filings.toolsItem 8. Financial Statements and Supplementary Data.
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Item 8. Financial Statements and Supplementary Data.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
AND FINANCIAL STATEMENT SCHEDULES
All other schedules are omitted because they are either not applicable, not required or the information required is included in the Consolidated Financial Statements, including the notes thereto.
Report of Independent Registered Public Accounting Firm
To the Stockholders and Board of Directors
CBRE Group, Inc.:
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of CBRE Group, Inc. and subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income, cash flows, and equity for each of the years in the three-year period ended December 31, 2025, and the related notes and financial statement schedule II (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 12, 2026 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Assessment of gross unrecognized tax benefits
As discussed in Notes 2 and 16 to the consolidated financial statements, the Company has recorded gross unrecognized tax benefits of $364 million as of December 31, 2025. The Company utilizes a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the available evidence indicates it is more likely than not that the position will be sustained upon examination, including resolution of related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount which is more than 50% likely to be realized upon ultimate settlement.
We identified the assessment of the gross unrecognized tax benefits as a critical audit matter. Complex auditor judgment and the involvement of tax professionals with specialized skills and knowledge were required in evaluating the Company’s interpretation of tax law and its estimate of the resolution of the tax positions underlying the unrecognized tax benefits.
The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s unrecognized tax benefits process, including the interpretation of tax law and the estimate of the unrecognized tax benefits. Since tax law is complex and often subject to interpretations, we involved tax professionals with specialized skills and knowledge, who assisted in:
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Obtaining and understanding of the Company’s tax planning strategies including changes in legal entity structures and intercompany financing arrangements,
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Evaluating the Company’s interpretation of tax law and the potential impact on the Company’s tax positions,
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Inspecting correspondence with applicable taxing authorities, and assessing the expiration of statutes of limitations, and,
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Performing an independent assessment of certain of the Company’s tax positions and comparing the results to the Company’s assessment.
/s/ KPMG LLP
We have served as the Company’s auditor since 2008.
Chicago, Illinois
February 12, 2026
Report of Independent Registered Public Accounting Firm
To the Stockholders and Board of Directors
CBRE Group, Inc.:
Opinion on Internal Control Over Financial Reporting
We have audited CBRE Group, Inc. and subsidiaries’ (the Company) internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income, cash flows, and equity for each of the years in the three-year period ended December 31, 2025, and the related notes and financial statement schedule II (collectively, the consolidated financial statements), and our report dated February 12, 2026 expressed an unqualified opinion on those consolidated financial statements.
The Company acquired acquired Industrious National Management Company LLC and Pearce Services, LLC during 2025, and management excluded from its assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2025, Industrious National Management Company LLC and Pearce Services, LLC’s internal control over financial reporting associated with eight percent of total assets, excluding goodwill, and one percent of total revenue included in the consolidated financial statements of the Company as of and for the year ended December 31, 2025. Our audit of internal control over financial reporting of the Company also excluded an evaluation of the internal control over financial reporting of Industrious National Management Company LLC and Pearce Services, LLC.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ KPMG LLP
Chicago, Illinois
February 12, 2026
CBRE GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in millions, except share data)
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| ASSETS | |||||||||||
| Current Assets: | |||||||||||
| Cash and cash equivalents | $ | 1,864 | $ | 1,114 | |||||||
| Restricted cash | 150 | 107 | |||||||||
| Receivables, less allowance for doubtful accounts of $125 and $101 at December 31, 2025 and 2024, respectively | 8,284 | 7,005 | |||||||||
| Warehouse receivables | 1,630 | 561 | |||||||||
| Contract assets | 462 | 400 | |||||||||
| Prepaid expenses | 372 | 332 | |||||||||
| Income taxes receivable | 175 | 130 | |||||||||
| Other current assets | 552 | 321 | |||||||||
| Total Current Assets | 13,489 | 9,970 | |||||||||
| Property and equipment, net of accumulated depreciation and amortization of $2,137 and $1,795 at December 31, 2025 and 2024, respectively | 1,049 | 914 | |||||||||
| Goodwill | 7,051 | 5,621 | |||||||||
| Other intangible assets, net of accumulated amortization of $2,764 and $2,494 at December 31, 2025 and 2024, respectively | 2,972 | 2,298 | |||||||||
| Operating lease assets | 2,062 | 1,198 | |||||||||
| Investments in unconsolidated subsidiaries (with $421 and $890 at fair value at December 31, 2025 and 2024, respectively) | 870 | 1,295 | |||||||||
| Non-current contract assets | 103 | 89 | |||||||||
| Real estate under development | 646 | 505 | |||||||||
| Non-current income taxes receivable | 106 | 75 | |||||||||
| Deferred tax assets, net | 697 | 538 | |||||||||
| Other assets | 1,832 | 1,880 | |||||||||
| Total Assets | $ | 30,877 | $ | 24,383 | |||||||
| LIABILITIES AND EQUITY | |||||||||||
| Current Liabilities: | |||||||||||
| Accounts payable and accrued expenses | $ | 4,838 | $ | 4,102 | |||||||
| Compensation and employee benefits payable | 1,630 | 1,419 | |||||||||
| Accrued bonus and profit sharing | 1,879 | 1,695 | |||||||||
| Operating lease liabilities | 284 | 200 | |||||||||
| Contract liabilities | 448 | 375 | |||||||||
| Income taxes payable | 258 | 209 | |||||||||
| Warehouse lines of credit (which fund loans that U.S. Government Sponsored Enterprises have committed to purchase) | 1,609 | 552 | |||||||||
| Revolving credit facilities | — | 132 | |||||||||
| Other short-term borrowings | 856 | 222 | |||||||||
| Current maturities of long-term debt | 71 | 36 | |||||||||
| Other current liabilities | 447 | 345 | |||||||||
| Total Current Liabilities | 12,320 | 9,287 | |||||||||
| Long-term debt, net of current maturities | 5,050 | 3,245 | |||||||||
| Non-current operating lease liabilities | 2,121 | 1,307 | |||||||||
| Non-current income taxes payable | — | — | |||||||||
| Non-current tax liabilities | 183 | 160 | |||||||||
| Deferred tax liabilities, net | 238 | 247 | |||||||||
| Other liabilities | 1,339 | 945 | |||||||||
| Total Liabilities | 21,251 | 15,191 | |||||||||
| Mezzanine Equity: | |||||||||||
| Redeemable non-controlling interests in consolidated entities | 433 | — | |||||||||
| Equity: | |||||||||||
| CBRE Group, Inc. Stockholders’ Equity: | |||||||||||
| Class A common stock; $0.01 par value; 525,000,000 shares authorized; 295,731,478 and 302,052,229 shares issued and outstanding at December 31, 2025 and 2024, respectively | 3 | 3 | |||||||||
| Additional paid-in capital | — | — | |||||||||
| Accumulated earnings | 9,916 | 9,567 | |||||||||
| Accumulated other comprehensive loss | (1,041) | (1,159) | |||||||||
| Total CBRE Group, Inc. Stockholders’ Equity | 8,878 | 8,411 | |||||||||
| Non-controlling interests | 315 | 781 | |||||||||
| Total Equity | 9,193 | 9,192 | |||||||||
| Total Liabilities and Equity | $ | 30,877 | $ | 24,383 | |||||||
The accompanying notes are an integral part of these consolidated financial statements.
