Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 04, 2020 | |
Document Information | ||
Document Type | 10-Q | |
Document Annual Report | true | |
Document Period End Date | Sep. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-38329 | |
Entity Registrant Name | NEWMARK GROUP, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 81-4467492 | |
Entity Address, Address Line One | 125 Park Avenue | |
Entity Address, City or Town | New York | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10017 | |
City Area Code | 212 | |
Local Phone Number | 372-2000 | |
Title of Each Class | Class A Common Stock, $0.01 par value | |
Trading Symbol(s) | NMRK | |
Name of Each Exchange on Which Registered | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001690680 | |
Current Fiscal Year End Date | --12-31 | |
Class A Common Stock | ||
Document Information | ||
Entity Common Stock, Shares Outstanding | 159,084,572 | |
Class B Common Stock | ||
Document Information | ||
Entity Common Stock, Shares Outstanding | 21,285,533 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 272,957,000 | $ 163,564,000 |
Restricted cash | 63,705,000 | 58,308,000 |
Marketable securities | 121,759,000 | 36,795,000 |
Loans held for sale, at fair value | 1,537,734,000 | 215,290,000 |
Receivables, net | 380,128,000 | 508,379,000 |
Receivables from related parties | 652,000 | 0 |
Other current assets (see Note 19) | 88,803,000 | 91,194,000 |
Total current assets | 2,465,738,000 | 1,073,530,000 |
Goodwill | 559,935,000 | 557,914,000 |
Mortgage servicing rights, net | 453,187,000 | 413,644,000 |
Loans, forgivable loans and other receivables from employees and partners, net | 479,792,000 | 403,710,000 |
Right-of-use assets | 191,705,000 | 201,661,000 |
Fixed assets, net | 102,016,000 | 98,016,000 |
Other intangible assets, net | 46,554,000 | 45,226,000 |
Other assets (see Note 19) | 379,685,000 | 407,898,000 |
Total assets | 4,678,612,000 | 3,201,599,000 |
Current liabilities: | ||
Warehouse facilities collateralized by U.S. Government Sponsored Enterprises | 1,510,333,000 | 209,648,000 |
Accrued compensation | 270,312,000 | 343,845,000 |
Accounts payable, accrued expenses and other liabilities (see Note 29) | 465,333,000 | 417,069,000 |
Securities loaned | 0 | 36,735,000 |
Payables to related parties | 5,185,000 | 38,090,000 |
Total current liabilities | 2,251,163,000 | 1,045,387,000 |
Long-term debt | 879,504,000 | 589,294,000 |
Right-of-use liabilities | 216,993,000 | 227,942,000 |
Other long-term liabilities (see Note 29) | 418,227,000 | 376,834,000 |
Total liabilities | 3,765,887,000 | 2,239,457,000 |
Commitments and contingencies (see Note 31) | ||
Redeemable partnership interests | 22,608,000 | 21,517,000 |
Equity: | ||
Additional paid-in capital | 335,955,000 | 318,165,000 |
Retained earnings | 348,430,000 | 313,112,000 |
Accumulated other comprehensive income (loss) | (3,739,000) | 0 |
Total stockholders’ equity | 648,756,000 | 599,664,000 |
Noncontrolling interests | 241,361,000 | 340,961,000 |
Total equity | 890,117,000 | 940,625,000 |
Total liabilities, redeemable partnership interests, and equity | 4,678,612,000 | 3,201,599,000 |
Class A Common Stock | ||
Equity: | ||
Common stock value | 1,632,000 | 1,608,000 |
Treasury stock at cost: 4,568,002 shares of Class A common stock at September 30, 2020 and December 31, 2019 | (34,894,000) | (34,894,000) |
Class B Common Stock | ||
Equity: | ||
Common stock value | 212,000 | 212,000 |
Contingent Class A Common Stock | ||
Equity: | ||
Common stock value | $ 1,160,000 | $ 1,461,000 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
Treasury stock, shares issued (in shares) | 4,568,002 | 4,568,002 | ||||
Class A Common Stock | ||||||
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 | ||||
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 | ||||
Common stock, shares issued (in shares) | 163,198,127 | 160,833,463 | ||||
Common stock, shares outstanding (in shares) | 158,630,125 | 157,811,436 | 156,265,461 | 154,989,126 | 156,679,527 | 156,916,336 |
Treasury stock, shares issued (in shares) | 4,568,002 | 4,568,002 | ||||
Class B Common Stock | ||||||
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 | ||||
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 | ||||
Common stock, shares issued (in shares) | 21,285,533 | 21,285,533 | ||||
Common stock, shares outstanding (in shares) | 21,285,533 | 21,285,533 | 21,300,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | ||
Revenues: | |||||
Revenues | $ 435,924 | $ 586,634 | $ 1,303,572 | $ 1,585,768 | |
Expenses: | |||||
Compensation and employee benefits | 253,908 | 341,036 | 784,684 | 921,126 | |
Equity-based compensation and allocations of net income to limited partnership units and FPUs | 50,769 | 56,647 | 74,544 | 109,871 | |
Total compensation and employee benefits | 304,677 | 397,683 | 859,228 | 1,030,997 | |
Operating, administrative and other | 61,790 | 86,297 | 215,083 | 275,939 | |
Fees to related parties | 6,109 | 7,088 | 17,126 | 21,035 | |
Depreciation and amortization | 29,627 | 36,781 | 104,613 | 98,510 | |
Total operating expenses | 402,203 | 527,849 | 1,196,050 | 1,426,481 | |
Other income, net | 108,608 | 108,711 | 73,657 | 95,267 | |
Income from operations | 142,329 | 167,496 | 181,179 | 254,554 | |
Interest expense, net | (9,532) | (8,167) | (28,617) | (23,947) | |
Income before income taxes and noncontrolling interests | 132,797 | 159,329 | 152,562 | 230,607 | |
Provision for income taxes | 33,272 | 36,760 | 38,158 | 52,568 | |
Consolidated net income | 99,525 | 122,569 | 114,404 | 178,039 | |
Less: Net income attributable to noncontrolling interests | 24,176 | 33,871 | 30,563 | 49,769 | |
Net income available to common stockholders | 75,349 | 88,698 | 83,841 | 128,270 | |
Basic earnings per share | |||||
Net income available to common stockholders | [1] | $ 72,101 | $ 85,475 | $ 75,703 | $ 118,599 |
Basic earnings per share (in usd per share) | $ 0.40 | $ 0.48 | $ 0.42 | $ 0.67 | |
Basic weighted-average shares of common stock outstanding (in shares) | 179,501 | 177,020 | 178,527 | 178,122 | |
Fully diluted earnings per share | |||||
Net income for fully diluted shares | $ 103,623 | $ 99,500 | $ 110,422 | $ 122,379 | |
Fully diluted earnings per share (in usd per share) | $ 0.39 | $ 0.48 | $ 0.42 | $ 0.66 | |
Fully diluted weighted-average shares of common stock outstanding (in shares) | 266,793 | 206,616 | 265,104 | 185,413 | |
Commissions | |||||
Revenues: | |||||
Revenues | $ 197,903 | $ 357,908 | $ 639,303 | $ 979,307 | |
Gains from mortgage banking activities/originations, net | |||||
Revenues: | |||||
Revenues | 91,192 | 72,332 | 210,686 | 148,769 | |
Management services, servicing fees and other | |||||
Revenues: | |||||
Revenues | $ 146,829 | $ 156,394 | $ 453,583 | $ 457,692 | |
[1] | Includes a reduction for dividends on preferred stock or exchangeable preferred partnership units in the amount of $3.2 million and $8.1 million for the three and nine months ended September 30, 2020, respectively, and $3.2 million and $9.7 million for the three and nine months ended September 30, 2019, respectively (see Note 1 — “Organization and Basis of Presentation”). |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Statement [Abstract] | ||||
Reduction for dividends on preferred stock or units | $ 3.2 | $ 3.2 | $ 8.1 | $ 9.7 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Consolidated net income | $ 99,525 | $ 122,569 | $ 114,404 | $ 178,039 |
Foreign currency translation adjustments | (1,135) | 0 | (3,739) | 0 |
Comprehensive income, net of tax | 98,390 | 122,569 | 110,665 | 178,039 |
Less: Comprehensive income attributable to noncontrolling interests, net of tax | 24,176 | 33,871 | 30,563 | 49,769 |
Comprehensive income available to common stockholders | $ 74,214 | $ 88,698 | $ 80,102 | $ 128,270 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Thousands | Total | Adjustments | Common StockClass A Common Stock | Common StockClass B Common Stock | Common StockContingent Class A Common Stock | Additional Paid-in Capital | Treasury Stock | Retained Earnings | Retained EarningsAdjustments | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests |
Beginning balance at Dec. 31, 2018 | $ 1,056,799 | $ 1,570 | $ 212 | $ 3,250 | $ 285,071 | $ (486) | $ 277,952 | $ 489,230 | |||
Increase (Decrease) in Stockholders' Equity | |||||||||||
Consolidated net income | 178,039 | 128,270 | 49,769 | ||||||||
Dividends to common stockholders | (51,659) | (51,659) | |||||||||
Preferred dividends on exchangeable preferred partnership units | 0 | (9,672) | 9,672 | ||||||||
Earnings distributions to limited partnership interests and other noncontrolling interests | (67,622) | (67,622) | |||||||||
Grant of exchangeability, redemption and issuance | (13,180) | 20 | 7,632 | (20,832) | |||||||
Issuance of limited partnership units including contingent units | 2,715 | 914 | 1,801 | ||||||||
Issuance and redemption of limited partnership units including contingent units | (33,983) | (33,983) | |||||||||
Repurchase of shares of Class A common stock | 0 | ||||||||||
Redemption of EPUs | (93,480) | (93,480) | |||||||||
Other | 1,284 | 1,284 | |||||||||
Ending balance at Sep. 30, 2019 | 978,913 | 1,590 | 212 | 3,250 | 294,901 | (34,469) | 344,891 | 368,538 | |||
Beginning balance at Jun. 30, 2019 | 1,016,003 | 1,583 | 212 | 2,956 | 292,441 | (14,382) | 277,115 | 456,078 | |||
Increase (Decrease) in Stockholders' Equity | |||||||||||
Consolidated net income | 122,569 | 88,698 | 33,871 | ||||||||
Dividends to common stockholders | (17,698) | (17,698) | |||||||||
Preferred dividends on exchangeable preferred partnership units | 0 | (3,224) | 3,224 | ||||||||
Earnings distributions to limited partnership interests and other noncontrolling interests | (26,101) | (26,101) | |||||||||
Grant of exchangeability, redemption and issuance | 682 | 7 | 2,872 | (2,197) | |||||||
Issuance of limited partnership units including contingent units | 2,715 | 294 | 620 | 1,801 | |||||||
Issuance and redemption of limited partnership units including contingent units | (20,087) | (20,087) | |||||||||
Repurchase of shares of Class A common stock | (7,021) | (2,363) | (4,658) | ||||||||
Restricted stock units compensation | (1,466) | (1,466) | |||||||||
Redemption of EPUs | (93,480) | (93,480) | |||||||||
Other | 2,797 | 2,797 | |||||||||
Ending balance at Sep. 30, 2019 | 978,913 | 1,590 | 212 | 3,250 | 294,901 | (34,469) | 344,891 | 368,538 | |||
Beginning balance at Dec. 31, 2019 | 940,625 | $ (19,023) | 1,608 | 212 | 1,461 | 318,165 | (34,894) | 313,112 | $ (19,023) | 340,961 | |
Increase (Decrease) in Stockholders' Equity | |||||||||||
Consolidated net income | 114,404 | 83,841 | 30,563 | ||||||||
Other comprehensive income (loss), net of tax | (3,421) | $ (3,421) | |||||||||
Dividends to common stockholders | (21,362) | (21,362) | |||||||||
Preferred dividends on exchangeable preferred partnership units | 0 | (8,138) | 8,138 | ||||||||
Earnings distributions to limited partnership interests and other noncontrolling interests | (44,609) | (44,609) | |||||||||
Grant of exchangeability, redemption and issuance | 7,405 | 24 | 11,188 | (3,807) | |||||||
Issuance and redemption of limited partnership units including contingent units | 907 | (301) | 315 | 893 | |||||||
Restricted stock units compensation | 8,289 | 5,587 | 2,702 | ||||||||
Redemption of EPUs | (93,480) | (93,480) | |||||||||
Other | 382 | 700 | (318) | ||||||||
Ending balance at Sep. 30, 2020 | 890,117 | 1,632 | 212 | 1,160 | 335,955 | (34,894) | 348,430 | (3,739) | 241,361 | ||
Beginning balance at Jun. 30, 2020 | 884,812 | 1,623 | 212 | 1,050 | 329,196 | (34,894) | 278,130 | (2,604) | 312,099 | ||
Increase (Decrease) in Stockholders' Equity | |||||||||||
Consolidated net income | 99,525 | 75,349 | 24,176 | ||||||||
Other comprehensive income (loss), net of tax | (1,135) | ||||||||||
Dividends to common stockholders | (1,799) | (1,799) | |||||||||
Preferred dividends on exchangeable preferred partnership units | 0 | (3,250) | 3,250 | ||||||||
Earnings distributions to limited partnership interests and other noncontrolling interests | (6,530) | (6,530) | |||||||||
Grant of exchangeability, redemption and issuance | 5,279 | 9 | 4,525 | 745 | |||||||
Issuance and redemption of limited partnership units including contingent units | 110 | (110) | |||||||||
Restricted stock units compensation | 3,366 | 2,265 | 1,101 | ||||||||
Redemption of EPUs | (93,480) | (93,480) | |||||||||
Other | 79 | 79 | |||||||||
Ending balance at Sep. 30, 2020 | $ 890,117 | $ 1,632 | $ 212 | $ 1,160 | $ 335,955 | $ (34,894) | $ 348,430 | $ (3,739) | $ 241,361 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Parenthetical) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Class A Common Stock | ||||
Increase (Decrease) in Stockholders' Equity | ||||
Treasury stock repurchases (in shares) | 0 | 2,279,373 | 0 | 3,892,405 |
Common Stock | ||||
Increase (Decrease) in Stockholders' Equity | ||||
Dividends declared per share of common stock (dollars per share) | $ 0.01 | $ 0.10 | $ 0.12 | $ 0.30 |
Dividends declared and paid per share of common stock (dollars per share) | $ 0.01 | $ 0.10 | $ 0.12 | $ 0.29 |
Common Stock | Class A Common Stock | ||||
Increase (Decrease) in Stockholders' Equity | ||||
Grant of exchangeability, redemption and issuance of limited partnership interests and issuance of common stock (in shares) | 818,689 | 588,972 | 2,364,664 | 1,965,195 |
Treasury stock repurchases (in shares) | 2,279,373 | 3,892,405 |
CONDENSED CONSOLIDATED STATEM_6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||
Consolidated net income | $ 99,525 | $ 122,569 | $ 114,404 | $ 178,039 | |
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | |||||
Gain on originated mortgage servicing rights | (126,571) | (73,873) | |||
Depreciation and amortization | 29,627 | 36,781 | 104,613 | 98,510 | |
Nasdaq earn-out recognition | (121,906) | (98,580) | |||
Provision for credit losses on the financial guarantee liability | 14,702 | 0 | |||
Provision for doubtful accounts | 2,976 | 1,575 | |||
Equity-based compensation and allocation of net income to limited partnership units and FPUs | 74,544 | 109,872 | |||
Employee loan amortization | 50,193 | 31,688 | |||
Deferred tax (benefit) provision | (20) | 956 | |||
Unrealized (gains) on loans held for sale | (27,136) | (22,522) | |||
Loss (income) from an equity method investment | 7,400 | (1,300) | 11,562 | (6,000) | |
Change in fair value of contingent consideration | (11,445) | 639 | |||
Realized loss (gains) on marketable securities | 2,204 | (4,056) | |||
Unrealized loss (gains) on non-marketable investments | 26,837 | (20,960) | |||
Unrealized (gains) on marketable securities | 0 | (4,445) | |||
Change in valuation of derivative asset | 7,110 | 37,181 | |||
Loan originations—loans held for sale | (8,285,891) | (7,511,234) | |||
Loan sales—loans held for sale | 6,990,582 | 7,820,263 | |||
Other | 3,899 | 3,234 | |||
Consolidated net (loss) income, adjusted for non-cash and non-operating items | (1,169,343) | 540,287 | |||
Changes in operating assets and liabilities: | |||||
Receivables, net | 120,729 | (24,293) | |||
Loans, forgivable loans and other receivables from employees and partners | (130,037) | (102,745) | |||
Other assets | 194 | (62,883) | |||
Accrued compensation | (98,191) | 13,326 | |||
Accounts payable, accrued expenses and other liabilities | (40,031) | 24,114 | |||
Payables to related parties | (24,371) | 5,609 | |||
Net cash (used in) provided by operating activities | (1,341,050) | 393,415 | |||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||
Payments for acquisitions, net of cash acquired | (5,850) | (18,212) | |||
Distributions from equity method investment | 0 | 7,293 | |||
Proceeds from the sale of marketable securities | 34,738 | 32,606 | |||
Purchase of non-marketable investments | 0 | (28,000) | |||
Purchases of fixed assets | (16,182) | (23,447) | |||
Purchase of mortgage servicing rights | (200) | (845) | |||
Net cash provided by (used in) investing activities | 12,506 | (30,605) | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||
Proceeds from warehouse facilities | 8,285,891 | 7,511,234 | |||
Principal payments on warehouse facilities | (6,985,205) | (7,802,761) | |||
Settlement of pre-Spin-Off related party receivables | 0 | 33,892 | |||
Borrowing of debt | 365,000 | 155,000 | |||
Repayment of debt | (75,000) | (95,000) | |||
Securities loaned | (36,735) | 24,838 | |||
Treasury stock repurchases | 0 | (33,983) | |||
Earnings distributions to limited partnership interests and noncontrolling interests | (81,879) | (112,691) | |||
Dividends to stockholders | (21,362) | (51,659) | |||
Payments on acquisition earn-outs | (3,981) | (3,407) | |||
Payment of deferred financing costs | (3,395) | (1,363) | |||
Net cash provided by (used in) financing activities | 1,443,334 | (375,900) | |||
Net (decrease) increase in cash and cash equivalents and restricted cash | 114,790 | (13,090) | |||
Cash and cash equivalents and restricted cash at beginning of period | 221,872 | 187,406 | $ 187,406 | ||
Cash and cash equivalents and restricted cash at end of period | $ 336,662 | $ 174,316 | 336,662 | 174,316 | $ 221,872 |
Cash paid during the period for: | |||||
Interest | 22,435 | 19,392 | |||
Taxes | 69,460 | 82,939 | |||
Supplemental disclosure of non-cash operating, investing and financing activities: | |||||
Right-of-use assets and liabilities | $ 26,444 | $ 52,381 |
Organization and Basis of Prese
Organization and Basis of Presentation | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | Organization and Basis of Presentation Newmark Group, Inc., formerly known as Newmark Knight Frank (together with its subsidiaries, “Newmark” or the “Company”), a Delaware corporation, was formed as NRE Delaware, Inc. on November 18, 2016. Newmark changed its name to Newmark Group, Inc. on October 18, 2017. Newmark Holdings, L.P. (“Newmark Holdings”) is a consolidated subsidiary of Newmark for which Newmark is the general partner. Newmark and Newmark Holdings jointly own Newmark Partners, L.P. (“Newmark OpCo”), the operating partnership. Newmark is a leading commercial real estate services firm. Newmark offers a diverse array of integrated services and products designed to meet the full needs of both real estate investors/owners and occupiers. Newmark’s investor/owner services and products include capital markets, which consists of investment sales, debt and structured finance and loan sales, agency leasing, property management, valuation and advisory, commercial real estate due diligence consulting and advisory services and Government Sponsored Enterprise (“GSE”) lending and loan servicing, mortgage brokerage and equity-raising. Newmark’s occupier services and products include tenant representation, real estate management technology systems, workplace and occupancy strategy, global corporate consulting services, project management, lease administration and facilities management. Newmark enhances these services and products through innovative real estate technology solutions and data analytics that enable clients to increase their efficiency and profits by optimizing their real estate portfolio. Newmark has relationships with many of the world’s largest commercial property owners, real estate developers and investors, as well as Fortune 500 and Forbes Global 2000 companies. Newmark's Separation and Spin-Off From BGC Partners, Inc. Newmark was formed initially through the purchase by BGC Partners, Inc. (“BGC Partners” or “BGC”) of Newmark & Company Real Estate, Inc. and certain of its affiliates in 2011. A majority of the voting power of BGC Partners is held by Cantor Fitzgerald, L.P. (“Cantor”). On December 13, 2017, BGC, BGC Holdings L.P. (“BGC Holdings”), BGC Partners, L.P. (“BGC U.S. OpCo”), Newmark, Newmark Holdings, Newmark OpCo and, solely for the provisions listed therein, Cantor and BGC Global Holdings, L.P. entered into a Separation and Distribution Agreement (as amended on November 8, 2018 and amended and restated on November 23, 2018, the “Separation and Distribution Agreement”). See Note 1 — “Organization and Basis of Presentation” to the Newmark financial statements in Part II, Item 8 of the Newmark Annual Report on Form 10-K for the year ended December 31, 2019, for additional information regarding the transactions effected pursuant to the Separation and Distribution Agreements, including the separation and the pro rata distribution (the "Spin-Off") of Newmark, Newmark Holdings and Newmark OpCo from BGC, BGC Holdings and BGC U.S. OpCo (the “Separation”) and Newmark's initial public offering (“IPO”). On November 30, 2018 (the “Distribution Date”), BGC completed its previously announced Spin-Off to its stockholders of all of the shares of common stock of Newmark owned by BGC as of immediately prior to the effective time of the Spin-Off, with shares of Newmark Class A common stock distributed to the holders of shares of BGC Class A common stock (including directors and executive officers of BGC Partners) of record as of the close of business on November 23, 2018 (the “Record Date”), and shares of Newmark Class B common stock distributed to the holders of shares of BGC Class B common stock (consisting of Cantor and CF Group Management, Inc. (“CFGM”)) of record as of the close of business on the Record Date. The Spin-Off was effective as of 12:01 a.m., New York City time, on the Distribution Date. Based on the number of shares of BGC common stock outstanding as of the close of business on the Record Date, BGC’s stockholders as of the Record Date received in the Spin-Off 0.463895 of a share of Newmark Class A common stock for each share of BGC Class A common stock held as of the Record Date, and 0.463895 of a share of Newmark Class B common stock for each share of BGC Class B common stock held as of the Record Date. BGC Partners stockholders received cash in lieu of any fraction of a share of Newmark common stock that they otherwise would have received in the Spin-Off. Prior to and in connection with the Spin-Off, 14.8 million Newmark Holdings units held by BGC were exchanged into 9.4 million shares of Newmark Class A common stock, and 5.4 million shares of Newmark Class B common stock, and 7.0 million Newmark OpCo units held by BGC were exchanged into 6.9 million shares of Newmark Class A common stock. These Newmark Class A and Class B shares of common stock were included in the Spin-Off to BGC’s stockholders. In the aggregate, BGC distributed 131,886,409 shares of Newmark Class A common stock and 21,285,537 shares of Newmark Class B common stock to BGC’s stockholders in the Spin-Off. These shares of Newmark common stock collectively represented approximately 94% of the total voting power of outstanding common stock and approximately 87% of the total economics of Newmark outstanding common stock, in each case as of the Distribution Date. On March 7, 2018, BGC Partners and its operating subsidiaries had purchased 16.6 million newly issued exchangeable limited partnership units (the “Newmark Holdings Units”) of Newmark Holdings for approximately $242.0 million (the “Investment in Newmark Holdings”). On November 30, 2018, BGC Partners also caused its subsidiary, BGC Holdings, to distribute pro rata (the “BGC Holdings Distribution”) all of the 1,458,931 Newmark Holdings Units held by BGC Holdings immediately prior to the effective time of the BGC Holdings Distribution to its limited partners entitled to receive distributions on their BGC Holdings units (including Cantor and executive officers of BGC) who were holders of record of such units as of the Record Date. The Newmark Holdings Units distributed to BGC Holdings partners in the BGC Holdings distribution are exchangeable for shares of Newmark Class A common stock, and in the case of the 449,917 Newmark Holdings Units received by Cantor also into shares of Newmark Class B common stock, at the applicable exchange ratio (subject to adjustment). As of September 30, 2020, the exchange ratio was 0.9373 shares of Newmark common stock per Newmark Holdings Unit. Following the Spin-Off and the BGC Holdings Distribution, BGC Partners ceased to be Newmark’s controlling stockholder, and BGC and its subsidiaries no longer held any shares of Newmark common stock or other equity interests in it or its subsidiaries. Therefore, BGC no longer consolidates Newmark with its financial results subsequent to the Spin-Off. Cantor continues to control Newmark and its subsidiaries following the Spin-Off and the BGC Holdings Distribution. Nasdaq Monetization Transactions On June 28, 2013, BGC had sold certain assets of its on-the-run, electronic benchmark U.S. Treasury platform (“eSpeed”) to Nasdaq, Inc. The total consideration received in the transaction included $750.0 million in cash paid upon closing and an earn-out of up to 14,883,705 shares of Nasdaq common stock to be paid ratably over 15 years, provided that Nasdaq, as a whole, produces at least $25.0 million in consolidated gross revenues each year (the “Nasdaq Earn-out”). The remaining rights under the Nasdaq Earn-out were transferred to Newmark on September 28, 2017 as part of the transaction (see Note 7 — “Marketable Securities” for additional information). Exchangeable Preferred Partnership Units and Nasdaq Forward Contracts On June 18, 2018 and September 26, 2018, Newmark OpCo issued approximately $175.0 million and $150.0 million of exchangeable preferred partnership units (“EPUs”), respectively, in private transactions to the Royal Bank of Canada (“RBC”) (the “Newmark OpCo Preferred Investment”). Newmark received $266.1 million of cash in 2018 with respect to these transactions. The EPUs were issued in four tranches and are separately convertible by either RBC or Newmark into a fixed number of shares of Newmark Class A common stock, subject to a revenue hurdle in each of the fourth quarters of 2019 through 2022 for each of the respective four tranches. The ability to convert the EPUs into Newmark Class A common stock is subject to the special purpose vehicle's (the "SPV's") option to settle the postpaid forward contracts as described below. As the EPUs represent equity ownership of a consolidated subsidiary of Newmark, they have been included in “Noncontrolling interests” on the accompanying unaudited condensed consolidated balance sheets and unaudited condensed consolidated statements of changes in equity. The EPUs are entitled to a preferred payable-in-kind dividend, which is recorded as accretion to the carrying amount of the EPUs through Retained earnings on the accompanying unaudited condensed consolidated statements of changes in equity and are reductions to “Net income (loss) available to common stockholders” for the purpose of calculating earnings per share. Contemporaneously with the issuance of the EPUs, an SPV that is a consolidated subsidiary of Newmark entered into four variable postpaid forward contracts with RBC (together, the “Nasdaq Forwards”). The SPV is an indirect subsidiary of Newmark whose sole assets are the Nasdaq Earn-outs for 2019 through 2022. The Nasdaq Forwards provide the SPV the option to settle using up to 992,247 Nasdaq shares, to be received by the SPV pursuant to the Nasdaq Earn-out shares to be received (see Note 7 — “Marketable Securities”), or Newmark Class A common stock, in exchange for either cash or redemption of the EPUs, notice of which must be provided to RBC prior to November 1 of each year from 2019 through 2022. In September 2020, the SPV notified RBC of its decision to settle the second Nasdaq Forward using the Nasdaq shares the SPV expects to receive in November 2020 in exchange for the second tranche of the EPUs. The fair value of the Nasdaq shares that Newmark will receive is based on the September 30, 2020 price of Nasdaq. As a result of Newmark’s settlement method election, Newmark reclassified $93.5 million of EPUs as of September 30, 2020 from “Noncontrolling interests” to a payable, included in “Current portion of accounts payable, accrued expenses and other liabilities” on the accompanying unaudited condensed consolidated balance sheets. In September 2019, the SPV notified RBC of its decision to settle the first variable postpaid forward contract using the Nasdaq common stock the SPV received in November 2019 in exchange for the first tranche of the EPUs, which resulted in a payable to RBC that was settled upon receipt of Nasdaq earn-out shares. The fair value of the Nasdaq common stock that Newmark received was $98.6 million. On December 2, 2019, Newmark settled the first variable postpaid forward contract with 898,685 Nasdaq common stock shares, with a fair value of $93.5 million and Newmark retained 93,562 Nasdaq common stock shares. (a) Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission and in conformity with accounting principles generally accepted in the U.S. (“U.S. GAAP”). For the year ended December 31, 2019, Newmark changed the line item formerly known as “Allocations of net income and grant of exchangeability to limited partnership units and FPUs and issuance of common stock” to “Equity-based compensation and allocations of net income to limited partnership units and FPUs” on the unaudited condensed consolidated statements of operations and statements of cash flow. The change resulted in the reclassification of amortization charges related to equity-based awards, such as REUs and Restricted Stock Units (“RSUs”), from “Compensation and employee benefits” to “Equity-based compensation and allocations of net income to limited partnership units and FPUs.” “Equity-based compensation and allocations of net income to limited partnership units and FPUs” reflect the following items related to cash and equity-based compensation: • Charges with respect to the grant of shares of common stock or limited partnership units, such as HDUs, including in connection with the redemption of non-exchangeable limited partnership units, including PSUs; • Charges with respect to grants of exchangeability, such as the right of holders of limited partnership units with no capital accounts, such as PSUs, to exchange the units into shares of common stock, or HDUs, as well as the cash paid in the settlement of the related preferred units to pay withholding taxes owed by the unit holder upon such exchange; • Preferred units are granted in connection with the grant of certain limited partnership units, such as PSUs, that may be granted exchangeability to cover the withholding taxes owed by the unit holder, rather than issuing the gross amount of shares to employees, subject to cashless withholding of shares to pay applicable withholding taxes; • Charges related to the amortization of RSUs and limited partnership units; and • Allocations of net income to limited partnership units and founding/working partner units (“FPUs”), including the Preferred Distribution (as hereinafter defined). Intercompany balances and transactions within Newmark have been eliminated. Transactions between Cantor or BGC and Newmark pursuant to service agreements between Cantor and BGC (see Note 27 — “Related Party Transactions”), representing valid receivables and liabilities of Newmark which are periodically cash settled, have been included on the accompanying unaudited condensed consolidated financial statements as either receivables from or payables to related parties. Newmark receives administrative services to support its operations, and in return, Cantor and/or BGC allocates certain of its expenses to Newmark. Such expenses represent costs related, but not limited to, treasury, legal, accounting, information technology, payroll administration, human resources, incentive compensation plans and other services. These costs, together with an allocation of Cantor and/or BGC overhead costs, are included as expenses on the accompanying unaudited condensed consolidated statements of operations. Where it is possible to specifically attribute such expenses to activities of Newmark, these amounts have been expensed directly to Newmark. Allocation of all other such expenses is based on a services agreement between Cantor and/or BGC which reflects the utilization of service provided or benefits received by Newmark during the periods presented on a consistent basis, such as headcount, square footage, revenue, etc. Management believes the assumptions underlying the stand-alone financial statements, including the assumptions regarding allocated expenses, reasonably reflect the utilization of services provided to or the benefit received by Newmark during the periods presented. However, these shared expenses may not represent the amounts that would have been incurred had Newmark operated independently from Cantor and or BGC. Actual costs that would have been incurred if Newmark had performed the services itself would depend on multiple factors, including organizational structure and strategic decisions in various areas, including information technology and infrastructure (see Note 27 — “Related Party Transactions” for an additional discussion of expense allocations). Transfers of cash, both to and from Cantor and/or BGC, are included in “Receivables from related parties or Payables to related parties” on the unaudited condensed consolidated balance sheets and as part of the change in payments to and borrowings from related parties in the financing section prior to the Spin-Off and in the operating section after the Spin-Off on the accompanying unaudited condensed consolidated statements of cash flows. The income tax provision on the accompanying unaudited condensed consolidated statements of operations and unaudited condensed consolidated statements of comprehensive income has been calculated as if Newmark had been operating on a stand-alone basis and filed separate tax returns in the jurisdictions in which it operates. Prior to the Spin-Off, Newmark’s operations had been included in the BGC U.S. federal and state tax returns or separate non-U.S. jurisdictions tax returns. As Newmark operations in many jurisdictions were unincorporated commercial units of BGC and its subsidiaries, stand-alone tax returns have not been filed for the operations in these jurisdictions. The accompanying unaudited condensed consolidated financial statements contain all normal and recurring adjustments that, in the opinion of management, are necessary for a fair presentation of the accompanying unaudited condensed consolidated balance sheets, unaudited condensed consolidated statements of operations, unaudited condensed consolidated statements of comprehensive income, unaudited condensed consolidated statements of cash flows and unaudited condensed consolidated statements of changes in equity of Newmark for the periods presented. (b) Recently Adopted Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers , which relates to how an entity recognizes the revenue it expects to be entitled to for the transfer of promised goods and services to customers. The ASU replaced certain previously existing revenue recognition guidance. The FASB has subsequently issued several additional amendments to the standard, including ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) , which clarifies the guidance on principal versus agent analysis based on the notion of control and affects recognition of revenue on a gross or net basis. Newmark adopted the standards as of their effective date of January 1, 2018 and recognized an increase in assets, liabilities, beginning retained earnings and noncontrolling interests of $64.4 million, $45.6 million, $16.5 million and $2.3 million, respectively, as the cumulative effect of adoption of this accounting change. The impact of adoption is primarily related to Newmark’s brokerage revenues from leasing commissions where revenue recognition was previously deferred when future contingencies exist under the previous revenue recognition guidance. The adoption of the new revenue recognition guidance accelerated these commission revenues that were based, in part, on future contingent events. For example, a portion of certain brokerage revenues from leasing commissions were deferred until a future contingency was resolved (e.g., tenant move-in or payment of first month’s rent). Under the new revenue recognition model, Newmark’s performance obligation will be typically satisfied at lease signing, and, therefore, the portion of the commission that is contingent on a future event will likely be recognized earlier, if it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. Further, Newmark previously presented expenses incurred on behalf of customers for certain management services subject to reimbursement on a net basis within expenses. Under the new revenue recognition model, Newmark concluded that it controls the services provided by a third-party on behalf of customers and, therefore, acts as a principal under those contracts. As a result, for these service contracts Newmark will present expenses incurred on behalf of customers along with corresponding reimbursement revenue on a gross basis on the accompanying unaudited condensed consolidated statements of operations, with no material impact on net income available to common stockholders. Newmark elected to adopt the new guidance using a modified retrospective approach applied to contracts that were not completed as of January 1, 2018. Accordingly, the new revenue standard is applied prospectively in Newmark’s financial statements from January 1, 2018 onward. The new revenue recognition guidance does not apply to revenue associated with financial instruments, including loans and securities that are accounted for under other U.S. GAAP standards, and as a result did not have a material impact on the elements of the accompanying unaudited condensed consolidated statements of operations most closely associated with financial instruments, including Gains from mortgage banking activities/origination, net, and Servicing fees. See Note 13 — “Revenues from Contracts with Customers” for additional information. In February 2016, the Financial Accounting Standards Board ("FASB") issued ASU No. 2016-02, Leases (Topic 842) . This standard requires lessees to recognize a Right-of-use (“ROU”) asset and lease liability for all leases with terms of more than 12 months. Recognition, measurement and presentation of expenses will depend on classification as a finance or operating lease. The amendments also require certain quantitative and qualitative disclosures. Accounting guidance for lessors is mostly unchanged. In July 2018, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 842, Leases , to clarify how to apply certain aspects of the new leases standard. The amendments address the rate implicit in the lease, impairment of the net investment in the lease, lessee reassessment of lease classification, lessor reassessment of lease term and purchase options, variable payments that depend on an index or rate and certain transition adjustments, among other issues. In addition, in July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842) , Targeted Improvements , which provided an additional (and optional) transition method to adopt the new leases standard. Under the new transition method, a reporting entity would initially apply the new lease requirements at the effective date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption; continue to report comparative periods presented in the financial statements in the period of adoption in accordance with legacy U.S. GAAP (i.e., ASC 840, Leases ); and provide the required disclosures under ASC 840 for all periods presented under legacy U.S. GAAP. Further, ASU No. 2018-11 contains a practical expedient that allows lessors to avoid separating lease and associated non-lease components within a contract if certain criteria are met. In December 2018, the FASB issued ASU No. 2018-20, Leases (Topic 842), Narrow-Scope Improvements for Lessors , to clarify guidance for lessors on sales taxes and other similar taxes collected from lessees, certain lessor costs and recognition of variable payments for contracts with lease and non-lease components. In March 2019, the FASB issued ASU No. 2019-01, Leases (Topic 842), Codification Improvements , to clarify certain application and transitional disclosure aspects of the new leases standard. The amendments address determination of the fair value of the underlying asset by lessors that are not manufacturers or dealers and clarify interim period transition disclosure requirements, among other issues. The guidance in ASUs 2016-02, 2018-10, 2018-11 and 2018-20 was effective beginning January 1, 2019, with early adoption permitted; whereas the guidance in ASU No. 2019-01 is effective beginning January 1, 2020, with early adoption permitted. Newmark adopted the above mentioned standards on January 1, 2019 using the effective date as the date of initial application. Therefore, pursuant to this transition method, financial information was not updated and the disclosures required under the new leases standards were not provided for dates and periods before January 1, 2019. The guidance provides a number of optional practical expedients to be utilized by lessees upon transition. Accordingly, Newmark elected the “package of practical expedients,” which permitted Newmark not to reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs. Newmark did not elect the use-of-hindsight or the practical expedient pertaining to land easements, with the latter not being applicable to Newmark. The new