		Significant Unobservable Inputs	Range		Weighted Average
Accounts payable, accrued expenses and other liabilities:
Contingent consideration	$	—	$	20,056	Discount rate	7.9% - 10.2%	(1)	4.1%
					Probability of meeting earnout and contingencies	99.0% - 100.0%	(1)	99.5%
Derivative assets and liabilities:
Forward sale contracts	$	12,832	$	2,825	Counterparty credit risk	N/A		N/A
Rate lock commitments	$	5,651	$	2,431	Counterparty credit risk	N/A		N/A

December 31, 2022
Level 3 assets and liabilities	Assets		Liabilities		Significant Unobservable Inputs	Range		Weighted Average
Accounts payable, accrued expenses and other liabilities:
Contingent consideration	$	—	$	8,343	Discount rate	4.0% - 11.8%	(1)	5.1%
					Probability of meeting earnout and contingencies	75.0% - 100.0%	(1)	98.9%
Derivative assets and liabilities:
Forward sale contracts	$	11,139	$	624	Counterparty credit risk	N/A		N/A
Rate lock commitments	$	3,181	$	8,754	Counterparty credit risk	N/A		N/A

(1)Newmark’s estimate of contingent consideration as of September 30, 2023 and December 31, 2022 was based on the acquired business’ projected future financial performance, including revenues.