CBRE GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in millions, except share and per share data)
| Year Ended December 31, | ||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||||||||||||||
| Revenue | $ | 40,550 | $ | 35,767 | $ | 31,949 | ||||||||||||||||||||||||||
| Costs and expenses: | ||||||||||||||||||||||||||||||||
| Cost of revenue | 32,984 | 28,811 | 25,675 | |||||||||||||||||||||||||||||
| Operating, administrative and other | 5,543 | 5,011 | 4,562 | |||||||||||||||||||||||||||||
| Depreciation and amortization | 729 | 674 | 622 | |||||||||||||||||||||||||||||
| Total costs and expenses | 39,256 | 34,496 | 30,859 | |||||||||||||||||||||||||||||
| Gain on disposition of real estate | 459 | 142 | 27 | |||||||||||||||||||||||||||||
| Operating income | 1,753 | 1,413 | 1,117 | |||||||||||||||||||||||||||||
| Equity income (loss) from unconsolidated subsidiaries | 40 | (19) | 248 | |||||||||||||||||||||||||||||
| Other income | 19 | 39 | 61 | |||||||||||||||||||||||||||||
| Interest expense, net of interest income | 216 | 215 | 149 | |||||||||||||||||||||||||||||
| Write-off of financing costs on extinguished debt | 2 | — | — | |||||||||||||||||||||||||||||
| Income before provision for income taxes | 1,594 | 1,218 | 1,277 | |||||||||||||||||||||||||||||
| Provision for income taxes | 317 | 182 | 250 | |||||||||||||||||||||||||||||
| Net income | 1,277 | 1,036 | 1,027 | |||||||||||||||||||||||||||||
| Less: Net income attributable to non-controlling interests | 120 | 68 | 41 | |||||||||||||||||||||||||||||
| Net income attributable to CBRE Group, Inc. | $ | 1,157 | $ | 968 | $ | 986 | ||||||||||||||||||||||||||
| Basic income per share: | ||||||||||||||||||||||||||||||||
| Net income per share attributable to CBRE Group, Inc. | $ | 3.88 | $ | 3.16 | $ | 3.20 | ||||||||||||||||||||||||||
| Weighted-average shares outstanding for basic income per share | 298,157,861 | 305,859,458 | 308,430,080 | |||||||||||||||||||||||||||||
| Diluted income per share: | ||||||||||||||||||||||||||||||||
| Net income per share attributable to CBRE Group, Inc. | $ | 3.85 | $ | 3.14 | $ | 3.15 | ||||||||||||||||||||||||||
| Weighted-average shares outstanding for diluted income per share | 300,751,541 | 308,033,612 | 312,550,942 | |||||||||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
CBRE GROUP, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Dollars in millions)
| Year Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Net income | $ | 1,277 | $ | 1,036 | $ | 1,027 | ||||||||||||||
| Other comprehensive income (loss): | ||||||||||||||||||||
| Foreign currency translation gain (loss) | 33 | (243) | 111 | |||||||||||||||||
| Pension liability adjustments, net of income tax (expense) benefit of $(37.6), $1.1 and $(0.7) for the years ended December 31, 2025, 2024 and 2023, respectively | 112 | 4 | 2 | |||||||||||||||||
| Other, net of income tax benefit (expense) of $33.5, $(2.8) and $3.6 for the years ended December 31, 2025, 2024 and 2023, respectively | (6) | (9) | (18) | |||||||||||||||||
| Total other comprehensive income (loss) | 139 | (248) | 95 | |||||||||||||||||
| Comprehensive income | 1,416 | 788 | 1,122 | |||||||||||||||||
| Less: Comprehensive income attributable to non-controlling interests | 141 | 55 | 77 | |||||||||||||||||
| Comprehensive income attributable to CBRE Group, Inc. | $ | 1,275 | $ | 733 | $ | 1,045 |
The accompanying notes are an integral part of these consolidated financial statements.
CBRE GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in millions)
| Year Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||||||||||
| Net income | $ | 1,277 | $ | 1,036 | $ | 1,027 | ||||||||||||||
| Reconciliation of net income to net cash provided by operating activities: | ||||||||||||||||||||
| Depreciation and amortization | 729 | 674 | 622 | |||||||||||||||||
| Amortization of other assets | 199 | 195 | 168 | |||||||||||||||||
| Net non-cash mortgage servicing rights and premiums on loan sales | (187) | (162) | (102) | |||||||||||||||||
| Deferred income taxes | (269) | (194) | (121) | |||||||||||||||||
| Stock-based compensation expense | 120 | 146 | 96 | |||||||||||||||||
| Equity (income) loss from investments | (40) | 19 | (248) | |||||||||||||||||
| Gain on sale of real estate assets | (459) | (142) | (27) | |||||||||||||||||
| Other non-cash adjustments | 227 | 8 | (18) | |||||||||||||||||
| Changes in: | ||||||||||||||||||||
| Sale of mortgage loans | 15,135 | 12,817 | 9,714 | |||||||||||||||||
| Origination of mortgage loans | (16,163) | (12,668) | (9,905) | |||||||||||||||||
| Warehouse lines of credit | 1,057 | (114) | 218 | |||||||||||||||||
| Receivables, prepaid expenses and other assets | (882) | (597) | (702) | |||||||||||||||||
| Accounts payable, accrued liabilities and other liabilities | 570 | 566 | 34 | |||||||||||||||||
| Accrued compensation expenses | 285 | 206 | (173) | |||||||||||||||||
| Income taxes, net | (40) | (82) | (103) | |||||||||||||||||
| Net cash provided by operating activities | 1,559 | 1,708 | 480 | |||||||||||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||||||||||
| Capital expenditures | (366) | (307) | (305) | |||||||||||||||||
| Payments for business acquired, net of cash acquired | (1,374) | (1,067) | (203) | |||||||||||||||||
| Capital contributions related to investments | (161) | (136) | (127) | |||||||||||||||||
| Acquisition and development of real estate assets | (390) | (389) | (171) | |||||||||||||||||
| Proceeds from disposition of real estate assets | 509 | 235 | 77 | |||||||||||||||||
| Other investing activities, net | 155 | 150 | 48 | |||||||||||||||||
| Net cash used in investing activities | (1,627) | (1,514) | (681) | |||||||||||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||||||||
| Proceeds from revolving credit facility | — | 4,173 | 4,006 | |||||||||||||||||
| Repayment of revolving credit facility | (132) | (4,041) | (4,184) | |||||||||||||||||
| Proceeds from commercial paper, net | 677 | 175 | — | |||||||||||||||||
| Proceeds from long-term debt | 2,410 | 495 | 1,723 | |||||||||||||||||
| Repayment of long-term debt | (670) | (9) | (437) | |||||||||||||||||
| Repurchase of common stock | (968) | (627) | (665) | |||||||||||||||||
| Other financing activities, net | (521) | (387) | (289) | |||||||||||||||||
| Net cash provided by (used in) financing activities | 796 | (221) | 154 | |||||||||||||||||
| Effect of currency exchange rate changes on cash and cash equivalents and restricted cash | 65 | (123) | 13 | |||||||||||||||||
| NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | 793 | (150) | (34) | |||||||||||||||||
| CASH, CASH EQUIVALENTS AND RESTRICTED CASH, AT BEGINNING OF PERIOD | 1,221 | 1,371 | 1,405 | |||||||||||||||||
| CASH, CASH EQUIVALENTS AND RESTRICTED CASH, AT END OF PERIOD | $ | 2,014 | $ | 1,221 | $ | 1,371 | ||||||||||||||
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | ||||||||||||||||||||
| Cash paid during the period for: | ||||||||||||||||||||
| Interest | $ | 448 | $ | 396 | $ | 191 | ||||||||||||||
| Income tax payments, net | $ | 599 | $ | 467 | $ | 467 | ||||||||||||||
| Non-cash investing and financing activities: | ||||||||||||||||||||
| Deferred and/or contingent consideration | $ | 183 | $ | 19 | $ | 54 |
The accompanying notes are an integral part of these consolidated financial statements.