standard also provides practical expedients for an entity’s ongoing accounting as a lessee. Newmark elected the short-term lease recognition exemption for all leases that qualify. This means, for those leases that qualify, Newmark will not recognize ROU assets and lease liabilities, and this includes not recognizing ROU assets and lease liabilities for existing short-term leases of those assets upon transition. Newmark also elected the practical expedient to not separate lease and non-lease components for all leases other than leases of real estate. As a result, upon adoption, acting primarily as a lessee, Newmark recognized a $178.8 million ROU asset, net of tenant improvements, and a $226.7 million lease liability on the accompanying unaudited condensed consolidated balance sheets for its real estate operating leases. The adoption of the guidance did not have a material impact on the accompanying unaudited condensed consolidated statements of operations, unaudited condensed consolidated statements of changes in equity and unaudited condensed consolidated statements of cash flows. See Note 18 — “Leases” for additional information on Newmark’s leasing arrangements. In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities . This ASU requires entities to measure equity investments that do not result in consolidation and are not accounted for under the equity method at fair value and recognize any changes in fair value in net income unless the investments qualify for the new measurement alternative. The guidance also requires entities to record changes in instrument-specific credit risk for financial liabilities measured under the fair value option in other comprehensive income. In February 2018, the FASB issued ASU No. 2018-03, Technical Corrections and Improvements to Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities , to clarify transition and subsequent accounting for equity investments without a readily determinable fair value, among other aspects of the guidance issued in ASU No. 2016-01. The amendments in ASU No. 2018-03 were effective for fiscal years beginning January 1, 2018 and interim periods beginning July 1, 2018. The amendments and technical corrections provided in ASU No. 2018-03 could be adopted concurrently with ASU No. 2016-01, which was effective for Newmark on January 1, 2018. Newmark adopted both ASUs on January 1, 2018 using the modified retrospective approach for equity securities with a readily determinable fair value and the prospective method for equity investments without a readily determinable fair value. The adoption of this guidance did not have a material impact on the accompanying unaudited condensed consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326) : Measurement of Credit Losses on Financial Instruments, which requires financial assets that are measured at amortized cost to be presented, net of an allowance for credit losses, at the amount expected to be collected over their estimated life. Expected credit losses for newly recognized financial assets, as well as changes to credit losses during the period, are recognized in earnings. For certain purchased financial assets with deterioration in credit quality since origination (“PCD assets”), the initial allowance for expected credit losses will be recorded as an increase to the purchase price. Expected credit losses, including losses on off-balance-sheet exposures, such as lending commitments, will be measured based on historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. In November 2018, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments-Credit Losses , to clarify that operating lease receivables accounted for under ASC 842, Leases , are not in the scope of the new credit losses guidance, and, instead, impairment of receivables arising from operating leases should be accounted for in accordance with ASC 842, Leases . In April 2019, the FASB issued ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments . The ASU makes changes to the guidance introduced or amended by ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326)-Measurement of Credit Losses on Financial Instruments . See below for the description of the amendments stipulated in ASU No. 2019-04. In addition, in May 2019, the FASB issued ASU No. 2019-05, Financial Instruments-Credit Losses (Topic 326): Targeted Transition Relief . The amendments in this ASU allow entities, upon adoption of ASU No. 2016-13, to irrevocably elect the fair value option for financial instruments that were previously carried at amortized cost and are eligible for the fair value option under ASC 825-10, Financial Instruments: Overall. In November 2019, the FASB issued ASU No. 2019-11, Codification Improvements to Topic 326, Financial Instruments-Credit Losses . The amendments in this ASU require entities to include certain expected recoveries of the amortized cost basis previously written off, or expected to be written off, in the allowance for credit losses for PCD assets; provide transition relief related to troubled debt restructurings; allow entities to exclude accrued interest amounts from certain required disclosures; and clarify the requirements for applying the collateral maintenance practical expedient. The amendments in ASUs No. 2018-19, 2019-04, 2019-05 and 2019-11 are required to be adopted concurrently with the guidance in ASU No. 2016-13. Newmark adopted the standards on their required effective date beginning January 1, 2020. The primary effect of adoption, on a pre-tax basis, resulted in a decrease in assets of $8.0 million, an increase in liabilities of $17.9 million and a decrease in retained earnings of $25.9 million, respectively. In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805)-Clarifying the Definition of Business , which clarifies the definition of a business with the objective of providing additional guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The new standard became effective beginning January 1, 2018 on a prospective basis. The adoption of this guidance did not have a material impact on the accompanying unaudited condensed consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment , which eliminates the requirement to determine the fair value of individual assets and liabilities of a reporting unit to measure goodwill impairment. Under the amendments in the new ASU, goodwill impairment testing will be performed by comparing the fair value of the reporting unit with its carrying amount and recognizing an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. Newmark adopted the standard on its required effective date beginning January 1, 2020. The new guidance will be applied on a prospective basis. The adoption of the new guidance did not have a material impact on the accompanying unaudited condensed consolidated financial statements. In February 2017, the FASB issued ASU No. 2017-05, Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets , which clarifies the scope and application of ASC 610-20, Other Income-Gains and Losses from Derecognition of Nonfinancial Assets , and defines in substance nonfinancial assets. The ASU also impacts the accounting for partial sales of nonfinancial assets (including in substance real |
Limited Partnership Interests i
Limited Partnership Interests in Newmark Holdings and BGC Holdings | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
Limited Partnership Interests in Newmark Holdings and BGC Holdings | Limited Partnership Interests in Newmark Holdings and BGC Holdings Newmark is a holding company with no direct operations and conducts substantially all of its operations through its operating subsidiaries. Virtually all of Newmark’s condensed consolidated net assets and net income are those of condensed consolidated variable interest entities. Newmark Holdings is a condensed consolidated subsidiary of Newmark for which Newmark is the general partner. Newmark and Newmark Holdings jointly own Newmark OpCo, the operating partnership. In connection with the Separation and BGC Holdings Distribution, holders of BGC Holdings partnership interests received partnership interests in Newmark Holdings, described below (see Note 27 — “Related Party Transactions”). These collectively represent all of the “limited partnership interests” in BGC Holdings and Newmark Holdings. As a result of the Separation, the limited partnership interests in Newmark Holdings were distributed to the holders of limited partnership interests in BGC Holdings, whereby each holder of BGC Holdings limited partnership interests at that time received a corresponding Newmark Holdings limited partnership interest, determined by the contribution ratio (as hereafter defined), which was equal to a BGC Holdings limited partnership interest multiplied by one divided by 2.2 (the “contribution ratio”), divided by the exchange ratio (which is the ratio by which a Newmark Holdings limited partnership interest can be exchanged for a number of shares of Newmark Class A common stock (the “exchange ratio”)). Initially, the exchange ratio equaled one, so that each Newmark Holdings limited partnership interest was exchangeable for one share of Newmark Class A common stock; however, such exchange ratio is subject to adjustment. For reinvestment, acquisition or other purposes, Newmark may determine on a quarterly basis to distribute to its stockholders a smaller percentage of its income than Newmark Holdings distributes to its equity holders (excluding tax distributions from Newmark Holdings) of the cash that it received from Newmark OpCo. In such circumstances, the Separation and Distribution Agreement provides that the exchange ratio will be reduced to reflect the amount of additional cash retained by Newmark as a result of the distribution of such smaller percentage, after the payment of taxes. As of September 30, 2020, the exchange ratio equaled 0.9373. Redeemable Partnership Interests Founding/working partners have limited partnership interests (“FPUs”) in BGC Holdings and Newmark Holdings. Newmark accounts for FPUs outside of permanent capital as “Redeemable partnership interests,” on the accompanying unaudited condensed consolidated balance sheets. This classification is applicable to FPUs because these units are redeemable upon termination of a partner, including a termination of employment, which can be at the option of the partner and not within the control of the issuer. FPUs are held by limited partners who are primarily employees of BGC and generally receive quarterly allocations of net income. Upon termination of employment or otherwise ceasing to provide substantive services, the FPUs are generally redeemed, and the unit holders are no longer entitled to participate in the quarterly allocations of net income. These quarterly allocations of net income are contingent upon services being provided by the unit holder and are reflected as a component of compensation expense under “Equity-based compensation and allocations of net income to limited partnership units and FPUs” on the accompanying unaudited condensed consolidated statements of operations to the extent they relate to FPUs held by Newmark employees. Limited Partnership Units Certain employees of Newmark hold limited partnership interests in Newmark Holdings and BGC Holdings (e.g., REUs, RPUs, PSUs, PSIs, HDUs, and LPUs, collectively the “limited partnership units”). Prior to the Separation, certain employees of both BGC and Newmark generally received limited partnership units in BGC Holdings. As a result of the Separation, these employees were distributed limited partnership units in Newmark Holdings equal to a BGC Holdings limited partnership unit multiplied by the contribution ratio. In addition, in the BGC Holdings Distribution, these employees also received additional limited partnership units in Newmark Holdings. Subsequent to the Separation, Newmark employees generally have been granted limited partnership units in Newmark Holdings. Generally, such limited partnership units receive quarterly allocations of net income and generally are contingent upon services being provided by the unit holders. As prescribed in U.S. GAAP guidance, prior to the Spin-Off, the quarterly allocations of net income on such limited partnership units were reflected as a component of compensation expense under “Equity-based compensation and allocations of net income to limited partnership units and FPUs” on the unaudited condensed consolidated statements of operations. Following the Spin-Off, the quarterly allocations of net income on BGC Holdings and Newmark Holdings limited partnership units held by Newmark employees are reflected as a component of compensation expense under “Equity-based compensation and allocations of net income to limited partnership units and FPUs” on the accompanying unaudited condensed consolidated statements of operations, and the quarterly allocations of net income on Newmark Holdings limited partnership units held by BGC employees are reflected as a component of “Net income (loss) attributable to noncontrolling interests” on the accompanying unaudited condensed consolidated statements of operations. From time to time, Newmark issues limited partnership units as part of the consideration for acquisitions. Certain of these limited partnership units held by Newmark employees entitle the holders to receive post-termination payments equal to the notional amount of the units in four Certain Newmark employees hold preferred partnership units (“Preferred Units”). Each quarter, the net profits of Newmark Holdings are allocated to such units at a rate of either 0.6875% (which is 2.75% per calendar year) or such other amount as set forth in the award documentation (the “Preferred Distribution”). These allocations are deducted before the calculation and distribution of the quarterly partnership distribution for the remaining partnership units and are generally contingent upon services being provided by the unit holder. The Preferred Units are not entitled to participate in partnership distributions other than with respect to the Preferred Distribution. Preferred Units may not be made exchangeable into Newmark’s Class A common stock and are only entitled to the Preferred Distribution, and accordingly are not included in Newmark’s fully diluted share count. The quarterly allocations of net income on Preferred Units are reflected in compensation expense under “Equity-based compensation and allocations of net income to limited partnership units and FPUs” on the accompanying unaudited condensed consolidated statements of operations. After deduction of the Preferred Distribution, the remaining partnership units generally receive quarterly allocation of net income based on their weighted-average pro rata share of economic ownership of the operating subsidiaries. In addition, Preferred Units are granted in connection with the grant of certain limited partnership units, such as PSUs, that may be granted exchangeability to cover the withholding taxes owed by the unit holder, rather than issuing the gross amount of shares to employees, subject to cashless withholding of shares to pay applicable withholding taxes. Certain Newmark employees hold non-distribution earning units (e.g. NPSUs and NREUs, collectively “N Units”) that do not participate in quarterly partnership distributions and are not allocated any items of profit or loss. N Units become distribution earning limited partnership units, ratably over a four-year vesting term, if certain revenue thresholds are met at the end of each vesting term. Cantor Units Cantor holds limited partnership interests in Newmark Holdings (“Cantor units”). Cantor units are reflected as a component of “Noncontrolling interests” on the accompanying unaudited condensed consolidated balance sheets. Cantor receives quarterly allocations of net income (loss) and are reflected as a component of “Net income (loss) attributable to noncontrolling interests” on the accompanying unaudited condensed consolidated statements of operations. BGC Units Prior to the Spin-Off, BGC and its operating subsidiaries held limited partnership interests in Newmark Holdings (“BGC Units”). Such BGC Units were reflected as a component of “Noncontrolling interests” on the accompanying unaudited condensed consolidated balance sheets. BGC received quarterly allocations of net income (loss) on BGC Units, which were reflected as a component of “Net income (loss) attributable to noncontrolling interests” on the accompanying unaudited condensed consolidated statements of operations. In conjunction with the Spin-Off, such units were either exchanged for shares of Newmark Class A and Class B shares that were distributed to BGC Stockholders in the Spin-Off, or distributed to the partners of BGC Holdings in the BGC Holdings Distribution (see Note 1 — “Organization and Basis of Presentation”). Exchangeable Preferred Limited Partnership Units The EPUs were issued in four tranches and are separately convertible by either RBC or Newmark into a fixed number of Newmark’s Class A common stock, subject to a revenue hurdle for Newmark in each of the fourth quarters of 2019 through 2022 for each of the four tranches, respectively. As the EPUs represent equity ownership of a consolidated subsidiary of Newmark, they have been included in “Noncontrolling interests” on the unaudited condensed consolidated statements of changes in equity. The EPUs are entitled to a preferred payable-in-kind dividend, which is recorded as accretion to the carrying amount of the EPUs through retained earnings on the unaudited condensed consolidated statements of changes in equity and are reductions to “Net income available to common stockholders” for the purpose of calculating earnings per share. (See Note 1 — “Organization and Basis of Presentation” for additional information). General Certain of the limited partnership interests, described above, have been granted exchangeability into BGC and/or Newmark Class A common stock, and additional limited partnership interests may become exchangeable for BGC and/or Newmark Class A common stock. At the time exchangeability is granted, Newmark recognizes an expense based on the fair value of the award on that date, which is included in “Equity-based compensation and allocations of net income to limited partnership units and FPUs” on the accompanying unaudited condensed consolidated statements of operations. In addition, certain limited partnership interests have been granted the right to exchange into a Newmark partnership unit with a capital account, such as HDUs. HDUs have a stated capital account which is initially based on the closing trading price of Newmark Class A common stock at the time the HDU is granted and are included in “Other long-term liabilities” on the accompanying unaudited condensed consolidated balance sheets. HDUs participate in quarterly partnership distributions and are not exchangeable into shares of Class A common stock. Limited partnership interests held by Cantor in Newmark Holdings as of September 30, 2020 are exchangeable for 22.7 million shares of Newmark Class B common stock. Subsequent to the Spin-Off, limited partnership interests in BGC Holdings held by a partner or Cantor may become exchangeable for BGC Class A or Class B common stock on a one-for-one basis, and limited partnership interests in Newmark Holdings held by a partner or Cantor may become exchangeable for a number of shares of Newmark Class A or Class B common stock equal to the number of limited partnership interests multiplied by the exchange ratio at that time. As of September 30, 2020, the exchange ratio equaled 0.9373. Each quarter, net income (loss) is allocated between the limited partnership interests and the common stockholders. In quarterly periods in which Newmark has a net loss, the loss is allocated to Cantor and reflected as a component of “Net income (loss) attributable to noncontrolling interests” on the accompanying unaudited condensed consolidated statements of operations. In subsequent quarters in which Newmark has net income, the initial allocation of income to the limited partnership interests is allocated to Cantor, and reflected in, “Net income (loss) attributable to noncontrolling interests,” to recover any losses taken in earlier quarters, with the remaining income allocated to the limited partnership interests. This income (loss) allocation process has no material impact on the net income (loss) allocated to common stockholders. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting PoliciesFor a detailed discussion about Newmark’s significant accounting policies, see Note 3 — “Summary of Significant Accounting Policies,” in Newmark’s consolidated financial statements included in Part II, Item 8 of Newmark’s Annual Report on Form 10-K for the year ended December 31, 2019. Other than the following, there were no significant changes made to Newmark’s significant accounting policies during the three and nine months ended September 30, 2020. Current Expected Credit Losses ("CECL"): Newmark adopted ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326)-Measurement of Credit Losses on Financial Instruments ("ASC 326") , and related amendments on January 1, 2020, which created a new framework to evaluate credit losses arising from certain financial instruments. The CECL methodology represents a significant change from prior U.S. GAAP and replaced the prior impairment methods, which generally required that a loss be incurred before it was recognized. For financial instruments in scope, the methodology generally results in the earlier recognition of the provision for credit losses and the related allowance for credit losses than under prior U.S. GAAP. Expected credit losses for newly recognized financial assets carried at amortized cost and credit exposures on off-balance sheet financial guarantees, as well as changes to expected lifetime credit losses during the period, are recognized in earnings. Financial guarantee liability Newmark's adoption of ASC 326 impacted the reserving methodology for the loss-sharing guarantee provided to Fannie Mae under the DUS Program. The expected credit loss is modeled based on Newmark's historical loss experience adjusted to reflect current economic conditions. A significant amount of judgment is required in the determination of the appropriate reasonable and supportable period, the methodology used to incorporate current and future macroeconomic conditions, determination of the probability of and exposure at default or non-payment, current delinquency status, loan size, terms, amortization types, and the forward-looking view of the primary risk drivers (debt-service coverage ratio and loan-to-value), all of which are ultimately used in measuring the quantitative components of the reserve. Beyond the reasonable and supportable period, Newmark estimates expected credit losses using its historical loss rates. In addition, Newmark reviews the reserves periodically and makes adjustments for certain external and internal qualitative factors, which may increase or decrease the reserves for credit losses. In order to estimate credit losses, assumptions about current and future economic conditions are incorporated into the model using multiple economic scenarios that are weighted to reflect the conditions at each measurement date. As a result of the adoption of ASC 326, Newmark recorded a pre-tax increase to the loss sharing guarantee liability of $17.9 million through beginning stockholders' equity on January 1, 2020. Receivables Newmark has accrued commissions receivable from real estate brokerage transactions, management services and other receivables from its customers. For its CECL reserve, Newmark segregated its receivables into certain pools based on similar risk characteristics and further defined a range of potential loss rates for each pool based on aging. Newmark designed its methodology to allow for a range of loss rates in each pool such that changes in forward-looking conditions can be incorporated into the estimate. Each pool is assigned a loss rate that incorporates management’s view of current conditions and forward-looking conditions that inform the level of expected credit losses in each pool. The credit loss estimate includes specifically identified amounts for which payment has become unlikely. As a result of the adoption of ASC 326, Newmark recorded a pre-tax increase to the reserves of $4.3 million through beginning stockholder's equity. During the nine months ended September 30, 2020, there was an increase in the reserve of $3.0 million. Loans, Forgivable Loans and Other Receivables from Employees and Partners Newmark has entered into various agreements with certain of its employees and partners, whereby these individuals receive loans which may be either wholly or in part repaid from the distribution earnings that the individual receives on some or all of their limited partnership units or may be forgiven over a period of time. The forgivable portion of these loans is not included in Newmark’s estimate of expected credit losses when employees meet the conditions for forgiveness through their continued employment over the specified time period, and is recognized as compensation expense over the life of the loan. The amounts due from terminated employees that Newmark does not expect to collect are included in the allowance for credit losses. As a result of the adoption of ASC 326, Newmark recorded a pre-tax reserves of $3.7 million through beginning stockholders' equity on January 1, 2020. During the three and nine months ended September 30, 2020 there was an increase in the reserve of $0.5 million. From time to time, Newmark may also enter into agreements with employees and partners to grant bonus and salary advances or other types of loans. These advances and loans are repayable in the time frame outlined in the underlying agreements. Newmark reviews loan balances each reporting period for collectability. If Newmark determines that the collectability of a portion of the loan balances is not expected, Newmark recognizes a reserve against the loan balances as compensation expense. Segment: Newmark has a single operating segment. Newmark is a real estate services firm offering services to commercial real estate tenants, investors, owners, occupiers, developers, leasing and corporate advisory, investment sales and real estate finance, consulting, origination and servicing of commercial mortgage loans, valuation, project and development management and property and facility management. The chief operating decision-maker regardless of geographic location evaluates the operating results of Newmark as total real estate services and allocates resources accordingly. Newmark recognized revenues as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Leasing and other commissions $ 114,947 $ 213,242 $ 375,465 $ 603,094 Capital markets commissions 82,956 144,666 263,838 376,213 Gains from mortgage banking activities/origination, net 91,192 72,332 210,686 148,769 Management services, servicing fees and other 146,829 156,394 453,583 457,692 Revenues $ 435,924 $ 586,634 $ 1,303,572 $ 1,585,768 |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions In January 2020, Newmark completed the acquisition of certain assets of Hopkins Appraisal Services, a national leader in the valuation of restaurants and retail petroleum facilities. For the nine months ended September 30, 2020, the following table summarizes the components of the purchase consideration transferred, and the preliminary allocation of the assets acquired and liabilities assumed, for the acquisition. Newmark expects to finalize its analysis of the assets acquired and liabilities assumed within the first year of the acquisition, and therefore adjustments to assets and liabilities may occur (in thousands): As of the Purchase Price Cash and stock issued at closing $ 6,249 Contingent consideration 3,590 Total $ 9,839 Allocations Goodwill $ 6,294 Other intangible assets, net 2,700 Receivables, net 796 Fixed Assets, net 134 Other assets 29 Accounts payable, accrued expenses and other liabilities (114) Total $ 9,839 The total consideration for the acquisition during the nine months ended September 30, 2020 was $9.8 million in total fair value, comprising cash of $5.9 million and $0.4 million of RSUs. The total consideration included contingent consideration of 104,653 RSUs (with an acquisition date fair value of $1.3 million), and $2.2 million in cash that may be issued contingent on certain targets being met through 2022. The excess of the consideration over the fair value of the net assets acquired has been recorded as goodwill of $6.3 million, of which $2.4 million is deductible by Newmark for tax purposes. This acquisition was accounted for using the purchase method of accounting. The results of operations of the acquisition have been included on the accompanying unaudited condensed consolidated financial statements subsequent to the date of acquisition, which in aggregate contributed $1.9 million and $5.2 million to Newmark’s revenues for the three and nine months ended September 30, 2020. In April 2019, Newmark completed the acquisition of MLG Commercial LLC, a Milwaukee-based commercial real estate company offering both brokerage and property management services in Wisconsin. In June 2019, Newmark completed the acquisition of ACRES, a commercial brokerage and management firm headquartered in Utah. ACRES operates offices in Salt Lake City, Utah; Boise, Idaho; and Reno, Nevada. In December 2019, Newmark completed the acquisition of Harper Dennis Hobbs Holdings Limited, a tenant-focused real estate advisory services firm, based in London. For the year ended December 31, 2019, the following table summarizes the components of the purchase consideration transferred, and the preliminary allocation of the assets acquired and liabilities assumed in connection with the acquisitions in 2019 (in thousands): As of the Purchase Price Cash, stock and units issued at closing $ 38,826 Contingent consideration 18,067 Total $ 56,893 Allocations Cash $ 1,391 Goodwill 43,804 Other intangible assets, net 9,641 Receivables, net 7,540 Other assets 614 Accounts payable, accrued expenses and other liabilities (3,972) Accrued compensation (2,125) Total $ 56,893 The total consideration for acquisitions during the year ended December 31, 2019 was $56.9 million in total fair value, comprising cash and Newmark Holdings partnership units. The total consideration included contingent consideration of 327,692 Newmark Holdings partnership units (with an acquisition date fair value of $2.7 million), and $15.3 million in cash that may be issued contingent on certain targets being met through 2021. The excess of the consideration over the fair value of the net assets acquired has been recorded as goodwill of $43.8 million, of which $29.7 million is deductible by Newmark for tax purposes. The 2019 acquisitions were accounted for using the purchase method of accounting. The results of operations of these acquisitions have been included on the accompanying unaudited condensed consolidated financial statements subsequent to their respective dates of acquisition, which in aggregate contributed $1.7 million and $3.4 million to Newmark’s revenue for the three and nine months ended September 30, 2019, respectively. |
Earnings Per Share and Weighted
Earnings Per Share and Weighted-Average Shares Outstanding | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share and Weighted-Average Shares Outstanding | Earnings Per Share and Weighted-Average Shares Outstanding U.S. GAAP guidance — Earnings (Loss) Per Share provides guidance on the computation and presentation of earnings (loss) per share (“EPS”). Basic EPS excludes dilution and is computed by dividing Net income available to common stockholders by the weighted-average number of shares of common stock outstanding and contingent shares for which all necessary conditions have been satisfied except for the passage of time. Net income (loss) is allocated to Newmark’s outstanding common stock, FPUs, limited partnership units and Cantor units (see Note 2 — “Limited Partnership Interests in Newmark Holdings and BGC Holdings”). In addition, in relation to the Newmark OpCo Preferred Investment, the EPUs issued in June 2018 and September 2018 are entitled to a preferred payable-in-kind dividend which is recorded as accretion to the carrying amount of the EPUs and is a reduction to net income available to common stockholders for the calculation of Newmark’s basic earnings per share and fully diluted earnings per share. The following is the calculation of Newmark’s basic EPS (in thousands, except per share data): Three months ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Basic earnings per share: Net income available to common stockholders (1) $ 72,101 $ 85,475 $ 75,703 $ 118,599 Basic weighted-average shares of common stock outstanding 179,501 177,020 178,527 178,122 Basic earnings per share $ 0.40 $ 0.48 $ 0.42 $ 0.67 (1) Includes a reduction for dividends on preferred stock or exchangeable preferred partnership units in the amount of $3.2 million and $8.1 million for the three and nine months ended September 30, 2020, respectively, and $3.2 million and $9.7 million for the three and nine months ended September 30, 2019, respectively. (see Note 1 — “Organization and Basis of Presentation”). Fully diluted EPS is calculated utilizing net income available to common stockholders plus net income allocations to the limited partnership interests in Newmark Holdings as the numerator. The denominator comprises Newmark’s weighted-average number of outstanding shares of Newmark common stock to the extent the related units are dilutive and, if dilutive, the weighted-average number of limited partnership interests and other contracts to issue shares of common stock, stock options and RSUs. The limited partnership interests generally are potentially exchangeable into shares of Newmark Class A common stock and are entitled to remaining earnings after the deduction for the Preferred Distribution; as a result, they are included in the fully diluted EPS computation to the extent that the effect would be dilutive. The following is the calculation of Newmark’s fully diluted EPS (in thousands, except per share data): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Fully diluted earnings per share: Net income available to common stockholders $ 72,101 $ 85,475 $ 75,703 $ 118,599 Allocations of net income to limited partnership interests in Newmark 31,522 14,025 34,719 3,780 Net income for fully diluted shares $ 103,623 $ 99,500 $ 110,422 $ 122,379 Weighted-average shares: Common stock outstanding 179,501 177,020 178,527 178,122 Partnership units (1) 86,912 28,466 86,093 5,661 RSUs (Treasury stock method) 155 786 254 1,231 Newmark exchange shares 225 344 230 399 Fully diluted weighted-average shares of common stock outstanding 266,793 206,616 265,104 185,413 Fully diluted earnings per share $ 0.39 $ 0.48 $ 0.42 $ 0.66 (1) Partnership units collectively include founding/working partner units, limited partnership units, and Cantor and BGC units (see Note 2 — “Limited Partnership Interests in Newmark Holdings and BGC Holdings” for more information). For the three and nine months ended September 30, 2020, 9.2 million and 6.0 million potentially dilutive securities, respectively, were excluded from the computation of fully diluted EPS because their effect would have been anti-dilutive. Anti-dilutive securities for the three and nine months ended September 30, 2020 included only RSUs. For the three and nine months ended September 30, 2019, 61.8 million and 85.4 million potentially dilutive securities, respectively, were excluded from the computation of fully diluted EPS because their effect would have been anti-dilutive. Anti-dilutive securities for the three months ended September 30, 2019 included 61.7 million limited partnership interests and 0.1 million RSUs. Anti-dilutive securities for the nine months ended September 30, 2019 included 84.9 million limited partnership units and 0.5 million RSUs. |
Stock Transactions and Unit Red
Stock Transactions and Unit Redemptions | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Stock Transactions and Unit Redemptions | Stock Transactions and Unit Redemptions As of September 30, 2020, Newmark has two classes of authorized common stock: Class A common stock and Class B common stock. Class A Common Stock Each share of Class A common stock is entitled to one vote. Newmark has 1.0 billion authorized shares of Class A common stock at $0.01 par value per share. Changes in shares of Newmark’s Class A common stock outstanding were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Shares outstanding at beginning of period 157,811,436 156,679,527 156,265,461 156,916,336 Share issuances: LPU redemption/exchange (1) 607,971 543,990 1,617,690 1,666,766 Issuance of Class A common stock for Newmark RSUs 210,718 42,618 746,974 217,223 Other — 2,364 — 81,206 Treasury stock repurchases — (2,279,373) — (3,892,405) Shares outstanding at end of period 158,630,125 154,989,126 158,630,125 154,989,126 (1) Because they were included in the Newmark’s fully diluted share count, if dilutive, any exchange of LPUs into Class A common stock would not impact the fully diluted number of shares and units outstanding. Class B Common Stock Each share of Class B common stock is entitled to 10 votes and is convertible at any time into one share of Class A common stock. As of September 30, 2020 and September 30, 2019, there were 21.3 million shares of Newmark Class B common stock outstanding. Share Repurchases On August 1, 2018, the Newmark Board of Directors and Audit Committee authorized repurchases of shares of Newmark Class A common stock and purchases of limited partnership interests or other equity interests in Newmark's subsidiaries up to $200 million. This authorization includes repurchases of shares or purchase of units from executive officers, other employees and partners, including of BGC and Cantor, as well as other affiliated persons or entities. From time to time, Newmark may actively continue to repurchase shares and/or purchase units. As of September 30, 2020, Newmark had repurchased 4.6 million shares of Class A common stock at an average price of $9.32. As of September 30, 2020, Newmark had $157.4 million remaining from its share repurchase and unit purchase authorization. The following table details Newmark's share repurchase activity during 2020, including the total number of shares purchased, the average price paid per share, the number of shares repurchased as part of Newmark's publicly announced repurchase program and the approximate value that may yet be purchased under such program (in thousands except share and per share amounts): Period Total Average Total Number of Shares Repurchased as Part of Publicly Announced Program Approximate Balance, January 1, 2020 4,568,002 $ 9.32 4,568,002 $ 157,413 January 1, 2020 - March 31, 2020 — — — — April 1, 2020 - June 30, 2020 — — — — July 1, 2020 - September 30, 2020 — — — — Total 4,568,002 $ 9.32 4,568,002 $ 157,413 Redeemable Partnership Interests The changes in the carrying amount of FPUs as of September 30, 2020 and December 31, 2019 were as follows (in thousands): September 30, 2020 December 31, 2019 Balance at beginning of period: $ 21,517 $ 26,170 Income allocation 1,740 5,288 Distributions of income (5) (5,355) Redemptions (644) (927) Issuance and other — (3,659) Balance at end of period $ 22,608 $ 21,517 |
Marketable Securities
Marketable Securities | 9 Months Ended |
Sep. 30, 2020 | |
Marketable Securities [Abstract] | |
Marketable Securities | Marketable Securities On June 28, 2013, BGC sold certain assets of eSpeed, its on-the-run business, to Nasdaq. The total consideration received by BGC in the transaction included the Nasdaq Earn-out of up to 14,883,705 shares of Nasdaq common stock to be paid ratably over 15 years, provided that Nasdaq, as a whole, produces at least $25.0 million in consolidated gross revenues each year. The Nasdaq Earn-out was excluded from the initial gain on the divestiture and is recognized in income as it is realized and earned when these contingent events have occurred, consistent with the accounting guidance for gain contingencies. BGC transferred the remaining rights under the Nasdaq Earn-out to Newmark on September 28, 2017. Any Nasdaq shares that were received by BGC prior to September 28, 2017 were not transferred to Newmark. In connection with the Nasdaq Earn-out, Newmark received 992,247 shares during the year ended December 31, 2019 and expects to receive 992,247 shares in the fourth quarter of 2020. Newmark will recognize the remaining Nasdaq Earn-out of up to 6,945,729 shares of Nasdaq common stock ratably over approximately the next 7 years, provided that Nasdaq, as a whole, produces at least $25.0 million in gross revenues each year. During the three months ended September 30, 2020 and 2019, in connection with the Nasdaq Earn-out, Newmark recognized a gain of $121.9 million and $98.6 million, respectively, which is included in “Other income, net” in the accompanying unaudited condensed consolidated statements of operations. For further information, refer to the section titled “Exchangeable Preferred Partnership Units and Forward Contracts” in Note 1 — “Organization and Basis of Presentation”, see Note 11 — “Derivatives” and see Note 26 — “Fair Value of Financial Assets and Liabilities”. Newmark sold 343,562 of the Nasdaq shares during the three months ended March 31, 2020 and 100,000 and 350,000 for the three and nine months ended September 30, 2019, respectively. Newmark received gross proceeds of $34.7 million during the three months ended March 31, 2020 and $10.4 million and $32.6 million during the three and nine months ended September 30, 2019, respectively, on the Nasdaq shares sold. Newmark recognized a gain on the sale of these shares of $2.2 million for the three months ended March 31, 2020 and a gain of $2.2 million and $4.1 million for the three and nine months ended September 30, 2019, respectively. Newmark did not record unrealized gains or losses on the mark-to-market of these securities for the three and nine months ended September 30, 2020. Newmark recorded unrealized gains (loss) on the mark-to-market of these securities of $(0.7) million and $4.4 million for the three and nine months ended September 30, 2019, respectively. Realized and unrealized gains on the mark-to-market of these shares are included in “Other income, net” on the accompanying unaudited condensed consolidated statements of operations. As of September 30, 2020 and December 31, 2019, Newmark reflected $121.9 million and $36.8 million related to Nasdaq shares, respectively, included in “Marketable securities” on the accompanying unaudited condensed consolidated balance sheets (see Note 20 — “Securities Loaned”). |
