Fair Value of Financial Assets and Liabilities (Tables)

3 Months Ended

Mar. 31, 2024

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 March 31, 2024
	Level 1		Level 2		Level 3		Total
Assets:
Marketable securities	$	86	$	—	$	—	$	86
Loans held for sale, at fair value	—		505,668		—		505,668

Rate lock commitments	—		—		2,559		2,559

Forward Sales Contracts	—		—		2,131		2,131
Total	$	86	$	505,668	$	4,690	$	510,444
Liabilities:

Contingent consideration	—		—		25,910		25,910
Rate lock commitments	—		—		999		999
Forward Sales Contracts	—		—		857		857
Total	$	—	$	—	$	27,766	$	27,766


	As of December 31, 2023
	Level 1		Level 2		Level 3		Total
Assets:
Marketable securities	$	99	$	—	$	—	$	99
Loans held for sale, at fair value	—		528,944		—		528,944

Rate lock commitments	—		—		9,604		9,604

Forward Sales Contracts	—		—		1,259		1,259
Total	$	99	$	528,944	$	10,863	$	539,906
Liabilities:
Contingent consideration	$	—	$	—	$	25,740	$	25,740
Rate lock commitments	—		—		1,023		1,023
Forwards Sales Contracts	—		—		20,304		20,304
Total	$	—	$	—	$	47,067	$	47,067

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 Sales Contracts and contingent consideration measured at fair value on recurring basis were as follows (in thousands):


	As of March 31, 2024
	Opening Balance		Total realized and unrealized gains (losses) included in Net income		Additions		Settlements		Closing Balance		Unrealized gains (losses) outstanding
Assets:
Rate lock commitments	$	9,604	$	2,559	$	—	$	(9,604)	$	2,559	$	2,559
Forward Sales Contracts	1,259		2,131		—		(1,259)		2,131		2,131

Total	$	10,863	$	4,690	$	—	$	(10,863)	$	4,690	$	4,690

	Opening Balance		Total realized and unrealized gains (losses) included in Net income		Additions		Settlements		Closing Balance		Unrealized gains (losses) outstanding
Liabilities:
Contingent consideration	$	25,740	$	170	$	—	$	—	$	25,910	$	170
Rate lock commitments	1,023		999		—		(1,023)		999		999
Forward Sales Contracts	20,304		857		—		(20,304)		857		857
Total	$	47,067	$	2,026	$	—	$	(21,327)	$	27,766	$	2,026


	As of December 31, 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	$	9,604	$	—	$	(3,181)	$	9,604	$	9,604
Forward Sales Contracts	11,139		1,259		—		(11,139)		1,259		$	1,259

Total	$	14,320	$	10,863	$	—	$	(14,320)	$	10,863	$	10,863

	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	$	6,192	$	12,189	$	(984)	$	25,740	$	6,192
Rate lock commitments	8,754		1,023		—		(8,754)		1,023		1,023
Forward Sales Contracts	624		20,304		—		(624)		20,304		20,304
Total	$	17,721	$	27,519	$	12,189	$	(10,362)	$	47,067	$	27,519

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:


March 31, 2024
Level 3 assets and liabilities	Assets		Liabilities		Significant Unobservable Inputs	Range		Weighted Average
Accounts payable, accrued expenses and other liabilities:
Contingent consideration	$	—	$	25,910	Discount rate	0.0% - 8.0%	(1)	2.7%
					Probability of meeting earnout and contingencies	99.0% - 100.0%	(1)	99.7%

Derivative assets and liabilities:

Forward Sales Contracts	$	2,131	$	857	Counterparty credit risk	N/A		N/A
Rate lock commitments	$	2,559	$	999	Counterparty credit risk	N/A		N/A


December 31, 2023
Level 3 assets and liabilities	Assets		Liabilities		Significant Unobservable Inputs	Range		Weighted Average
Accounts payable, accrued expenses and other liabilities:
Contingent consideration	$	—	$	25,740	Discount rate	0.0% - 8.0%	(1)	2.6%
					Probability of meeting earnout and contingencies	99.0% - 100.0%	(1)	99.7%

Derivative assets and liabilities:

Forward Sales Contracts	$	1,259	$	20,304	Counterparty credit risk	N/A		N/A
Rate lock commitments	$	9,604	$	1,023	Counterparty credit risk	N/A		N/A

(1)Newmark’s estimate of contingent consideration as of March 31, 2024 and December 31, 2023 was based on the acquired business’ projected future financial performance, including revenues.