CBRE GROUP, INC.
CONSOLIDATED STATEMENTS OF EQUITY
(Dollars in millions, except share data)
| CBRE Group, Inc. Stockholders’ | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accumulated other comprehensive loss | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Class A common stock | Additional paid-in capital | Accumulated earnings | Minimum pension liability | Foreign currency translation and other | Non- controlling interests | Total | Redeemable Non-controlling interests | |||||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2022 | 311,014,160 | $ | 3 | $ | — | $ | 8,833 | $ | (119) | $ | (864) | $ | 753 | $ | 8,606 | $ | — | ||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | 986 | — | — | 41 | 1,027 | — | ||||||||||||||||||||||||||||||||||||||||||||
| Pension liability adjustments, net of tax | — | — | — | — | 2 | — | — | 2 | — | ||||||||||||||||||||||||||||||||||||||||||||
| Restricted stock awards vesting | 1,742,328 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Compensation expense for equity awards | — | — | 96 | — | — | — | — | 96 | — | ||||||||||||||||||||||||||||||||||||||||||||
| Units repurchased for payment of taxes on equity awards | — | — | (36) | (36) | — | — | — | (72) | — | ||||||||||||||||||||||||||||||||||||||||||||
| Repurchase of common stock | (7,867,348) | — | (47) | (602) | — | — | — | (649) | — | ||||||||||||||||||||||||||||||||||||||||||||
| Foreign currency translation gain | — | — | — | — | — | 75 | 36 | 111 | — | ||||||||||||||||||||||||||||||||||||||||||||
| Contributions from non-controlling interests | — | — | — | — | — | — | 6 | 6 | — | ||||||||||||||||||||||||||||||||||||||||||||
| Distributions to non-controlling interests | — | — | — | — | — | — | (42) | (42) | — | ||||||||||||||||||||||||||||||||||||||||||||
| Other | — | — | (13) | 7 | — | (18) | 6 | (18) | — | ||||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2023 | 304,889,140 | 3 | — | 9,188 | (117) | (807) | 800 | 9,067 | — | ||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | 968 | — | — | 68 | 1,036 | — | ||||||||||||||||||||||||||||||||||||||||||||
| Pension liability adjustments, net of tax | — | — | — | — | 4 | — | — | 4 | — | ||||||||||||||||||||||||||||||||||||||||||||
| Restricted stock awards vesting | 2,273,713 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Compensation expense for equity awards | — | — | 146 | — | — | — | — | 146 | — | ||||||||||||||||||||||||||||||||||||||||||||
| Units repurchased for payment of taxes on equity awards | — | — | (105) | — | — | — | — | (105) | — | ||||||||||||||||||||||||||||||||||||||||||||
| Repurchase of common stock | (5,110,624) | — | (55) | (589) | — | — | — | (644) | — | ||||||||||||||||||||||||||||||||||||||||||||
| Foreign currency translation loss | — | — | — | — | — | (230) | (13) | (243) | — | ||||||||||||||||||||||||||||||||||||||||||||
| Contributions from non-controlling interests | — | — | — | — | — | — | 22 | 22 | — | ||||||||||||||||||||||||||||||||||||||||||||
| Distributions to non-controlling interests | — | — | — | — | — | — | (74) | (74) | — | ||||||||||||||||||||||||||||||||||||||||||||
| Deconsolidation of investments | — | — | — | — | — | — | (24) | (24) | — | ||||||||||||||||||||||||||||||||||||||||||||
| Other | — | — | 14 | — | — | (9) | 2 | 7 | — | ||||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2024 | 302,052,229 | 3 | — | 9,567 | (113) | (1,046) | 781 | 9,192 | — | ||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | 1,157 | — | — | 94 | 1,251 | 26 | ||||||||||||||||||||||||||||||||||||||||||||
| Pension liability adjustments, net of tax | — | — | — | — | 112 | — | — | 112 | — | ||||||||||||||||||||||||||||||||||||||||||||
| Restricted stock awards vesting | 731,730 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Compensation expense for equity awards | — | — | 120 | — | — | — | — | 120 | — | ||||||||||||||||||||||||||||||||||||||||||||
| Units repurchased for payment of taxes on equity awards | — | — | (37) | — | — | — | — | (37) | — | ||||||||||||||||||||||||||||||||||||||||||||
| Repurchase of common stock | (7,052,481) | — | (167) | (797) | — | — | — | (964) | — | ||||||||||||||||||||||||||||||||||||||||||||
| Foreign currency translation gain | — | — | — | — | — | 47 | 21 | 68 | 31 | ||||||||||||||||||||||||||||||||||||||||||||
| Distributions to non-controlling interests | — | — | — | — | — | — | (93) | (93) | — | ||||||||||||||||||||||||||||||||||||||||||||
| Acquisition of non-controlling interests | — | — | 83 | — | — | (35) | (480) | (432) | 364 | ||||||||||||||||||||||||||||||||||||||||||||
| Other | — | — | 1 | (11) | — | (6) | (8) | (24) | 12 | ||||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2025 | 295,731,478 | $ | 3 | $ | — | $ | 9,916 | $ | (1) | $ | (1,040) | $ | 315 | $ | 9,193 | $ | 433 |
The accompanying notes are an integral part of these consolidated financial statements.
CBRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Nature of Operations
CBRE Group, Inc., a Delaware corporation (which may be referred to in these financial statements as the “company,” “we,” “us” and “our”), was incorporated on February 20, 2001. We are the world’s largest commercial real estate services and investment firm, based on 2025 revenue, with leading global market positions in most lines of business we serve.
Our business is focused on providing services to real estate investors and occupiers. For investors, we provide capital markets (property sales and mortgage origination), loan servicing, leasing, investment management, property management, project management, valuation and development services, among others. For occupiers, we provide facilities management, project management, transaction (both property sales and leasing) and consulting services, among others. We primarily generate revenue from both management fees (large multi-year portfolio and per-project contracts) and commissions generated by transactions. As of December 31, 2025, the company has more than 155,000 employees (including Turner & Townsend employees) serving clients in more than 100 countries providing services under the following brand names: “CBRE” (real estate advisory and outsourcing services); “CBRE Investment Management” (investment management); “Trammell Crow Company” (primarily U.S. development); and “Telford Living” (U.K. development); “Turner & Townsend Holdings Limited” (global program, project and cost management), “J&J Worldwide Services” (now doing business as CBRE Government & Defense Services, outsourcing services for the U.S. federal government), “Direct Line” (technical facilities management services for data centers), “Industrious” (flexible workplace and employee experience services) and “Pearce Services” (digital power and infrastructure services).