Investments
Investments | 9 Months Ended |
Sep. 30, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investments | InvestmentsNewmark 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. During the three months ended September 30, 2020 and September 30, 2019, Newmark recognized equity (loss) income of $(7.4) million and $1.3 million, respectively, and $(11.6) million and $6.0 million and for the nine months ended September 30, 2020 and September 30, 2019, respectively. Newmark did not receive any distributions for the three and nine months ended September 30, 2019. Newmark received distributions of $8.6 million for the year ended December 31, 2019. The carrying value of these investments was $88.3 million and $100.0 million as of September 30, 2020 and December 31, 2019, respectively, and is included in “Other assets” on the accompanying unaudited condensed consolidated balance sheets. Investments Carried Under Measurement Alternatives Newmark has acquired investments in entities for which it does not have the ability to exert significant influence over operating and financial policies. |
Capital and Liquidity Requireme
Capital and Liquidity Requirements | 9 Months Ended |
Sep. 30, 2020 | |
Broker-Dealer, Net Capital Requirement, SEC Regulation [Abstract] | |
Capital and Liquidity Requirements | Capital and Liquidity Requirements Newmark is subject to various capital requirements in connection with seller/servicer agreements that Newmark has entered into with the various GSEs. Failure to maintain minimum capital requirements could result in Newmark’s inability to originate and service loans for the respective GSEs and could have a direct material adverse effect on the accompanying unaudited condensed consolidated financial statements. Management believes that, as of September 30, 2020 and December 31, 2019, Newmark had met all capital requirements. As of September 30, 2020, the most restrictive capital requirement was the net worth requirement of the Federal National Mortgage Association (“Fannie Mae”). Newmark exceeded the minimum requirement by $336.9 million. Certain of Newmark’s agreements with Fannie Mae allow Newmark to originate and service loans under Fannie Mae’s Delegated Underwriting and Servicing (“DUS”) Program. These agreements require Newmark to maintain sufficient collateral to meet Fannie Mae’s restricted and operational liquidity requirements based on a pre-established formula. Certain of Newmark’s agreements with the Federal Home Loan Mortgage Corporation (“Freddie Mac”) allow Newmark to service loans under Freddie Mac’s Targeted Affordable Housing (“TAH”) Program. These agreements require Newmark to pledge sufficient collateral to meet Freddie Mac’s liquidity requirement of 8% of the outstanding principal of TAH loans serviced by Newmark. Management believes that, as of September 30, 2020 and December 31, 2019, Newmark had met all liquidity requirements. In addition, as a servicer for Fannie Mae, the Government National Mortgage Association (“Ginnie Mae”) and Federal Housing Administration, Newmark is required to advance to investors any uncollected principal and interest due from borrowers. As of September 30, 2020 and December 31, 2019, outstanding borrower advances were $1.3 million and $0.3 million, respectively, and are included in “Other assets” on the accompanying unaudited condensed consolidated balance sheets. |
Loans Held for Sale, at Fair Va
Loans Held for Sale, at Fair Value | 9 Months Ended |
Sep. 30, 2020 | |
Trade and Loans Receivables Held-for-sale, Net, Not Part of Disposal Group [Abstract] | |
Loans Held for Sale, at Fair Value | Loans Held for Sale, at Fair Value Loans held for sale, at fair value represent originated loans that are typically financed by short-term warehouse facilities (see Note 21 — “Warehouse Facilities Collateralized by U.S. Government Sponsored Enterprises”) and sold within 45 days from the date the mortgage loan is funded. Newmark initially and subsequently measures all loans held for sale at fair value on the accompanying unaudited condensed consolidated balance sheets. The fair value measurement falls within the definition of a Level 2 measurement (significant other observable inputs) within the fair value hierarchy. Electing to use fair value allows a better offset of the change in the fair value of the loans and the change in fair value of the derivative instruments used as economic hedges. Loans held for sale had a cost basis and fair value as follows (in thousands): Cost Basis Fair Value September 30, 2020 $ 1,510,598 $ 1,537,734 December 31, 2019 210,116 215,290 As of September 30, 2020 and December 31, 2019, all of the loans held for sale 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. As of September 30, 2020 and December 31, 2019, there were no loans held for sale that were 90 days or more past due or in nonaccrual status. |
Derivatives
Derivatives | 9 Months Ended |
Sep. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | Derivatives Newmark accounts for its derivatives at fair value and recognizes all derivatives as either assets or liabilities on the accompanying unaudited condensed consolidated balance sheets. In its normal course of business, Newmark enters into commitments to extend credit for mortgage loans at a specific rate (rate lock commitments) and commitments to deliver these loans to third-party investors at a fixed price (forward sale contracts). In addition, Newmark has entered into the Nasdaq Forwards (see Note 1 — “Organization and Basis of Presentation”) that are accounted for as derivatives. The fair value of derivative contracts, computed in accordance with Newmark’s netting policy, is set forth below (in thousands): As of September 30, 2020 As of December 31, 2019 Derivative contract Assets Liabilities Notional Amounts (1) Assets Liabilities Notional Amounts (1) Rate lock commitments $ 45,561 $ 1,133 $ 378,546 $ 32,035 $ 12,124 $ 1,396,827 Nasdaq Forwards 18,959 — 267,480 26,502 — 267,480 Forward sale contracts 9,625 41,730 1,889,144 14,389 13,537 1,606,943 Total $ 74,145 $ 42,863 $ 2,535,170 $ 72,926 $ 25,661 $ 3,271,250 (1) Notional amounts represent the sum of gross long and short derivative contracts, an indication of the volume of Newmark’s derivative activity, and do not represent anticipated losses. The change in fair value of rate lock commitments and forward sale contracts related to mortgage loans are reported as part of “Gains from mortgage banking activities/originations, net” on the accompanying unaudited condensed consolidated statements of operations. The change in fair value of rate lock commitments are disclosed net of $0.7 million and $0.2 million of income for the three months ended September 30, 2020 and September 30, 2019, respectively, and $1.6 million of expenses for the nine months ended September 30, 2020 and September 30, 2019, respectively. The changes in fair value of rate lock commitments are reported as part of “Compensation and employee benefits” on the accompanying unaudited condensed consolidated statements of operations. Gains and losses on derivative contracts which are included on the unaudited condensed consolidated statements of operations were as follows (in thousands): Location of gain (loss) recognized in income for derivatives Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Derivatives not designed as hedging instruments: Nasdaq Forwards Other income (loss), net $ (5,771) $ (8,214) $ (7,543) $ (37,181) Rate lock commitments Gains from mortgage banking (3,951) 5,734 46,004 27,113 Rate lock commitments Compensation and employee benefits (677) 236 (1,576) (1,620) Forward sale contracts Gains (loss) from mortgage banking 16,187 12 (32,105) (24,404) Total $ 5,788 $ (2,232) $ 4,780 $ (36,092) Derivative assets and derivative liabilities are included in “Other current assets”, “Other assets” and the “Accounts payable, accrued expenses and other liabilities”, on the accompanying unaudited condensed consolidated balance sheets. |
Credit Enhancement Receivable,
Credit Enhancement Receivable, Credit Enhancement Deposit and Contingent Liability | 9 Months Ended |
Sep. 30, 2020 | |
Credit Enhancement Receivable Contingent Liability And Credit Enhancement Deposit [Abstract] | |
Credit Enhancement Receivable, Credit Enhancement Deposit and Contingent Liability | Credit Enhancement Receivable, Credit Enhancement Deposit and Contingent Liability Newmark is a party to a Credit Enhancement Agreement (“CEA”), dated March 9, 2012, with German American Capital Corporation and Deutsche Bank Americas Holding Corporation (together, the “DB Entities”). On October 20, 2016, the DB Entities assigned the CEA to Deutsche Bank AG Cayman Island Branch, a Cayman Island Branch of Deutsche Bank AG (“DB Cayman”). Under the terms of these agreements, DB Cayman provides Newmark with varying levels of ongoing credit protection, subject to certain limits, for Fannie Mae and Freddie Mac loans subject to loss sharing (see Note 23 — “Financial Guarantee Liability”) in Newmark’s servicing portfolio as of March 9, 2012. DB Cayman will also reimburse Newmark for any losses incurred due to violation of underwriting and servicing agreements that occurred prior to March 9, 2012. For the three and nine months ended September 30, 2020 and September 30, 2019, there were no reimbursements under the CEA. Credit enhancement receivable Newmark's servicing portfolio consisted of the following loss-sharing components (in thousands): September 30, 2020 December 31, 2019 Total credit risk loan portfolio $ 22,658,120 $ 20,209,577 Maximum DB Cayman credit protection 28,762 29,253 Maximum pre-credit enhancement loss exposure $ 6,698,151 $ 5,835,163 Maximum DB Cayman credit protection 9,587 9,751 Maximum loss exposure without any form of credit protection $ 6,688,564 $ 5,825,412 As of September 30, 2020 and December 31, 2019, there were no credit enhancement receivables. Credit enhancement deposit The CEA required the DB Entities to deposit $25.0 million into Newmark’s Fannie Mae restricted liquidity account (see Note 9 — “Capital and Liquidity Requirements”), which Newmark is required to return to DB Cayman, less any outstanding claims, on March 9, 2021. As of September 30, 2020 and December 31, 2019, the $25.0 million deposit is included in “Accounts payable, accrued expenses and other liabilities” and "Other long-term liabilities", respectively, on the unaudited accompanying condensed consolidated balance sheets. Contingent liability Under the CEA, Newmark is required to pay DB Cayman, on March 9, 2021, an amount equal to 50% of the positive difference, if any, between (a) $25.0 million, and (b) Newmark’s unreimbursed loss-sharing payments from March 9, 2012 through March 9, 2021 on Newmark’s servicing portfolio as of March 9, 2012. Contingent liabilities as of September 30, 2020 and December 31, 2019 were $12.2 million and $11.8 million, respectively and are included in “Accounts payable, accrued expenses and other liabilities” on the accompanying unaudited condensed consolidated balance sheets. |
Revenues from Contracts with Cu
Revenues from Contracts with Customers | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenues from Contracts with Customers | Revenues from Contracts with Customers The following table presents Newmark’s total revenues separately for its revenues from contracts with customers and other sources of revenues (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Revenues from contracts with customers: Leasing and other commissions $ 114,947 $ 213,242 $ 375,465 $ 603,094 Capital markets commissions 82,956 144,666 263,838 376,213 Management services 107,439 104,184 338,106 319,746 Total 305,342 462,092 977,409 1,299,053 Other sources of revenue (1) : Gains from mortgage banking activities/originations, net 91,192 72,332 210,686 148,769 Servicing fees and other 39,390 52,210 115,477 137,946 Total $ 435,924 $ 586,634 $ 1,303,572 $ 1,585,768 (1) Although these items have customers under contract, they were recorded as other sources of revenue as they were excluded from the scope of ASU No. 2014-9. Disaggregation of revenues Newmark’s chief operating decision-maker, regardless of geographic location, evaluates the operating results, including revenues, of Newmark as total real estate (see Note 3 — “Summary of Significant Accounting Policies” for further discussion). Contract balances The timing of Newmark’s revenue recognition may differ from the timing of payment by its customers. Newmark records a receivable when revenue is recognized prior to payment and Newmark has an unconditional right to payment. Alternatively, when payment precedes the provision of the related services, Newmark records deferred revenue until the performance obligations are satisfied. |
Gains from Mortgage Banking Act
Gains from Mortgage Banking Activities/Originations, Net | 9 Months Ended |
Sep. 30, 2020 | |
Mortgage Banking [Abstract] | |
Gains from Mortgage Banking Activities/Originations, Net | Gains from Mortgage Banking Activities/Originations, Net Gains from mortgage banking activities/originations, net consists of the following activity (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Fair value of expected net future cash flows from servicing recognized at commitment, net $ 60,948 $ 37,424 $ 132,423 $ 78,657 Loan originations related fees and sales premiums, net 30,244 34,908 78,263 70,112 Total $ 91,192 $ 72,332 $ 210,686 $ 148,769 |
Mortgage Servicing Rights, Net
Mortgage Servicing Rights, Net | 9 Months Ended |
Sep. 30, 2020 | |
Transfers and Servicing [Abstract] | |
Mortgage Servicing Rights, Net | Mortgage Servicing Rights, Net The changes in the carrying amount of MSRs were as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, Mortgage Servicing Rights 2020 2019 2020 2019 Beginning Balance $ 460,473 $ 413,425 $ 432,666 $ 416,131 Additions 53,006 35,186 126,571 73,873 Purchases from an affiliate — 123 200 845 Amortization (24,901) (22,503) (70,859) (64,618) Ending Balance $ 488,578 $ 426,231 $ 488,578 $ 426,231 Valuation Allowance Beginning Balance $ (37,241) $ (12,642) $ (19,022) $ (4,322) Decrease (increase) 1,850 (7,380) (16,369) (15,700) Ending Balance $ (35,391) $ (20,022) $ (35,391) $ (20,022) Net Balance $ 453,187 $ 406,209 $ 453,187 $ 406,209 Servicing fees are included in “Management services, servicing fees and other” on the accompanying unaudited condensed consolidated statements of operations and were as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Servicing fees $ 29,432 $ 26,526 $ 84,347 $ 78,134 Escrow interest and placement fees 876 6,518 4,995 17,505 Ancillary fees 2,060 3,955 5,584 11,270 Total $ 32,368 $ 36,999 $ 94,926 $ 106,909 Newmark’s primary servicing portfolio at September 30, 2020 and December 31, 2019 was $64.6 billion and $59.9 billion, respectively. Also, Newmark is the named special servicer for a number of commercial mortgage-backed securitizations. Upon certain specified events (such as, but not limited to, loan defaults and loans assumptions), the administration of the loan is transferred to Newmark. Newmark’s special servicing portfolio was $2.3 billion and $2.4 billion at September 30, 2020 and December 31, 2019, respectively. The estimated fair value of the MSRs at September 30, 2020 and December 31, 2019 was $482.4 million and $441.7 million, respectively. Fair values are estimated using a valuation model that calculates the present value of the future net servicing cash flows. The cash flows assumptions used are based on assumptions Newmark believes market participants would use to value the portfolio. Significant assumptions include estimates of the cost of servicing per loan, discount rate, earnings rate on escrow deposits and prepayment speeds. The discount rates used in measuring fair value for the nine months ended September 30, 2020 and the year ended December 31, 2019 were between 6.1% and 13.5%, respectively, and varied based on investor type. An increase in discount rate of 100 basis points or 200 basis points would result in a decrease in fair value by $13.2 million and $25.7 million, respectively, at September 30, 2020 and by $11.9 million and $23.3 million, respectively, at December 31, 2019. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets, Net | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets, Net | Goodwill and Other Intangible Assets, Net The changes in the carrying amount of goodwill were as follows (in thousands): Balance, January 1, 2019 $ 515,321 Acquisitions 43,804 Measurement period adjustments (1,211) Balance, December 31, 2019 557,914 Acquisitions 6,294 Measurement period adjustments (3,380) Balance, September 30, 2020 $ 559,935 Goodwill is not amortized and is reviewed annually for impairment or more frequently if impairment indicators arise, in accordance with U.S. GAAP guidance on Goodwill and Other Intangible Assets . Newmark completed its annual goodwill impairment testing for the year ended December 31, 2019, which did not result in a goodwill impairment (see Note 4 — “Acquisitions” for more information). Other intangible assets consisted of the following (in thousands, except weighted-average life): September 30, 2020 Gross Accumulated Net Weighted- Indefinite life: Trademark and trade names $ 11,350 $ — $ 11,350 N/A License agreements (GSE) 5,390 — 5,390 N/A Definite life: Trademark and trade names 8,449 (7,096) 1,353 0.1 Non-contractual customers 30,131 (8,825) 21,306 7.0 License agreements 4,981 (4,022) 959 0.0 Non-compete agreements 6,982 (3,095) 3,887 0.6 Contractual customers 3,052 (1,482) 1,570 0.4 Below market leases 926 (187) 739 0.2 Total $ 71,261 $ (24,707) $ 46,554 5.1 December 31, 2019 Gross Accumulated Net Weighted- Indefinite life: Trademark and trade names $ 11,350 $ — $ 11,350 N/A License agreements (GSE) 5,390 — 5,390 N/A Definite life: Trademark and trade names 10,511 (9,070) 1,441 0.1 Non-contractual customers 24,262 (6,109) 18,153 7.4 License agreements 4,981 (3,288) 1,693 0.1 Non-compete agreements 6,953 (2,434) 4,519 0.8 Contractual customers 3,052 (1,177) 1,875 0.5 Below market leases 941 (136) 805 0.3 Total $ 67,440 $ (22,214) $ 45,226 4.9 Intangible amortization expense for the three months ended September 30, 2020 and September 30, 2019 was $1.7 million and $2.8 million, respectively, and $5.1 million and $5.4 million for the nine months ended September 30, 2020 and September 30, 2019, respectively. Intangible amortization is included as a part of “Depreciation and amortization” on the accompanying unaudited condensed consolidated statements of operations. Impairment charges are included in intangible amortization expense. The estimated future amortization of definite life intangible assets as of September 30, 2020 was as follows (in thousands): 2020 $ 1,689 2021 5,746 2022 3,706 2023 3,348 2024 2,793 Thereafter 12,532 Total $ 29,814 |
Fixed Assets, Net
Fixed Assets, Net | 9 Months Ended |
Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Fixed Assets, Net | Fixed Assets, Net Fixed assets, net consisted of the following (in thousands): September 30, 2020 December 31, 2019 Leasehold improvements and other fixed assets $ 129,244 $ 119,682 Software, including software development costs 29,953 28,063 Computer and communications equipment 25,756 23,028 Total, cost 184,953 170,773 Accumulated depreciation and amortization (82,937) (72,757) Total, net $ 102,016 $ 98,016 Depreciation expense for the three months ended September 30, 2020 and September 30, 2019 was $5.3 million and $4.4 million, respectively, and $13.6 million and $13.7 million for the nine months ended September 30, 2020 and September 30, 2019, respectively. Newmark recorded an impairment charge of $1.1 million and $1.4 million for internally developed software for the three and nine months ended September 30, 2020, respectively. The impairment charge is included as a part of “Depreciation and amortization” on the accompanying unaudited condensed consolidated statements of operations. There were no impairment charges for the three and nine months ended September 30, 2019. Capitalized software development costs for the three months ended September 30, 2020 and September 30, 2019 were $0.5 million and $0.6 million, respectively, and $2.6 million and $2.9 million for the nine months ended September 30, 2020 and September 30, 2019, respectively. Amortization of software development costs totaled $0.3 million and $0.6 million for the three months ended September 30, 2020 and September 30, 2019, respectively, and $0.9 million and $1.8 million for the nine months ended September 30, 2020 and September 30, 2019, respectively. Amortization of software development costs is included as part of “Depreciation and amortization” on the accompanying unaudited condensed consolidated statements of operations. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Leases | Leases Newmark has operating leases for real estate and equipment. These leases have remaining lease terms ranging from 1 to 12 years, some of which include options to extend the leases in 5 to 10 years increments for up to 10 years. Renewal periods are included in the lease term only when renewal is reasonably certain, which is a high threshold and requires management to apply the judgment to determine the appropriate lease term. Certain leases also include periods covered by an option to terminate the lease if Newmark is reasonably certain not to exercise the termination option. Operating lease costs were $12.6 million and $12.1 million for the three months ended September 30, 2020 and September 30, 2019, respectively, and $37.6 million and $34.7 million for the nine months ended September 30, 2020 and September 30, 2019, respectively, and are included in “Operating, administrative and other” on the accompanying unaudited condensed consolidated statements of operations. Operating cash flows for the nine months ended September 30, 2020 and September 30, 2019 included payments of $36.4 million and $32.9 million for operating lease liabilities, respectively. As of September 30, 2020 and December 31, 2019, Newmark did not have any leases that have not yet commenced but that create significant rights and obligations. For the three and nine months ended September 30, 2020 and September 30, 2019, Newmark had short-term lease expense of $0.2 million and $0.7 million, respectively, and $0.7 million and $2.0 million respectively, and sublease income of $0.4 million and $0.8 million, respectively, and $0.2 million and $0.6 million, respectively. The weighted-average discount rate as of September 30, 2020 and December 31, 2019 was 7.21% and the remaining weighted-average lease term was 8.4 and 8.8 years, respectively. As of September 30, 2020 and December 31, 2019, Newmark had operating lease ROU assets of $191.7 million and $201.7 million, respectively, and operating lease ROU liabilities of $28.6 million and $27.2 million, respectively, recorded in “Accounts payable, and accrued expenses and other liabilities” and $217.0 million and $227.9 million, respectively, recorded in “Right-of-use liabilities”, on the accompanying unaudited condensed consolidated balance sheets. Rent expense, including the operating lease costs above, for the three months ended September 30, 2020 and September 30, 2019 were $12.3 million and $13.0 million, respectively, and $37.3 million and $36.7 million for the nine months ended September 30, 2020 and September 30, 2019, respectively. Rent expense is included in “Operating, administrative and other” on the accompanying unaudited condensed consolidated statements of operations. Newmark is obligated for minimum rental payments under various non-cancelable operating leases, principally for office space, expiring at various dates through 2032. Certain of these leases contain escalation clauses that require payment of additional rent to the extent of increases in certain operating or other costs. Minimum lease payments under these arrangements were as follows (in thousands): September 30, 2020 December 31, 2019 2020 $ 11,826 $ 44,709 2021 45,205 42,612 2022 41,059 39,812 2023 39,676 38,210 2024 37,068 35,602 Thereafter 155,102 146,463 Total lease payments 329,936 347,408 Less: Interest 84,297 92,282 Present value of lease liability $ 245,639 $ 255,126 |
Other Current Assets and Other
Other Current Assets and Other Assets | 9 Months Ended |
Sep. 30, 2020 | |
Other Assets [Abstract] | |
Other Current Assets and Other Assets | Other Current Assets and Other Assets Other current assets consisted of the following (in thousands): September 30, 2020 December 31, 2019 Derivative assets $ 55,491 $ 51,021 Prepaid expenses 16,155 15,251 Other taxes 13,933 22,483 Rent and other deposits 1,507 1,703 Other 1,717 736 Total $ 88,803 $ 91,194 Other assets consisted of the following (in thousands): September 30, 2020 December 31, 2019 Deferred tax assets $ 190,617 $ 182,781 Equity method investment 88,315 99,966 Non-marketable investments 67,275 94,113 Derivative assets 18,654 21,905 Other 14,824 9,133 Total $ 379,685 $ 407,898 |
Securities Loaned
Securities Loaned | 9 Months Ended |
Sep. 30, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Securities Loaned | Securities LoanedAs of September 30, 2020, Newmark did not have Securities loaned with Cantor. As of December 31, 2019, Newmark had Securities loaned with Cantor of $36.7 million. The market value of the Securities loaned as of December 31, 2019 was $36.8 million. |
Warehouse Facilities Collateral
Warehouse Facilities Collateralized by U.S. Government Sponsored Enterprises | 9 Months Ended |
Sep. 30, 2020 | |
Brokers and Dealers [Abstract] | |
Warehouse Facilities Collateralized by U.S. Government Sponsored Enterprises | Warehouse Facilities Collateralized by U.S. Government Sponsored Enterprises Newmark uses its warehouse facilities and repurchase agreements to fund mortgage loans originated under its various lending programs. Outstanding borrowings against these lines are collateralized by an assignment of the underlying mortgages and third-party purchase commitments and are recourse only to Berkeley Point Capital, LLC. Newmark had the following lines available and borrowings outstanding (in thousands): Committed Uncommitted Balance at September 30, 2020 Balance at December 31, 2019 Stated Spread Rate Type Warehouse facility due October 8, 2021 (1) $ 1,500,000 $ — $ 993,200 $ 34,125 115 bps - 140 bps Variable Warehouse facility due June 16, 2021 (2) 450,000 — 273,088 16,759 115 bps - 140 bps Variable Warehouse facility due September 25, 2021 400,000 — 164,590 8,097 115 bps - 140 bps Variable Fannie Mae repurchase agreement, open maturity — 400,000 79,455 150,667 105 bps Variable Total $ 2,350,000 $ 400,000 $ 1,510,333 $ 209,648 (1) A warehouse line was temporarily increased by $600.0 million for the period August 28, 2020 to October 27, 2020. A warehouse line was temporarily increased by $500.0 million for the period September 8, 2020 to October 31, 2020. (2) A warehouse line established a $125.0 million sublimit line of credit to fund potential principal and interest servicing advances on the Company's Fannie Mae portfolio during the forbearance period related to the CARES Act. Advances will have an interest rate of 1-month LIBOR plus 200 bps. There were no outstanding draws outstanding under this sublimit at September 30, 2020. Pursuant to the terms of the warehouse facilities, Newmark is required to meet several financial covenants. Newmark was in compliance with all covenants as of September 30, 2020 and December 31, 2019 and for the three and nine months ended September 30, 2020 and September 30, 2019. The borrowing rates on the warehouse facilities are based on short-term LIBOR plus applicable margins. Due to the short-term maturity of these instruments, the carrying amounts approximate fair value. |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Long-term debt consisted of the following (in thousands): September 30, 2020 December 31, 2019 6.125% Senior Notes $ 542,166 $ 540,377 Credit Facility 337,338 48,917 Total $ 879,504 $ 589,294 6.125% Senior Notes On November 6, 2018, Newmark closed its offering of $550.0 million aggregate principal amount of 6.125% Senior Notes due 2023 (the “6.125% Senior Notes”). The 6.125% Senior Notes were priced on November 1, 2018 at 98.937% to yield 6.375%. The 6.125% Senior Notes were offered and sold by Newmark in a private offering exempt from the registration requirements under the Securities Act of 1933, as amended (“Securities Act”). The 6.125% Senior Notes were subsequently exchanged for notes with substantially similar terms that were registered under the Securities Act. The 6.125% Senior Notes bear an interest rate of 6.125% per annum, payable on each May 15 and November 15, beginning on May 15, 2019, and will mature on November 15, 2023. The carrying amount of the 6.125% Senior Notes was determined as follows (in thousands): September 30, 2020 December 31, 2019 Principal balance $ 550,000 $ 550,000 Less: debt issue cost 4,009 4,972 Less: debt discount 3,825 4,651 Total $ 542,166 $ 540,377 Newmark uses the effective interest rate method to amortize debt discounts and uses the straight-line method to amortize debt issue costs over the life of the notes. Interest expense, amortization of debt issue costs and amortization of the debt discount of the 6.125% Senior Notes, included in “Interest (expense) income, net” on the accompanying unaudited condensed consolidated statements of operations, were as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Interest expense 8,702 8,684 26,092 26,041 Debt issue cost amortization 321 321 963 961 Debt discount amortization 275 263 737 775 Total $ 9,298 $ 9,268 $ 27,792 $ 27,777 Debt Repurchase Program On June 16, 2020, the Newmark Board of Directors and its Audit Committee authorized a debt repurchase program for the repurchase by Newmark of up to $50.0 million of Newmark’s 6.125% Senior Notes and any future debt securities issued by the Company (collectively, “Company debt securities”). As of September 30, 2020, Newmark had $50.0 million remaining under its debt repurchase authorization. Credit Facility On November 28, 2018, Newmark entered into a credit agreement by and among Newmark, the several financial institutions from time to time party thereto, as Lenders, and Bank of America N.A., as administrative agent (the “Credit Agreement”). The Credit Agreement provided for a $250.0 million three-year unsecured senior revolving credit facility (the “Credit Facility”). Borrowings under the Credit Facility bore an annual interest rate equal to, at Newmark’s option, either (a) LIBOR for specified periods, or upon the consent of all Lenders, such other period that is 12 months or less, plus an applicable margin, or (b) a base rate equal to the greatest of (i) the federal funds rate plus 0.5%, (ii) the prime rate as established by the administrative agent, and (iii) one-month LIBOR plus 1.0%. The applicable margin is 2.0% with respect to LIBOR borrowings and can range from 1.25% to 2.25% in (a) above and was 1.00% with respect to base rate borrowings and can range from 0.25% to 1.25% in (b) above, depending upon Newmark’s credit rating. The Credit Facility also provides for an unused facility fee. On February 26, 2020, Newmark entered into an amendment to the Credit Agreement (the “Amended Credit Agreement”), increasing the size of the Credit Facility to $425.0 million (the “Amended Credit Facility”) and extending the maturity date to February 26, 2023. The annual interest rate on the Amended Credit Facility was reduced to LIBOR plus 1.75%, subject to a pricing grid linked to Newmark’s credit ratings from Standard & Poor’s and Fitch. On March 16, 2020, Newmark entered into a second amendment to the Credit Agreement (the “Second Amended Credit Agreement”), increasing the size of the Amended Credit Facility to $465.0 million and extending the maturity date to February 26, 2023 (the "Second Amended Credit Facility"). The annual interest rate on the Second Amended Credit Facility is LIBOR plus 1.75%, subject to a pricing grid linked to Newmark’s credit ratings from Standard & Poor’s and Fitch. During the nine months ended September 30, 2020, Newmark drew $365.0 million on the Credit Facility and paid down $75.0. On October 14, 2020, Newmark paid down an additional $100.0 million of the Credit Facility. Details of the Second Amended Credit Facility are as follows (in thousands): September 30, 2020 December 31, 2019 Principal balance $ 340,000 $ 50,000 Less: Debt issue cost 2,662 1,083 Total $ 337,338 $ 48,917 As of September 30, 2020 and 2019, borrowings under the Credit Facility carried an interest rate of 1.91% and 4.41%, with a weighted-average interest rate of 2.53% and 4.41%, respectively. Newmark uses the straight-line method to amortize debt issue costs over the life of the notes. Interest expense and amortization of debt issue costs of the Second Amended Credit Facility, included in “Interest (expense) income, net” on the accompanying unaudited condensed consolidated statements of operations, were as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Interest expense $ 1,805 $ 552 $ 5,504 $ 1,267 Debt issue cost amortization 275 141 737 424 Unused facility fee 63 153 203 481 Total $ 2,143 $ 846 $ 6,444 $ 2,172 On November 30, 2018, Newmark entered into an unsecured credit agreement (the “Cantor Credit Agreement”) with Cantor (see Note 27 — “Related Party Transactions” for a more detailed discussion). |
Financial Guarantee Liability
Financial Guarantee Liability | 9 Months Ended |
Sep. 30, 2020 | |
Guarantees [Abstract] | |
Financial Guarantee Liability | Financial Guarantee Liability Newmark shares risk of loss for loans originated under the Fannie Mae DUS and Freddie TAH programs and could incur losses in the event of defaults under or foreclosure of these loans. Under the loss-share guarantee, Newmark’s maximum liability to the extent of actual losses incurred is approximately 33% of the outstanding principal balance on Fannie Mae DUS or Freddie TAH loans. Risk-sharing percentages are established on a loan-by-loan basis when originated, with most loans at 33% and “modified” loans at lower percentages. Under certain circumstances, risk-sharing percentages can be revised subsequent to origination or Newmark could be required to repurchase the loan. In the event of a loss resulting from a catastrophic event that is not required to be covered by borrowers’ insurance policies, Newmark can recover the loss under its mortgage impairment insurance policy. Any potential recovery is subject to the policy’s deductibles and limits. At September 30, 2020, the credit risk loans being serviced by Newmark on behalf of Fannie Mae and Freddie Mac had outstanding principal balances of $22.7 billion with a maximum potential loss of $6.7 billion, of which $9.6 million is covered by the Credit Enhancement Agreement. At December 31, 2019, the credit risk loans being serviced by Newmark on behalf of Fannie Mae and Freddie Mac had outstanding principal balances of approximately $20.2 billion with a maximum potential loss of approximately and $5.8 billion, of which and $9.8 million was covered by the Credit Enhancement Agreement (see Note 12 — “Credit Enhancement Receivable, Credit Enhancement Deposit and Contingent Liability”). Newmark’s current estimate of expected credit losses considers various factors, including, without being limited to, historical default and losses, current delinquency status, loan size, terms, amortization types, the forward-looking view of the primary risk drivers (debt-service coverage ratio and loan-to-value) based on forecasts of economic conditions and local market performance. During the nine months ended September 30, 2020 there was an increase in the reserve by $14.7 million. There was no increase in the reserve for the three months ended September 30, 2020. A loan is considered to be delinquent once it is 60 days past due. As of September 30, 2020, there were four loans in the credit risk portfolio with outstanding principal balances of $53.5 million, with a maximum loss exposure of $17.8 million, that were delinquent. If all four delinquent loans resulted in a loss event, proceeds from the liquidation of assets are estimated to approximate $41.7 million based on current estimates of fair value. Newmark’s share of the loss would approximate $6.0 million. The provisions for risk-sharing were included in “Operating, administrative and other” on the accompanying unaudited condensed consolidated statements of operations as follows (in thousands): Balance, January 1, 2019 $ 15 Impact of adopting ASC 326 17,935 Balance, January 1, 2020 $ 17,950 Provision for expected credit losses 14,702 Balance, September 30, 2020 $ 32,652 |
Concentrations of Credit Risk
Concentrations of Credit Risk | 9 Months Ended |
Sep. 30, 2020 | |
Risks and Uncertainties [Abstract] | |
Concentrations of Credit Risk | Concentrations of Credit RiskThe lending activities of Newmark create credit risk in the event that counterparties do not fulfill their contractual payment obligations. In particular, Newmark is exposed to credit risk related to the Fannie Mae DUS and Freddie Mac TAH loans (see Note 23 — “Financial Guarantee Liability”). As of September 30, 2020, 22% and 14% of $6.7 billion of the maximum loss was for properties located in California and Texas, respectively. As of December 31, 2019, 21% and 16% of $5.8 billion of the maximum loss was for properties located in California and Texas, respectively. |
Escrow and Custodial Funds
Escrow and Custodial Funds | 9 Months Ended |
Sep. 30, 2020 | |
Deposit Assets Disclosure [Abstract] | |
Escrow and Custodial Funds | Escrow and Custodial FundsIn conjunction with the servicing of multifamily and commercial loans, Newmark holds escrow and other custodial funds. Escrow funds are held at unaffiliated financial institutions generally in the form of cash and cash equivalents. These funds amounted to $1.3 billion and $925.0 million as of September 30, 2020 and December 31, 2019, respectively. These funds are held for the benefit of Newmark’s borrowers and are segregated in custodial bank accounts. These amounts are excluded from the assets and liabilities of Newmark. |
Fair Value of Financial Assets
Fair Value of Financial Assets and Liabilities | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Assets and Liabilities | Fair Value of Financial Assets and Liabilities U.S. GAAP guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets and liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows: • Level 1 measurements—Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. • Level 2 measurements—Quoted prices in markets that are not active or financial instruments for which all significant inputs are observable, either directly or indirectly. • Level 3 measurements—Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. As required by U.S. GAAP guidance, assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. 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, 2020 Level 1 Level 2 Level 3 Total Assets: Marketable securities $ 121,759 $ — $ — $ 121,759 Nasdaq Forwards — $ — $ 18,959 $ 18,959 Loans held for sale, at fair value — 1,537,734 — 1,537,734 Rate lock commitments — — 45,561 45,561 Forward sale contracts — — 9,625 9,625 Total $ 121,759 $ 1,537,734 $ 74,145 $ 1,733,638 Liabilities: Contingent consideration $ — $ — $ 31,575 $ 31,575 Rate lock commitments — — 1,133 1,133 Forward sale contracts — — 41,730 41,730 Total $ — $ — $ 74,438 $ 74,438 As of December 31, 2019 Level 1 Level 2 Level 3 Total Assets: Marketable securities $ 36,795 $ — $ — $ 36,795 Nasdaq Forwards — — 26,502 26,502 Loans held for sale, at fair value — 215,290 — 215,290 Rate lock commitments — — 32,035 32,035 Forward sale contracts — — 14,389 14,389 Total $ 36,795 $ 215,290 $ 72,926 $ 325,011 Liabilities: Contingent consideration $ — $ — $ 45,172 $ 45,172 Rate lock commitments — — 12,124 12,124 Forwards sale contracts — — 13,537 13,537 Total $ — $ — $ 70,833 $ 70,833 There were no transfers among Level 1, Level 2 and Level 3 for the three and nine months ended September 30, 2020 and September 30, 2019. Level 3 Financial Assets and Liabilities: Changes in Level 3 Nasdaq Forwards, 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, 2020 Opening Total realized Issuances Settlements Closing Unrealized Assets: Rate lock commitments $ 32,035 $ 45,561 $ — $ (32,035) $ 45,561 $ 45,561 Forward sale contracts 14,389 9,625 — (14,389) 9,625 9,625 Nasdaq Forwards 26,502 (7,543) — — 18,959 18,959 Total $ 72,926 $ 47,643 $ — $ (46,424) $ 74,145 $ 74,145 Opening Total realized Issuances Settlements Closing Unrealized Liabilities: Contingent consideration $ 45,172 $ (12,034) $ 2,221 $ (3,784) $ 31,575 $ 145 Rate lock commitments 12,124 1,133 — (12,124) 1,133 1,133 Forward sale contracts 13,537 41,730 — (13,537) 41,730 41,730 Total $ 70,833 $ 30,829 $ 2,221 $ (29,445) $ 74,438 $ 43,008 As of December 31, 2019 Opening Total realized Issuances Settlements Closing Unrealized Assets: Rate lock commitments $ 6,732 $ 32,035 $ — $ (6,732) $ 32,035 $ 32,035 Forward sale contracts 8,177 14,389 — (8,177) 14,389 14,389 Nasdaq Forwards 77,619 (51,117) — — 26,502 26,502 Total $ 92,528 $ (4,693) $ — $ (14,909) $ 72,926 $ 72,926 Opening Total realized Issuances Settlements Closing Unrealized Liabilities: Contingent consideration $ 32,551 $ 2,287 $ 14,957 $ (4,623) $ 45,172 $ 2,287 Rate lock commitments 7,470 12,124 — (7,470) 12,124 12,124 Forward sale contracts 9,208 13,537 — (9,208) 13,537 13,537 Total $ 49,229 $ 27,948 $ 14,957 $ (21,301) $ 70,833 $ 27,948 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, 2020 Level 3 assets and liabilities Assets Liabilities Significant Unobservable Range Weighted Accounts payable, accrued expenses and other liabilities: Contingent consideration $ — $ 31,575 Discount rate 0.3% - 10.4% (1) 7.3% Probability of meeting earnout and contingencies 0% - 100% (1) 98.5% Financial forecast information Derivative assets and liabilities: Nasdaq Forwards $ 18,959 $ — Implied volatility 37.9% - 42.2% (2) 41.9% Forward sale contracts $ 9,625 $ 41,730 Counterparty credit risk N/A N/A Rate lock commitments $ 45,561 $ 1,133 Counterparty credit risk N/A N/A December 31, 2019 Level 3 assets and liabilities Assets Liabilities Significant Unobservable Range Weighted Accounts payable, accrued expenses and other liabilities: Contingent consideration $ — $ 45,172 Discount rate 0.3% - 10.4% 8.6% Probability of meeting earnout and contingencies 90% - 100% (1) 98.1% Financial forecast information Derivative assets and liabilities: Nasdaq Forwards $ 26,502 $ — Implied volatility 25.7% - 34.8% (2) 32.2% Forward sale contracts $ 14,389 $ 13,537 Counterparty credit risk N/A N/A Rate lock commitments $ 32,035 $ 12,124 Counterparty credit risk N/A N/A (1) Newmark’s estimate of contingent consideration as of September 30, 2020 and December 31, 2019 was based on the acquired business’ projected future financial performance, including revenues. (2) The volatility of Newmark’s Nasdaq Forwards is primarily based on the volatility of the underlying Nasdaq stock price. Valuation Processes - Level 3 Measurements Both the rate lock commitments to borrowers and the forward sale contracts to investors are derivatives and, accordingly, are marked to fair value on the accompanying unaudited condensed consolidated statements of operations. The fair value of Newmark’s rate lock commitments to borrowers and loans held for sale and the related input levels includes, as applicable: • The assumed gain loss of the expected loan sale to the investor, net of employee benefits; • The expected net future cash flows associated with servicing the loan; • The effects of interest rate movements between the date of the rate lock and the balance sheet date; and • The nonperformance risk of both the counterparty and Newmark. The fair value of Newmark’s forward sales contracts to investors considers effects of interest rate movements between the trade date and the balance sheet date. The market price changes are multiplied by the notional amount of the forward sales contracts to measure the fair value. The fair value of Newmark’s rate lock commitments and forward sale contracts is adjusted to reflect the risk that the agreement will not be fulfilled. Newmark’s exposure to nonperformance in rate lock and forward sale contracts is represented by the contractual amount of those instruments. Given the credit quality of Newmark’s counterparties, the short duration of rate lock commitments and forward sales contracts, and Newmark’s historical experience with the agreements, management does not believe the risk of nonperformance by Newmark’s counterparties to be significant. The Nasdaq Forwards are derivatives and, accordingly, are marked to fair value on the accompanying unaudited condensed consolidated statements of operations. The fair value of the Nasdaq Forwards are determined utilizing the following inputs, as applicable: • The underlying number of shares and the related strike price; • The maturity date; and • The implied volatility of Nasdaq’s stock price. The fair value of Newmark’s Nasdaq Forwards considers the effects of Nasdaq’s stock price volatility between the balance sheet date and the maturity date. The fair value is determined by the use of a Black-Scholes put option valuation model. Information About Uncertainty of Level 3 Fair Value Measurements The significant unobservable inputs used in the fair value of Newmark’s contingent consideration are the discount rate and forecasted financial information. Significant increases (decreases) in the discount rate would have resulted in a significantly lower (higher) fair value measurement. Significant increases (decreases) in the forecasted financial information would have resulted in a significantly higher (lower) fair value measurement. As of September 30, 2020 and December 31, 2019, the present value of expected payments related to Newmark’s contingent consideration was $31.6 million and $45.2 million, respectively (see Note 31 — “Commitments and Contingencies”). As of September 30, 2020 and December 31, 2019, the undiscounted value of the payments, assuming that all contingencies are met, would be $60.6 million and $66.4 million, respectively. Fair Value Measurements on a Non-Recurring Basis Equity investments carried under the measurement alternative are remeasured at fair value on a non-recurring basis to reflect observable transactions which occurred during the period. Newmark applied the measurement alternative to equity securities with the fair value of $67.3 million and $94.1 million, which were included in “Other assets” on the accompanying unaudited condensed consolidated balance sheets as of September 30, 2020 and December 31, 2019, respectively. These investments are classified within Level 2 in the fair value hierarchy, because their estimated fair value is based on valuation methods using the observable transaction price at the transaction date. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions (a) Service Agreements Newmark receives administrative services, including but not limited to, treasury, legal, accounting, information technology, payroll administration, human resources, incentive compensation plans and other support, provided by Cantor and/or BGC. Allocated expenses were $6.1 million and $7.1 million for the three months ended September 30, 2020 and September 30, 2019, respectively, and $17.1 million and $21.0 million for the nine months ended September 30, 2020 and September 30, 2019, respectively. These expenses are included as part of “Fees to related parties” on the accompanying unaudited condensed consolidated statements of operations. (b) Loans, Forgivable Loans and Other Receivables from Employees and Partners Newmark has entered into various agreements with certain employees and partners whereby these individuals receive loans which may be either wholly or in part repaid from the distribution of earnings that the individuals receive on some or all of their limited partnership interests or may be forgiven over a period of time. The forgivable portion of these loans is recognized as compensation expense over the life of the loans. From time to time, Newmark may also enter into agreements with employees and partners to grant bonus and salary advances or other types of loans. These advances and loans are repayable in the timeframes outlined in the underlying agreements. As of September 30, 2020 and December 31, 2019, the aggregate balance of employee loans was $479.8 million and $403.7 million, respectively, and is included as “Loans, forgivable loans and other receivables from employees and partners, net” on the accompanying unaudited condensed consolidated balance sheets. Compensation expense for the above-mentioned employee loans for the three months ended September 30, 2020 and September 30, 2019 was $18.3 million and $13.2 million, respectively, and $50.2 million and $31.7 million for the nine months ended September 30, 2020 and September 30, 2019, respectively. The compensation expense related to these employee loans is included as part of “Compensation and employee benefits” on the accompanying unaudited condensed consolidated statements of operations. Transfer of Employees to Newmark and Other Related Party Transactions In connection with the expansion of the mortgage brokerage and lending activities, Newmark has entered into an agreement with Cantor pursuant to which five former employees of Cantor's affiliate, Cantor Commercial Real Estate ("CCRE"), transferred to Newmark, effective as of May 1, 2018. In connection with this transfer of employees, Cantor paid $6.9 million to Newmark in October 2018, and Newmark Holdings issued $6.7 million of limited partnership units and $0.2 million of cash in the form of a cash distribution agreement to the employees. In addition, Newmark Holdings issued $2.2 million of Newmark Holdings partnership units with a capital account and $0.5 million of limited partnership units in exchange for the cash payment from Cantor to Newmark of $2.2 million. Newmark recorded $6.9 million and $2.2 million as “Stockholders’ equity” and “Redeemable partnership interests”, respectively, on the unaudited condensed consolidated balance sheets. In consideration for the Cantor payment, Newmark has agreed to return up to a maximum of $3.3 million to Cantor based on the employees’ production during their first two years of employment with Newmark. As of December 31, 2019, Newmark had $2.6 million, respectively, included in “Payables to related parties” on the accompanying unaudited condensed consolidated balance sheets, to be returned to Cantor related to this transaction. Newmark has agreed to allow certain of these employees to continue to provide consulting services to Cantor in exchange for a forgivable loan which was directly paid by Cantor to these employees. In July 2020, Newmark paid $3.3 million to Cantor based on the employees’ production. In February 2019, Newmark's Audit Committee authorized Newmark and its subsidiaries to originate and service GSE loans for Cantor and its affiliates (other than BGC) and service loans originated by Cantor and its affiliates (other than BGC) on prices, rates and terms no less favorable to Newmark and its subsidiaries than those charged by third parties. The authorization is subject to certain terms and conditions, including but not limited to: (i) a maximum amount up to $100.0 million per loan, (ii) a $250.0 million limit on loans that have not yet been acquired or sold to a GSE at any given time, and (iii) a separate $250.0 million limit on originated Fannie Mae Loans outstanding to Cantor at any given time. (c) Transactions with CCRE Newmark has a referral agreement in place with CCRE, in which Newmark’s brokers are incentivized to refer business to CCRE through a revenue-share agreement. Newmark recognized $0.4 million and $0.1 million of revenue for the three months ended September 30, 2020 and September 30, 2019, respectively, and $0.5 million and $0.8 million for the nine months ended September 30, 2020 and September 30, 2019, respectively, in connection with this revenue-share agreement. Newmark also has a revenue-share agreement with CCRE, in which Newmark pays CCRE for referrals for leasing or other services. Newmark did not make any payments under this agreement to CCRE for the three and nine months ended September 30, 2020 and September 30, 2019, respectively. In addition, Newmark has a loan referral agreement in place with CCRE, in which either party can refer a loan to the other. For the three and nine months ended September 30, 2020, Newmark did not have any revenues from these referrals. For the three and nine months ended September 30, 2019, revenues from these referrals were $0.7 million and $1.6 million, respectively. Such revenues are recognized in “Gains from mortgage banking activities/originations, net” on the accompanying unaudited condensed consolidated statements of operations. These referral fees are net of the broker fees and commissions paid to CCRE. Broker fees and commissions for the three and nine months ended September 30, 2019 were $0.2 million and $0.4 million, respectively. Newmark did not purchase any primary servicing rights during the three months ended September 30, 2020. Newmark purchased the primary servicing rights for $137.0 million of loans originated by CCRE for $0.6 million for the three months ended September 30, 2019. Newmark purchased the primary servicing rights for $227.0 million and $584.0 million of loans originated by CCRE for $0.2 million and $0.8 million for the nine months ended September 30, 2020 and September 30, 2019, respectively. Newmark also services loans for CCRE on a “fee for service” basis, generally prior to a loan’s sale or securitization, and for which no MSR is recognized. Newmark recognized servicing revenues (excluding interest and placement fees) from servicing rights purchased from CCRE on a “fee for service” basis of $1.3 million and $0.9 million for the three months ended September 30, 2020 and September 30, 2019, respectively, and $3.3 million and $2.9 million for the nine months ended September 30, 2020 and September 30, 2019, respectively, which was included as part of “Management services, servicing fee and other” on the accompanying unaudited condensed consolidated statements of operations. On July 22, 2019, Cantor Commercial Real Estate Lending, L.P. (“CCRE Lending”), a wholly owned subsidiary of Real Estate LP, made a $146.6 million commercial real estate loan (the “Loan”) to a single-purpose company (the “Borrower”) in which Barry Gosin, Newmark’s Chief Executive Officer, owns a 19% interest. The Loan is secured by the Borrower’s interest in property in Pennsylvania that is subject to a ground lease. While CCRE Lending initially provided the full loan amount, on August 16, 2019, a third-party bank purchased approximately 80% of the Loan value from CCRE Lending, with CCRE Lending retaining approximately 20%. The Loan matures on August 6, 2029, and is payable monthly at a fixed interest rate of 4.38% per annum. Newmark provided certain commercial loan brokerage services to the Borrower in the ordinary course of its business, and the Borrower paid Newmark a fee, as the broker of the Loan, of $0.7 million. The Newmark Audit Committee approved the commercial loan brokerage services and the related fee amount received. Transactions with Executive Officers and Directors In connection with Newmark’s 2019 executive compensation process, Newmark’s executive officers received certain monetization of prior awards as compensation at Newmark, as set forth below: On December 19, 2019, the Newmark Compensation Committee approved the right to (i) exchange 552,483 non-exchangeable PSUs held by Mr. Lutnick into 552,483 HDUs (which, based on the closing price of the Class A common stock of $13.61 per share on such date, had a value of $7,017,000); and (ii) exchange for cash 602,463 non-exchangeable PPSUs held by Mr. Lutnick (which had an average determination price of $13.25 per unit) for a payment of $7,983,000 for taxes when the PSUs are exchanged. On December 19, 2019, the Compensation Committee approved the right to (i) exchange 443,872 non-exchangeable PSUs held by Mr. Gosin into 443,872 HDUs (which, based on the closing price of the Class A common stock of $13.61 per share on such date, had a value of $5,637,548); and (ii) exchange for cash 539,080 non-exchangeable PPSUs held by Mr. Gosin (which had an average determination price of $9.95 per unit) for a payment of $5,362,452 for taxes when the PSUs are exchanged. On December 19, 2019, the Compensation Committee approved the cancellation of 145,464 non-exchangeable PSUs held by Mr. Merkel, and the cancellation of 178,179 non-exchangeable PPSUs (which had an average determination price of $10.61 per unit). Additionally, on December 19, 2019, Mr. Merkel exchanged 4,222 already exchangeable PSUs held by him in exchange for Class A common stock. The above transaction resulted in income of $3,791,848 for Mr. Merkel, of which Newmark withheld $1,989,483 for taxes and issued the remaining $1,802,365 in the form of 132,429 net shares of Class A common stock valued at a price of $13.61 per share. On December 19, 2019, the Compensation Committee approved the right to (i) exchange 5,846 non-exchangeable PSUs held by Mr. Rispoli into 5,846 HDUs (which, based on the closing price of the Class A common stock of $13.61 per share on such date, had a value of $74,250); and (ii) exchange for cash 4,917 Newmark Holdings non-exchangeable PPSUs held by Mr. Rispoli (which had an average determination price of $12.355 per unit) for a payment of $60,750 for taxes when the PSUs are exchanged. On October 30, 2019, the Newmark Audit and Compensation Committees approved the repurchase from Mr. Merkel of 55,193 shares of Newmark Class A common stock at $10.69 per share, the closing price on October 30, 2019. On December 19, 2019, the Newmark Audit and Compensation Committees approved the repurchase from Mr. Merkel of 132,429 shares of Newmark Class A common stock at $13.61 per share, the closing price on December 19, 2019. On November 4, 2020, the Audit Committee of the Board of Directors authorized entities in which executive officers have a non-controlling interest to engage Newmark to provide ordinary course real estate services to them as long as Newmark’s fees are consistent with the fees that Newmark ordinarily charges for these services. CF Real Estate Finance Holdings, LP. Contemporaneously with the acquisition of Berkeley Point, on September 8, 2017, Newmark invested $100.0 million in a newly formed commercial real estate-related financial and investment business, Real Estate LP, which is controlled and managed by Cantor. Real Estate LP may conduct activities in any real estate related business or asset backed securities related business or any extensions thereof and ancillary activities thereto. As of September 30, 2020 and December 31, 2019, Newmark’s investment was accounted for under the equity method (see Note 8 — “Investments”). Spin-Off The Separation and Distribution Agreement sets forth the agreements among BGC, Cantor, Newmark and their respective subsidiaries with respect to the Separation and related matters (see Note 1 — “Organization and Basis of Presentation” for additional information). As a result of the Separation, the limited partnership interests in Newmark Holdings were distributed to the holders of limited partnership interests in BGC Holdings, including Cantor and CFGM, whereby each holder of BGC Holdings limited partnership interests at that time now held a BGC Holdings limited partnership interest and a corresponding Newmark Holdings limited partnership interest, which was equal to a BGC Holdings limited partnership interest multiplied by the contribution ratio, divided by the current exchange ratio. The exchange ratio is subject to adjustment, in accordance with the terms of the Separation and Distribution Agreement (see Note 2 — “Limited Partnership Interests in Newmark Holdings and BGC Holdings” for additional information). On November 30, 2018, BGC completed the Spin-Off. BGC Partners’ stockholders, including Cantor and CFGM, as of the Record Date, received in the Spin-Off 0.463895 of a share of Newmark Class A or Class B common stock for each share of BGC Class A or Class B common stock held as of the Record Date. In the aggregate, BGC distributed 131.9 million shares of Newmark Class A common stock and 21.3 million shares of Newmark Class B common stock to BGC’s stockholders in the Spin-Off. As Cantor and CFGM held 100% of the shares of BGC Class B common stock as of the Record Date, Cantor and CFGM were distributed 100% of the shares of Newmark Class B common stock in the Spin-Off. Prior to and in connection with the Spin-Off, 14.8 million Newmark Holdings Units held by BGC were exchanged into 9.4 million shares of Newmark Class A common stock and 5.4 million shares of Newmark Class B common stock, and 7.0 million Newmark OpCo units held by BGC were exchanged into 6.9 million shares of Newmark Class A common stock. These Newmark Class A and Class B shares of common stock were included in the Spin-Off to BGC’s stockholders. On November 30, 2018, pursuant to the BGC Holdings Distribution, BGC Holdings distributed pro rata all of the 1.5 million exchangeable limited partnership units of Newmark Holdings held by BGC Holdings immediately prior to the effective time of the Spin-Off to its limited partners entitled to receive distributions on their BGC Holdings units who were holders of record of such units as of November 23, 2018 (including Cantor, CFGM and executive officers of BGC and Newmark). The Newmark Holdings Units distributed to BGC Holdings partners in the BGC Holdings Distribution are exchangeable for shares of Newmark Class A common stock, and in the case of the 0.4 million Newmark Holdings Units received by Cantor also into shares of Newmark Class B common stock, at the exchange ratio of 0.9793 shares of Newmark common stock per Newmark Holdings Unit (subject to adjustment). As of September 30, 2020, the exchange ratio equaled 0.9373. (See Note 1 — “Organization and Basis of Presentation” for additional information). Following the Spin-Off and the BGC Holdings Distribution, BGC Partners ceased to be a controlling stockholder of Newmark, and BGC and its subsidiaries no longer held any shares of Newmark common stock or equity interests in Newmark or its subsidiaries. Cantor continues to control Newmark and its subsidiaries following the Spin-Off and the BGC Holdings Distribution (see Note 1 — “Organization and Basis of Presentation” for additional information). Subsequent to the Spin-Off and the BGC Holdings Distribution, there are remaining partners who hold limited partnership interests in Newmark Holdings who are BGC employees, and there are remaining partners who hold limited partnership interests in BGC Holdings who are Newmark employees. The Newmark limited partnership interests were distributed as part of the Separation and the BGC Holdings Distribution. Employees of Newmark and BGC are granted only limited partnership interests in Newmark Holdings and BGC Holdings, respectively. As a result of the Spin-Off and the BGC Holdings Distribution, as the existing limited partnership interests in Newmark Holdings held by BGC employees and the existing limited partnership interests in BGC Holdings held by Newmark employees are exchanged/redeemed, the related capital is contributed to and from Cantor, respectively. BGC’s 2018 Investment in Newmark Holdings On March 7, 2018, BGC Partners and its operating subsidiaries purchased 16.6 million units of Newmark Holdings for approximately $242.0 million. The price per Newmark Holdings Unit was based on the $14.57 closing price of Newmark’s Class A common stock on March 6, 2018, as reported on the NASDAQ Global Select Market. These newly issued Newmark Holdings Units were exchangeable, at BGC’s discretion, into either shares of Newmark Class A common stock or shares of Newmark Class B common stock. BGC made the Investment in Newmark Holdings pursuant to an Investment Agreement, dated as of March 6, 2018, by and among BGC, BGC Holdings, BGC U.S. OpCo, BGC Global OpCo, Newmark, Newmark Holdings and Newmark OpCo. The Investment by BGC in Newmark Holdings and related transactions were approved by the Audit Committees and Boards of Directors of BGC and Newmark. BGC and its subsidiaries funded the Investment by BGC in Newmark Holdings using the proceeds of its CEO sales program. Newmark used the proceeds to repay the balance of the outstanding principal amount under its unsecured senior term loan credit agreement with Bank of America, N.A., as administrative agent, and a syndicate of lenders that was guaranteed by BGC. In addition, in accordance with the Separation and Distribution Agreement, BGC owned 7.0 million limited partnership interests in the Newmark OpCo (“Newmark OpCo Units”) immediately prior to the Spin-Off, as a result of other issuances of BGC Class A common stock primarily related to the redemption of limited partnership units in BGC Holdings and Newmark Holdings. Other Transactions with CF&Co On June 18, 2018 and September 26, 2018, Newmark entered into transactions related to the monetization of the Nasdaq shares that Newmark expects to receive in 2019 through 2022 (see Note 1 — “Organization and Basis of Presentation”). Newmark paid $4.0 million in fees for services provided by CF&Co related to these monetization transactions. These fees were recorded as a deduction from the carrying amount of the EPUs. On November 6, 2018, Newmark issued an aggregate of $550.0 million principal amount of 6.125% Senior Notes due 2023. In connection with this issuance of the 6.125% Senior Notes, Newmark paid $0.8 million in underwriting fees to CF&Co. (d) Other Related Party Transactions On November 30, 2018, Newmark entered into an unsecured credit agreement with Cantor (the “Cantor Credit Agreement”). The Cantor Credit Agreement provides for each party to issue loans to the other party at the lender’s discretion. Pursuant to the Cantor Credit Agreement, the parties and their respective subsidiaries (with respect to Cantor, other than BGC and its subsidiaries) may borrow up to an aggregate principal amount of $250 million from each other from time to time at an interest rate which is the higher of Cantor’s or Newmark’s short-term borrowing rate then in effect, plus 1%. Receivables from related parties were $0.7 million as of September 30, 2020. There were no receivables from related parties as of December 31, 2019. Payables to related parties were $5.2 million and $38.1 million as of September 30, 2020 and December 31, 2019, respectively. For a detailed discussion about Newmark’s Payables to related parties, see Note 1 — “Organization and Basis of Presentation”, Note 2 — “Limited Partnership Interests in Newmark and BGC Holdings” and Note 22 — “Long-Term Debt” in Newmark’s consolidated financial statements, included in Part II, Item 8 of Newmark’s Annual Report on Form 10-K for the year ended December 31, 2019. On May 15, 2020, the Newmark Audit Committee authorized RKF Retail Holdings LLC, a subsidiary of the Company, entered into a one-year sublease to BGC U.S. OpCo ("BGC") of approximately 21,000 rentable square feet of excess space. The sublease commenced on May 15, 2020 and expires on May 31, 2021. Under the terms of the lease, BGC will pay Newmark a fixed rent amount of $1.1 million. In connection with this agreement, Newmark received $0.2 million and $0.5 million from BGC for the three and nine months ended September 30, 2020. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The accompanying unaudited condensed consolidated financial statements include U.S. federal, state and local income taxes on Newmark’s allocable share of its U.S. results of operations, as well as taxes payable to jurisdictions outside the U.S. In addition, certain of Newmark’s entities are taxed as U.S. partnerships and are subject to the Unincorporated Business Tax (“UBT”) in New York City. Therefore, the tax liability or benefit related to the partnership income or loss, except for UBT, rests with the partners (see Note 2 — “Limited Partnership Interests”, for discussion of partnership interests), rather than the partnership entity. Income taxes are accounted for using the asset and liability method, as prescribed in U.S. GAAP guidance for Income Taxes . Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the accompanying unaudited condensed consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded against deferred tax assets if it is deemed more likely than not that those assets will not be realized. The Tax Cut and Jobs Act (the “Tax Act”), enacted on December 22, 2017, includes the global intangible low-taxed income (“GILTI”) provision. This provision requires inclusion in Newmark's U.S. income tax return of the earnings of certain foreign subsidiaries. Newmark has elected to treat taxes associated with the GILT provision as a current period expense when incurred and thus has not recorded taxes, if any, for basis differences under this regime. Pursuant to U.S. GAAP guidance on Accounting for Uncertainty in Income Taxes , Newmark provides for uncertain tax positions based upon management’s assessment of whether a tax benefit is more likely than not to be sustained upon examination by tax authorities. As of September 30, 2020, Newmark had $0.2 million of unrecognized tax benefits which, if recognized, would affect the effective tax rate. As of December 31, 2019, Newmark's unrecognized tax benefits, excluding related interest and penalties, were $0.2 million, all of which, if recognized, would affect the effective tax rate. Newmark recognized interest and penalties related to income tax matters in “Provision for income taxes” on the accompanying unaudited condensed consolidated statements of operations. As of September 30, 2020, Newmark has not accrued any tax-related interest and penalties. |
Accounts Payable, Accrued Expen
Accounts Payable, Accrued Expenses and Other Liabilities | 9 Months Ended |
Sep. 30, 2020 | |
Payables and Accruals [Abstract] | |
Accounts Payable, Accrued Expenses and Other Liabilities | Accounts Payable, Accrued Expenses and Other Liabilities The accounts payable, accrued expenses and other liabilities consisted of the following (in thousands): September 30, 2020 December 31, 2019 Accounts payable and accrued expenses $ 110,271 $ 161,988 Redeemable preferred partnership units 93,480 — Outside broker payable 54,873 74,280 Payroll taxes payable 53,027 45,612 Corporate taxes payable 38,964 69,237 Derivative liability 42,863 25,661 Right-of-use liabilities 28,645 27,184 Credit enhancement deposit 25,000 — Contingent consideration 18,210 13,107 Total $ 465,333 $ 417,069 Other long-term liabilities consisted of the following (in thousands): September 30, 2020 December 31, 2019 Accrued compensation $ 309,710 $ 278,399 Payroll taxes payable 62,500 41,355 Contingent consideration 13,365 32,065 Credit enhancement deposit — 25,000 Financial guarantee liability 32,652 15 Total $ 418,227 $ 376,834 |
Compensation
Compensation | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Compensation | Compensation Newmark’s Compensation Committee may grant various equity-based awards to employees of Newmark, including RSUs, restricted stock, limited partnership units and shares of Newmark Class A common stock upon exchange or redemption of Newmark limited partnership units (see Note 2 — “Limited Partnership Interests in Newmark Holdings and BGC Holdings”). On December 13, 2017, as part of the Separation, the Newmark Group, Inc. Long Term Incentive Plan (the “Newmark Equity Plan”) was approved by Newmark’s then sole stockholder, BGC, for Newmark to issue up to 400.0 million shares of Newmark Class A common stock, of which 65.0 million are registered, that may be delivered or cash-settled pursuant to awards granted during the life of the Newmark Equity Plan. As of September 30, 2020, awards with respect to 28.2 million shares have been granted and 371.8 million shares are available for future awards. Upon vesting of RSUs, issuance of restricted stock and exchange or redemption of limited partnership units, Newmark generally issues new shares of its Class A common stock. Prior to the Separation, BGC’s Compensation Committee granted various equity-based awards to employees of Newmark, including RSUs, restricted stock, limited partnership units and exchange rights for shares of BGC Class A common stock upon exchange of BGC Holdings limited partnership units (see Note 2 — “Limited Partnership interests in Newmark Holdings and BGC Holdings”). As a result of the Separation, limited partnership interests in Newmark Holdings were distributed to the holders of limited partnership interests in BGC Holdings. Each holder of BGC Holdings limited partnership interests at that time held a BGC Holdings limited partnership interest and 0.4545 of a corresponding Newmark Holdings limited partnership interest. The exchange ratio is the number of shares of Newmark common stock that a holder will receive upon exchange of one Newmark Holdings exchangeable unit (the exchange ratio was initially one, but is subject to adjustment as set forth in the Separation and Distribution Agreement and was 0.9373 as of September 30, 2020). Newmark incurred compensation expense related to Class A common stock, limited partnership units and RSUs held by Newmark employees as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Issuance of common stock and exchangeability expenses $ 13,243 $ 17,499 $ 21,668 $ 39,671 Allocations of net income to limited partnership units and FPUs (1) 29,221 32,496 30,753 50,410 Limited partnership units amortization 4,902 5,239 12,808 16,618 RSU amortization 3,404 1,413 9,315 3,172 Equity-based compensation and allocations of net income to limited partnership units and FPUs $ 50,770 $ 56,647 $ 74,544 $ 109,871 (1) Certain limited partnership units receive quarterly allocations of net income and are generally contingent upon services being provided by the unit holders, including the Preferred Distribution. (a) Limited Partnership Units A summary of the activity associated with limited partnership units held by Newmark employees is as follows: Newmark Units BGC Units Balance, January 1, 2019 44,733,487 (1) 61,870,969 Issued 13,813,204 319,586 Redeemed/exchanged units (2,487,885) (3,938,134) Forfeited units/other 4,742,046 (2,198,720) Balance, December 31, 2019 60,800,852 56,053,701 Issued 6,811,808 1,064,781 Redeemed/exchanged units (1,798,651) (2,217,536) Forfeited units/other (82,945) (40,451) September 30, 2020 (2) 65,731,064 54,860,495 Total exchangeable units outstanding (2) : December 31, 2019 10,108,598 24,692,695 September 30, 2020 10,017,066 25,047,827 (1) Includes the pre-IPO Newmark employees share-equivalent limited partnership units in BGC Holdings. (2) The Limited Partnership table above also includes partnership units issued for consideration for acquisitions. As of September 30, 2020, there were 5.2 million partnership units in Newmark Holdings outstanding, of which 2.0 million units were exchangeable, and 9.2 million partnership units in BGC Holdings outstanding, of which 4.5 million were exchangeable. As of December 31, 2019, there were 5.3 million partnership units in Newmark Holdings outstanding, of which 1.4 million units were exchangeable, and 9.5 million partnership units in BGC Holdings outstanding, of which 2.9 million were exchangeable. The Limited Partnership Units table above includes both regular and Preferred Units. The Preferred Units are not entitled to participate in partnership distributions other than with respect to the Preferred Distribution (see Note 2 — “Limited Partnership Interests in BGC Holdings and Newmark Holdings” for further information on Preferred Units). A summary of the BGC Holdings and Newmark Holdings limited partnership units held by Newmark employees is as follows: Newmark BGC Regular units 61,301,972 53,247,827 Preferred Units 4,429,092 1,612,668 Balance, September 30, 2020 65,731,064 54,860,495 A summary of units held by Newmark employees redeemed in connection with the issuance of Newmark or BGC Class A common stock (at the current exchange ratio) or granted exchangeability for Newmark or BGC Class A common stock is as follows: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 BGC Units 34,893 87,566 225,725 379,191 Newmark Units 25,419 63,594 194,072 208,969 Total 60,312 151,160 419,797 588,160 Compensation expense related to the issuance of Newmark or BGC Class A common stock and grants of exchangeability on Newmark Holdings and BGC Holdings limited partnership units to Newmark employees is as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Issuance of common stock and exchangeability expenses $ 125 $ — $ 2,606 $ 2,719 Limited partnership units with a post-termination payout held by Newmark employees are as follows (dollars in thousands): September 30, 2020 December 31, 2019 Notional Value (1) $ 257,517 $ 261,025 Estimated fair value of the post-termination payout (2) $ 62,992 $ 51,378 Outstanding limited partnership units in BGC Holdings 5,265,878 6,251,816 Outstanding limited partnership units in BGC Holdings - unvested 1,008,934 1,508,510 Outstanding limited partnership units in Newmark Holdings 18,904,604 17,097,639 Outstanding limited partnership units in Newmark Holdings - unvested 9,268,547 9,357,822 (1) Beginning January 1, 2018, Newmark began granting stand-alone limited partnership units in Newmark Holdings to Newmark employees. (2) Included in “Other long-term liabilities” on the accompanying unaudited condensed consolidated balance sheets. Liability balance also includes $6.8 million of post-termination units issued as consideration for acquisition. Compensation expense related to limited partnership units held by Newmark employees with a post-termination pay-out amount is recognized over the stated service period. These units generally vest between three Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Limited partnership units amortization $ 4,902 $ 5,239 $ 12,808 $ 16,618 During the three and nine months ended September 30, 2020, Newmark granted conversion rights to Newmark employees on 0.5 million outstanding limited partnership units in BGC Holdings and 3.0 million outstanding limited partnership units in Newmark Holdings. During the three months ended September 30, 2019, Newmark granted conversion rights to Newmark employees on 0.6 million outstanding limited partnership units in BGC Holdings and 1.6 million outstanding limited partnership units in Newmark Holdings, and during the nine months ended September 30, 2019, Newmark granted conversion rights to Newmark employees on 1.8 million outstanding limited partnership units in BGC Holdings and 3.3 million outstanding limited partnership units in Newmark Holdings. Granting conversion rights gives the employee the option to convert the limited partnership units to HDUs with a capital balance within BGC Holdings or Newmark Holdings. Generally, HDUs are not considered share-equivalent limited partnership units and are not in the fully diluted share count. The grant of conversion rights to Newmark employees are as follows (in thousands): September 30, 2020 December 31, 2019 Notional Value $ 206,851 $ 194,995 Estimated fair value of limited partnership units (1) $ 199,149 $ 182,800 (1) Included in “Other long-term liabilities” on the accompanying unaudited condensed consolidated balance sheets. Compensation expense related to these limited partnership units held by Newmark employees was as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Issuance of common stock and exchangeability expenses $ 13,118 $ 17,499 $ 19,062 $ 36,952 During the three and nine months ended September 30, 2020, Newmark employees were granted 1.3 million and 3.5 million N Units, respectively, that are excluded from the table above, since these units are not considered share-equivalent limited partnership units and are not included in the fully diluted share count. The N Units do not receive quarterly allocations of net income and remain unvested. Upon vesting, which occurs if the certain thresholds are met, the N Units are converted to equivalent limited partnership units that receive quarterly certain income distributions and can be granted exchange rights or redeemed at a later date, at which time these N Units would be reflected as a share-equivalent grant in the tables above. During the three and nine months ended September 30, 2020, 0.9 million and 2.4 million N Units respectively, vested and converted into distribution earning limited partnership units and were therefore included in the fully diluted share count. (b) Restricted Stock Units A summary of the activity associated with Newmark and BGC RSUs held by Newmark employees is as follows (fair value amount in thousands): Newmark RSUs (1) BGC RSUs (2) Restricted Weighted- Fair Weighted- Restricted Weighted- Fair Weighted- Balance, January 1, 2019 219,887 $ 13.52 $ 2,973 2.28 168,675 $ 9.77 $ 1,619 0.98 Granted 4,766,611 7.42 35,344 — — — Settled units (delivered shares) (109,007) 11.70 (1,275) (107,820) 9.38 (1,011) Forfeited units (193,920) 8.67 (1,681) (14,048) 10.02 (141) Balance, December 31, 2019 4,683,571 $ 7.55 $ 35,361 5.69 46,807 $ 9.97 $ 467 0.25 Granted 6,748,717 $ 8.28 $ 55,904 7,912 $ 3.69 $ 29 Settled units (delivered shares) (895,909) $ 7.90 $ (7,080) (45,544) $ 9.95 $ (453) Forfeited units (156,190) $ 7.98 $ (1,246) (1,153) $ 10.62 $ (12) Balance, September 30, 2020 10,380,189 $ 7.99 $ 82,939 5.91 8,022 $ 3.81 $ 31 2.42 (1) Beginning January 1, 2018, Newmark began granting stand-alone Newmark RSUs to Newmark employees with the awards vesting ratably over the two (2) RSUs granted to these individuals generally vest over a two The fair value of Newmark and BGC RSUs held by Newmark employees is determined on the date of grant based on the market value (adjusted if appropriate based upon the award’s eligibility to receive dividends), and is recognized, net of the effect of estimated forfeitures, ratably over the vesting period. Newmark uses historical data, including historical forfeitures and turnover rates, to estimate expected forfeiture rates for RSUs. Each RSU is settled for one share of BGC or Newmark Class A common stock, as applicable, upon completion of the vesting period. Compensation expense related to Newmark and BGC RSUs are as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 RSU amortization $ 3,404 $ 1,413 $ 9,315 $ 3,172 As of September 30, 2020, there was $79.0 million total unrecognized compensation expense related to unvested Newmark RSUs. (c) Deferred Compensation Newmark may pay certain bonuses in the form of deferred cash compensation awards, which generally vest over a future service period. The total compensation expense recognized in relation to the deferred cash compensation awards was $0.1 million and $0.3 million for the three and nine months ended September 30, 2020, respectively, and $0.2 million and $0.6 million for the three and nine months ended September 30, 2019, respectively. As of September 30, 2020 and December 31, 2019, the total liability for the deferred cash compensation awards was $1.2 million and $1.5 million, respectively, and is included in “Other long-term liabilities” on the unaudited condensed consolidated balance sheets. See Note 27 — "Related Party Transactions" for compensation related matters for the transfer of CCRE employees to Newmark. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies (a) Contractual Obligations and Commitments As of September 30, 2020 and December 31, 2019, Newmark was committed to fund approximately $0.5 billion and $1.5 billion, respectively, which is the total remaining draws on construction loans originated by Newmark under the HUD 221(d) 4, 220 and 232 programs, rate locked loans that have not been funded, forward commitments, as well as the funding for Fannie Mae structured transactions. Newmark also has corresponding commitments to sell these loans to various investors as they are funded. (b) Contingent Payments Related to Acquisitions Newmark completed acquisitions from 2015 through 2020 with contingent cash consideration of $18.2 million. The contingent equity instruments and cash liability is recorded at fair value in “Accounts payable, accrued expenses and other liabilities” on Newmark’s unaudited condensed consolidated balance sheets. (c) Contingencies In the ordinary course of business, various legal actions are brought and are pending against Newmark and its subsidiaries in the U.S. and internationally. In some of these actions, substantial amounts are claimed. Newmark is also involved, from time to time, in reviews, examinations, investigations and proceedings by governmental and self-regulatory agencies (both formal and informal) regarding Newmark’s businesses, which may result in regulatory, civil and criminal judgments, settlements, fines, penalties, injunctions or other relief. The following generally does not include matters that Newmark has pending against other parties which, if successful, would result in awards in favor of Newmark or its subsidiaries: Employment, Competitor-Related and Other Litigation From time to time, Newmark and its subsidiaries are involved in litigation, claims and arbitration in the U.S. and internationally, relating to various employment matters, including with respect to termination of employment, hiring of employees currently or previously employed by competitors, terms and conditions of employment and other matters. In light of the competitive nature of the real estate services industry, litigation, claims and arbitration between competitors regarding employee hiring are not uncommon. Legal reserves are established in accordance with U.S. GAAP guidance on Accounting for Contingencies, when a material legal liability is both probable and reasonably estimable. Once established, reserves are adjusted when there is more information available or when an event occurs requiring a change. The outcome of such items cannot be determined with certainty. Newmark is unable to estimate a possible loss or range of loss in connection with specific matters beyond its current accrual and any other amounts disclosed. Management believes that, based on currently available information, the final outcome of these current pending matters will not have a material adverse effect on Newmark’s unaudited condensed consolidated financial statements and disclosures taken as a whole. Risks and Uncertainties Newmark generates revenues by providing financial intermediary and brokerage activities and commercial real estate services to institutional customers. Revenues for these services are transaction-based. As a result, revenues could vary based on the transaction volume of global financial and real estate markets. Additionally, financing is sensitive to interest rate fluctuations, which could have an impact on Newmark’s overall profitability. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Third Quarter 2020 Dividend Newmark has declared a qualified quarterly dividend of $0.01 per share payable on December 14, 2020 to Class A and Class B common stockholders of record as of November 25, 2020. The declaration date was November 4, 2020 and the ex-dividend date will be November 24, 2020. |