2. Significant Accounting Policies
Principles of Consolidation
The accompanying consolidated financial statements include our accounts and those of our consolidated subsidiaries, which are comprised of variable interest entities in which we are the primary beneficiary and voting interest entities, in which we determined we have a controlling financial interest, under the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 810, “Consolidations.” The equity attributable to non-controlling interests in subsidiaries is shown separately in the accompanying consolidated balance sheets. All significant intercompany accounts and transactions have been eliminated in consolidation.
Variable Interest Entities (VIEs)
We determine whether an entity is a VIE and, if so, whether it should be consolidated by utilizing judgments and estimates that are inherently subjective. Our determination of whether an entity in which we hold a direct or indirect variable interest is a VIE is based on several factors, including whether the entity’s total equity investment at risk upon inception is sufficient to finance the entity’s activities without additional subordinated financial support. We make judgments regarding the sufficiency of the equity at risk based first on a qualitative analysis, and then a quantitative analysis, if necessary.
We analyze any investments in VIEs to determine if we are the primary beneficiary. In evaluating whether we are the primary beneficiary, we evaluate our direct and indirect economic interests in the entity. A reporting entity is determined to be the primary beneficiary if it holds a controlling financial interest in the VIE. Determining which reporting entity, if any, has a controlling financial interest in a VIE is primarily a qualitative approach focused on identifying which reporting entity has both: (i) the power to direct the activities of a VIE that most significantly impact such entity’s economic performance; and (ii) the obligation to absorb losses or the right to receive benefits from such entity that could potentially be significant to such entity. Performance of that analysis requires the exercise of judgment.
We consider a variety of factors in identifying the entity that holds the power to direct matters that most significantly impact the VIE’s economic performance including, but not limited to, the ability to direct financing, leasing, construction and other operating decisions and activities. In addition, we consider the rights of other investors to participate in those decisions, to replace the manager and to sell or liquidate the entity. We determine whether we are the primary beneficiary of a VIE at the time we become involved with a variable interest entity and reconsider that conclusion on an ongoing basis.
We consolidate any VIE of which we are the primary beneficiary and disclose significant VIEs of which we are not the primary beneficiary, if any, as well as disclose our maximum exposure to loss related to VIEs that are not consolidated (see Note 6 – Variable Interest Entities).
CBRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Voting Interest Entities (VOEs)
For VOEs, we consolidate the entity if we have a controlling financial interest. We have a controlling financial interest in a VOE if: (i) for legal entities other than limited partnerships, we own a majority voting interest in the VOE or, for limited partnerships and similar entities, we own a majority of the entity’s kick-out rights through voting limited partnership interests; and (ii) non-controlling shareholders or partners do not hold substantive participating rights and no other conditions exist that would indicate that we do not control the entity.
Use of Estimates
Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP), which require management to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the amounts reported in our consolidated financial statements and accompanying notes. Such estimates include the value of goodwill, intangibles and other long-lived assets, real estate assets, accounts receivable, contract assets, operating lease assets, investments in unconsolidated subsidiaries and assumptions used in the calculation of income taxes, retirement, other post-employment benefits, and loss contingencies, among others. These estimates and assumptions are based on our best judgment. We evaluate our estimates and assumptions on an ongoing basis using historical experience and other factors, including consideration of the current economic environment, and adjust such estimates and assumptions when facts and circumstances dictate. Actual results may differ from these estimates and assumptions.
Certain prior year amounts have been reclassified to conform to the fiscal 2025 presentation.
Cash and Cash Equivalents
Cash and cash equivalents generally consist of cash and highly liquid investments with an original maturity of three months or less. We also manage certain cash and cash equivalents as an agent for our investment and property and facilities management clients. These amounts are not included in the accompanying consolidated balance sheets (see “Fiduciary Funds” discussion below).
Restricted Cash
Included in the accompanying consolidated balance sheets as of December 31, 2025 and 2024 is restricted cash of $150 million and $107 million, respectively. The balances primarily include restricted cash set aside to cover funding obligations as required by contracts executed by us in the ordinary course of business.
Fiduciary Funds
The accompanying consolidated balance sheets do not include the net assets of escrow, agency and fiduciary funds, which are held by us on behalf of clients.
Concentration of Credit Risk
Financial instruments that potentially subject us to credit risk consist principally of trade receivables and interest-bearing investments. Users of real estate services account for a substantial portion of trade receivables and collateral is generally not required. The risk associated with this concentration is limited due to the large number of users and their geographic dispersion.
We place substantially all our interest-bearing investments with several major financial institutions to limit the amount of credit exposure with any one financial institution.
Debt and Equity Securities and Other Investments
Debt securities are classified as held to maturity when we have the positive intent and ability to hold the securities to maturity. Debt securities not classified as held to maturity are classified as available for sale. Available for sale debt securities are carried at their fair value and any difference between cost and fair value is recorded as an unrealized gain or loss, net of income taxes, and is reported as accumulated other comprehensive income (loss) in the consolidated statements of equity. Premiums and discounts are recognized in interest using the effective interest method. Realized gains and losses and declines in
CBRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
value resulting from credit losses on available for sale debt securities have not been significant. The cost of securities sold is based on the specific identification method. Interest on securities classified as available for sale are included in interest income.
Our investments in unconsolidated subsidiaries in which we have the ability to exercise significant influence over operating and financial policies, but do not control, or entities which are VIEs in which we are not the primary beneficiary are accounted for under the equity method in accordance with FASB ASC Topic 323, “Instruments - Equity Method and Joint Ventures.” We eliminate transactions with such equity method subsidiaries to the extent of our ownership in such subsidiaries. Accordingly, our share of the earnings from these equity-method basis companies, generally recognized on a lag of three months or less, is included in consolidated net income. We have elected to account for certain eligible investments and related interests at fair value in accordance with the FASB ASC Topic 825, “Financial Instruments.”
For a portion of our investments in unconsolidated subsidiaries reported at fair value, we estimate fair value using the net asset value (NAV) per share (or its equivalent) our investees provide. These investments are considered investment companies, or are the equivalent of investment companies, as they carry all investments at fair value, with unrealized gains and losses resulting from changes in fair value reflected in earnings. Accordingly, we effectively carry our investments at an amount that is equivalent to our proportionate share of the net assets of each investment that would be allocated to us if each investment was liquidated at the net asset value as of the measurement date.
Equity investments that do not result in consolidation and are not accounted for under the equity method (primarily marketable equity securities) that have readily determinable fair values are measured at fair value with changes therein reflected in net income. Equity instruments that do not have readily determinable fair values and do not qualify for using the net asset value per share practical expedient in FASB ASC Topic 820, “Fair Value Measurements” (Topic 820) are measured at cost, less any impairment, and adjusted for subsequent observable transactions for the same or similar investments of the same issuer.
Impairment Evaluation
Impairment losses on investments, other than available for sale debt securities and investments otherwise measured at fair value, are recognized upon evidence of other-than-temporary losses of value. When testing for impairment on investments that are not actively traded on a public market, we generally use a discounted cash flow approach to estimate the fair value of our investments and/or look to comparable activities in the marketplace. Management’s judgment is required in developing the assumptions for the discounted cash flow approach. These assumptions include net asset values, internal rates of return, discount and capitalization rates, interest rates and financing terms, rental rates, timing of leasing activity, estimates of lease terms and related concessions, etc. When determining if impairment is other-than-temporary, we also look to the length of time and the extent to which fair value has been less than cost as well as the financial condition and near-term prospects of each investment. See Note 11 – Investments in Unconsolidated Subsidiaries for further details on other-than-temporary impairment losses.
Property and Equipment
Property and equipment, which includes leasehold improvements, is stated at cost, net of accumulated depreciation and impairment. Depreciation and amortization of property and equipment is computed primarily using the straight-line method over their estimated useful lives ranging up to 10 years. Leasehold improvements are amortized over the shorter of the term of their associated leases, excluding options to renew unless we are reasonably certain that we will exercise the option to renew, or the estimated useful life of the asset. We capitalize expenditures that significantly increase the life of our assets and expense the costs of maintenance and repairs.
We review property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. If this review indicates that such assets are considered impaired, the impairment is recognized in the period the changes occur and represents the amount by which the carrying value exceeds the fair value of the asset or asset group.
Certain costs related to the development or purchase of internal-use software are capitalized. Internal-use software costs incurred in the preliminary project stage are expensed as incurred. Significant direct consulting costs and certain payroll and related costs, which are incurred during the development stage of a project are generally capitalized and amortized over a three-year period (except for enterprise software development platforms, which range from three to seven years) when placed into production.
CBRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Real Estate
Classification and Impairment Evaluation
We classify real estate in accordance with the criteria of the FASB ASC Topic 360, “Property, Plant and Equipment” (Topic 360) as follows: (i) real estate held for sale, which includes completed assets or land for sale in its present condition that meet all of Topic 360’s “held for sale” criteria; (ii) real estate under development (current), which includes real estate that we are in the process of developing that is expected to be completed and disposed of within one year of the balance sheet date; (iii) real estate under development (non-current), which includes real estate that we are in the process of developing that is expected to be completed and disposed of more than one year from the balance sheet date; or (iv) real estate held for investment, which consists of land on which development activities have not yet commenced and completed assets or land held for disposition that do not meet the “held for sale” criteria. Any asset reclassified from real estate held for sale to real estate held for investment is recorded individually at the lower of its fair value at the date of the reclassification or its carrying amount before it was classified as “held for sale,” adjusted (in the case of real estate held for investment) for any depreciation that would have been recognized had the asset been continuously classified as real estate held for investment.
Real estate held for sale is recorded at the lower of cost or fair value less cost to sell. If an asset’s fair value less cost to sell, based on discounted future cash flows, management estimates, or market comparisons, is less than its carrying amount, an allowance is recorded against the asset. Real estate under development and real estate held for investment are carried at cost less depreciation and impairment, as applicable. Buildings and improvements included in real estate held for investment are depreciated using the straight-line method over their estimated useful lives, generally up to 39 years. Tenant improvements included in real estate held for investment are amortized using the straight-line method over the shorter of their estimated useful lives or terms of the respective leases. Land improvements included in real estate held for investment are depreciated over their estimated useful lives, up to 15 years.
Real estate under development and real estate held for investment are evaluated for impairment and losses are recorded when undiscounted cash flows estimated to be generated by an asset are less than the asset’s carrying amount. The amount of the impairment loss, if any, is calculated as the excess of the asset’s carrying value over its fair value, which is determined using a discounted cash flow analysis, management estimates or market comparisons.
A summary of our real estate assets is as follows (dollars in millions):
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Real estate under development, current (included in other current assets) | $ | 66 | $ | — | |||||||
| Real estate and other assets held for sale (included in other current assets) | 98 | 40 | |||||||||
| Real estate under development | 646 | 505 | |||||||||
| Real estate held for investment (included in other assets, net) | 310 | 243 | |||||||||
| Total real estate | $ | 1,120 | $ | 788 |
Cost Capitalization and Allocation
When acquiring, developing, and constructing real estate assets, we capitalize recoverable costs. Capitalization begins when the activities related to development have begun and ceases when activities are substantially complete and the asset is available for occupancy. Recoverable costs capitalized include pursuit costs, or pre-acquisition/pre-construction costs, taxes and insurance, interest, development and construction costs and costs of incidental operations. We do not capitalize any internal costs when acquiring, developing, and constructing real estate assets. We expense transaction costs for acquisitions that qualify as a business in accordance with FASB ASC Topic 805, “Business Combinations” (Topic 805). Pursuit costs capitalized in connection with a potential development project that we have determined not to pursue are written off in the period that determination is made.
At times, we purchase bulk land that we intend to sell or develop in phases. The land basis allocated to each phase is based on the relative estimated fair value of the phases before construction except for newly acquired held for sale phases which are measured at their fair value less cost to sell at the acquisition date. We allocate construction costs incurred relating to more than one phase between the various phases; if the costs cannot be specifically attributed to a certain phase or the improvements benefit more than one phase, we allocate the costs between the phases based on their relative estimated sales values, where practicable, or other value methods as appropriate under the circumstances. Relative allocations of the costs are revised as the sales value estimates are revised.
CBRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
When acquiring real estate with existing buildings, we allocate the purchase price between land, land improvements, building and intangibles related to in-place leases, if any, based on their relative fair values. The fair values of acquired land and buildings are determined based on an estimated discounted future cash flow model with lease-up assumptions as if the building was vacant upon acquisition. The fair value of in-place leases includes the value of lease intangibles for above or below-market rents and tenant origination costs, determined on a lease-by-lease basis. The capitalized values for both lease intangibles and tenant origination costs are amortized over the term of the underlying leases. Amortization related to lease intangibles is recorded as either an increase to or a reduction of rental income and amortization for tenant origination costs is recorded to amortization expense.
Disposition of Real Estate
We account for gains and losses on the sale of real estate and other nonfinancial assets or in substance nonfinancial assets to noncustomers that are not an output of our ordinary activities and are not a business in accordance with FASB ASC Topic 610-20, “Other Income – Gains and Losses from the Derecognition of Nonfinancial Assets.” Where we do not have a controlling financial interest in the entity that holds the transferred assets after the transaction, we derecognize the assets or in substance nonfinancial assets and recognize a gain or loss when control of the underlying assets transfers to the counterparty.
We may also dispose of real estate through the transfer of a long-term leasehold representing a major part of the remaining economic life of the property. We account for these transfers as sales-type leases in accordance with FASB ASC Topic 842, “Leases” by derecognizing the carrying amount of the underlying asset, recognizing any net investment in the lease and recognizing selling profit or loss in net income.