Organization and Basis of Pre_2
Organization and Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission and in conformity with accounting principles generally accepted in the U.S. (“U.S. GAAP”). For the year ended December 31, 2019, Newmark changed the line item formerly known as “Allocations of net income and grant of exchangeability to limited partnership units and FPUs and issuance of common stock” to “Equity-based compensation and allocations of net income to limited partnership units and FPUs” on the unaudited condensed consolidated statements of operations and statements of cash flow. The change resulted in the reclassification of amortization charges related to equity-based awards, such as REUs and Restricted Stock Units (“RSUs”), from “Compensation and employee benefits” to “Equity-based compensation and allocations of net income to limited partnership units and FPUs.” “Equity-based compensation and allocations of net income to limited partnership units and FPUs” reflect the following items related to cash and equity-based compensation: • Charges with respect to the grant of shares of common stock or limited partnership units, such as HDUs, including in connection with the redemption of non-exchangeable limited partnership units, including PSUs; • Charges with respect to grants of exchangeability, such as the right of holders of limited partnership units with no capital accounts, such as PSUs, to exchange the units into shares of common stock, or HDUs, as well as the cash paid in the settlement of the related preferred units to pay withholding taxes owed by the unit holder upon such exchange; • Preferred units are granted in connection with the grant of certain limited partnership units, such as PSUs, that may be granted exchangeability to cover the withholding taxes owed by the unit holder, rather than issuing the gross amount of shares to employees, subject to cashless withholding of shares to pay applicable withholding taxes; • Charges related to the amortization of RSUs and limited partnership units; and • Allocations of net income to limited partnership units and founding/working partner units (“FPUs”), including the Preferred Distribution (as hereinafter defined). Intercompany balances and transactions within Newmark have been eliminated. Transactions between Cantor or BGC and Newmark pursuant to service agreements between Cantor and BGC (see Note 27 — “Related Party Transactions”), representing valid receivables and liabilities of Newmark which are periodically cash settled, have been included on the accompanying unaudited condensed consolidated financial statements as either receivables from or payables to related parties. Newmark receives administrative services to support its operations, and in return, Cantor and/or BGC allocates certain of its expenses to Newmark. Such expenses represent costs related, but not limited to, treasury, legal, accounting, information technology, payroll administration, human resources, incentive compensation plans and other services. These costs, together with an allocation of Cantor and/or BGC overhead costs, are included as expenses on the accompanying unaudited condensed consolidated statements of operations. Where it is possible to specifically attribute such expenses to activities of Newmark, these amounts have been expensed directly to Newmark. Allocation of all other such expenses is based on a services agreement between Cantor and/or BGC which reflects the utilization of service provided or benefits received by Newmark during the periods presented on a consistent basis, such as headcount, square footage, revenue, etc. Management believes the assumptions underlying the stand-alone financial statements, including the assumptions regarding allocated expenses, reasonably reflect the utilization of services provided to or the benefit received by Newmark during the periods presented. However, these shared expenses may not represent the amounts that would have been incurred had Newmark operated independently from Cantor and or BGC. Actual costs that would have been incurred if Newmark had performed the services itself would depend on multiple factors, including organizational structure and strategic decisions in various areas, including information technology and infrastructure (see Note 27 — “Related Party Transactions” for an additional discussion of expense allocations). Transfers of cash, both to and from Cantor and/or BGC, are included in “Receivables from related parties or Payables to related parties” on the unaudited condensed consolidated balance sheets and as part of the change in payments to and borrowings from related parties in the financing section prior to the Spin-Off and in the operating section after the Spin-Off on the accompanying unaudited condensed consolidated statements of cash flows. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers , which relates to how an entity recognizes the revenue it expects to be entitled to for the transfer of promised goods and services to customers. The ASU replaced certain previously existing revenue recognition guidance. The FASB has subsequently issued several additional amendments to the standard, including ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) , which clarifies the guidance on principal versus agent analysis based on the notion of control and affects recognition of revenue on a gross or net basis. Newmark adopted the standards as of their effective date of January 1, 2018 and recognized an increase in assets, liabilities, beginning retained earnings and noncontrolling interests of $64.4 million, $45.6 million, $16.5 million and $2.3 million, respectively, as the cumulative effect of adoption of this accounting change. The impact of adoption is primarily related to Newmark’s brokerage revenues from leasing commissions where revenue recognition was previously deferred when future contingencies exist under the previous revenue recognition guidance. The adoption of the new revenue recognition guidance accelerated these commission revenues that were based, in part, on future contingent events. For example, a portion of certain brokerage revenues from leasing commissions were deferred until a future contingency was resolved (e.g., tenant move-in or payment of first month’s rent). Under the new revenue recognition model, Newmark’s performance obligation will be typically satisfied at lease signing, and, therefore, the portion of the commission that is contingent on a future event will likely be recognized earlier, if it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. Further, Newmark previously presented expenses incurred on behalf of customers for certain management services subject to reimbursement on a net basis within expenses. Under the new revenue recognition model, Newmark concluded that it controls the services provided by a third-party on behalf of customers and, therefore, acts as a principal under those contracts. As a result, for these service contracts Newmark will present expenses incurred on behalf of customers along with corresponding reimbursement revenue on a gross basis on the accompanying unaudited condensed consolidated statements of operations, with no material impact on net income available to common stockholders. Newmark elected to adopt the new guidance using a modified retrospective approach applied to contracts that were not completed as of January 1, 2018. Accordingly, the new revenue standard is applied prospectively in Newmark’s financial statements from January 1, 2018 onward. The new revenue recognition guidance does not apply to revenue associated with financial instruments, including loans and securities that are accounted for under other U.S. GAAP standards, and as a result did not have a material impact on the elements of the accompanying unaudited condensed consolidated statements of operations most closely associated with financial instruments, including Gains from mortgage banking activities/origination, net, and Servicing fees. See Note 13 — “Revenues from Contracts with Customers” for additional information. In February 2016, the Financial Accounting Standards Board ("FASB") issued ASU No. 2016-02, Leases (Topic 842) . This standard requires lessees to recognize a Right-of-use (“ROU”) asset and lease liability for all leases with terms of more than 12 months. Recognition, measurement and presentation of expenses will depend on classification as a finance or operating lease. The amendments also require certain quantitative and qualitative disclosures. Accounting guidance for lessors is mostly unchanged. In July 2018, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 842, Leases , to clarify how to apply certain aspects of the new leases standard. The amendments address the rate implicit in the lease, impairment of the net investment in the lease, lessee reassessment of lease classification, lessor reassessment of lease term and purchase options, variable payments that depend on an index or rate and certain transition adjustments, among other issues. In addition, in July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842) , Targeted Improvements , which provided an additional (and optional) transition method to adopt the new leases standard. Under the new transition method, a reporting entity would initially apply the new lease requirements at the effective date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption; continue to report comparative periods presented in the financial statements in the period of adoption in accordance with legacy U.S. GAAP (i.e., ASC 840, Leases ); and provide the required disclosures under ASC 840 for all periods presented under legacy U.S. GAAP. Further, ASU No. 2018-11 contains a practical expedient that allows lessors to avoid separating lease and associated non-lease components within a contract if certain criteria are met. In December 2018, the FASB issued ASU No. 2018-20, Leases (Topic 842), Narrow-Scope Improvements for Lessors , to clarify guidance for lessors on sales taxes and other similar taxes collected from lessees, certain lessor costs and recognition of variable payments for contracts with lease and non-lease components. In March 2019, the FASB issued ASU No. 2019-01, Leases (Topic 842), Codification Improvements , to clarify certain application and transitional disclosure aspects of the new leases standard. The amendments address determination of the fair value of the underlying asset by lessors that are not manufacturers or dealers and clarify interim period transition disclosure requirements, among other issues. The guidance in ASUs 2016-02, 2018-10, 2018-11 and 2018-20 was effective beginning January 1, 2019, with early adoption permitted; whereas the guidance in ASU No. 2019-01 is effective beginning January 1, 2020, with early adoption permitted. Newmark adopted the above mentioned standards on January 1, 2019 using the effective date as the date of initial application. Therefore, pursuant to this transition method, financial information was not updated and the disclosures required under the new leases standards were not provided for dates and periods before January 1, 2019. The guidance provides a number of optional practical expedients to be utilized by lessees upon transition. Accordingly, Newmark elected the “package of practical expedients,” which permitted Newmark not to reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs. Newmark did not elect the use-of-hindsight or the practical expedient pertaining to land easements, with the latter not being applicable to Newmark. The new standard also provides practical expedients for an entity’s ongoing accounting as a lessee. Newmark elected the short-term lease recognition exemption for all leases that qualify. This means, for those leases that qualify, Newmark will not recognize ROU assets and lease liabilities, and this includes not recognizing ROU assets and lease liabilities for existing short-term leases of those assets upon transition. Newmark also elected the practical expedient to not separate lease and non-lease components for all leases other than leases of real estate. As a result, upon adoption, acting primarily as a lessee, Newmark recognized a $178.8 million ROU asset, net of tenant improvements, and a $226.7 million lease liability on the accompanying unaudited condensed consolidated balance sheets for its real estate operating leases. The adoption of the guidance did not have a material impact on the accompanying unaudited condensed consolidated statements of operations, unaudited condensed consolidated statements of changes in equity and unaudited condensed consolidated statements of cash flows. See Note 18 — “Leases” for additional information on Newmark’s leasing arrangements. In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities . This ASU requires entities to measure equity investments that do not result in consolidation and are not accounted for under the equity method at fair value and recognize any changes in fair value in net income unless the investments qualify for the new measurement alternative. The guidance also requires entities to record changes in instrument-specific credit risk for financial liabilities measured under the fair value option in other comprehensive income. In February 2018, the FASB issued ASU No. 2018-03, Technical Corrections and Improvements to Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities , to clarify transition and subsequent accounting for equity investments without a readily determinable fair value, among other aspects of the guidance issued in ASU No. 2016-01. The amendments in ASU No. 2018-03 were effective for fiscal years beginning January 1, 2018 and interim periods beginning July 1, 2018. The amendments and technical corrections provided in ASU No. 2018-03 could be adopted concurrently with ASU No. 2016-01, which was effective for Newmark on January 1, 2018. Newmark adopted both ASUs on January 1, 2018 using the modified retrospective approach for equity securities with a readily determinable fair value and the prospective method for equity investments without a readily determinable fair value. The adoption of this guidance did not have a material impact on the accompanying unaudited condensed consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326) : Measurement of Credit Losses on Financial Instruments, which requires financial assets that are measured at amortized cost to be presented, net of an allowance for credit losses, at the amount expected to be collected over their estimated life. Expected credit losses for newly recognized financial assets, as well as changes to credit losses during the period, are recognized in earnings. For certain purchased financial assets with deterioration in credit quality since origination (“PCD assets”), the initial allowance for expected credit losses will be recorded as an increase to the purchase price. Expected credit losses, including losses on off-balance-sheet exposures, such as lending commitments, will be measured based on historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. In November 2018, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments-Credit Losses , to clarify that operating lease receivables accounted for under ASC 842, Leases , are not in the scope of the new credit losses guidance, and, instead, impairment of receivables arising from operating leases should be accounted for in accordance with ASC 842, Leases . In April 2019, the FASB issued ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments . The ASU makes changes to the guidance introduced or amended by ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326)-Measurement of Credit Losses on Financial Instruments . See below for the description of the amendments stipulated in ASU No. 2019-04. In addition, in May 2019, the FASB issued ASU No. 2019-05, Financial Instruments-Credit Losses (Topic 326): Targeted Transition Relief . The amendments in this ASU allow entities, upon adoption of ASU No. 2016-13, to irrevocably elect the fair value option for financial instruments that were previously carried at amortized cost and are eligible for the fair value option under ASC 825-10, Financial Instruments: Overall. In November 2019, the FASB issued ASU No. 2019-11, Codification Improvements to Topic 326, Financial Instruments-Credit Losses . The amendments in this ASU require entities to include certain expected recoveries of the amortized cost basis previously written off, or expected to be written off, in the allowance for credit losses for PCD assets; provide transition relief related to troubled debt restructurings; allow entities to exclude accrued interest amounts from certain required disclosures; and clarify the requirements for applying the collateral maintenance practical expedient. The amendments in ASUs No. 2018-19, 2019-04, 2019-05 and 2019-11 are required to be adopted concurrently with the guidance in ASU No. 2016-13. Newmark adopted the standards on their required effective date beginning January 1, 2020. The primary effect of adoption, on a pre-tax basis, resulted in a decrease in assets of $8.0 million, an increase in liabilities of $17.9 million and a decrease in retained earnings of $25.9 million, respectively. In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805)-Clarifying the Definition of Business , which clarifies the definition of a business with the objective of providing additional guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The new standard became effective beginning January 1, 2018 on a prospective basis. The adoption of this guidance did not have a material impact on the accompanying unaudited condensed consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment , which eliminates the requirement to determine the fair value of individual assets and liabilities of a reporting unit to measure goodwill impairment. Under the amendments in the new ASU, goodwill impairment testing will be performed by comparing the fair value of the reporting unit with its carrying amount and recognizing an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. Newmark adopted the standard on its required effective date beginning January 1, 2020. The new guidance will be applied on a prospective basis. The adoption of the new guidance did not have a material impact on the accompanying unaudited condensed consolidated financial statements. In February 2017, the FASB issued ASU No. 2017-05, Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets , which clarifies the scope and application of ASC 610-20, Other Income-Gains and Losses from Derecognition of Nonfinancial Assets , and defines in substance nonfinancial assets. The ASU also impacts the accounting for partial sales of nonfinancial assets (including in substance real estate). Under this guidance, when an entity transfers its controlling interest in a nonfinancial asset but retains a noncontrolling ownership interest, the entity is required to measure the retained interest at fair value, which results in a full gain or loss recognition upon the sale of a controlling interest in a nonfinancial asset. Newmark adopted the standard on its required effective date of January 1, 2018. The adoption of this guidance did not have a material impact on the accompanying unaudited condensed consolidated financial statements. In May 2017, the FASB issued ASU No. 2017-09, Compensation-Stock Compensation (Topic 718)-Scope of Modification Accounting , which amends the scope of modification accounting for share-based payment arrangements and provides guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting. Under this guidance, an entity would not apply modification accounting if the fair value, the vesting conditions, and the classification of the awards (as equity or liability) are the same immediately before and after the modification. The new standard became effective for Newmark beginning January 1, 2018 on a prospective basis for awards modified on or after the adoption date. The adoption of this guidance did not have a material impact on the accompanying unaudited condensed consolidated financial statements. In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities . The guidance intends to better align an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. To meet that objective, the amendments expand and refine hedge accounting for both nonfinancial and financial risk components and align the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. In October 2018, the FASB issued ASU No. 2018-16, Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes . Based on concerns about the sustainability of LIBOR, in 2017, a committee convened by the Federal Reserve Board and the Federal Reserve Bank of New York identified a broad Treasury repurchase agreement (repo) financing rate referred to as the SOFR as its preferred alternative reference rate. The guidance in ASU No. 2018-16 adds the OIS rate based on SOFR as a U.S. benchmark interest rate to facilitate the LIBOR to SOFR transition and provide sufficient lead time for entities to prepare for changes to interest rate risk hedging strategies for both risk management and hedge accounting purposes. The amendments in this ASU were required to be adopted concurrently with the guidance in ASU No. 2017-12. The guidance became effective beginning January 1, 2019 and was required to be applied on a prospective and modified retrospective basis. As Newmark currently does not designate any derivative contracts as hedges for accounting purposes, the adoption of this new guidance did not have a material impact on the accompanying unaudited condensed consolidated financial statements. In February 2018, the FASB issued ASU No. 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income . The guidance helps organizations address certain stranded income tax effects in accumulated other comprehensive income resulting from the Tax Cuts and Jobs Act of 2017 by providing an option to reclassify these stranded tax effects to retained earnings in each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act (or portion thereof) is recorded. The new standard became effective on January 1, 2019. The guidance was required to be applied to either in the period of adoption or retrospective to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. Newmark adopted the new standard on its required effective date and elected to reclassify the stranded income tax effects of the Tax Cuts and Jobs Act from accumulated other comprehensive income to retained earnings. However, the adoption of the new guidance did not have a material effect on the accompanying unaudited condensed consolidated financial statements. In June 2018, the FASB issued ASU No. 2018-07, Compensation--Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting . The guidance largely aligns the accounting for share-based payment awards issued to employees and nonemployees, whereby the existing employee guidance will apply to non-employee share-based transactions (as long as the transaction is not effectively a form of financing), with the exception of specific guidance relate to the attribution of compensation cost. The cost of nonemployee awards will continue to be recorded as if the grantor had paid cash for the goods or services. In addition, the contractual term will be able to be used in lieu of an expected term in the option-pricing model for non-employee awards. The new standard became effective beginning January 1, 2019. The ASU was required to be applied on a prospective basis to all new awards granted after the date of adoption. In addition, any liability-classified awards that were not been settled and equity-classified awards for which a measurement date had not been established by the adoption date were remeasured at fair value as of the adoption date with cumulative effect adjustment to opening retained earnings in the year of adoption. Newmark adopted this standard on its effective date. The adoption of this guidance did not have a material impact on the accompanying unaudited condensed consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement . The guidance is part of the FASB’s disclosure framework project, whose objective and primary focus are to improve the effectiveness of disclosures in the notes to financial statements. The ASU eliminates, amends and adds certain disclosure requirements for fair value measurements. The FASB concluded that these changes improve the overall usefulness of the footnote disclosures for financial statement users and reduce costs for preparers. Certain disclosures are required to be applied prospectively and other disclosures need to be adopted retrospectively in the period of adoption. As permitted by the transition guidance in the ASU, Newmark early adopted eliminated and modified disclosure requirements as of September 30, 2018. The early adoption of this standard did not have an impact on the accompanying unaudited condensed consolidated financial statements. The additional disclosure requirements were adopted by Newmark beginning January 1, 2020, and the adoption of these fair value measurement disclosures did not have an impact on Newmark’s unaudited condensed consolidated financial statements. See Note 26 — “Fair Value of Financial Assets and Liabilities” for additional information. In August 2018, the FASB issued ASU No. 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force) . The guidance on the accounting for implementation, setup, and other upfront costs (collectively referred to as implementation costs) applies to entities that are a customer in a hosting arrangement that is a service contract. The amendments align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The accounting for the service element of a hosting arrangement that is a service contract is not affected by the guidance in this ASU. The new standard became effective beginning January 1, 2020. The adoption of this guidance did not have a material impact on the accompanying unaudited condensed consolidated financial statements. In October 2018, the FASB issued ASU No. 2018-17, Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities (“VIE”) . The guidance was issued in response to stakeholders’ observations that Topic 810, Consolidation , could be improved in the areas of applying the variable interest entity guidance to private companies under common control and in considering indirect interests held through related parties under common control for determining whether fees paid to decision makers and service providers are variable interests. The new standard became effective beginning January 1, 2020, with early adoption permitted, and must be applied retrospectively with a cumulative-effect adjustment to retained earnings at the beginning of the earliest period presented. Newmark adopted the standard on its effective date beginning January 1, 2020. The adoption of this guidance did not have a material impact on the accompanying unaudited condensed consolidated financial statements. In April 2019, the FASB issued ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments . The ASU amends guidance introduced or amended by ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326)-Measurement of Credit Losses on Financial Instruments , ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities , and ASU No. 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities . The amendments to ASU No. 2016-13 clarify the scope of the credit losses standard and address guidance related to accrued interest receivable balances, recoveries, variable interest rates and prepayments, among other issues. With respect to amendments to ASU No. 2017-12, the guidance addresses partial-term fair value hedges, fair value hedge basis adjustments, and certain transition requirements, along with other issues. The clarifying guidance pertaining to ASU No. 2016-01 requires an entity to remeasure an equity security without a readily determinable fair value accounted for under the measurement alternative at fair value in accordance with guidance in ASC 820, Fair Value Measurement ; specifies that equity securities without a readily determinable fair value denominated in nonfunctional currency must be remeasured at historical exchange rates; and provides fair value measurement disclosure guidance. Newmark adopted this standard on the required effective date beginning January 1, 2020. The adoption of the hedge accounting and the recognition and measurement guidance amendments did not have a material impact on Newmark’s unaudited condensed consolidated financial statements. See above for the impact of adoption of the amendments related to the credit losses standard. In July 2019, the FASB issued ASU No. 2019-07, Codification Updates to SEC Sections-Amendments to SEC Paragraphs Pursuant to SEC Final Rule Releases No. 33-10532, Disclosure Update and Simplification, and Nos. 33-10231 and 33-10442, Investment Company Reporting Modernization, and Miscellaneous Updates . The guidance clarifies or improves the disclosure and presentation requirements of a variety of codification topics by aligning them with already effective SEC final rules, thereby eliminating redundancies and making the codification easier to apply. This ASU was effective upon issuance and did not have a material impact on Newmark's unaudited condensed consolidated financial statements and related disclosures. In November 2019, the FASB issued ASU No. 2019-08, Compensation-Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Codification Improvements-Share-Based Consideration Payable to a Customer . The ASU simplifies and increases comparability of accounting for nonemployee share-based payments, specifically those made to customers. Under the new guidance, such awards will be accounted for as a reduction of the transaction price in revenue, but should be measured and classified following the stock compensation guidance in ASC 718, Compensation-Stock Compensation . Newmark adopted standard on the required effective date beginning January 1, 2020. The adoption of this guidance did not have a material impact on Newmark’s unaudited condensed consolidated financial statements. In March 2020, the FASB issued ASU No. 2020-03, Codification Improvements to Financial Instruments . This ASU makes narrow-scope amendments related to various aspects pertaining to financial instruments and related disclosures by clarifying or improving the Codification. For the most part, the guidance was effective upon issuance, and the adoption of the standard did not have a material impact on Newmark’s unaudited condensed consolidated financial statements. |
New Accounting Pronouncements | New Accounting Pronouncements In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes . The ASU is part of the FASB’s simplification initiative, and it is expected to reduce costs and complexity related to accounting for income taxes by eliminating certain exceptions to the guidance in ASC 740, Income Taxes related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The new guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates, and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The new standard will become effective for Newmark beginning January 1, 2021 and, with certain exceptions, will be applied prospectively. Early adoption is permitted. Management is currently evaluating the impact of the new guidance on Newmark’s unaudited condensed consolidated financial statements. In January 2020, the FASB issued ASU No. 2020-01, Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)-Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 (a consensus of the FASB Emerging Issues Task Force) . These amendments improve current guidance by reducing diversity in practice and increasing comparability of the accounting for the interactions between these codification topics as they pertain to certain equity securities, investments under the equity method of accounting and forward contracts or purchased options to purchase securities that, upon settlement of the forward contract or exercise of the purchased option, would be accounted for under the equity method of accounting or the fair value option. The new standard will become effective for Newmark beginning January 1, 2021 and will be applied prospectively. Early adoption is permitted. Management is currently evaluating the impact of the new guidance on Newmark's unaudited condensed consolidated financial statements. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting . The guidance is designed to provide relief from the accounting analysis and impacts that may otherwise be required for modifications to agreements (e.g., loans, debt securities, derivatives, and borrowings) necessitated by reference rate reform as entities transition away from the London Interbank Offered Rate ("LIBOR") and other interbank offered rates to alternative reference rates. This ASU also provides optional expedients to enable companies to continue to apply hedge accounting to certain hedging relationships impacted by reference rate reform. Application of the guidance is optional and only available in certain situations. The ASU is effective upon issuance and generally can be applied through December 31, 2022. Management is currently evaluating the impact of the new guidance on the Newmark’s unaudited condensed consolidated financial statements. In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity . The standard is expected to reduce complexity and improve comparability of financial reporting associated with accounting for convertible instruments and contracts in an entity’s own equity. The ASU also enhances information transparency by making targeted improvements to the related disclosures guidance. Additionally, the amendments affect the diluted EPS calculation for instruments that may be settled in cash or shares and for convertible instruments. The new standard will become effective for Newmark beginning January 1, 2022 and can be applied using either a modified retrospective or a fully retrospective method of transition. Early adoption is permitted, but no earlier than beginning January 1, 2021. Management is currently evaluating the impact of the new guidance on Newmark’s unaudited condensed consolidated financial statements. |
Current Expected Credit Losses | Current Expected Credit Losses ("CECL"): Newmark adopted ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326)-Measurement of Credit Losses on Financial Instruments ("ASC 326") , and related amendments on January 1, 2020, which created a new framework to evaluate credit losses arising from certain financial instruments. The CECL methodology represents a significant change from prior U.S. GAAP and replaced the prior impairment methods, which generally required that a loss be incurred before it was recognized. For financial instruments in scope, the methodology generally results in the earlier recognition of the provision for credit losses and the related allowance for credit losses than under prior U.S. GAAP. Expected credit losses for newly recognized financial assets carried at amortized cost and credit exposures on off-balance sheet financial guarantees, as well as changes to expected lifetime credit losses during the period, are recognized in earnings. Financial guarantee liability Newmark's adoption of ASC 326 impacted the reserving methodology for the loss-sharing guarantee provided to Fannie Mae under the DUS Program. The expected credit loss is modeled based on Newmark's historical loss experience adjusted to reflect current economic conditions. A significant amount of judgment is required in the determination of the appropriate reasonable and supportable period, the methodology used to incorporate current and future macroeconomic conditions, determination of the probability of and exposure at default or non-payment, current delinquency status, loan size, terms, amortization types, and the forward-looking view of the primary risk drivers (debt-service coverage ratio and loan-to-value), all of which are ultimately used in measuring the quantitative components of the reserve. Beyond the reasonable and supportable period, Newmark estimates expected credit losses using its historical loss rates. In addition, Newmark reviews the reserves periodically and makes adjustments for certain external and internal qualitative factors, which may increase or decrease the reserves for credit losses. In order to estimate credit losses, assumptions about current and future economic conditions are incorporated into the model using multiple economic scenarios that are weighted to reflect the conditions at each measurement date. As a result of the adoption of ASC 326, Newmark recorded a pre-tax increase to the loss sharing guarantee liability of $17.9 million through beginning stockholders' equity on January 1, 2020. Receivables Newmark has accrued commissions receivable from real estate brokerage transactions, management services and other receivables from its customers. For its CECL reserve, Newmark segregated its receivables into certain pools based on similar risk characteristics and further defined a range of potential loss rates for each pool based on aging. Newmark designed its methodology to allow for a range of loss rates in each pool such that changes in forward-looking conditions can be incorporated into the estimate. Each pool is assigned a loss rate that incorporates management’s view of current conditions and forward-looking conditions that inform the level of expected credit losses in each pool. The credit loss estimate includes specifically identified amounts for which payment has become unlikely. As a result of the adoption of ASC 326, Newmark recorded a pre-tax increase to the reserves of $4.3 million through beginning stockholder's equity. During the nine months ended September 30, 2020, there was an increase in the reserve of $3.0 million. Loans, Forgivable Loans and Other Receivables from Employees and Partners Newmark has entered into various agreements with certain of its employees and partners, whereby these individuals receive loans which may be either wholly or in part repaid from the distribution earnings that the individual receives on some or all of their limited partnership units or may be forgiven over a period of time. The forgivable portion of these loans is not included in Newmark’s estimate of expected credit losses when employees meet the conditions for forgiveness through their continued employment over the specified time period, and is recognized as compensation expense over the life of the loan. The amounts due from terminated employees that Newmark does not expect to collect are included in the allowance for credit losses. As a result of the adoption of ASC 326, Newmark recorded a pre-tax reserves of $3.7 million through beginning stockholders' equity on January 1, 2020. During the three and nine months ended September 30, 2020 there was an increase in the reserve of $0.5 million. From time to time, Newmark may also enter into agreements with employees and partners to grant bonus and salary advances or other types of loans. These advances and loans are repayable in the time frame outlined in the underlying agreements. Newmark reviews loan balances each reporting period for collectability. If Newmark determines that the collectability of a portion of the loan balances is not expected, Newmark recognizes a reserve against the loan balances as compensation expense. Segment: Newmark has a single operating segment. Newmark is a real estate services firm offering services to commercial real estate tenants, investors, owners, occupiers, developers, leasing and corporate advisory, investment sales and real estate finance, consulting, origination and servicing of commercial mortgage loans, valuation, project and development management and property and facility management. The chief operating decision-maker regardless of geographic location evaluates the operating results of Newmark as total real estate services and allocates resources accordingly. Newmark recognized revenues as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Leasing and other commissions $ 114,947 $ 213,242 $ 375,465 $ 603,094 Capital markets commissions 82,956 144,666 263,838 376,213 Gains from mortgage banking activities/origination, net 91,192 72,332 210,686 148,769 Management services, servicing fees and other 146,829 156,394 453,583 457,692 Revenues $ 435,924 $ 586,634 $ 1,303,572 $ 1,585,768 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Schedule of segment reporting information, by segment | Newmark recognized revenues as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Leasing and other commissions $ 114,947 $ 213,242 $ 375,465 $ 603,094 Capital markets commissions 82,956 144,666 263,838 376,213 Gains from mortgage banking activities/origination, net 91,192 72,332 210,686 148,769 Management services, servicing fees and other 146,829 156,394 453,583 457,692 Revenues $ 435,924 $ 586,634 $ 1,303,572 $ 1,585,768 |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
Summary of components of purchase consideration transferred and preliminary allocation of assets acquired and liabilities assumed | Newmark expects to finalize its analysis of the assets acquired and liabilities assumed within the first year of the acquisition, and therefore adjustments to assets and liabilities may occur (in thousands): As of the Purchase Price Cash and stock issued at closing $ 6,249 Contingent consideration 3,590 Total $ 9,839 Allocations Goodwill $ 6,294 Other intangible assets, net 2,700 Receivables, net 796 Fixed Assets, net 134 Other assets 29 Accounts payable, accrued expenses and other liabilities (114) Total $ 9,839 For the year ended December 31, 2019, the following table summarizes the components of the purchase consideration transferred, and the preliminary allocation of the assets acquired and liabilities assumed in connection with the acquisitions in 2019 (in thousands): As of the Purchase Price Cash, stock and units issued at closing $ 38,826 Contingent consideration 18,067 Total $ 56,893 Allocations Cash $ 1,391 Goodwill 43,804 Other intangible assets, net 9,641 Receivables, net 7,540 Other assets 614 Accounts payable, accrued expenses and other liabilities (3,972) Accrued compensation (2,125) Total $ 56,893 |
Earnings Per Share and Weight_2
Earnings Per Share and Weighted-Average Shares Outstanding (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of basic earnings per share | The following is the calculation of Newmark’s basic EPS (in thousands, except per share data): Three months ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Basic earnings per share: Net income available to common stockholders (1) $ 72,101 $ 85,475 $ 75,703 $ 118,599 Basic weighted-average shares of common stock outstanding 179,501 177,020 178,527 178,122 Basic earnings per share $ 0.40 $ 0.48 $ 0.42 $ 0.67 (1) Includes a reduction for dividends on preferred stock or exchangeable preferred partnership units in the amount of $3.2 million and $8.1 million for the three and nine months ended September 30, 2020, respectively, and $3.2 million and $9.7 million for the three and nine months ended September 30, 2019, respectively. (see Note 1 — “Organization and Basis of Presentation”). |
Schedule of fully diluted earnings per share | The following is the calculation of Newmark’s fully diluted EPS (in thousands, except per share data): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Fully diluted earnings per share: Net income available to common stockholders $ 72,101 $ 85,475 $ 75,703 $ 118,599 Allocations of net income to limited partnership interests in Newmark 31,522 14,025 34,719 3,780 Net income for fully diluted shares $ 103,623 $ 99,500 $ 110,422 $ 122,379 Weighted-average shares: Common stock outstanding 179,501 177,020 178,527 178,122 Partnership units (1) 86,912 28,466 86,093 5,661 RSUs (Treasury stock method) 155 786 254 1,231 Newmark exchange shares 225 344 230 399 Fully diluted weighted-average shares of common stock outstanding 266,793 206,616 265,104 185,413 Fully diluted earnings per share $ 0.39 $ 0.48 $ 0.42 $ 0.66 (1) Partnership units collectively include founding/working partner units, limited partnership units, and Cantor and BGC units (see Note 2 — “Limited Partnership Interests in Newmark Holdings and BGC Holdings” for more information). |
Stock Transactions and Unit R_2
Stock Transactions and Unit Redemptions (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Schedule of changes in common stock outstanding | Changes in shares of Newmark’s Class A common stock outstanding were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Shares outstanding at beginning of period 157,811,436 156,679,527 156,265,461 156,916,336 Share issuances: LPU redemption/exchange (1) 607,971 543,990 1,617,690 1,666,766 Issuance of Class A common stock for Newmark RSUs 210,718 42,618 746,974 217,223 Other — 2,364 — 81,206 Treasury stock repurchases — (2,279,373) — (3,892,405) Shares outstanding at end of period 158,630,125 154,989,126 158,630,125 154,989,126 |
Schedule of share repurchase activity | The following table details Newmark's share repurchase activity during 2020, including the total number of shares purchased, the average price paid per share, the number of shares repurchased as part of Newmark's publicly announced repurchase program and the approximate value that may yet be purchased under such program (in thousands except share and per share amounts): Period Total Average Total Number of Shares Repurchased as Part of Publicly Announced Program Approximate Balance, January 1, 2020 4,568,002 $ 9.32 4,568,002 $ 157,413 January 1, 2020 - March 31, 2020 — — — — April 1, 2020 - June 30, 2020 — — — — July 1, 2020 - September 30, 2020 — — — — Total 4,568,002 $ 9.32 4,568,002 $ 157,413 |
Schedule of changes in carrying amount of redeemable partnership interest | The changes in the carrying amount of FPUs as of September 30, 2020 and December 31, 2019 were as follows (in thousands): September 30, 2020 December 31, 2019 Balance at beginning of period: $ 21,517 $ 26,170 Income allocation 1,740 5,288 Distributions of income (5) (5,355) Redemptions (644) (927) Issuance and other — (3,659) Balance at end of period $ 22,608 $ 21,517 |
Loans Held for Sale, at Fair _2
Loans Held for Sale, at Fair Value (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Trade and Loans Receivables Held-for-sale, Net, Not Part of Disposal Group [Abstract] | |
Summary of loans held for sale at cost basis and fair value | Loans held for sale had a cost basis and fair value as follows (in thousands): Cost Basis Fair Value September 30, 2020 $ 1,510,598 $ 1,537,734 December 31, 2019 210,116 215,290 |
Derivatives (Tables)
Derivatives (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of fair value of derivative contracts | The fair value of derivative contracts, computed in accordance with Newmark’s netting policy, is set forth below (in thousands): As of September 30, 2020 As of December 31, 2019 Derivative contract Assets Liabilities Notional Amounts (1) Assets Liabilities Notional Amounts (1) Rate lock commitments $ 45,561 $ 1,133 $ 378,546 $ 32,035 $ 12,124 $ 1,396,827 Nasdaq Forwards 18,959 — 267,480 26,502 — 267,480 Forward sale contracts 9,625 41,730 1,889,144 14,389 13,537 1,606,943 Total $ 74,145 $ 42,863 $ 2,535,170 $ 72,926 $ 25,661 $ 3,271,250 |
Summary of gain (loss) on change in fair value of derivatives included in condensed consolidated statements of operations | Gains and losses on derivative contracts which are included on the unaudited condensed consolidated statements of operations were as follows (in thousands): Location of gain (loss) recognized in income for derivatives Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Derivatives not designed as hedging instruments: Nasdaq Forwards Other income (loss), net $ (5,771) $ (8,214) $ (7,543) $ (37,181) Rate lock commitments Gains from mortgage banking (3,951) 5,734 46,004 27,113 Rate lock commitments Compensation and employee benefits (677) 236 (1,576) (1,620) Forward sale contracts Gains (loss) from mortgage banking 16,187 12 (32,105) (24,404) Total $ 5,788 $ (2,232) $ 4,780 $ (36,092) |
Credit Enhancement Receivable_2
Credit Enhancement Receivable, Credit Enhancement Deposit and Contingent Liability (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Credit Enhancement Receivable Contingent Liability And Credit Enhancement Deposit [Abstract] | |
Summary of credit enhancement receivable | Newmark's servicing portfolio consisted of the following loss-sharing components (in thousands): September 30, 2020 December 31, 2019 Total credit risk loan portfolio $ 22,658,120 $ 20,209,577 Maximum DB Cayman credit protection 28,762 29,253 Maximum pre-credit enhancement loss exposure $ 6,698,151 $ 5,835,163 Maximum DB Cayman credit protection 9,587 9,751 Maximum loss exposure without any form of credit protection $ 6,688,564 $ 5,825,412 |
Revenues from Contracts with _2
Revenues from Contracts with Customers (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of revenues from contracts with customers and our other sources of revenues | The following table presents Newmark’s total revenues separately for its revenues from contracts with customers and other sources of revenues (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Revenues from contracts with customers: Leasing and other commissions $ 114,947 $ 213,242 $ 375,465 $ 603,094 Capital markets commissions 82,956 144,666 263,838 376,213 Management services 107,439 104,184 338,106 319,746 Total 305,342 462,092 977,409 1,299,053 Other sources of revenue (1) : Gains from mortgage banking activities/originations, net 91,192 72,332 210,686 148,769 Servicing fees and other 39,390 52,210 115,477 137,946 Total $ 435,924 $ 586,634 $ 1,303,572 $ 1,585,768 (1) Although these items have customers under contract, they were recorded as other sources of revenue as they were excluded from the scope of ASU No. 2014-9. |
Gains from Mortgage Banking A_2
Gains from Mortgage Banking Activities/Originations, Net (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Mortgage Banking [Abstract] | |
Summary of gains from mortgage banking activities, net | Gains from mortgage banking activities/originations, net consists of the following activity (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Fair value of expected net future cash flows from servicing recognized at commitment, net $ 60,948 $ 37,424 $ 132,423 $ 78,657 Loan originations related fees and sales premiums, net 30,244 34,908 78,263 70,112 Total $ 91,192 $ 72,332 $ 210,686 $ 148,769 |
Mortgage Servicing Rights, Net
Mortgage Servicing Rights, Net (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Transfers and Servicing [Abstract] | |
Summary of changes in the carrying amount of mortgage servicing rights | The changes in the carrying amount of MSRs were as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, Mortgage Servicing Rights 2020 2019 2020 2019 Beginning Balance $ 460,473 $ 413,425 $ 432,666 $ 416,131 Additions 53,006 35,186 126,571 73,873 Purchases from an affiliate — 123 200 845 Amortization (24,901) (22,503) (70,859) (64,618) Ending Balance $ 488,578 $ 426,231 $ 488,578 $ 426,231 Valuation Allowance Beginning Balance $ (37,241) $ (12,642) $ (19,022) $ (4,322) Decrease (increase) 1,850 (7,380) (16,369) (15,700) Ending Balance $ (35,391) $ (20,022) $ (35,391) $ (20,022) Net Balance $ 453,187 $ 406,209 $ 453,187 $ 406,209 |
Schedule of servicing fees and escrow interest | Servicing fees are included in “Management services, servicing fees and other” on the accompanying unaudited condensed consolidated statements of operations and were as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Servicing fees $ 29,432 $ 26,526 $ 84,347 $ 78,134 Escrow interest and placement fees 876 6,518 4,995 17,505 Ancillary fees 2,060 3,955 5,584 11,270 Total $ 32,368 $ 36,999 $ 94,926 $ 106,909 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets, Net (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of changes in carrying amount of goodwill | The changes in the carrying amount of goodwill were as follows (in thousands): Balance, January 1, 2019 $ 515,321 Acquisitions 43,804 Measurement period adjustments (1,211) Balance, December 31, 2019 557,914 Acquisitions 6,294 Measurement period adjustments (3,380) Balance, September 30, 2020 $ 559,935 |
Schedule of components of other intangible assets | Other intangible assets consisted of the following (in thousands, except weighted-average life): September 30, 2020 Gross Accumulated Net Weighted- Indefinite life: Trademark and trade names $ 11,350 $ — $ 11,350 N/A License agreements (GSE) 5,390 — 5,390 N/A Definite life: Trademark and trade names 8,449 (7,096) 1,353 0.1 Non-contractual customers 30,131 (8,825) 21,306 7.0 License agreements 4,981 (4,022) 959 0.0 Non-compete agreements 6,982 (3,095) 3,887 0.6 Contractual customers 3,052 (1,482) 1,570 0.4 Below market leases 926 (187) 739 0.2 Total $ 71,261 $ (24,707) $ 46,554 5.1 December 31, 2019 Gross Accumulated Net Weighted- Indefinite life: Trademark and trade names $ 11,350 $ — $ 11,350 N/A License agreements (GSE) 5,390 — 5,390 N/A Definite life: Trademark and trade names 10,511 (9,070) 1,441 0.1 Non-contractual customers 24,262 (6,109) 18,153 7.4 License agreements 4,981 (3,288) 1,693 0.1 Non-compete agreements 6,953 (2,434) 4,519 0.8 Contractual customers 3,052 (1,177) 1,875 0.5 Below market leases 941 (136) 805 0.3 Total $ 67,440 $ (22,214) $ 45,226 4.9 |
Summary of estimated future amortization expense of definite life intangible assets | The estimated future amortization of definite life intangible assets as of September 30, 2020 was as follows (in thousands): 2020 $ 1,689 2021 5,746 2022 3,706 2023 3,348 2024 2,793 Thereafter 12,532 Total $ 29,814 |
Fixed Assets, Net (Tables)
Fixed Assets, Net (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Summary of components of fixed assets, net | Fixed assets, net consisted of the following (in thousands): September 30, 2020 December 31, 2019 Leasehold improvements and other fixed assets $ 129,244 $ 119,682 Software, including software development costs 29,953 28,063 Computer and communications equipment 25,756 23,028 Total, cost 184,953 170,773 Accumulated depreciation and amortization (82,937) (72,757) Total, net $ 102,016 $ 98,016 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Schedule of minimum lease payments | Minimum lease payments under these arrangements were as follows (in thousands): September 30, 2020 December 31, 2019 2020 $ 11,826 $ 44,709 2021 45,205 42,612 2022 41,059 39,812 2023 39,676 38,210 2024 37,068 35,602 Thereafter 155,102 146,463 Total lease payments 329,936 347,408 Less: Interest 84,297 92,282 Present value of lease liability $ 245,639 $ 255,126 |
Other Current Assets and Othe_2
Other Current Assets and Other Assets (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Other Assets [Abstract] | |
Summary of other current assets | Other current assets consisted of the following (in thousands): September 30, 2020 December 31, 2019 Derivative assets $ 55,491 $ 51,021 Prepaid expenses 16,155 15,251 Other taxes 13,933 22,483 Rent and other deposits 1,507 1,703 Other 1,717 736 Total $ 88,803 $ 91,194 |
Summary of non current other assets | Other assets consisted of the following (in thousands): September 30, 2020 December 31, 2019 Deferred tax assets $ 190,617 $ 182,781 Equity method investment 88,315 99,966 Non-marketable investments 67,275 94,113 Derivative assets 18,654 21,905 Other 14,824 9,133 Total $ 379,685 $ 407,898 |
Warehouse Facilities Collater_2
Warehouse Facilities Collateralized by U.S. Government Sponsored Enterprises (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Brokers and Dealers [Abstract] | |
Schedule of company lines available and borrowings outstanding | Newmark had the following lines available and borrowings outstanding (in thousands): Committed Uncommitted Balance at September 30, 2020 Balance at December 31, 2019 Stated Spread Rate Type Warehouse facility due October 8, 2021 (1) $ 1,500,000 $ — $ 993,200 $ 34,125 115 bps - 140 bps Variable Warehouse facility due June 16, 2021 (2) 450,000 — 273,088 16,759 115 bps - 140 bps Variable Warehouse facility due September 25, 2021 400,000 — 164,590 8,097 115 bps - 140 bps Variable Fannie Mae repurchase agreement, open maturity — 400,000 79,455 150,667 105 bps Variable Total $ 2,350,000 $ 400,000 $ 1,510,333 $ 209,648 (1) A warehouse line was temporarily increased by $600.0 million for the period August 28, 2020 to October 27, 2020. A warehouse line was temporarily increased by $500.0 million for the period September 8, 2020 to October 31, 2020. (2) A warehouse line established a $125.0 million sublimit line of credit to fund potential principal and interest servicing advances on the Company's Fannie Mae portfolio during the forbearance period related to the CARES Act. Advances will have an interest rate of 1-month LIBOR plus 200 bps. There were no outstanding draws outstanding under this sublimit at September 30, 2020. |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt and long-term debt payable to related parties | Long-term debt consisted of the following (in thousands): September 30, 2020 December 31, 2019 6.125% Senior Notes $ 542,166 $ 540,377 Credit Facility 337,338 48,917 Total $ 879,504 $ 589,294 The carrying amount of the 6.125% Senior Notes was determined as follows (in thousands): September 30, 2020 December 31, 2019 Principal balance $ 550,000 $ 550,000 Less: debt issue cost 4,009 4,972 Less: debt discount 3,825 4,651 Total $ 542,166 $ 540,377 Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Interest expense 8,702 8,684 26,092 26,041 Debt issue cost amortization 321 321 963 961 Debt discount amortization 275 263 737 775 Total $ 9,298 $ 9,268 $ 27,792 $ 27,777 Details of the Second Amended Credit Facility are as follows (in thousands): September 30, 2020 December 31, 2019 Principal balance $ 340,000 $ 50,000 Less: Debt issue cost 2,662 1,083 Total $ 337,338 $ 48,917 Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Interest expense $ 1,805 $ 552 $ 5,504 $ 1,267 Debt issue cost amortization 275 141 737 424 Unused facility fee 63 153 203 481 Total $ 2,143 $ 846 $ 6,444 $ 2,172 |
Financial Guarantee Liability (
Financial Guarantee Liability (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Guarantees [Abstract] | |
Summary of provisions for risk sharing | The provisions for risk-sharing were included in “Operating, administrative and other” on the accompanying unaudited condensed consolidated statements of operations as follows (in thousands): Balance, January 1, 2019 $ 15 Impact of adopting ASC 326 17,935 Balance, January 1, 2020 $ 17,950 Provision for expected credit losses 14,702 Balance, September 30, 2020 $ 32,652 |
Fair Value of Financial Asset_2
Fair Value of Financial Assets and Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
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, 2020 Level 1 Level 2 Level 3 Total Assets: Marketable securities $ 121,759 $ — $ — $ 121,759 Nasdaq Forwards — $ — $ 18,959 $ 18,959 Loans held for sale, at fair value — 1,537,734 — 1,537,734 Rate lock commitments — — 45,561 45,561 Forward sale contracts — — 9,625 9,625 Total $ 121,759 $ 1,537,734 $ 74,145 $ 1,733,638 Liabilities: Contingent consideration $ — $ — $ 31,575 $ 31,575 Rate lock commitments — — 1,133 1,133 Forward sale contracts — — 41,730 41,730 Total $ — $ — $ 74,438 $ 74,438 As of December 31, 2019 Level 1 Level 2 Level 3 Total Assets: Marketable securities $ 36,795 $ — $ — $ 36,795 Nasdaq Forwards — — 26,502 26,502 Loans held for sale, at fair value — 215,290 — 215,290 Rate lock commitments — — 32,035 32,035 Forward sale contracts — — 14,389 14,389 Total $ 36,795 $ 215,290 $ 72,926 $ 325,011 Liabilities: Contingent consideration $ — $ — $ 45,172 $ 45,172 Rate lock commitments — — 12,124 12,124 Forwards sale contracts — — 13,537 13,537 Total $ — $ — $ 70,833 $ 70,833 |
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 Nasdaq Forwards, 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, 2020 Opening Total realized Issuances Settlements Closing Unrealized Assets: Rate lock commitments $ 32,035 $ 45,561 $ — $ (32,035) $ 45,561 $ 45,561 Forward sale contracts 14,389 9,625 — (14,389) 9,625 9,625 Nasdaq Forwards 26,502 (7,543) — — 18,959 18,959 Total $ 72,926 $ 47,643 $ — $ (46,424) $ 74,145 $ 74,145 Opening Total realized Issuances Settlements Closing Unrealized Liabilities: Contingent consideration $ 45,172 $ (12,034) $ 2,221 $ (3,784) $ 31,575 $ 145 Rate lock commitments 12,124 1,133 — (12,124) 1,133 1,133 Forward sale contracts 13,537 41,730 — (13,537) 41,730 41,730 Total $ 70,833 $ 30,829 $ 2,221 $ (29,445) $ 74,438 $ 43,008 As of December 31, 2019 Opening Total realized Issuances Settlements Closing Unrealized Assets: Rate lock commitments $ 6,732 $ 32,035 $ — $ (6,732) $ 32,035 $ 32,035 Forward sale contracts 8,177 14,389 — (8,177) 14,389 14,389 Nasdaq Forwards 77,619 (51,117) — — 26,502 26,502 Total $ 92,528 $ (4,693) $ — $ (14,909) $ 72,926 $ 72,926 Opening Total realized Issuances Settlements Closing Unrealized Liabilities: Contingent consideration $ 32,551 $ 2,287 $ 14,957 $ (4,623) $ 45,172 $ 2,287 Rate lock commitments 7,470 12,124 — (7,470) 12,124 12,124 Forward sale contracts 9,208 13,537 — (9,208) 13,537 13,537 Total $ 49,229 $ 27,948 $ 14,957 $ (21,301) $ 70,833 $ 27,948 |
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, 2020 Level 3 assets and liabilities Assets Liabilities Significant Unobservable Range Weighted Accounts payable, accrued expenses and other liabilities: Contingent consideration $ — $ 31,575 Discount rate 0.3% - 10.4% (1) 7.3% Probability of meeting earnout and contingencies 0% - 100% (1) 98.5% Financial forecast information Derivative assets and liabilities: Nasdaq Forwards $ 18,959 $ — Implied volatility 37.9% - 42.2% (2) 41.9% Forward sale contracts $ 9,625 $ 41,730 Counterparty credit risk N/A N/A Rate lock commitments $ 45,561 $ 1,133 Counterparty credit risk N/A N/A December 31, 2019 Level 3 assets and liabilities Assets Liabilities Significant Unobservable Range Weighted Accounts payable, accrued expenses and other liabilities: Contingent consideration $ — $ 45,172 Discount rate 0.3% - 10.4% 8.6% Probability of meeting earnout and contingencies 90% - 100% (1) 98.1% Financial forecast information Derivative assets and liabilities: Nasdaq Forwards $ 26,502 $ — Implied volatility 25.7% - 34.8% (2) 32.2% Forward sale contracts $ 14,389 $ 13,537 Counterparty credit risk N/A N/A Rate lock commitments $ 32,035 $ 12,124 Counterparty credit risk N/A N/A (1) Newmark’s estimate of contingent consideration as of September 30, 2020 and December 31, 2019 was based on the acquired business’ projected future financial performance, including revenues. (2) The volatility of Newmark’s Nasdaq Forwards is primarily based on the volatility of the underlying Nasdaq stock price. |
Accounts Payable, Accrued Exp_2
Accounts Payable, Accrued Expenses and Other Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Payables and Accruals [Abstract] | |
Summary of current portion of accounts payable, accrued expenses and other liabilities | The accounts payable, accrued expenses and other liabilities consisted of the following (in thousands): September 30, 2020 December 31, 2019 Accounts payable and accrued expenses $ 110,271 $ 161,988 Redeemable preferred partnership units 93,480 — Outside broker payable 54,873 74,280 Payroll taxes payable 53,027 45,612 Corporate taxes payable 38,964 69,237 Derivative liability 42,863 25,661 Right-of-use liabilities 28,645 27,184 Credit enhancement deposit 25,000 — Contingent consideration 18,210 13,107 Total $ 465,333 $ 417,069 |
Summary of other long-term liabilities | Other long-term liabilities consisted of the following (in thousands): September 30, 2020 December 31, 2019 Accrued compensation $ 309,710 $ 278,399 Payroll taxes payable 62,500 41,355 Contingent consideration 13,365 32,065 Credit enhancement deposit — 25,000 Financial guarantee liability 32,652 15 Total $ 418,227 $ 376,834 |
Compensation (Tables)
Compensation (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of compensation cost for share-based payment arrangements | Newmark incurred compensation expense related to Class A common stock, limited partnership units and RSUs held by Newmark employees as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Issuance of common stock and exchangeability expenses $ 13,243 $ 17,499 $ 21,668 $ 39,671 Allocations of net income to limited partnership units and FPUs (1) 29,221 32,496 30,753 50,410 Limited partnership units amortization 4,902 5,239 12,808 16,618 RSU amortization 3,404 1,413 9,315 3,172 Equity-based compensation and allocations of net income to limited partnership units and FPUs $ 50,770 $ 56,647 $ 74,544 $ 109,871 (1) Certain limited partnership units receive quarterly allocations of net income and are generally contingent upon services being provided by the unit holders, including the Preferred Distribution. Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Issuance of common stock and exchangeability expenses $ 125 $ — $ 2,606 $ 2,719 Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Limited partnership units amortization $ 4,902 $ 5,239 $ 12,808 $ 16,618 Compensation expense related to these limited partnership units held by Newmark employees was as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Issuance of common stock and exchangeability expenses $ 13,118 $ 17,499 $ 19,062 $ 36,952 Compensation expense related to Newmark and BGC RSUs are as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 RSU amortization $ 3,404 $ 1,413 $ 9,315 $ 3,172 |
Schedule of activity associated with limited partnership units | A summary of the activity associated with limited partnership units held by Newmark employees is as follows: Newmark Units BGC Units Balance, January 1, 2019 44,733,487 (1) 61,870,969 Issued 13,813,204 319,586 Redeemed/exchanged units (2,487,885) (3,938,134) Forfeited units/other 4,742,046 (2,198,720) Balance, December 31, 2019 60,800,852 56,053,701 Issued 6,811,808 1,064,781 Redeemed/exchanged units (1,798,651) (2,217,536) Forfeited units/other (82,945) (40,451) September 30, 2020 (2) 65,731,064 54,860,495 Total exchangeable units outstanding (2) : December 31, 2019 10,108,598 24,692,695 September 30, 2020 10,017,066 25,047,827 (1) Includes the pre-IPO Newmark employees share-equivalent limited partnership units in BGC Holdings. (2) The Limited Partnership table above also includes partnership units issued for consideration for acquisitions. As of September 30, 2020, there were 5.2 million partnership units in Newmark Holdings outstanding, of which 2.0 million units were exchangeable, and 9.2 million partnership units in BGC Holdings outstanding, of which 4.5 million were exchangeable. As of December 31, 2019, there were 5.3 million partnership units in Newmark Holdings outstanding, of which 1.4 million units were exchangeable, and 9.5 million partnership units in BGC Holdings outstanding, of which 2.9 million were exchangeable. The Limited Partnership Units table above includes both regular and Preferred Units. The Preferred Units are not entitled to participate in partnership distributions other than with respect to the Preferred Distribution (see Note 2 — “Limited Partnership Interests in BGC Holdings and Newmark Holdings” for further information on Preferred Units). A summary of the BGC Holdings and Newmark Holdings limited partnership units held by Newmark employees is as follows: Newmark BGC Regular units 61,301,972 53,247,827 Preferred Units 4,429,092 1,612,668 Balance, September 30, 2020 65,731,064 54,860,495 |
Schedule of units redeemed | A summary of units held by Newmark employees redeemed in connection with the issuance of Newmark or BGC Class A common stock (at the current exchange ratio) or granted exchangeability for Newmark or BGC Class A common stock is as follows: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 BGC Units 34,893 87,566 225,725 379,191 Newmark Units 25,419 63,594 194,072 208,969 Total 60,312 151,160 419,797 588,160 |
Schedule of limited partnership units with a post-termination payout | Limited partnership units with a post-termination payout held by Newmark employees are as follows (dollars in thousands): September 30, 2020 December 31, 2019 Notional Value (1) $ 257,517 $ 261,025 Estimated fair value of the post-termination payout (2) $ 62,992 $ 51,378 Outstanding limited partnership units in BGC Holdings 5,265,878 6,251,816 Outstanding limited partnership units in BGC Holdings - unvested 1,008,934 1,508,510 Outstanding limited partnership units in Newmark Holdings 18,904,604 17,097,639 Outstanding limited partnership units in Newmark Holdings - unvested 9,268,547 9,357,822 (1) Beginning January 1, 2018, Newmark began granting stand-alone limited partnership units in Newmark Holdings to Newmark employees. (2) Included in “Other long-term liabilities” on the accompanying unaudited condensed consolidated balance sheets. Liability balance also includes $6.8 million of post-termination units issued as consideration for acquisition. |
Schedule of grant of conversion rights | September 30, 2020 December 31, 2019 Notional Value $ 206,851 $ 194,995 Estimated fair value of limited partnership units (1) $ 199,149 $ 182,800 (1) Included in “Other long-term liabilities” on the accompanying unaudited condensed consolidated balance sheets. |
Schedule of activity associated with restricted stock units | A summary of the activity associated with Newmark and BGC RSUs held by Newmark employees is as follows (fair value amount in thousands): Newmark RSUs (1) BGC RSUs (2) Restricted Weighted- Fair Weighted- Restricted Weighted- Fair Weighted- Balance, January 1, 2019 219,887 $ 13.52 $ 2,973 2.28 168,675 $ 9.77 $ 1,619 0.98 Granted 4,766,611 7.42 35,344 — — — Settled units (delivered shares) (109,007) 11.70 (1,275) (107,820) 9.38 (1,011) Forfeited units (193,920) 8.67 (1,681) (14,048) 10.02 (141) Balance, December 31, 2019 4,683,571 $ 7.55 $ 35,361 5.69 46,807 $ 9.97 $ 467 0.25 Granted 6,748,717 $ 8.28 $ 55,904 7,912 $ 3.69 $ 29 Settled units (delivered shares) (895,909) $ 7.90 $ (7,080) (45,544) $ 9.95 $ (453) Forfeited units (156,190) $ 7.98 $ (1,246) (1,153) $ 10.62 $ (12) Balance, September 30, 2020 10,380,189 $ 7.99 $ 82,939 5.91 8,022 $ 3.81 $ 31 2.42 (1) Beginning January 1, 2018, Newmark began granting stand-alone Newmark RSUs to Newmark employees with the awards vesting ratably over the two (2) RSUs granted to these individuals generally vest over a two |
Organization and Basis of Pre_3
Organization and Basis of Presentation (Details) $ in Thousands | Dec. 02, 2019USD ($)shares | Nov. 30, 2018shares | Sep. 26, 2018USD ($)tranchecontractshares | Mar. 07, 2018USD ($)shares | Jun. 28, 2013USD ($)shares | Dec. 31, 2018USD ($) | Nov. 30, 2020USD ($) | Sep. 30, 2020USD ($)shares | Dec. 31, 2019USD ($)shares | Nov. 30, 2019USD ($) | Jan. 01, 2019USD ($) | Nov. 29, 2018shares | Jun. 18, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 13, 2017 |
Description Of Business | |||||||||||||||
Shares owned (in shares) | shares | 93,562 | ||||||||||||||
Common stock units issued (in shares) | shares | 1,458,931 | ||||||||||||||
Marketable securities | $ 121,759 | $ 36,795 | |||||||||||||
Shares settled (in shares) | shares | 898,685 | ||||||||||||||
Investment owned shares settled fair value | $ (93,500) | ||||||||||||||
Assets | (4,678,612) | (3,201,599) | |||||||||||||
Liabilities | 3,765,887 | 2,239,457 | |||||||||||||
Retained earnings | (348,430) | (313,112) | |||||||||||||
Noncontrolling interests | 241,361 | 340,961 | |||||||||||||
Right-of-use assets | 191,705 | 201,661 | |||||||||||||
Operating lease liability | $ 245,639 | $ 255,126 | |||||||||||||
Class A Common Stock | |||||||||||||||
Description Of Business | |||||||||||||||
Limited partnership units exchange ratio (in percentage) | 0.9373 | 1 | |||||||||||||
Common stock, shares issued (in shares) | shares | 163,198,127 | 160,833,463 | |||||||||||||
Common stock units issued (in shares) | shares | 449,917 | ||||||||||||||
Class B Common Stock | |||||||||||||||
Description Of Business | |||||||||||||||
Common stock, shares issued (in shares) | shares | 21,285,533 | 21,285,533 | |||||||||||||
BGC Partners LP and its Operating Subsidiaries | Newmark Units | |||||||||||||||
Description Of Business | |||||||||||||||
Purchase of units (units) | shares | 16,600,000 | ||||||||||||||
Purchase value of units | $ 242,000 | ||||||||||||||
Accounting Standards Update 2016-02 | |||||||||||||||
Description Of Business | |||||||||||||||
Right-of-use assets | $ 178,800 | ||||||||||||||
Operating lease liability | $ 226,700 | ||||||||||||||
Common Stock | |||||||||||||||
Description Of Business | |||||||||||||||
Fair value of equity security | $ 121,900 | $ 36,800 | |||||||||||||
Common Stock | Nasdaq Earn-Out | |||||||||||||||
Description Of Business | |||||||||||||||
Marketable securities | $ 98,600 | ||||||||||||||
Common Stock | Forecast | |||||||||||||||
Description Of Business | |||||||||||||||
Fair value of equity security | |||||||||||||||
Nasdaq Omx | |||||||||||||||
Description Of Business | |||||||||||||||
Purchase consideration paid in cash | $ 750,000 | ||||||||||||||
Period for expected payment under Common stock transaction (years) | 15 years | ||||||||||||||
Maximum | Nasdaq Omx | |||||||||||||||
Description Of Business | |||||||||||||||
Shares received from transaction (in shares) | shares | 992,247 | ||||||||||||||
Maximum | Nasdaq Omx | BGC Partners Inc | |||||||||||||||
Description Of Business | |||||||||||||||
Expected payment of shares under common stock transaction (in shares) | shares | 14,883,705 | ||||||||||||||
Minimum | Nasdaq Omx | BGC Partners Inc | |||||||||||||||
Description Of Business | |||||||||||||||
Gross revenue on expected payment per year under common stock transaction | $ 25,000 | ||||||||||||||
RBC | Newmark OpCo | |||||||||||||||
Description Of Business | |||||||||||||||
Exchangeable preferred limited partnership units issued (in shares) | $ 150,000 | $ 175,000 | |||||||||||||
Proceeds from issuance of EPUs | $ 266,100 | ||||||||||||||
Exchangeable preferred limited partnership units, number of tranches | tranche | 4 | ||||||||||||||
Nasdaq Forwards | |||||||||||||||
Description Of Business | |||||||||||||||
Number of derivative contracts (contracts) | contract | 4 | ||||||||||||||
Adjustments | |||||||||||||||
Description Of Business | |||||||||||||||
Assets | 8,000 | $ (64,400) | |||||||||||||
Liabilities | 17,900 | 45,600 | |||||||||||||
Retained earnings | $ 25,900 | (16,500) | |||||||||||||
Noncontrolling interests | $ 2,300 | ||||||||||||||
Spinoff | Class A Common Stock | |||||||||||||||
Description Of Business | |||||||||||||||
Limited partnership units exchange ratio (in percentage) | 0.463895 | ||||||||||||||
Number of units converted to common stock (in shares) | shares | 9,400,000 | ||||||||||||||
Spinoff | Class B Common Stock | |||||||||||||||
Description Of Business | |||||||||||||||
Limited partnership units exchange ratio (in percentage) | 0.463895 | ||||||||||||||
Number of units converted to common stock (in shares) | shares | 5,400,000 | ||||||||||||||
Spinoff | Newmark Holdings | BGC Partners Inc | |||||||||||||||
Description Of Business | |||||||||||||||
Shares owned (in shares) | shares | 14,800,000 | ||||||||||||||
Spinoff | Newmark OpCo | Class A Common Stock | |||||||||||||||
Description Of Business | |||||||||||||||
Number of units converted to common stock (in shares) | shares | 6,900,000 | ||||||||||||||
Spinoff | Newmark OpCo | Common Stock | |||||||||||||||
Description Of Business | |||||||||||||||
Number of units converted to common stock (in shares) | shares | 7,000,000 | ||||||||||||||
Spinoff | Newmark Group | BGC Partners Inc | Class A Common Stock | |||||||||||||||
Description Of Business | |||||||||||||||
Common stock, shares issued (in shares) | shares | 131,886,409 | ||||||||||||||
Ownership interest (percentage) | 94.00% | ||||||||||||||
Economic interest ownership percentage (in percentage) | 87.00% | ||||||||||||||
Spinoff | Newmark Group | BGC Partners Inc | Class B Common Stock | |||||||||||||||
Description Of Business | |||||||||||||||
Common stock, shares issued (in shares) | shares | 21,285,537 |
Limited Partnership Interests_2
Limited Partnership Interests in Newmark Holdings and BGC Holdings (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Sep. 30, 2020trancheshares | Dec. 31, 2019 | Dec. 13, 2017 | |
Related Party Transaction | |||||||
Payout period for post-termination awards | 4 years | ||||||
Percentage to preferred units (in percentage) | 0.6875% | 0.6875% | 0.6875% | 0.6875% | 2.75% | ||
Non Distribution Earning Units | |||||||
Related Party Transaction | |||||||
Award vesting period | 4 years | ||||||
Class A Common Stock | |||||||
Related Party Transaction | |||||||
Limited partnership units exchange ratio (in percentage) | 0.9373 | 1 | |||||