Goodwill and Other Intangible Assets
Our acquisitions of businesses require the application of purchase accounting, which results in tangible and identifiable intangible assets and liabilities of the acquired entity being recorded at fair value. The difference between the purchase price and the fair value of net assets acquired is recorded as goodwill. Deferred consideration arrangements granted in connection with a business combination are evaluated to determine whether all or a portion is, in substance, additional purchase price or compensation for services. Additional purchase price is added to the fair value of consideration transferred in the business combination and compensation is included in operating expenses in the period it is incurred.
We are required to test goodwill and other intangible assets deemed to have indefinite useful lives for impairment at least annually, or more often if circumstances or events indicate a change in the impairment status, in accordance with FASB ASC Topic 350, “Intangibles – Goodwill and Other.” The guidance permits, but does not require an entity to perform a qualitative assessment with respect to any of its reporting units or indefinite-lived intangible assets to determine whether a quantitative impairment test is needed. Entities are permitted to assess based on qualitative factors whether it is more likely than not that a reporting unit’s or indefinite-lived intangible asset’s fair value is less than its carrying amount before applying the quantitative impairment test. If it is more likely than not that the fair value of a reporting unit or indefinite-lived intangible asset is less than its carrying amount, the entity conducts the quantitative impairment test. If not, the entity does not need to apply the quantitative test. The qualitative test is elective, and an entity can go directly to the quantitative test rather than making a more-likely-than-not assessment based on an evaluation of qualitative factors. When performing a quantitative test, we use a combination of market and income approaches. The market approach is based on the guideline public company method which estimates the value of our reporting units by applying valuation multiples of selected guideline public companies to the reporting unit’s key operating metrics. The income approach is based on the discounted cash flow method which estimates the fair value of our reporting units and indefinite-lived intangible assets by estimating the present value of projected future cash flows. Management’s judgment is required to develop assumptions to estimate fair values, including selected market multiples for the guideline public company method and revenue growth rates, profit margin percentages, and discount rates for the discounted cash flow model. We record an impairment loss when the amount by which a reporting unit’s or indefinite-lived intangible asset’s carrying value exceeds its fair value, not to exceed the carrying amount of the goodwill or indefinite-lived intangible asset. See Note 10 – Goodwill and Other Intangible Assets for more information.
Business Combinations
We estimate the fair value of identifiable assets, liabilities and any non-controlling interests acquired in a business combination and recognize goodwill as the excess of the purchase price over the recorded value of the acquired assets and liabilities in accordance with Topic 805. When estimating the fair value of acquired assets, we utilize various valuation models which may require significant judgment, particularly where observable market values do not exist. Inputs requiring significant
CBRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
judgment may include discount rates, growth rates, cost of capital, royalty rates, tax rates, market values, depreciated replacement costs, selling prices less costs to dispose, and remaining useful lives, among others. Reasonable differences in these inputs could have a significant impact on the estimated value of acquired assets, the resulting value of goodwill, subsequent depreciation and amortization expense, and the results of future asset impairment evaluations.
Leases
We are the lessee in contracts for our office space tenancies, for leased vehicles, and for some leases of land in our development business. We monitor our service arrangements to evaluate whether they meet the definition of a lease.
The present value of lease payments, which are either fixed payments, in-substance fixed payments, or variable payments tied to an index or rate are recognized on the consolidated balance sheets with corresponding lease liabilities and right-of-use (ROU) assets upon the commencement of the lease. These lease costs are expensed over the respective lease term in accordance with the classification of the lease (i.e., operating versus finance classification). Variable lease payments not tied to an index or rate are expensed as incurred and are not subject to capitalization. After the commencement date, any modifications to the leasing arrangement are assessed and the ROU asset and lease liability are remeasured to recognize modifications to the lease term, leased asset, or lease payments.
The base terms for our lease arrangements typically do not extend beyond 15 years, except for land leases. We commonly have renewal options in our leases, but most of these options do not create a significant economic incentive for us to extend the lease term. Therefore, payments during periods covered by these renewal options are typically not included in our lease liabilities and right-of-use assets. Specific to our vehicle leases, early termination options are common and economic penalties associated with early termination of these contracts are typically significant enough to make it reasonably certain that we will not exercise such options. Therefore, payments during periods covered by these early termination options in vehicle leases are typically included in our lease liabilities and right-of-use assets. As an accounting policy election, our short-term leases with an initial term of 12 months or less are not recognized as lease liabilities and right-of-use assets in the consolidated balance sheets. The rent expense associated with short term leases is recognized on a straight-line basis over the lease term and was not significant.
Most of our office space leases include variable payments based on our share of actual common area maintenance and operating costs of the leased property. Many of our vehicle leases include variable payments based on actual service and fuel costs. For both office space and vehicle leases, we have elected the practical expedient to not separate lease components from non-lease components. Therefore, these costs are classified as variable lease payments.
Lease payments are typically discounted at our incremental borrowing rate because the interest rate implicit in the lease cannot be readily determined in the absence of key inputs which are typically not reported by our lessors. Because we do not generally borrow on a collateralized basis, judgement was used to estimate the secured borrowing rate associated with our leases based on relevant market data and our inputs applied to accepted valuation methodologies. The incremental borrowing rate calculated for each lease also reflects the lease term, currency, and geography specific to each lease.
Deferred Financing Costs
Costs incurred in connection with financing activities are generally deferred and amortized over the terms of the related debt agreements ranging up to eleven years. Debt issuance costs related to a recognized debt liability are presented in the accompanying consolidated balance sheets as a direct deduction from the carrying amount of that debt liability. Amortization of these costs is charged to interest expense in the accompanying consolidated statements of operations. We classify debt issuance costs associated with our line of credit arrangement as an asset, regardless of whether there are any outstanding borrowings on the arrangement. Total deferred financing costs, net of accumulated amortization, related to our revolving line of credit have been included in other assets in the accompanying consolidated balance sheets and were $9 million and $6 million as of December 31, 2025 and 2024, respectively.
See Note 12 – Long-Term Debt and Short-Term Borrowings for additional information on activities associated with our debt.
CBRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Revenue Recognition
We account for revenue with customers in accordance with FASB ASC Topic 606, “Revenue from Contracts with Customers” (Topic 606). Revenue is recognized when or as control of the promised services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those services.
The following is a description of principal activities – separated by reportable segments – from which we generate revenue. For more detailed information about our reportable segments, see Note 19 – Revenue from Contracts with Customers and Note 20 – Segments.
Advisory Services
Our Advisory Services segment provides a comprehensive range of services globally, including leasing, property sales, mortgage origination, loan servicing and valuation services.
Leasing and Property Sales
We provide strategic advice and execution for owners, investors, and occupiers of real estate in connection with the leasing of office, industrial and retail space. We also offer clients fully integrated property sales services under the CBRE Capital Markets brand. We are compensated for our services in the form of a commission and, in some instances, may earn various forms of variable incentive consideration. Our commission is paid upon the occurrence of certain contractual event(s) which may be contingent. For example, a portion of our leasing commission may be paid upon signing of the lease by the tenant, with the remaining paid upon occurrence of another future contingent event (e.g., payment of first month’s rent or tenant move-in). For leases, we typically satisfy our performance obligation at the point in time when control is transferred – generally, at the time of the first contractual event where there is a present right to payment. We look to history, experience with a customer, and deal specific considerations as part of the most likely outcome estimation approach to support our judgement that the second contingency (if applicable) will be met. Therefore, we typically accelerate the recognition of the revenue associated with the second contingent event. For property sales, our commission is typically paid at the closing of the sale, which represents transfer of control for services to the customer.