Class B Common Stock | Cantor | |||||||
Related Party Transaction | |||||||
Exchangeable partnership units (in shares) | 22,700,000 | ||||||
Share conversion rate (in shares) | 1 | ||||||
Newmark OpCo | RBC | |||||||
Related Party Transaction | |||||||
Exchangeable preferred limited partnership units, number of tranches | tranche | 4 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
New Accounting Pronouncements or Change in Accounting Principle | ||||
Guaranty liabilities | $ 32,652 | $ 32,652 | $ 15 | $ 15 |
Stockholders equity | 648,756 | 648,756 | 599,664 | |
Increase in reserve | 3,000 | |||
Related party increase to allowance for receivables | $ 500 | $ 500 | ||
Adjustments | ||||
New Accounting Pronouncements or Change in Accounting Principle | ||||
Guaranty liabilities | 17,900 | $ 17,935 | ||
Accounts Receivable | Adjustments | ||||
New Accounting Pronouncements or Change in Accounting Principle | ||||
Stockholders equity | 4,300 | |||
Loans Receivable | Adjustments | ||||
New Accounting Pronouncements or Change in Accounting Principle | ||||
Stockholders equity | $ 3,700 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenue from External Customer | ||||
Revenues | $ 435,924 | $ 586,634 | $ 1,303,572 | $ 1,585,768 |
Leasing and other commissions | ||||
Revenue from External Customer | ||||
Revenues | 114,947 | 213,242 | 375,465 | 603,094 |
Capital markets commissions | ||||
Revenue from External Customer | ||||
Revenues | 82,956 | 144,666 | 263,838 | 376,213 |
Gains from mortgage banking activities/originations, net | ||||
Revenue from External Customer | ||||
Revenues | 91,192 | 72,332 | 210,686 | 148,769 |
Management services, servicing fees and other | ||||
Revenue from External Customer | ||||
Revenues | $ 146,829 | $ 156,394 | $ 453,583 | $ 457,692 |
Acquisitions - Summary of Compo
Acquisitions - Summary of Components of Purchase Consideration Transferred and Preliminary Allocation of Assets Acquired and Liabilities Assumed (Detail) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | 12 Months Ended | ||
Jan. 31, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Purchase Price | |||||
Cash and stock issued at closing | $ 5,850 | $ 18,212 | |||
Allocations | |||||
Goodwill | 559,935 | $ 557,914 | $ 515,321 | ||
HVS | |||||
Purchase Price | |||||
Cash and stock issued at closing | $ 6,249 | ||||
Contingent consideration | 3,590 | 2,200 | |||
Total | 9,839 | 9,800 | |||
Allocations | |||||
Goodwill | 6,294 | $ 6,300 | |||
Other intangible assets, net | 2,700 | ||||
Receivables, net | 796 | ||||
Fixed Assets, net | 134 | ||||
Other assets | 29 | ||||
Accounts payable, accrued expenses and other liabilities | (114) | ||||
Net assets acquired | $ 9,839 | ||||
2019 Acquisitions | |||||
Purchase Price | |||||
Cash and stock issued at closing | 38,826 | ||||
Contingent consideration | 18,067 | ||||
Total | 56,893 | ||||
Allocations | |||||
Cash and cash equivalents | 1,391 | ||||
Goodwill | 43,804 | ||||
Other intangible assets, net | 9,641 | ||||
Receivables, net | 7,540 | ||||
Other assets | 614 | ||||
Accounts payable, accrued expenses and other liabilities | (3,972) | ||||
Accrued compensation | (2,125) | ||||
Net assets acquired | $ 56,893 |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Detail) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Jan. 31, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Business Acquisition | |||||||
Additional goodwill recognized | $ 559,935 | $ 559,935 | $ 557,914 | $ 515,321 | |||
Business acquisition, aggregate revenue contribution | 1,900 | 5,200 | |||||
HVS | |||||||
Business Acquisition | |||||||
Total consideration transferred | $ 9,839 | 9,800 | |||||
Payments to acquire businesses, gross | $ 5,900 | ||||||
Business acquisition, equity interest issued (in shares) | 104,653 | ||||||
Business acquisition, contingent non cash consideration, fair value | 1,300 | $ 1,300 | |||||
Contingent consideration | 3,590 | 2,200 | |||||
Additional goodwill recognized | $ 6,294 | 6,300 | 6,300 | ||||
Business acquisition, amount deductible for tax | $ 2,400 | 2,400 | |||||
HVS | Restricted Stock Units (RSUs) | |||||||
Business Acquisition | |||||||
Shares issued as compensation | $ 400 | ||||||
2019 Acquisitions | |||||||
Business Acquisition | |||||||
Total consideration transferred | 56,893 | ||||||
Contingent consideration cash | 15,300 | ||||||
Contingent consideration | 18,067 | ||||||
Additional goodwill recognized | 43,804 | ||||||
Business acquisition, amount deductible for tax | $ 29,700 | ||||||
Business acquisition, aggregate revenue contribution | $ 1,700 | $ 3,400 | |||||
2019 Acquisitions | Newmark Holdings, L.P. | Limited Partnership Units | |||||||
Business Acquisition | |||||||
Business acquisition, equity interest issued (in shares) | 327,692 | ||||||
Business acquisition, contingent non cash consideration, fair value | $ 2,700 |
Earnings Per Share and Weight_3
Earnings Per Share and Weighted-Average Shares Outstanding - Calculation of Basic Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | ||
Basic earnings per share | |||||
Net income available to common stockholders | [1] | $ 72,101 | $ 85,475 | $ 75,703 | $ 118,599 |
Basic weighted-average shares of common stock outstanding (in shares) | 179,501 | 177,020 | 178,527 | 178,122 | |
Basic earnings per share (in usd per share) | $ 0.40 | $ 0.48 | $ 0.42 | $ 0.67 | |
Reduction for dividends on preferred stock or units | $ 3,200 | $ 3,200 | $ 8,100 | $ 9,700 | |
[1] | Includes a reduction for dividends on preferred stock or exchangeable preferred partnership units in the amount of $3.2 million and $8.1 million for the three and nine months ended September 30, 2020, respectively, and $3.2 million and $9.7 million for the three and nine months ended September 30, 2019, respectively (see Note 1 — “Organization and Basis of Presentation”). |
Earnings Per Share and Weight_4
Earnings Per Share and Weighted-Average Shares Outstanding - Calculation of Fully Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | ||
Fully diluted earnings per share: | |||||
Net income available to common stockholders | [1] | $ 72,101 | $ 85,475 | $ 75,703 | $ 118,599 |
Allocations of net income to limited partnership interests in Newmark Holdings, net of tax | 31,522 | 14,025 | 34,719 | 3,780 | |
Net income for fully diluted shares | $ 103,623 | $ 99,500 | $ 110,422 | $ 122,379 | |
Weighted-average shares: | |||||
Common stock outstanding (in shares) | 179,501 | 177,020 | 178,527 | 178,122 | |
Partnership units (units) | 86,912 | 28,466 | 86,093 | 5,661 | |
RSUs (Treasury stock method) (units) | 155 | 786 | 254 | 1,231 | |
Newmark exchange shares (shares) | 225 | 344 | 230 | 399 | |
Fully diluted weighted-average shares of common stock outstanding (in shares) | 266,793 | 206,616 | 265,104 | 185,413 | |
Fully diluted earnings per share (in usd per share) | $ 0.39 | $ 0.48 | $ 0.42 | $ 0.66 | |
[1] | Includes a reduction for dividends on preferred stock or exchangeable preferred partnership units in the amount of $3.2 million and $8.1 million for the three and nine months ended September 30, 2020, respectively, and $3.2 million and $9.7 million for the three and nine months ended September 30, 2019, respectively (see Note 1 — “Organization and Basis of Presentation”). |
Earnings Per Share and Weight_5
Earnings Per Share and Weighted-Average Shares Outstanding - Additional Information (Detail) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Antidilutive Securities Excluded fom Computation of Earnings Per Share | ||||
Anti-dilutive securities excluded from computation of fully diluted earnings per share amount (in shares) | 9.2 | 61.8 | 6 | 85.4 |
Limited Partnership Units | ||||
Antidilutive Securities Excluded fom Computation of Earnings Per Share | ||||
Anti-dilutive securities excluded from computation of fully diluted earnings per share amount (in shares) | 61.7 | 84.9 | ||
Restricted Stock Units (RSUs) | ||||
Antidilutive Securities Excluded fom Computation of Earnings Per Share | ||||
Anti-dilutive securities excluded from computation of fully diluted earnings per share amount (in shares) | 0.1 | 0.5 |
Stock Transactions and Unit R_3
Stock Transactions and Unit Redemptions - Additional Information (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Sep. 30, 2020USD ($)voteclass$ / sharesshares | Jun. 30, 2020$ / sharesshares | Mar. 31, 2020$ / shares | Sep. 30, 2020USD ($)voteclassshares$ / shares | Dec. 31, 2019USD ($)$ / sharesshares | Sep. 30, 2019shares | Jun. 30, 2019shares | Dec. 31, 2018shares | Aug. 01, 2018USD ($) | |
Class of Stock | |||||||||
Number of authorized classes of common stock | class | 2 | 2 | |||||||
Shares repurchased (in shares) | 4,568,002 | 4,568,002 | 4,568,002 | ||||||
Class A Common Stock | |||||||||
Class of Stock | |||||||||
Common stock, votes per share | vote | 1 | 1 | |||||||
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | ||||||
Common stock, par value (in usd per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | ||||||
Common stock, shares outstanding (in shares) | 158,630,125 | 157,811,436 | 158,630,125 | 156,265,461 | 154,989,126 | 156,679,527 | 156,916,336 | ||
Shares repurchased (in shares) | 4,568,002 | 4,568,002 | 4,568,002 | ||||||
Shares repurchased price (in dollars per share) | $ / shares | $ 0 | $ 0 | $ 0 | $ 9.32 | $ 9.32 | ||||
Share repurchase and redemption unit remaining authorized amount | $ | $ 157,413 | $ 157,413 | $ 157,413 | ||||||
Class A Common Stock | Maximum | Limited Partnership Interests or Other Equity Interests in Subsidiaries | Affiliated Persons or Entities | |||||||||
Class of Stock | |||||||||
Stock repurchases and redeemed or repurchases authorized amount | $ | $ 200,000 | ||||||||
Class B Common Stock | |||||||||
Class of Stock | |||||||||
Common stock, votes per share | vote | 10 | 10 | |||||||
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 | 500,000,000 | ||||||
Common stock, par value (in usd per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | ||||||
Conversion of common stock (in shares) | 1 | ||||||||
Common stock, shares outstanding (in shares) | 21,285,533 | 21,285,533 | 21,285,533 | 21,300,000 |
Stock Transactions and Unit R_4
Stock Transactions and Unit Redemptions - Schedule of Changes in Shares of Common Stock Outstanding (Detail) - shares | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Share issuances: | ||||||
Other (in shares) | 0 | 0 | ||||
Class A Common Stock | ||||||
Increase (Decrease) in Stockholders' Equity | ||||||
Shares outstanding at beginning of period (in shares) | 157,811,436 | 156,265,461 | 156,679,527 | 156,265,461 | 156,916,336 | |
Share issuances: | ||||||
LPU redemption/exchange (in shares) | 607,971 | 543,990 | 1,617,690 | 1,666,766 | ||
Other (in shares) | 2,364 | 81,206 | ||||
Treasury stock repurchases (in shares) | 0 | 0 | 0 | (2,279,373) | 0 | (3,892,405) |
Shares outstanding at end of period (in shares) | 158,630,125 | 157,811,436 | 154,989,126 | 158,630,125 | 154,989,126 | |
Class A Common Stock | Restricted Stock Units (RSUs) | ||||||
Share issuances: | ||||||
Issuance of Class A common stock for Newmark RSUs (in shares) | 210,718 | 42,618 | 746,974 | 217,223 |
Stock Transactions and Unit R_5
Stock Transactions and Unit Redemptions - Schedule of Share Repurchase Activity (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Class of Stock | |||||||
Shares repurchased (in shares) | 4,568,002 | 4,568,002 | 4,568,002 | ||||
Class A Common Stock | |||||||
Class of Stock | |||||||
Shares repurchased (in shares) | 4,568,002 | 4,568,002 | 4,568,002 | ||||
Treasury stock repurchases (in shares) | 0 | 0 | 0 | 2,279,373 | 0 | 3,892,405 | |
Average price paid per unit or share (in dollars per share) | $ 0 | $ 0 | $ 0 | $ 9.32 | $ 9.32 | ||
Total Number of Shares Repurchased as Part of Publicly Announced Program | 0 | 0 | 0 | 4,568,002 | 4,568,002 | ||
Approximate Dollar Value of Units and Shares That May Yet Be Repurchased/ Purchased Under the Program | $ 157,413 | $ 157,413 | $ 157,413 |
Stock Transactions and Unit R_6
Stock Transactions and Unit Redemptions - Schedule of Changes in Carrying Amount of Redeemable Partnership Interest (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Increase (Decrease) in Temporary Equity | ||
Balance at beginning of period | $ 21,517 | $ 26,170 |
Income allocation | 1,740 | 5,288 |
Distributions of income | (5) | (5,355) |
Redemptions | (644) | (927) |
Issuance and other | 0 | (3,659) |
Balance at end of period | $ 22,608 | $ 21,517 |
Marketable Securities (Details)
Marketable Securities (Details) - USD ($) | Jun. 28, 2013 | Sep. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 |
Marketable Securities | |||||||
Gross proceeds from sale of marketable securities | $ 34,738,000 | $ 32,606,000 | |||||
Gain (loss) on marketable securities | (2,204,000) | 4,056,000 | |||||
Unrealized (gains) loss on marketable securities | 0 | $ 4,445,000 | |||||
Common Stock | |||||||
Marketable Securities | |||||||
Amount recognized in connection with the earn-out including other income (loss) (in shares) | 992,247 | ||||||
Number of shares sold in transaction (in shares) | 343,562 | 100,000 | 350,000 | ||||
Gross proceeds from sale of marketable securities | $ 34,700,000 | $ 10,400,000 | $ 32,600,000 | ||||
Gain (loss) on marketable securities | $ 2,200,000 | 2,200,000 | 4,100,000 | ||||
Unrealized (gains) loss on marketable securities | $ (700,000) | $ 4,400,000 | |||||
Marketable securities | $ 121,900,000 | $ 121,900,000 | $ 36,800,000 | ||||
Common Stock | Nasdaq Earn-Out | |||||||
Marketable Securities | |||||||
Gain (loss) on marketable securities | $ 121,900,000 | ||||||
Maximum | Common Stock | |||||||
Marketable Securities | |||||||
Remaining earn-out receivable under common stock transaction (in shares) | 6,945,729 | ||||||
Minimum | Common Stock | |||||||
Marketable Securities | |||||||
Gross revenue on earn-out receivable per year under common stock transaction | $ 25,000,000 | ||||||
BGC Partners Inc | Common Stock | |||||||
Marketable Securities | |||||||
Period for earn-out receivable under common stock transaction (years) | 7 years | ||||||
BGC Partners Inc | Nasdaq Omx | |||||||
Marketable Securities | |||||||
Period for earn-out receivable under common stock transaction (years) | 15 years | ||||||
BGC Partners Inc | Nasdaq Omx | Maximum | |||||||
Marketable Securities | |||||||
Earn-out shares receivable under common stock transaction (in shares) | 14,883,705 | ||||||
BGC Partners Inc | Nasdaq Omx | Minimum | |||||||
Marketable Securities | |||||||
Gross revenue on earn-out receivable per year under common stock transaction | $ 25,000,000 |
Investments (Details)
Investments (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Sep. 08, 2017 | |
Schedule of Equity Method Investments | ||||||
(Loss) income from equity method investments | $ (7,400,000) | $ 1,300,000 | $ (11,562,000) | $ 6,000,000 | ||
Distributions received | 0 | 0 | $ 8,600,000 | |||
Equity method investment | 88,315,000 | 88,315,000 | 99,966,000 | |||
Unrealized (gains) loss on marketable securities | 0 | $ 17,100,000 | (26,800,000) | $ 21,000,000 | ||
Other Assets | ||||||
Schedule of Equity Method Investments | ||||||
Equity method investment | 88,300,000 | 88,300,000 | 100,000,000 | |||
Alternative investment | $ 67,300,000 | $ 67,300,000 | $ 94,100,000 | |||
CF Real Estate Finance Holdings, L.P. | ||||||
Schedule of Equity Method Investments | ||||||
Equity method investment ownership percentage (in percentage) | 27.00% | 27.00% | ||||
Equity method investment | $ 100,000,000 |
Capital and Liquidity Require_2
Capital and Liquidity Requirements (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Compliance with Regulatory Capital Requirements under Banking Regulations | ||
Percentage of Freddie Mac's liquidity requirement of outstanding principal of TAH loans serviced (in percentage) | 8.00% | 8.00% |
Other Assets | ||
Compliance with Regulatory Capital Requirements under Banking Regulations | ||
Outstanding borrower advances | $ 1.3 | $ 0.3 |
Seller/Servicer Agreements | ||
Compliance with Regulatory Capital Requirements under Banking Regulations | ||
Amount of capital in excess of aggregate regulatory requirements | $ 336.9 |
Loans Held for Sale, at Fair _3
Loans Held for Sale, at Fair Value - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Trade and Loans Receivables Held-for-sale, Net, Not Part of Disposal Group [Abstract] | |||||
Maximum period of loans held for sale sold | 45 days | ||||
Financing Receivable, Nonaccrual | $ 0 | $ 0 | $ 0 | ||
Interest income on loans held for sale | 6,800,000 | $ 14,800,000 | 18,900,000 | $ 29,900,000 | |
Gains (loss) recognized on change in fair value on loans held for sale | $ 2,000,000 | $ (3,200,000) | $ 27,100,000 | $ 22,500,000 |
Loans Held for Sale, at Fair _4
Loans Held for Sale, at Fair Value - Summary of Loans Held for Sale at Cost Basis and Fair Value (Detail) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Accounts, Notes, Loans and Financing Receivable | ||
Loans held for sale, at fair value | $ 1,537,734 | $ 215,290 |
Cost Basis | ||
Accounts, Notes, Loans and Financing Receivable | ||
Loans held for sale, at fair value | 1,510,598 | 210,116 |
Fair Value | ||
Accounts, Notes, Loans and Financing Receivable | ||
Loans held for sale, at fair value | $ 1,537,734 | $ 215,290 |
Derivatives - Fair Value of Der
Derivatives - Fair Value of Derivative Contracts (Detail) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Assets | $ 74,145,000 | $ 72,926,000 |
Liabilities | 42,863,000 | 25,661,000 |
Notional amounts | 2,535,170,000 | 3,271,250,000 |
Rate lock commitments | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Assets | 45,561,000 | 32,035,000 |
Liabilities | 1,133,000 | 12,124,000 |
Notional amounts | 378,546,000 | 1,396,827,000 |
Nasdaq Forwards | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Assets | 18,959,000 | 26,502,000 |
Liabilities | 0 | 0 |
Notional amounts | 267,480,000 | 267,480,000 |
Forward sale contracts | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Assets | 9,625,000 | 14,389,000 |
Liabilities | 41,730,000 | 13,537,000 |
Notional amounts | $ 1,889,144,000 | $ 1,606,943,000 |
Derivatives - Additional Inform
Derivatives - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Rate lock commitments | Compensation and employee benefits | ||||
Derivative Instruments, Gain (Loss) | ||||
Gain (loss) recognized in income for derivatives | $ 0.7 | $ (0.2) | $ 1.6 | $ 1.6 |
Derivatives - Summary of Gains
Derivatives - Summary of Gains Losses on Derivative Contracts Included in Condensed Consolidated Statements of Operations (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Rate lock commitments | Compensation and employee benefits | ||||
Derivative Instruments, Gain (Loss) | ||||
Gain (loss) recognized in income for derivatives | $ 700 | $ (200) | $ 1,600 | $ 1,600 |
Not Designated as Hedging Instrument | ||||
Derivative Instruments, Gain (Loss) | ||||
Gain (loss) recognized in income for derivatives | 5,788 | (2,232) | 4,780 | (36,092) |
Not Designated as Hedging Instrument | Nasdaq Forwards | Other income (loss), net | ||||
Derivative Instruments, Gain (Loss) | ||||
Gain (loss) recognized in income for derivatives | (5,771) | (8,214) | (7,543) | (37,181) |
Not Designated as Hedging Instrument | Rate lock commitments | Gains from mortgage banking activities/originations, net | ||||
Derivative Instruments, Gain (Loss) | ||||
Gain (loss) recognized in income for derivatives | (3,951) | 5,734 | 46,004 | 27,113 |
Not Designated as Hedging Instrument | Rate lock commitments | Compensation and employee benefits | ||||
Derivative Instruments, Gain (Loss) | ||||
Gain (loss) recognized in income for derivatives | (677) | 236 | (1,576) | (1,620) |
Not Designated as Hedging Instrument | Forward sale contracts | Gains from mortgage banking activities/originations, net | ||||
Derivative Instruments, Gain (Loss) | ||||
Gain (loss) recognized in income for derivatives | $ 16,187 | $ 12 | $ (32,105) | $ (24,404) |
Credit Enhancement Receivable_3
Credit Enhancement Receivable, Credit Enhancement Deposit and Contingent Liability (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Credit Enhancement Receivable Contingent Liability And Credit Enhancement Deposit | |||||
Credit risk loans | $ 22,658,120,000 | $ 22,658,120,000 | $ 20,209,577,000 | ||
Credit enhancement receivable | 0 | 0 | 0 | ||
Deposit in Fannie Mae restricted liquidity account | 25,000,000 | 25,000,000 | 25,000,000 | ||
Credit Risk | |||||
Credit Enhancement Receivable Contingent Liability And Credit Enhancement Deposit | |||||
Maximum DB Cayman credit protection | 28,762,000 | 28,762,000 | 29,253,000 | ||
DB Cayman | Credit Risk | |||||
Credit Enhancement Receivable Contingent Liability And Credit Enhancement Deposit | |||||
Reimbursements under serving agreement | 0 | $ 0 | 0 | $ 0 | |
Credit risk loans | $ 6,698,151,000 | 6,698,151,000 | 5,835,163,000 | ||
Maximum pre-credit enhancement loss exposure | 9,587,000 | 9,751,000 | |||
Maximum loss exposure without any form of credit protection | $ 6,688,564,000 | 5,825,412,000 | |||
Percentage of contingent payment (in percentage) | 50.00% | 50.00% | |||
Contingent liability | $ 12,200,000 | $ 12,200,000 | $ 11,800,000 |
Revenues from Contracts with _3
Revenues from Contracts with Customers - Schedule of Revenues from Contracts with Customers and Our Other Sources of Revenues (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Disaggregation of Revenue | ||||
Revenues from contracts with customers: | $ 305,342 | $ 462,092 | $ 977,409 | $ 1,299,053 |
Revenues | 435,924 | 586,634 | 1,303,572 | 1,585,768 |
Gains from mortgage banking activities/originations, net | ||||
Disaggregation of Revenue | ||||
Other sources of revenue: | 91,192 | 72,332 | 210,686 | 148,769 |
Servicing fees and other | ||||
Disaggregation of Revenue | ||||
Other sources of revenue: | 39,390 | 52,210 | 115,477 | 137,946 |
Leasing and other commissions | ||||
Disaggregation of Revenue | ||||
Revenues from contracts with customers: | 114,947 | 213,242 | 375,465 | 603,094 |
Revenues | 114,947 | 213,242 | 375,465 | 603,094 |
Capital markets commissions | ||||
Disaggregation of Revenue | ||||
Revenues from contracts with customers: | 82,956 | 144,666 | 263,838 | 376,213 |
Management services | ||||
Disaggregation of Revenue | ||||
Revenues from contracts with customers: | $ 107,439 | $ 104,184 | $ 338,106 | $ 319,746 |
Revenues from Contracts with _4
Revenues from Contracts with Customers - Additional Information (Detail) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |||
Deferred revenue | $ 1.9 | $ 4.2 | |
Deferred revenue, revenue recognized | $ 2.3 | $ 1.2 |
Gains from Mortgage Banking A_3
Gains from Mortgage Banking Activities/Originations, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Mortgage Banking [Abstract] | ||||
Fair value of expected net future cash flows from servicing recognized at commitment, net | $ 60,948 | $ 37,424 | $ 132,423 | $ 78,657 |
Loan originations related fees and sales premiums, net | 30,244 | 34,908 | 78,263 | 70,112 |
Total | $ 91,192 | $ 72,332 | $ 210,686 | $ 148,769 |
Mortgage Servicing Rights, Ne_2
Mortgage Servicing Rights, Net - Summary of Changes in the Carrying Amount of Mortgage Servicing Rights (Detail) - Mortgage Servicing Rights - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Mortgage Servicing Rights | ||||
Beginning Balance | $ 460,473 | $ 413,425 | $ 432,666 | $ 416,131 |
Additions | 53,006 | 35,186 | 126,571 | 73,873 |
Purchases from an affiliate | 0 | 123 | 200 | 845 |
Amortization | (24,901) | (22,503) | (70,859) | (64,618) |
Ending Balance | 488,578 | 426,231 | 488,578 | 426,231 |
Valuation Allowance | ||||
Beginning Balance | (37,241) | (12,642) | (19,022) | (4,322) |
Decrease (increase) | 1,850 | (7,380) | (16,369) | (15,700) |
Ending Balance | (35,391) | (20,022) | (35,391) | (20,022) |
Net Balance | $ 453,187 | $ 406,209 | $ 453,187 | $ 406,209 |
Mortgage Servicing Rights, Ne_3
Mortgage Servicing Rights, Net - Schedule of Servicing Fees and Escrow Interest (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Transfers and Servicing [Abstract] | ||||
Servicing fees | $ 29,432 | $ 26,526 | $ 84,347 | $ 78,134 |
Escrow interest and placement fees | 876 | 6,518 | 4,995 | 17,505 |
Ancillary fees | 2,060 | 3,955 | 5,584 | 11,270 |
Total servicing fees and escrow interest | $ 32,368 | $ 36,999 | $ 94,926 | $ 106,909 |
Mortgage Servicing Rights, Ne_4
Mortgage Servicing Rights, Net - Additional Information (Detail) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Mortgage Servicing Rights | ||
Primary servicing portfolio | $ 64,600 | $ 59,900 |
Special servicing portfolio | 2,300 | 2,400 |
Discount Rate One | ||
Mortgage Servicing Rights | ||
Decrease in fair value of servicing rights | 13.2 | 11.9 |
Discount Rate Two | ||
Mortgage Servicing Rights | ||
Decrease in fair value of servicing rights | $ 25.7 | $ 23.3 |
Minimum | ||
Mortgage Servicing Rights | ||
Discount rates used in measuring fair value (in percentage) | 6.10% | 6.10% |
Minimum | Discount Rate One | ||
Mortgage Servicing Rights | ||
Increase in discount rate (in percentage) | 1.00% | 1.00% |
Maximum | ||
Mortgage Servicing Rights | ||
Discount rates used in measuring fair value (in percentage) | 13.50% | 13.50% |
Maximum | Discount Rate Two | ||
Mortgage Servicing Rights | ||
Increase in discount rate (in percentage) | 2.00% | 2.00% |
Mortgage Servicing Rights | ||
Mortgage Servicing Rights | ||
Estimated fair value of MSRs | $ 482.4 | $ 441.7 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets, Net - Summary of Changes in Carrying Amount of Goodwill (Detail) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Goodwill | ||
Beginning balance | $ 557,914 | $ 515,321 |
Acquisitions | 6,294 | 43,804 |
Measurement period adjustments | (3,380) | (1,211) |
Ending balance | $ 559,935 | $ 557,914 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets, Net - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Goodwill impairment loss | $ 0 | ||||
Intangible amortization expense | $ 1,700,000 | $ 2,800,000 | $ 5,100,000 | $ 5,400,000 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets, Net - Components of Other Intangible Assets (Detail) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Schedule of Acquired Finite And Indefinite Lived Intangible Asset By Major Class | ||
Definite life, accumulated amortization | $ (24,707) | $ (22,214) |
Definite life, weighted- average remaining life (Years) | 5 years 1 month 6 days | 4 years 10 months 24 days |
Gross amount | $ 71,261 | $ 67,440 |
Definite life, accumulated amortization | (24,707) | (22,214) |
Net carrying amount | 46,554 | 45,226 |
Trademark and trade names | ||
Schedule of Acquired Finite And Indefinite Lived Intangible Asset By Major Class | ||
Definite life, gross amount | 8,449 | 10,511 |
Definite life, accumulated amortization | (7,096) | (9,070) |
Definite life, net carrying amount | $ 1,353 | $ 1,441 |
Definite life, weighted- average remaining life (Years) | 1 month 6 days | 1 month 6 days |
Definite life, accumulated amortization | $ (7,096) | $ (9,070) |
Non-contractual customers | ||
Schedule of Acquired Finite And Indefinite Lived Intangible Asset By Major Class | ||
Definite life, gross amount | 30,131 | 24,262 |
Definite life, accumulated amortization | (8,825) | (6,109) |
Definite life, net carrying amount | $ 21,306 | $ 18,153 |
Definite life, weighted- average remaining life (Years) | 7 years | 7 years 4 months 24 days |
Definite life, accumulated amortization | $ (8,825) | $ (6,109) |
Licensing agreements | ||
Schedule of Acquired Finite And Indefinite Lived Intangible Asset By Major Class | ||
Definite life, gross amount | 4,981 | 4,981 |
Definite life, accumulated amortization | (4,022) | (3,288) |
Definite life, net carrying amount | $ 959 | $ 1,693 |
Definite life, weighted- average remaining life (Years) | 0 years | 1 month 6 days |
Definite life, accumulated amortization | $ (4,022) | $ (3,288) |
Non-compete agreements | ||
Schedule of Acquired Finite And Indefinite Lived Intangible Asset By Major Class | ||
Definite life, gross amount | 6,982 | 6,953 |
Definite life, accumulated amortization | (3,095) | (2,434) |
Definite life, net carrying amount | $ 3,887 | $ 4,519 |
Definite life, weighted- average remaining life (Years) | 7 months 6 days | 9 months 18 days |
Definite life, accumulated amortization | $ (3,095) | $ (2,434) |
Contractual customers | ||
Schedule of Acquired Finite And Indefinite Lived Intangible Asset By Major Class | ||
Definite life, gross amount | 3,052 | 3,052 |
Definite life, accumulated amortization | (1,482) | (1,177) |
Definite life, net carrying amount | $ 1,570 | $ 1,875 |
Definite life, weighted- average remaining life (Years) | 4 months 24 days | 6 months |
Definite life, accumulated amortization | $ (1,482) | $ (1,177) |
Below market leases | ||
Schedule of Acquired Finite And Indefinite Lived Intangible Asset By Major Class | ||
Definite life, gross amount | 926 | 941 |
Definite life, accumulated amortization | (187) | (136) |
Definite life, net carrying amount | $ 739 | $ 805 |
Definite life, weighted- average remaining life (Years) | 2 months 12 days | 3 months 18 days |
Definite life, accumulated amortization | $ (187) | $ (136) |
Trademark and trade names | ||
Schedule of Acquired Finite And Indefinite Lived Intangible Asset By Major Class | ||
Indefinite life, intangible assets | 11,350 | 11,350 |
Licensing agreements | ||
Schedule of Acquired Finite And Indefinite Lived Intangible Asset By Major Class | ||
Indefinite life, intangible assets | $ 5,390 | $ 5,390 |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets, Net - Schedule of Estimated Future Amortization of Definite Life Intangible Assets (Detail) $ in Thousands | Sep. 30, 2020USD ($) |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity | |
2020 | $ 1,689 |
2021 | 5,746 |
2022 | 3,706 |
2023 | 3,348 |
2024 | 2,793 |
Thereafter | 12,532 |
Total | $ 29,814 |
Fixed Assets, Net - Components
Fixed Assets, Net - Components of Fixed Assets, Net (Detail) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment | ||
Fixed assets, gross | $ 184,953 | $ 170,773 |
Accumulated depreciation and amortization | (82,937) | (72,757) |
Fixed assets, net | 102,016 | 98,016 |
Leasehold improvements and other fixed assets | ||
Property, Plant and Equipment | ||
Fixed assets, gross | 129,244 | 119,682 |
Software, including software development costs | ||
Property, Plant and Equipment | ||
Fixed assets, gross | 29,953 | 28,063 |
Computer and communications equipment | ||
Property, Plant and Equipment | ||
Fixed assets, gross | $ 25,756 | $ 23,028 |
Fixed Assets, Net - Additional
Fixed Assets, Net - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Property, Plant and Equipment | ||||
Depreciation expense | $ 5,300,000 | $ 4,400,000 | $ 13,600,000 | $ 13,700,000 |
Impairment charges | 0 | 0 | ||
Software development costs capitalized | 500,000 | 600,000 | 2,600,000 | 2,900,000 |
Amortization of software development costs | 300,000 | $ 600,000 | 900,000 | $ 1,800,000 |
Software, including software development costs | ||||
Property, Plant and Equipment | ||||
Impairment charges | $ 1,100,000 | $ 1,400,000 |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Lessee, Lease, Description | |||||
Remaining lease terms | 12 years | 12 years | |||
Operating lease costs | $ 12,600 | $ 12,100 | $ 37,600 | $ 34,700 | |
Operating lease payments | 36,400 | 32,900 | |||
Short-term lease expense | 200 | 700 | 700 | 2,000 | |
Sublease income | $ 400 | 800 | $ 200 | 600 | |
Weighted average discount rate (in percentage) | 7.21% | 7.21% | 7.21% | ||
Weighted average lease term | 8 years 4 months 24 days | 8 years 4 months 24 days | 8 years 9 months 18 days | ||
Right-of-use assets | $ 191,705 | $ 191,705 | $ 201,661 | ||
Right-of-use liabilities | 28,645 | 28,645 | 27,184 | ||
Right-of-use liabilities, non-current | 216,993 | 216,993 | $ 227,942 | ||
Rent expense, under 842 | $ 12,300 | $ 13,000 | $ 37,300 | $ 36,700 | |
Minimum | |||||
Lessee, Lease, Description | |||||
Remaining lease terms | 1 year | 1 year | |||
Options to extend leases | 5 years | 5 years | |||
Maximum | |||||
Lessee, Lease, Description | |||||
Options to extend leases | 10 years | 10 years |
Leases - Schedule of Lease Paym
Leases - Schedule of Lease Payments (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Lessee, Operating Lease, Liability, Payment, Due | ||
2020 | $ 11,826 | $ 44,709 |
2021 | 45,205 | 42,612 |
2022 | 41,059 | 39,812 |
2023 | 39,676 | 38,210 |
2024 | 37,068 | 35,602 |
Thereafter | 155,102 | 146,463 |
Total lease payments | 329,936 | 347,408 |
Less: Interest | 84,297 | 92,282 |
Present value of lease liability | $ 245,639 | $ 255,126 |
Other Current Assets and Othe_3
Other Current Assets and Other Assets - Summary of Other Current Assets (Detail) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Other Assets [Abstract] | ||
Derivative assets | $ 55,491 | $ 51,021 |
Prepaid expenses | 16,155 | 15,251 |
Other taxes | 13,933 | 22,483 |
Rent and other deposits | 1,507 | 1,703 |
Other | 1,717 | 736 |
Total other current assets | $ 88,803 | $ 91,194 |
Other Current Assets and Othe_4
Other Current Assets and Other Assets - Summary of Other Assets (Detail) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Other Assets [Abstract] | ||
Deferred tax assets | $ 190,617 | $ 182,781 |
Equity method investment | 88,315 | 99,966 |
Non-marketable investments | 67,275 | 94,113 |
Derivative assets | 18,654 | 21,905 |
Other | 14,824 | 9,133 |
Total other non-current assets | $ 379,685 | $ 407,898 |
Securities Loaned (Details)
Securities Loaned (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Debt Instrument | ||
Securities loaned | $ 0 | $ 36,735,000 |
Cantor | ||
Debt Instrument | ||
Securities loaned | $ 0 | 36,700,000 |
Securities loaned, fair value | $ 36,800,000 |
Warehouse Facilities Collater_3
Warehouse Facilities Collateralized by U.S. Government Sponsored Enterprises (Details) - USD ($) | 2 Months Ended | 9 Months Ended | ||
Oct. 31, 2020 | Oct. 27, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | |
Securities Financing Transaction | ||||
Warehouse facilities collateralized by U.S. Government Sponsored Enterprises | $ 1,510,333,000 | $ 209,648,000 | ||
Outstanding draws | 1,510,333,000 | 209,648,000 | ||
Committed Lines | ||||
Securities Financing Transaction | ||||
Lines available | 2,350,000,000 | |||
Committed Lines | Subsequent Event | ||||
Securities Financing Transaction | ||||
Warehouse credit facility increase (decrease) | $ 500,000,000 | $ 600,000,000 | ||
Uncommitted Lines | ||||
Securities Financing Transaction | ||||
Lines available | 400,000,000 | |||
Warehouse facility due October 9, 2020 | ||||
Securities Financing Transaction | ||||
Warehouse facilities collateralized by U.S. Government Sponsored Enterprises | 993,200,000 | 34,125,000 | ||
Outstanding draws | $ 993,200,000 | 34,125,000 | ||
Warehouse facility due October 9, 2020 | LIBOR | Minimum | ||||
Securities Financing Transaction | ||||
Basis spread on variable rate (in percentage) | 1.15% | |||
Warehouse facility due October 9, 2020 | LIBOR | Maximum | ||||
Securities Financing Transaction | ||||
Basis spread on variable rate (in percentage) | 1.40% | |||
Warehouse facility due October 9, 2020 | Committed Lines | ||||
Securities Financing Transaction | ||||
Lines available | $ 1,500,000,000 | |||
Warehouse facility due June 16, 2021 | ||||
Securities Financing Transaction | ||||
Warehouse facilities collateralized by U.S. Government Sponsored Enterprises | 273,088,000 | 16,759,000 | ||
Outstanding draws | $ 273,088,000 | 16,759,000 | ||
Warehouse facility due June 16, 2021 | LIBOR | Minimum | ||||
Securities Financing Transaction | ||||
Basis spread on variable rate (in percentage) | 1.15% | |||
Warehouse facility due June 16, 2021 | LIBOR | Maximum | ||||
Securities Financing Transaction | ||||
Basis spread on variable rate (in percentage) | 1.40% | |||
Warehouse facility due June 16, 2021 | Committed Lines | ||||
Securities Financing Transaction | ||||
Lines available | $ 450,000,000 | |||
Warehouse facility due September 25, 2021 | ||||
Securities Financing Transaction | ||||
Warehouse facilities collateralized by U.S. Government Sponsored Enterprises | 164,590,000 | 8,097,000 | ||
Outstanding draws | $ 164,590,000 | 8,097,000 | ||
Warehouse facility due September 25, 2021 | LIBOR | Minimum | ||||
Securities Financing Transaction | ||||
Basis spread on variable rate (in percentage) | 1.15% | |||
Warehouse facility due September 25, 2021 | LIBOR | Maximum | ||||
Securities Financing Transaction | ||||
Basis spread on variable rate (in percentage) | 1.40% | |||
Warehouse facility due September 25, 2021 | Committed Lines | ||||
Securities Financing Transaction | ||||
Lines available | $ 400,000,000 | |||
Warehouse facility due June 16, 2021, sublimit | Committed Lines | ||||
Securities Financing Transaction | ||||
Lines available | 125,000,000 | |||
Warehouse facilities collateralized by U.S. Government Sponsored Enterprises | 0 | |||
Outstanding draws | $ 0 | |||
Warehouse facility due June 16, 2021, sublimit | Committed Lines | LIBOR | ||||
Securities Financing Transaction | ||||
Basis spread on variable rate (in percentage) | 2.00% | |||
Fannie Mae repurchase agreement, open maturity | ||||
Securities Financing Transaction | ||||
Warehouse facilities collateralized by U.S. Government Sponsored Enterprises | $ 79,455,000 | 150,667,000 | ||
Outstanding draws | $ 79,455,000 | $ 150,667,000 | ||
Fannie Mae repurchase agreement, open maturity | LIBOR | ||||
Securities Financing Transaction | ||||
Basis spread on variable rate (in percentage) | 1.05% | |||
Fannie Mae repurchase agreement, open maturity | Uncommitted Lines | ||||
Securities Financing Transaction | ||||
Lines available | $ 400,000,000 |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Jun. 16, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Nov. 06, 2018 |
Debt Instrument | |||||
Long-term debt | $ 879,504 | $ 589,294 | |||
Senior Notes | 6.125% Senior Notes | |||||
Debt Instrument | |||||
Long-term debt | $ 542,166 | 540,377 | |||
Stated interest rate (in percentage) | 6.125% | 6.125% | 6.125% | ||
Line of Credit | Revolving Credit Facility | |||||
Debt Instrument | |||||
Long-term debt | $ 337,338 | $ 48,917 | |||
Stated interest rate (in percentage) | 1.91% | 4.41% |
Long-Term Debt - Senior Notes N
Long-Term Debt - Senior Notes Narratives (Details) - Senior Notes - 6.125% Senior Notes - USD ($) | Sep. 30, 2020 | Jun. 16, 2020 | Nov. 06, 2018 | Nov. 01, 2018 |
Debt Instrument | ||||
Stated interest rate (in percentage) | 6.125% | 6.125% | 6.125% | |
Debt instrument face amount | $ 550,000,000 | |||
Debt price level (in percentage) | 98.937% | |||
Debt instrument yield (in percentage) | 6.375% |
Long-Term Debt - Debt Repurchas
Long-Term Debt - Debt Repurchase Program Narratives (Details) - USD ($) | Sep. 30, 2020 | Jun. 16, 2020 | Nov. 06, 2018 |
Equity, Class of Treasury Stock | |||
Remaining from debt repurchase authorization | $ 50,000,000 | ||
6.125% Senior Notes | Senior Notes | |||
Equity, Class of Treasury Stock | |||
Authorized debt repurchase program (up to) | $ 50,000,000 | ||
Stated interest rate (in percentage) | 6.125% | 6.125% | 6.125% |
Long-Term Debt - Senior Notes C
Long-Term Debt - Senior Notes Carrying Amount (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Details for the Senior Notes | ||
Total | $ 879,504 | $ 589,294 |
Senior Notes | 6.125% Senior Notes | ||
Details for the Senior Notes | ||
Principal balance | 550,000 | 550,000 |
Less: Debt issue cost | 4,009 | 4,972 |
Less: debt discount | 3,825 | 4,651 |
Total | $ 542,166 | $ 540,377 |
Long-Term Debt - Senior Notes_2
Long-Term Debt - Senior Notes Net Interest Expense (Details) - Senior Notes - 6.125% Senior Notes - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Interest Expense and Amortization of Debt Issue Costs | ||||
Interest expense | $ 8,702 | $ 8,684 | $ 26,092 | $ 26,041 |
Debt issue cost amortization | 321 | 321 | 963 | 961 |
Debt discount amortization | 275 | 263 | 737 | 775 |
Total | $ 9,298 | $ 9,268 | $ 27,792 | $ 27,777 |
Long-Term Debt - Credit Facilit
Long-Term Debt - Credit Facility Narratives (Details) - USD ($) | Oct. 14, 2020 | Mar. 16, 2020 | Feb. 26, 2020 | Nov. 28, 2018 | Sep. 30, 2020 | Sep. 30, 2019 |
Line of Credit Facility | ||||||
Proceeds from warehouse facilities | $ 8,285,891,000 | $ 7,511,234,000 | ||||
Repayments of Lines of Credit | 6,985,205,000 | $ 7,802,761,000 | ||||
Line of Credit | Revolving Credit Facility | ||||||
Line of Credit Facility | ||||||
Maximum revolving credit | $ 465,000,000 | $ 425,000,000 | $ 250,000,000 | |||
Long-term debt term | 3 years | |||||
Proceeds from warehouse facilities | 365,000,000 | |||||
Repayments of Lines of Credit | $ 75,000,000 | |||||
Stated interest rate (in percentage) | 1.91% | 4.41% | ||||
Line of Credit | Revolving Credit Facility | Subsequent Event | ||||||
Line of Credit Facility | ||||||
Repayments of Lines of Credit | $ 100,000,000 | |||||
LIBOR | Line of Credit | Revolving Credit Facility | ||||||
Line of Credit Facility | ||||||
Basis spread on variable rate (in percentage) | 1.75% | 1.75% | ||||
Interest Rate Option One | LIBOR | Line of Credit | Revolving Credit Facility | ||||||
Line of Credit Facility | ||||||
Basis spread on variable rate (in percentage) | 1.00% | |||||
Interest Rate Option Two | Federal Funds Rate | Line of Credit | Revolving Credit Facility | ||||||
Line of Credit Facility | ||||||
Basis spread on variable rate (in percentage) | 0.50% | |||||
Interest Rate Option Two | One-month LIBOR | Line of Credit | Revolving Credit Facility | ||||||
Line of Credit Facility | ||||||
Basis spread on variable rate (in percentage) | 1.00% | |||||
Interest Rate Option Two | LIBOR | Line of Credit | Revolving Credit Facility | ||||||
Line of Credit Facility | ||||||
Basis spread on variable rate (in percentage) | 2.00% | |||||
Minimum | Interest Rate Option One | LIBOR | Line of Credit | Revolving Credit Facility | ||||||
Line of Credit Facility | ||||||
Basis spread on variable rate (in percentage) | 0.25% | |||||
Minimum | Interest Rate Option Two | LIBOR | Line of Credit | Revolving Credit Facility | ||||||
Line of Credit Facility | ||||||
Basis spread on variable rate (in percentage) | 1.25% | |||||
Maximum | Interest Rate Option One | LIBOR | Line of Credit | Revolving Credit Facility | ||||||
Line of Credit Facility | ||||||
Basis spread on variable rate (in percentage) | 1.25% | |||||
Maximum | Interest Rate Option Two | LIBOR | Line of Credit | Revolving Credit Facility | ||||||
Line of Credit Facility | ||||||
Basis spread on variable rate (in percentage) | 2.25% | |||||
Weighted Average | Line of Credit | Revolving Credit Facility | ||||||
Line of Credit Facility | ||||||
Interest rate in the period (in percentage) | 2.53% | 4.41% |
Long-Term Debt - Credit Facil_2
Long-Term Debt - Credit Facility Net (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Details for the Credit Facility | ||
Total | $ 879,504 | $ 589,294 |
Revolving Credit Facility | Line of Credit | ||
Details for the Credit Facility | ||
Principal balance | 340,000 | 50,000 |
Less: Debt issue cost | 2,662 | 1,083 |
Total | $ 337,338 | $ 48,917 |
Long-Term Debt - Credit Facil_3
Long-Term Debt - Credit Facility Net Interest Expense (Details) - Revolving Credit Facility - Line of Credit - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Interest Expense and Amortization of Debt Issue Costs | ||||
Interest expense | $ 1,805 | $ 552 | $ 5,504 | $ 1,267 |
Debt issue cost amortization | 275 | 141 | 737 | 424 |
Unused facility fee | 63 | 153 | 203 | 481 |
Total | $ 2,143 | $ 846 | $ 6,444 | $ 2,172 |
Financial Guarantee Liability -
Financial Guarantee Liability - Additional Information (Detail) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2020USD ($)loan | Sep. 30, 2020USD ($)loan | Dec. 31, 2019USD ($) | |
Guarantor Obligations | |||
Outstanding loan balances | $ 22,700,000,000 | $ 22,700,000,000 | $ 20,200,000,000 |
Maximum loss potential | 6,700,000,000 | 6,700,000,000 | 5,800,000,000 |
Portion covered by Credit Enhancement Agreement | 9,600,000 | 9,600,000 | $ 9,800,000 |
Provision for expected credit losses | 0 | 14,702,000 | |
Delinquent | |||
Guarantor Obligations | |||
Outstanding loan balances | 53,500,000 | 53,500,000 | |
Maximum loss potential | $ 17,800,000 | $ 17,800,000 | |
Number of loans (loans) | loan | 4 | 4 | |
Liquidation value of loans outstanding | $ 41,700,000 | $ 41,700,000 | |
Potential loss on liquidation of loan | $ 6,000,000 | ||
Fannie Mae DUS or Freddie TAH Loans | Maximum | |||
Guarantor Obligations | |||
Percentage of contingent liability of actual losses incurred on outstanding loans (in percentage) | 33.00% |
Financial Guarantee Liability_2
Financial Guarantee Liability - Summary of Changes on Estimated Liability Under Guarantee Liability (Detail) - USD ($) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2020 | Sep. 30, 2020 | |
Guaranty LIability: | ||
Beginning balance | $ 15,000 | |
Provision for expected credit losses | $ 0 | 14,702,000 |
Ending balance | $ 32,652,000 | 32,652,000 |
Adjustments | ||
Guaranty LIability: | ||
Beginning balance | 17,900,000 | |
Adjusted Balance | ||
Guaranty LIability: | ||
Beginning balance | $ 17,950,000 |
Concentrations of Credit Risk (
Concentrations of Credit Risk (Details) - Fannie Mae DUS and Freddie Mac TAH Loans - Liabilities - Credit Concentration Risk - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Concentration Risk | ||
Maximum pre-credit enhancement loss exposure | $ 6,700,000,000 | $ 5,800,000,000 |
California | ||
Concentration Risk | ||
Concentration risk percentage (in percentage) | 22.00% | 21.00% |
Texas | ||
Concentration Risk | ||
Concentration risk percentage (in percentage) | 14.00% | 16.00% |
Escrow and Custodial Funds (Det
Escrow and Custodial Funds (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Deposit Assets Disclosure [Abstract] | ||
Escrow funds amount | $ 1,300 | $ 925 |
Fair Value of Financial Asset_3
Fair Value of Financial Assets and Liabilities - Fair Value Hierarchy of Financial Assets and Liabilities under U.S. GAAP Guidance (Detail) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Assets: | ||
Marketable securities | $ 121,759 | $ 36,795 |
Loans held for sale, at fair value | 1,537,734 | 215,290 |
Total assets | 1,733,638 | 325,011 |
Liabilities: | ||
Contingent consideration | 31,575 | 45,172 |
Total Liabilities | 74,438 | 70,833 |
Nasdaq Forwards | ||
Assets: | ||
Derivative asset | 18,959 | 26,502 |
Rate lock commitments | ||
Assets: | ||
Derivative asset | 45,561 | 32,035 |
Liabilities: | ||
Derivative liability | 1,133 | 12,124 |
Forward sale contracts | ||
Assets: | ||
Derivative asset | 9,625 | 14,389 |
Liabilities: | ||
Derivative liability | 41,730 | 13,537 |
Level 1 | ||
Assets: | ||
Marketable securities | 121,759 | 36,795 |
Loans held for sale, at fair value | 0 | 0 |
Total assets | 121,759 | 36,795 |
Liabilities: | ||
Contingent consideration | 0 | 0 |
Total Liabilities | 0 | 0 |
Level 1 | Nasdaq Forwards | ||
Assets: | ||
Derivative asset | 0 | 0 |
Level 1 | Rate lock commitments | ||
Assets: | ||
Derivative asset | 0 | 0 |
Liabilities: | ||
Derivative liability | 0 | 0 |
Level 1 | Forward sale contracts | ||
Assets: | ||
Derivative asset | 0 | 0 |
Liabilities: | ||
Derivative liability | 0 | 0 |
Level 2 | ||
Assets: | ||
Marketable securities | 0 | 0 |
Loans held for sale, at fair value | 1,537,734 | 215,290 |
Total assets | 1,537,734 | 215,290 |
Liabilities: | ||
Contingent consideration | 0 | 0 |
Total Liabilities | 0 | 0 |
Level 2 | Nasdaq Forwards | ||
Assets: | ||
Derivative asset | 0 | 0 |
Level 2 | Rate lock commitments | ||
Assets: | ||
Derivative asset | 0 | 0 |
Liabilities: | ||
Derivative liability | 0 | 0 |
Level 2 | Forward sale contracts | ||
Assets: | ||
Derivative asset | 0 | 0 |
Liabilities: | ||
Derivative liability | 0 | 0 |
Level 3 | ||
Assets: | ||
Marketable securities | 0 | 0 |
Loans held for sale, at fair value | 0 | 0 |
Total assets | 74,145 | 72,926 |
Liabilities: | ||
Contingent consideration | 31,575 | 45,172 |
Total Liabilities | 74,438 | 70,833 |
Level 3 | Nasdaq Forwards | ||
Assets: | ||
Derivative asset | 18,959 | 26,502 |
Level 3 | Rate lock commitments | ||
Assets: | ||
Derivative asset | 45,561 | 32,035 |
Liabilities: | ||
Derivative liability | 1,133 | 12,124 |
Level 3 | Forward sale contracts | ||
Assets: | ||
Derivative asset | 9,625 | 14,389 |
Liabilities: | ||
Derivative liability | $ 41,730 | $ 13,537 |
Fair Value of Financial Asset_4
Fair Value of Financial Assets and Liabilities - Changes in Level 3 Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Assets, Unobservable Input Reconciliation: | ||
Opening Balance | $ 72,926 | $ 92,528 |
Total realized and unrealized gains (losses) included in Net income (loss) | 47,643 | (4,693) |
Issuances | 0 | 0 |
Settlements | (46,424) | (14,909) |
Closing Balance | 74,145 | 72,926 |
Unrealized gains (losses) outstanding, at end of period | 74,145 | 72,926 |
Liabilities, Unobservable Input Reconciliation: | ||
Opening Balance | 70,833 | 49,229 |
Total realized and unrealized (gains) losses included in Net income (loss) | 30,829 | 27,948 |
Issuances | 2,221 | 14,957 |
Settlements | (29,445) | (21,301) |
Closing Balance | 74,438 | 70,833 |
Unrealized (gains) losses outstanding, at end of period | 43,008 | 27,948 |
Rate lock commitments | ||
Assets, Unobservable Input Reconciliation: | ||
Opening Balance | 32,035 | 6,732 |
Total realized and unrealized gains (losses) included in Net income (loss) | 45,561 | 32,035 |
Issuances | 0 | 0 |
Settlements | (32,035) | (6,732) |
Closing Balance | 45,561 | 32,035 |
Unrealized gains (losses) outstanding, at end of period | 45,561 | 32,035 |
Liabilities, Unobservable Input Reconciliation: | ||
Opening Balance | 12,124 | 7,470 |
Total realized and unrealized (gains) losses included in Net income (loss) | 1,133 | 12,124 |
Issuances | 0 | 0 |
Settlements | (12,124) | (7,470) |
Closing Balance | 1,133 | 12,124 |
Unrealized (gains) losses outstanding, at end of period | 1,133 | 12,124 |
Contingent consideration | ||
Liabilities, Unobservable Input Reconciliation: | ||
Opening Balance | 45,172 | 32,551 |
Total realized and unrealized (gains) losses included in Net income (loss) | (12,034) | 2,287 |
Issuances | 2,221 | 14,957 |
Settlements | (3,784) | (4,623) |
Closing Balance | 31,575 | 45,172 |
Unrealized (gains) losses outstanding, at end of period | 145 | 2,287 |
Forward sale contracts | ||
Assets, Unobservable Input Reconciliation: | ||
Opening Balance | 14,389 | 8,177 |
Total realized and unrealized gains (losses) included in Net income (loss) | 9,625 | 14,389 |
Issuances | 0 | 0 |
Settlements | (14,389) | (8,177) |
Closing Balance | 9,625 | 14,389 |
Unrealized gains (losses) outstanding, at end of period | 9,625 | 14,389 |
Liabilities, Unobservable Input Reconciliation: | ||
Opening Balance | 13,537 | 9,208 |
Total realized and unrealized (gains) losses included in Net income (loss) | 41,730 | 13,537 |
Issuances | 0 | 0 |
Settlements | (13,537) | (9,208) |
Closing Balance | 41,730 | 13,537 |
Unrealized (gains) losses outstanding, at end of period | 41,730 | 13,537 |
Nasdaq Forwards | ||
Assets, Unobservable Input Reconciliation: | ||
Opening Balance | 26,502 | 77,619 |
Total realized and unrealized gains (losses) included in Net income (loss) | (7,543) | (51,117) |
Issuances | 0 | 0 |
Settlements | 0 | 0 |
Closing Balance | 18,959 | 26,502 |
Unrealized gains (losses) outstanding, at end of period | $ 18,959 | $ 26,502 |
Fair Value of Financial Asset_5
Fair Value of Financial Assets and Liabilities - Quantitative Information about Level 3 Fair Value Measurements (Detail) $ in Thousands | Sep. 30, 2020USD ($) | Dec. 31, 2019USD ($) |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Assets | $ 74,145 | $ 72,926 |
Liabilities | $ 42,863 | 25,661 |
Minimum | Probability of meeting earnout and contingencies | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Contingent consideration liability, measurement input | 0 | |
Maximum | Probability of meeting earnout and contingencies | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Contingent consideration liability, measurement input | 1 | |
Weighted Average | Probability of meeting earnout and contingencies | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Contingent consideration liability, measurement input | 0.985 | |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Contingency consideration liability | $ 31,575 | $ 45,172 |
Level 3 | Minimum | Discount rate | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Contingent consideration liability, measurement input | 0.003 | 0.003 |
Level 3 | Minimum | Probability of meeting earnout and contingencies | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Contingent consideration liability, measurement input | 0.90 | |
Level 3 | Maximum | Discount rate | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Contingent consideration liability, measurement input | 0.104 | 0.104 |
Level 3 | Maximum | Probability of meeting earnout and contingencies | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Contingent consideration liability, measurement input | 1 | |
Level 3 | Weighted Average | Discount rate | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Contingent consideration liability, measurement input | 0.073 | 0.086 |
Level 3 | Weighted Average | Probability of meeting earnout and contingencies | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Contingent consideration liability, measurement input | 0.981 | |
Level 3 | Nasdaq Forwards | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Assets | $ 18,959 | $ 26,502 |
Level 3 | Nasdaq Forwards | Minimum | Volatility | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Contingent consideration liability, measurement input | 0.257 | |
Derivative asset, measurement input | 0.379 | |
Level 3 | Nasdaq Forwards | Maximum | Volatility | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Contingent consideration liability, measurement input | 0.348 | |
Derivative asset, measurement input | 0.422 | |
Level 3 | Nasdaq Forwards | Weighted Average | Volatility | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Contingent consideration liability, measurement input | 0.322 | |
Derivative asset, measurement input | 0.419 | |
Level 3 | Forward Sale Contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Assets | $ 9,625 | $ 14,389 |
Liabilities | 41,730 | 13,537 |
Level 3 | Rate lock commitments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Assets | 45,561 | 32,035 |
Liabilities | $ 1,133 | $ 12,124 |
Fair Value of Financial Asset_6
Fair Value of Financial Assets and Liabilities - Additional Information (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Fair Value, Measurements, Nonrecurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Alternative investment | $ 67,300 | $ 94,100 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Contingency consideration liability | 31,575 | 45,172 |
Undiscounted value of payments, assuming that all contingencies are met | $ 60,600 | $ 66,400 |
Related Party Transactions - Se
Related Party Transactions - Service Agreements and Loans (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Related Party Transaction | |||||
Fees to related parties | $ 6,109 | $ 7,088 | $ 17,126 | $ 21,035 | |
Loans, forgivable loans and other receivables from employees and partners, net | 479,792 | 479,792 | $ 403,710 | ||
Compensation and employee benefits | 304,677 | 397,683 | 859,228 | 1,030,997 | |
Employee Loans | |||||
Related Party Transaction | |||||
Loans, forgivable loans and other receivables from employees and partners, net | 479,800 | 479,800 | $ 403,700 | ||
Compensation and employee benefits | 18,300 | 13,200 | 50,200 | 31,700 | |
Cantor Fitzgerald Limited Partnership And B G C Partners Incorporation | |||||
Related Party Transaction | |||||
Fees to related parties | $ 6,100 | $ 7,100 | $ 17,100 | $ 21,000 |
Related Party Transactions - Tr
Related Party Transactions - Transfer of Employees to Newmark and Other Related Party Transactions (Details) shares in Millions | May 01, 2018USD ($)Employee | Feb. 28, 2019USD ($) | Oct. 31, 2018USD ($) | Sep. 30, 2020USD ($)shares | Jul. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Dec. 31, 2018USD ($) |
Related Party Transaction | ||||||||
Stockholders equity | $ 648,756,000 | $ 599,664,000 | ||||||
Redeemable partnership interests | 22,608,000 | 21,517,000 | $ 21,517,000 | $ 26,170,000 | ||||
Payables to related parties | $ 5,185,000 | 38,090,000 | ||||||
Newmark Holdings, L.P. | ||||||||
Related Party Transaction | ||||||||
Limited partnership units exchange ratio (in percentage) | 0.4545 | |||||||
CCRE | ||||||||
Related Party Transaction | ||||||||
Number of employees transferred | Employee | 5 | |||||||
Proceeds from limited partnership units | $ 6,900,000 | |||||||
Stockholders equity | $ 6,900,000 | |||||||
Redeemable partnership interests | $ 2,200,000 | |||||||
Maximum revenue share to related party in first two years | $ 3,300,000 | |||||||
Payables to related parties | $ 3,300,000 | $ 2,600,000 | ||||||
CCRE | Newmark Holdings, L.P. | ||||||||
Related Party Transaction | ||||||||
Proceeds from issuance of EPUs | 6,700,000 | |||||||
Limited partnership unit cash distributions | $ 200,000 | |||||||
Issuance of additional limited partners units in exchange (in shares) | shares | 2.2 | |||||||
Issuance of additional limited partners units in exchange for cash payment | $ 500,000 | |||||||
Issuance of additional limited partnership units with capital account | $ 2,200,000 | |||||||
Cantor Fitzgerald Limited Partnership And B G C Partners Incorporation | Government Sponsored Enterprise Loans | ||||||||
Related Party Transaction | ||||||||
Maximum amount per loan | $ 100,000,000 | |||||||
Limit on loans that have not yet been acquired or sold | 250,000,000 | |||||||
Limit on loans outstanding | $ 250,000,000 |
Related Party Transactions - _2
Related Party Transactions - Transactions with CCRE (Details) - USD ($) | Aug. 16, 2019 | Jul. 22, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
Related Party Transaction | ||||||
Purchase of mortgage servicing rights | $ 200,000 | $ 845,000 | ||||
Mortgage servicing right recognized | $ 30,244,000 | $ 34,908,000 | 78,263,000 | 70,112,000 | ||
Third Party Bank And Cantor Commercial Real Estate LP | ||||||
Related Party Transaction | ||||||
Amount of loan purchased by third-party (in percentage) | 80.00% | |||||
Amount of loan retained by third-party (in percentage) | 20.00% | |||||
Interest rate on loans receivable (in percentage) | 4.38% | |||||
Fee paid to Newmark for brokering loan | $ 700,000 | |||||
Real Estate Loan | Third Party Bank And Cantor Commercial Real Estate LP | ||||||
Related Party Transaction | ||||||
Commercial real estate loan | $ 146,600,000 | |||||
Primary Servicing Rights | ||||||
Related Party Transaction | ||||||
MSR acquired | 0 | |||||
Mr. Gosin | Third Party Bank And Cantor Commercial Real Estate LP | ||||||
Related Party Transaction | ||||||
Ownership interest of loans receivable (in percentage) | 19.00% | |||||
CCRE | ||||||
Related Party Transaction | ||||||
Recognized related party revenues | 400,000 | 100,000 | 500,000 | 800,000 | ||
CCRE | Loan Referral Agreement | ||||||
Related Party Transaction | ||||||
Revenue from loan referral agreement | 700,000 | 1,600,000 | ||||
Broker fees and commissions | 200,000 | 400,000 | ||||
CCRE | Primary Servicing Rights | ||||||
Related Party Transaction | ||||||
MSR acquired | 137,000,000 | 227,000,000 | 584,000,000 | |||
Purchase of mortgage servicing rights | 600,000 | 200,000 | 800,000 | |||
Mortgage servicing right recognized | $ 1,300,000 | $ 900,000 | $ 3,300,000 | $ 2,900,000 |
Related Party Transactions - _3
Related Party Transactions - Transactions With Executive Officers and Directors (Details) - USD ($) | Dec. 19, 2019 | Oct. 30, 2019 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 |
Related Party Transaction | |||||||||
Fees to related parties | $ 6,109,000 | $ 7,088,000 | $ 17,126,000 | $ 21,035,000 | |||||
Class A Common Stock | |||||||||
Related Party Transaction | |||||||||
Treasury stock repurchases (in shares) | 0 | 0 | 0 | 2,279,373 | 0 | 3,892,405 | |||
Shares repurchased price (in dollars per share) | $ 0 | $ 0 | $ 0 | $ 9.32 | $ 9.32 | ||||
Mr. Lutnick | |||||||||
Related Party Transaction | |||||||||
Number of non-exchangeable holdings approved for conversion (in shares) | 552,483 | ||||||||
Exchange share price (in dollars per share) | $ 13.61 | ||||||||
Value of LPU issued in exchange | $ 7,017,000 | ||||||||
Mr. Gosin | |||||||||
Related Party Transaction | |||||||||
Number of non-exchangeable holdings approved for conversion (in shares) | 443,872 | ||||||||
Exchange share price (in dollars per share) | $ 13.61 | ||||||||
Value of LPU issued in exchange | $ 5,637,548 | ||||||||
Mr. Merkel | Class A Common Stock | |||||||||
Related Party Transaction | |||||||||
Treasury stock repurchases (in shares) | 132,429 | 55,193 | |||||||
Shares repurchased price (in dollars per share) | $ 13.61 | $ 10.69 | |||||||
Mr. Merkel | Newmark Holdings PSUs Exchanged | |||||||||
Related Party Transaction | |||||||||
Fees to related parties | $ 3,791,848 | ||||||||
Amount withheld for taxes | 1,989,483 | ||||||||
Stock issued, value | $ 1,802,365 | ||||||||
Stock issued (in shares) | 132,429 | ||||||||
Shares issued (in dollars per share) | $ 13.61 | ||||||||
Mr. Rispoli | |||||||||
Related Party Transaction | |||||||||
Number of non-exchangeable holdings approved for conversion (in shares) | 5,846 | ||||||||
Exchange share price (in dollars per share) | $ 13.61 | ||||||||
Value of LPU issued in exchange | $ 74,250 | ||||||||
Preferred Units | Mr. Lutnick | |||||||||
Related Party Transaction | |||||||||
Number of non-exchangeable holdings approved for conversion (in shares) | 552,483 | ||||||||
Number of share issued for non exchangeable PPSU (in shares) | 602,463 | ||||||||
Determination price (in dollars per share) | $ 13.25 | ||||||||
Payment of withholding tax rate for common stock issue | $ 7,983,000 | ||||||||
Preferred Units | Mr. Gosin | |||||||||
Related Party Transaction | |||||||||
Number of non-exchangeable holdings approved for conversion (in shares) | 443,872 | ||||||||
Number of share issued for non exchangeable PPSU (in shares) | 539,080 | ||||||||
Determination price (in dollars per share) | $ 9.95 | ||||||||
Payment of withholding tax rate for common stock issue | $ 5,362,452 | ||||||||
Preferred Units | Mr. Merkel | |||||||||
Related Party Transaction | |||||||||
Exchange share price (in dollars per share) | $ 10.61 | ||||||||
Preferred Units | Mr. Merkel | Newmark Holdings PSUs Exchanged | |||||||||
Related Party Transaction | |||||||||
Number shares exchanged (in shares) | 4,222 | ||||||||
Preferred Units | Mr. Merkel | PSU | |||||||||
Related Party Transaction | |||||||||
Number of non-exchangeable PSU approved cancellation (in shares) | 145,464 | ||||||||
Preferred Units | Mr. Merkel | Non Exchangeable PPSU | |||||||||
Related Party Transaction | |||||||||
Number of non-exchangeable PSU approved cancellation (in shares) | 178,179 | ||||||||
Preferred Units | Mr. Rispoli | |||||||||
Related Party Transaction | |||||||||
Number of non-exchangeable holdings approved for conversion (in shares) | 5,846 | ||||||||
Number of share issued for non exchangeable PPSU (in shares) | 4,917 | ||||||||
Determination price (in dollars per share) | $ 12.355 | ||||||||
Payment of withholding tax rate for common stock issue | $ 60,750 |
Related Party Transactions - CF
Related Party Transactions - CF Real Estate Finance Holdings, LP and IPO and Spin-Off (Details) $ in Thousands, shares in Millions | Nov. 30, 2018shares | Nov. 30, 2018shares | Mar. 07, 2018shares | Sep. 30, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 13, 2017 | Sep. 08, 2017USD ($) |
Related Party Transaction | |||||||
Equity method investment | $ | $ 88,315 | $ 99,966 | |||||
Class B Common Stock | |||||||
Related Party Transaction | |||||||
Aggregate distribution of shares in spin-off (in shares) | 21.3 | ||||||
Class A Common Stock | |||||||
Related Party Transaction | |||||||
Aggregate distribution of shares in spin-off (in shares) | 131.9 | ||||||
Limited partnership units exchange ratio (in percentage) | 0.9373 | 1 | |||||
BGC Partners Inc | Class B Common Stock | |||||||
Related Party Transaction | |||||||
Exchange ratio (in percentage) | 46.3895% | 46.3895% | |||||
Cantor And CFGM | Class B Common Stock | |||||||
Related Party Transaction | |||||||
Percentage of Distributions of shares in spin-off (in percentage) | 100.00% | ||||||
Cantor And CFGM | BGC Partners Inc | Class B Common Stock | |||||||
Related Party Transaction | |||||||
Percentage of common shares held by limited partners (in percentage) | 100.00% | ||||||
BGC Partners LP and its Operating Subsidiaries | Newmark Units | |||||||
Related Party Transaction | |||||||
Exchange ratio (in percentage) | 97.93% | 97.93% | |||||
Limited partners capital account units held by BGC (in shares) | 14.8 | ||||||
Number of limited partnership units exchangeable (in shares) | 1.5 | ||||||
BGC Partners LP and its Operating Subsidiaries | Newmark Units | Class B Common Stock | |||||||
Related Party Transaction | |||||||
Number of shares, right to exchange from Class A to Class A or Class B common stock (in shares) | 5.4 | ||||||
BGC Partners LP and its Operating Subsidiaries | Newmark Units | Class A Common Stock | |||||||
Related Party Transaction | |||||||
Number of shares, right to exchange from Class A to Class A or Class B common stock (in shares) | 9.4 | ||||||
BGC Partners LP and its Operating Subsidiaries | Newmark Units | Cantor | |||||||
Related Party Transaction | |||||||
Aggregate distribution of shares in spin-off (in shares) | 0.4 | ||||||
Newmark OpCo | BGC Partners LP and its Operating Subsidiaries | Newmark Units | |||||||
Related Party Transaction | |||||||
Limited partners capital account units held by BGC (in shares) | 7 | ||||||
Limited partnership interests units (in shares) | 7 | ||||||
Newmark OpCo | BGC Partners LP and its Operating Subsidiaries | Newmark Units | Class A Common Stock | |||||||
Related Party Transaction | |||||||
Number of shares, right to exchange from Class A to Class A or Class B common stock (in shares) | 6.9 | ||||||
CF Real Estate Finance Holdings, L.P. | |||||||
Related Party Transaction | |||||||
Equity method investment | $ | $ 100,000 |
Related Party Transactions - BG
Related Party Transactions - BGC's 2018 Investment in Newmark Holdings (Details) - USD ($) | Mar. 07, 2018 | Sep. 26, 2018 | Nov. 06, 2018 |
BGC Partners LP and its Operating Subsidiaries | Newmark Units | |||
Related Party Transaction | |||
Purchase of units (units) | 16,600,000 | ||
Purchase value of units | $ 242,000,000 | ||
Closing price per share (in dollars per share) | $ 14.57 | ||
Limited partners capital account units held by BGC (in shares) | 14,800,000 | ||
BGC Partners LP and its Operating Subsidiaries | Newmark Units | Newmark OpCo | |||
Related Party Transaction | |||
Limited partners capital account units held by BGC (in shares) | 7,000,000 | ||
Cantor | |||
Related Party Transaction | |||
Fees for services | $ 4,000,000 | ||
Cantor | 6.125% Senior Notes | |||
Related Party Transaction | |||
Debt instrument face amount | $ 550,000,000 | ||
Stated interest rate (in percentage) | 6.125% | ||
Debt instrument, fee amount | $ 800,000 |
Related Party Transactions - Ot
Related Party Transactions - Other Related Party Transactions (Details) - USD ($) | Nov. 30, 2018 | Sep. 30, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | May 15, 2020 | Dec. 31, 2019 |
Related Party Transaction | ||||||
Receivables from related parties | $ 652,000 | $ 652,000 | $ 0 | |||
Payables to related parties | 5,185,000 | 5,185,000 | $ 38,090,000 | |||
Operating lease payments | 36,400,000 | $ 32,900,000 | ||||
Cantor Credit Agreement | Cantor | ||||||
Related Party Transaction | ||||||
Maximum revolving credit | $ 250,000,000 | |||||
Basis spread on variable rate (in percentage) | 1.00% | |||||
BGC Holdings, L.P. | Affiliated Entity | ||||||
Related Party Transaction | ||||||
Operating lease payments | $ 200,000 | $ 500,000 | ||||
BGC Holdings, L.P. | Affiliated Entity | ||||||
Related Party Transaction | ||||||
Receivables from related parties | $ 1,100,000 | |||||
Lessor, Operating Lease, Term of Contract | 1 year |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Income Tax Disclosure [Abstract] | ||
Unrecognized tax benefits that would impact effective tax rate | $ 200,000 | $ 200,000 |
Income tax-related interest and penalties | $ 0 |
Accounts Payable, Accrued Exp_3
Accounts Payable, Accrued Expenses and Other Liabilities - Components of Current Portion of Accounts Payable, Accrued Expenses and Other Liabilities (Detail) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Payables and Accruals [Abstract] | ||
Accounts payable and accrued expenses | $ 110,271 | $ 161,988 |
Redeemable preferred partnership units | 93,480 | 0 |
Outside broker payable | 54,873 | 74,280 |
Payroll taxes payable | 53,027 | 45,612 |
Corporate taxes payable | 38,964 | 69,237 |
Derivative liability | 42,863 | 25,661 |
Right-of-use liabilities | 28,645 | 27,184 |
Credit enhancement deposit | 25,000 | 0 |
Contingent consideration | 18,210 | 13,107 |
Total | $ 465,333 | $ 417,069 |
Accounts Payable, Accrued Exp_4
Accounts Payable, Accrued Expenses and Other Liabilities - Components of Other Liabilities (Detail) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | |||
Accrued compensation | $ 309,710 | $ 278,399 | |
Payroll taxes payable | 62,500 | 41,355 | |
Contingent consideration | 13,365 | 32,065 | |
Credit enhancement deposit | 0 | 25,000 | |
Financial guarantee liability | 32,652 | 15 | $ 15 |
Other liabilities | $ 418,227 | $ 376,834 |
Compensation - Additional Infor
Compensation - Additional Information (Detail) $ in Millions | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2020USD ($)shares | Sep. 30, 2019USD ($)shares | Sep. 30, 2020USD ($)shares | Sep. 30, 2019USD ($)shares | Dec. 31, 2019USD ($)shares | Dec. 31, 2018shares | Dec. 13, 2017shares | |
Share-based Compensation Arrangement by Share-based Payment Award | |||||||
Shares available for future awards (in shares) | 371,800,000 | 371,800,000 | |||||
Number of units redeemed (in shares) | 60,312 | 151,160 | 419,797 | 588,160 | |||
Number of shares vested and converted (in shares) | 900,000 | 2,400,000 | |||||
Unrecognized compensation expense related to unvested RSUs | $ | $ 79 | $ 79 | |||||
Deferred cash compensation expense recognized | $ | 0.1 | $ 0.2 | 0.3 | $ 0.6 | |||
Liability for deferred cash compensation awards | $ | $ 1.2 | $ 1.2 | $ 1.5 | ||||
Executives And Non Executives Employees | |||||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||||
Limited partners capital account units held by BGC (in shares) | 28,200,000 | 28,200,000 | |||||
Newmark Holdings, L.P. | |||||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||||
Limited partnership units exchange ratio (in percentage) | 0.4545 | 0.4545 | |||||
Newmark Holdings, L.P. | Restricted Stock Units (RSUs) | |||||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||||
Limited partnership units outstanding (in shares) | 10,380,189 | 10,380,189 | 4,683,571 | 219,887 | |||
Newmark Holdings, L.P. | Limited Partnership Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||||
Number of conversion rights granted (in shares) | 1,600,000 | 3,000,000 | 3,300,000 | ||||
BGC Holdings, L.P. | |||||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||||
Limited partnership units outstanding (in shares) | 54,860,495 | 54,860,495 | 56,053,701 | 61,870,969 | |||
BGC Holdings, L.P. | Limited Partnership Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||||
Limited partnership units outstanding (in shares) | 9,200,000 | 9,200,000 | 9,500,000 | ||||
Exchangeable partnership units (in shares) | 4,500,000 | 4,500,000 | 2,900,000 | ||||
BGC Holdings, L.P. | Limited Partnership Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||||
Number of conversion rights granted (in shares) | 500,000 | 600,000 | 1,800,000 | ||||
NEWMARK Group Inc Parent | |||||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||||
Limited partners capital account units held by BGC (in shares) | 18,904,604 | 18,904,604 | 17,097,639 | ||||
Limited partnership units outstanding (in shares) | 65,731,064 | 65,731,064 | 60,800,852 | 44,733,487 | |||
Number of units redeemed (in shares) | 25,419 | 63,594 | 194,072 | 208,969 | |||
NEWMARK Group Inc Parent | Limited Partnership Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||||
Limited partnership units outstanding (in shares) | 5,200,000 | 5,200,000 | 5,300,000 | ||||
Exchangeable partnership units (in shares) | 2,000,000 | 2,000,000 | 1,400,000 | ||||
Maximum | Newmark Holdings, L.P. | Restricted Stock Units (RSUs) | |||||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||||
Award vesting period | 8 years | ||||||
Maximum | NEWMARK Group Inc Parent | Limited Partnership Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||||
Award vesting period | 7 years | ||||||
Minimum | Newmark Holdings, L.P. | Restricted Stock Units (RSUs) | |||||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||||
Award vesting period | 2 years | ||||||
Minimum | NEWMARK Group Inc Parent | Limited Partnership Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||||
Award vesting period | 3 years | ||||||
Class A Common Stock | |||||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||||
Limited partnership units exchange ratio (in percentage) | 0.9373 | 0.9373 | 1 | ||||
Newmark Equity Plan | Class A Common Stock | Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||||
Shares authorized to be delivered pursuant to awards granted (in shares) | 400,000,000 | ||||||
Shares registered to be delivered pursuant to awards granted (in shares) | 65,000,000 | ||||||
Non Distribution Earning Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||||
Award vesting period | 4 years | ||||||
Unit granted during period (in shares) | 1,300,000 | 3,500,000 |
Compensation - Compensation Exp
Compensation - Compensation Expense Related to Limited Partnership Units and Restricted Stock Units (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Issuance of common stock and exchangeability expenses | $ 125 | $ 0 | $ 2,606 | $ 2,719 |
Equity-based compensation and allocations of net income to limited partnership units and FPUs | 74,544 | 109,872 | ||
Limited Partnership Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Issuance of common stock and exchangeability expenses | 13,118 | 17,499 | 19,062 | 36,952 |
NEWMARK Group Inc Parent | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Equity-based compensation and allocations of net income to limited partnership units and FPUs | 50,770 | 56,647 | 74,544 | 109,871 |
NEWMARK Group Inc Parent | Restricted Stock Units (RSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Limited partnership units amortization | 3,404 | 1,413 | 9,315 | 3,172 |
NEWMARK Group Inc Parent | Limited Partnership Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Issuance of common stock and exchangeability expenses | 13,243 | 17,499 | 21,668 | 39,671 |
Allocations of net income to limited partnership units and FPUs | 29,221 | 32,496 | 30,753 | 50,410 |
Limited partnership units amortization | $ 4,902 | $ 5,239 | $ 12,808 | $ 16,618 |
Compensation - Activity Associa
Compensation - Activity Associated with Limited Partnership Units (Detail) - shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
NEWMARK Group Inc Parent | ||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | ||
Number of Units, Balance outstanding at beginning of period (in shares) | 60,800,852 | 44,733,487 |
Number of Units, Granted (in shares) | 6,811,808 | 13,813,204 |
Number of units, Redeemed/exchanged units (in shares) | (1,798,651) | (2,487,885) |
Number of Units, Forfeited units (in shares) | (82,945) | 4,742,046 |
Number of Units, Balance outstanding at end of period (in shares) | 65,731,064 | 60,800,852 |
Exchangeable Units (units) | 10,017,066 | 10,108,598 |
BGC Holdings, L.P. | ||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | ||
Number of Units, Balance outstanding at beginning of period (in shares) | 56,053,701 | 61,870,969 |
Number of Units, Granted (in shares) | 1,064,781 | 319,586 |
Number of units, Redeemed/exchanged units (in shares) | (2,217,536) | (3,938,134) |
Number of Units, Forfeited units (in shares) | (40,451) | (2,198,720) |
Number of Units, Balance outstanding at end of period (in shares) | 54,860,495 | 56,053,701 |
Exchangeable Units (units) | 25,047,827 | 24,692,695 |
Regular units | NEWMARK Group Inc Parent | ||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | ||
Number of Units, Balance outstanding at end of period (in shares) | 61,301,972 | |
Regular units | BGC Holdings, L.P. | ||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | ||
Number of Units, Balance outstanding at end of period (in shares) | 53,247,827 | |
Preferred Units | NEWMARK Group Inc Parent | ||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | ||
Number of Units, Balance outstanding at end of period (in shares) | 4,429,092 | |
Preferred Units | BGC Holdings, L.P. | ||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | ||
Number of Units, Balance outstanding at end of period (in shares) | 1,612,668 |
Compensation - Units Redeemed i
Compensation - Units Redeemed in Connection with Issuance of Class A Common Stock (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Number of units redeemed (in shares) | 60,312 | 151,160 | 419,797 | 588,160 |
BGC Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Number of units redeemed (in shares) | 34,893 | 87,566 | 225,725 | 379,191 |
Newmark Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Number of units redeemed (in shares) | 25,419 | 63,594 | 194,072 | 208,969 |
Compensation - Limited Partners
Compensation - Limited Partnership Units with a Post-Termination Payout (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award | ||
Liability balance acquisition related post-termination units | $ 6,800 | |
BGC Holdings, L.P. | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Notional value | 257,517 | $ 261,025 |
Estimated fair value of the post-termination payout | $ 62,992 | $ 51,378 |
Outstanding limited partnership units (in shares) | 5,265,878 | 6,251,816 |
Outstanding limited partnership units - unvested (in dollars per share) | 1,008,934 | 1,508,510 |
NEWMARK Group Inc Parent | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Outstanding limited partnership units (in shares) | 18,904,604 | 17,097,639 |
Outstanding limited partnership units - unvested (in dollars per share) | 9,268,547 | 9,357,822 |
Compensation - Grant of Convers
Compensation - Grant of Conversion Rights to Newmark Employees (Details) - Limited Partnership Units - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Mar. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award | |||
Notional value | $ 206,851 | $ 194,995 | |
Estimated fair value of limited partnership units | $ 182,800 | $ 199,149 |
Compensation - Activity Assoc_2
Compensation - Activity Associated with Restricted Stock Units (Detail) - Restricted Stock Units (RSUs) - USD ($) $ / shares in Units, $ in Thousands | Dec. 31, 2018 | Sep. 30, 2020 | Dec. 31, 2019 |
Newmark Holdings, L.P. | |||
Restricted Stock Units | |||
Number of Units, Balance outstanding at beginning of period (in shares) | 4,683,571 | 219,887 | |
Number of Units, Granted (in shares) | 6,748,717 | 4,766,611 | |
Number of Settled units (delivered shares) (in shares) | (895,909) | (109,007) | |
Number of Units, Forfeited units (in shares) | (156,190) | (193,920) | |
Number of Units, Balance outstanding at end of period (in shares) | 219,887 | 10,380,189 | 4,683,571 |
Weighted- Average Grant Date Fair Value Per Share | |||
Balance at the beginning of period (in dollars per share) | $ 7.55 | $ 13.52 | |
Granted (in dollars per share) | 8.28 | 7.42 | |
Settled units (delivered shares) (in dollars per share) | 7.90 | 11.70 | |
Forfeited units (in dollars per share) | 7.98 | 8.67 | |
Balance at the end of period (in dollars per share) | $ 13.52 | $ 7.99 | $ 7.55 |
Fair Value Amount | |||
Balance at beginning of period | $ 35,361 | $ 2,973 | |
Granted | 55,904 | 35,344 | |
Settled units (delivered shares) | (7,080) | (1,275) | |
Forfeited units | (1,246) | (1,681) | |
Balance at end of period | $ 2,973 | $ 82,939 | $ 35,361 |
Weighted- Average Remaining Contractual Term (Years) | 2 years 3 months 10 days | 5 years 10 months 28 days | 5 years 8 months 8 days |
Newmark Holdings, L.P. | Minimum | |||
Fair Value Amount | |||
Award vesting period | 2 years | ||
Newmark Holdings, L.P. | Maximum | |||
Fair Value Amount | |||
Award vesting period | 8 years | ||
BGC Holdings, L.P. | |||
Restricted Stock Units | |||
Number of Units, Balance outstanding at beginning of period (in shares) | 46,807 | 168,675 | |
Number of Units, Granted (in shares) | 7,912 | 0 | |
Number of Settled units (delivered shares) (in shares) | (45,544) | (107,820) | |
Number of Units, Forfeited units (in shares) | (1,153) | (14,048) | |
Number of Units, Balance outstanding at end of period (in shares) | 168,675 | 8,022 | 46,807 |
Weighted- Average Grant Date Fair Value Per Share | |||
Balance at the beginning of period (in dollars per share) | $ 9.97 | $ 9.77 | |
Granted (in dollars per share) | 3.69 | 0 | |
Settled units (delivered shares) (in dollars per share) | 9.95 | 9.38 | |
Forfeited units (in dollars per share) | 10.62 | 10.02 | |
Balance at the end of period (in dollars per share) | $ 9.77 | $ 3.81 | $ 9.97 |
Fair Value Amount | |||
Balance at beginning of period | $ 467 | $ 1,619 | |
Granted | 29 | 0 | |
Settled units (delivered shares) | (453) | (1,011) | |
Forfeited units | (12) | (141) | |
Balance at end of period | $ 1,619 | $ 31 | $ 467 |
Weighted- Average Remaining Contractual Term (Years) | 11 months 23 days | 2 years 5 months 1 day | 3 months |
BGC Holdings, L.P. | Minimum | |||
Fair Value Amount | |||
Award vesting period | 2 years | ||
BGC Holdings, L.P. | Maximum | |||
Fair Value Amount | |||
Award vesting period | 4 years |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Loss Contingencies | ||
Contingent consideration | $ 13,365 | $ 32,065 |
Acquisitions from 2014 through 2018 | ||
Loss Contingencies | ||
Contingent consideration | 18,200 | |
Construction Loans | ||
Loss Contingencies | ||
Total remaining draws on construction loans committed to fund | $ 500,000 | $ 1,500,000 |
Subsequent Events (Details)
Subsequent Events (Details) | Nov. 04, 2020$ / shares |
Subsequent Event | |
Subsequent Event [Line Items] | |
Common stock dividends per share declared (in dollars per share) | $ 0.01 |