In addition to our commission, we may recognize other forms of variable consideration which can include, but are not limited to, commissions subject to concession or claw back and volume-based discounts or rebates. We assess variable consideration on a contract-by-contract basis, and when appropriate, recognize revenue based on our assessment of the outcome (using the most likely outcome approach or weighted probability) and historical results, if comparable and representative. We recognize variable consideration if it is deemed probable that there will not be significant reversal in the future.
Mortgage Originations and Loan Sales
We offer clients commercial mortgage and structured financing services. Fees from services within our mortgage brokerage business that are in the scope of Topic 606 include fees earned for the brokering of commercial mortgage loans primarily through relationships established with investment banking firms, national and regional banks, credit companies, insurance companies and pension funds. We are compensated for our brokerage services via a fee paid upon successful placement of a commercial mortgage borrower with a lender who will provide financing. The fee earned is contingent upon the funding of the loan, which represents the transfer of control for services to the customer. Therefore, we typically satisfy our performance obligation at the point in time of the funding of the loan.
We also earn fees from the origination and sale of commercial mortgage loans for which the company retains the servicing rights. Revenue from fees earned from Government-Sponsored Enterprises (GSEs) are out of the scope of Topic 606. These fees are governed by FASB ASC Topic 820, “Fair Value Measurements and Disclosures” (Topic 820) and FASB ASC Topic 860, “Transfers and Servicing.” Upon origination of a mortgage loan held for sale, the fair value of the mortgage servicing rights (MSR) to be retained is included in the forecasted proceeds from the anticipated loan sale and results in a net gain (which is reflected in revenue). Upon sale, we record a servicing asset or liability based on the fair value of the retained MSR associated with the transferred loan. Subsequent to the initial recording, MSRs are amortized and carried at the lower of amortized cost or fair value in other intangible assets in the accompanying consolidated balance sheets. They are amortized in proportion to and over the estimated period that the servicing income is expected to be received.
CBRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Valuation Services
We provide valuation services that include market-value appraisals, litigation support, discounted cash flow analyses, feasibility studies as well as consulting services such as property condition reports, hotel advisory and environmental consulting. We are compensated for valuation services in the form of a fee, which is payable on the occurrence of certain events (e.g., a portion on the delivery of a draft report with the remaining on the delivery of the final report). For consulting services, we may be paid based on the occurrence of time or event-based milestones (such as the delivery of draft reports). We typically satisfy our performance obligation for valuation services as services are rendered over time.
Building Operations & Experience
Our Building Operations & Experience (BOE) segment provides a broad suite of integrated, contractually-based outsourcing services globally for occupiers of real estate, including facilities management, and property management services to owners and investors of real estate.
Facilities Management Services
Facilities management involves the day-to-day management of client-occupied space and includes headquarters, regional offices, administrative offices, data centers and other critical facilities, manufacturing and laboratory facilities, distribution facilities and retail space. Contracts for facilities management services are often structured so we are reimbursed for client-dedicated personnel costs and subcontracted vendor costs as well as associated overhead expenses plus a monthly fee, and, in some cases, annual incentives tied to agreed upon performance targets, with any penalties typically capped. In addition, we have contracts for facilities management services based on fixed fees or guaranteed maximum prices. Fixed fee contracts are typically structured where an agreed upon scope of work is delivered for a fixed price while guaranteed maximum price contracts are structured with an agreed upon scope of work that will be provided to the client for a not to exceed price. Facilities management services represent a series of distinct daily services rendered over time. Consistent with the transfer of control for distinct, daily services to the customer, revenue is typically recognized at the end of each period for the fees associated with the services performed.
We control and direct the work of client-dedicated employees, and therefore present the related employee compensation and benefits expense and the corresponding revenue as gross on our consolidated statements of operations. In situations in which we engage third-party vendors and subcontractors to deliver services to our clients, we act as the principal provider as we control and direct the third-party activities prior to the transfer of services to the client and therefore present the related costs that we are reimbursed for as well as the corresponding revenue as gross. In arrangements where we do not control and direct third-party services delivered to the client, we act as the client’s agent and report revenue net of costs.
In addition to our management fee, we receive various types of variable consideration which can include but is not limited to key performance indicator bonuses or penalties which may be linked to subcontractor performance, gross maximum price, glidepaths, savings guarantees, shared savings, or fixed fee structures. We assess variable consideration on a contract-by-contract basis, and when appropriate, recognize revenue based on our assessment of the outcome (using the most likely outcome approach or weighted probability) and historical results, if comparable and representative. Using management assessments and historical results and statistics, we recognize revenue if it is deemed probable there will not be significant reversal in the future.
Property Management Services
We provide property management services on a contractual basis for owners of and investors in office, industrial and retail properties. These services include building engineering, lease administration, accounting and investment reporting services and flexible workplace solutions. We are compensated for our services through a monthly management fee earned based on either a specified percentage of the monthly rental income, rental receipts generated from the property under management or a fixed fee. We are also often reimbursed for our administrative and payroll costs directly attributable to the properties under management. Property management services represent a series of distinct daily services rendered over time. Consistent with the transfer of control for distinct, daily services to the customer, revenue is recognized at the end of each period for the fees associated with the services performed. The amount of revenue recognized is presented gross for any services provided by our employees, as we control them. We generally do not control third-party services delivered to property management clients. As such, we generally report revenues net of third-party costs.
CBRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Project Management
Our Project Management segment provides services on a portfolio wide or programmatic basis. Revenues from project management services generally include construction management, fixed management fees, variable fees, and incentive fees if certain agreed upon performance targets are met. Revenues from project management may also include reimbursement of payroll and related costs for personnel providing the services and subcontracted vendor costs. Project management services represent a series of distinct daily services rendered over time. Consistent with the transfer of control for distinct, daily services to the customer, revenue is typically recognized at the end of each period for the fees associated with the services performed.
We control and direct the work of client-dedicated employees, and therefore present the related employee compensation and benefits expense and the corresponding revenue as gross on our consolidated statements of operations. In situations in which we engage third-party vendors and subcontractors to deliver services to our clients, we act as the principal provider as we control and direct the third-party activities prior to the transfer of services to the client and therefore present the related costs that we are reimbursed for as well as the corresponding revenue as gross. In arrangements where we do not control and direct third-party services delivered to the client, we act as the client’s agent and report revenue net of costs.
Real Estate Investments
Our REI segment is comprised of investment management services provided globally and development services in the U.S., the U.K., Europe and Asia Pacific (APAC).
Investment Management Services
Our investment management services are provided to pension funds, insurance companies, sovereign wealth funds, foundations, endowments, and other institutional investors seeking to generate returns and diversification through investment in real assets. We sponsor investment programs that span the risk/return spectrum in North America, Europe, Asia, and Australia. We are typically compensated in the form of a base management fee, disposition fees, acquisition fees and incentive fees in the form of performance fees or carried interests based on fund type (open or closed ended, respectively). For the base management fees, we typically satisfy the performance obligation as service is rendered over time pursuant to the series guidance. Consistent with the transfer of control for distinct, daily services to the customer, revenue is recognized at the end of each period for the fees associated with the services performed. For acquisition and disposition services, we typically satisfy the performance obligation at a point in time (at acquisition or upon disposition). For contracts with contingent fees, including performance fees, incentive fees and carried interests, we assess variable consideration on a contract-by-contract basis, and when appropriate, recognize revenue based on our assessment of the outcome (using the most likely outcome approach or weighted probability) and historical results, if comparable and representative. Revenue associated with performance fees and carried interests are typically impacted by volatility in the real estate market, a broad range of possible outcomes, and other factors in the market that are outside of our control.
Development Services
Our development services consist of real estate development and investment activities in the U.S., the U.K. and Europe to users of and investors in commercial real estate, as well as for our own account.
We pursue opportunistic, risk-mitigated development and investment in commercial real estate across a wide spectrum of property types, including industrial, office and retail properties; healthcare facilities of all types (medical office buildings, hospitals and ambulatory surgery centers); data centers; and multi-family residential/mixed-use projects. We pursue development and investment activity on behalf of our clients on a fee basis with no, or limited, ownership interest in a property, in partnership with our clients through co-investment – either on an individual project basis or through programs with certain strategic capital partners or for our own account up to 100% ownership. Development services represent a series of distinct daily services rendered over time. Consistent with the transfer of control for distinct, daily services to the customer, revenue is recognized at the end of each period for the fees associated with the services performed. Fees are typically payable monthly over the service term or upon contractual defined events, like project milestones. In addition to development fee revenue, we receive various types of variable consideration which can include, but is not limited to, contingent lease-up bonuses, cost saving incentives, profit sharing on sales and at-risk fees. We assess variable consideration on a contract-by-contract basis, and when appropriate, recognize revenue based on our assessment of the outcome (using the most likely outcome approach or weighted probability) and historical results, if comparable and representative. We accelerate revenue if it is deemed probable there will not be significant reversal in the future. Sales of real estate to customers which are considered an output of ordinary activities are recognized as revenue when or as control of the assets are transferred to the customer.
CBRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Accounts Receivable and Allowance for Doubtful Accounts
We record accounts receivable for our unconditional rights to consideration arising from our performance under contracts with customers. The carrying value of such receivables, net of the allowance for doubtful accounts, represents their estimated net realizable value. We estimate our allowance for doubtful accounts for specific accounts receivable balances based on historical collection trends, the age of outstanding accounts receivables and existing economic conditions associated with the receivables. Past-due accounts receivable balances are written off when our internal collection efforts have been unsuccessful. As a practical expedient, we do not adjust the promised amount of consideration for the effects of a significant financing component when we expect, at contract inception, that the period between our transfer of a promised service to a customer and when the customer pays for that service will be one year or less. We do not typically include extended payment terms in our contracts with customers.
Remaining Performance Obligations
Remaining performance obligations represent the aggregate transaction prices for contracts where our performance obligations have not yet been satisfied. As of December 31, 2025, the aggregate amount of transaction price allocated to remaining performance obligations in our leasing business was not significant. We apply the practical expedient related to remaining performance obligations that are part of a contract that has an original expected duration of one year or less and the as-invoiced practical expedient, and the practical expedient related to variable consideration from remaining performance obligations pursuant to the series guidance. All of our remaining performance obligations apply to one of these practical expedients.
Contract Assets and Contract Liabilities
Contract assets represent assets for revenue that has been recognized in advance of billing the customer and for which the right to bill is contingent upon something other than the passage of time. This is common for contingent portions of commissions in brokerage, development and construction revenue in development services and incentive fees present in various businesses. Billing requirements vary by contract but are generally structured around fixed monthly fees, reimbursement of employee and other third-party costs, and the achievement or completion of certain contingent events.
When we receive consideration, or such consideration is unconditionally due, from a customer prior to transferring services to the customer under the terms of the services contract, we record deferred revenue, which represents a contract liability. We recognize the contract liability as revenue once we have transferred control of the service to the customer and all revenue recognition criteria are met.
Contract assets and contract liabilities are determined for each contract on a net basis. For contract assets, we classify the short-term portion as a separate line item within current assets and the long-term portion as a separate line item in the accompanying consolidated balance sheets. For contract liabilities, we classify the short-term portion as a separate line item within current liabilities and the long-term portion within other liabilities, long-term in the accompanying consolidated balance sheets.
Contract Costs
Contract costs, accounted for under FASB ASC Topic 340-40, “Other Assets and Deferred Costs – Contracts with Customers,” primarily consist of upfront costs incurred to obtain or to fulfill a contract. The majority of these costs relate to transition costs to fulfill contracts prior to services being rendered and are included within other intangible assets in the accompanying consolidated balance sheets. Capitalized transition costs are amortized based on the transfer of services to which the assets relate which can vary on a contract-by-contract basis and are included in cost of revenue in the accompanying consolidated statement of operations. Contract costs that are recognized as assets are reviewed for impairment when events and changes in circumstances indicate that their carrying amounts may not be recoverable.
Applying the contract cost practical expedient, we recognize the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that we otherwise would have recognized is one year or less.
CBRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Business Promotion and Advertising Costs
The costs of business promotion and advertising are expensed as incurred. Business promotion and advertising costs of $89 million, $82 million and $74 million were included in operating, administrative and other expenses for the years ended December 31, 2025, 2024 and 2023, respectively.
Foreign Currencies
The financial statements of subsidiaries located outside the U.S. are generally measured using the local currency as the functional currency. The assets and liabilities of these subsidiaries are translated at the rates of exchange at the balance sheet date, and income and expenses are translated at the average monthly rate. The resulting translation adjustments are included in the accumulated other comprehensive income/loss component of equity. Gains and losses resulting from foreign currency transactions are included in the results of operations.
Comprehensive Income
Comprehensive income consists of net income and other comprehensive income/loss. In the accompanying consolidated balance sheets, accumulated other comprehensive income/loss primarily consists of foreign currency translation adjustments, qualified derivative activities, unrealized holding gains on available for sale debt securities and pension liability adjustments. Foreign currency translation adjustments exclude any income tax effects given that earnings of non-U.S. subsidiaries are deemed to be reinvested for an indefinite period of time (see Note 16 – Income Taxes).
Warehouse Receivables
Our wholly-owned subsidiary CBRE Capital Markets, Inc. (CBRE Capital Markets) is a Federal Home Loan Mortgage Corporation (Freddie Mac) approved Multifamily Program Plus Seller/Servicer and an approved Federal National Mortgage Association (Fannie Mae) Aggregation and Negotiated Transaction Seller/Servicer. In addition, CBRE Capital Markets’ wholly-owned subsidiary CBRE Multifamily Capital, Inc. (CBRE MCI) is an approved Fannie Mae Delegated Underwriting and Servicing (DUS) Seller/Servicer and CBRE Capital Markets’ wholly-owned subsidiary CBRE HMF, Inc. (CBRE HMF) is a U.S. Department of Housing and Urban Development (HUD) approved Non-Supervised Federal Housing Authority (FHA) Title II Mortgagee, an approved Multifamily Accelerated Processing (MAP) lender and an approved Government National Mortgage Association (Ginnie Mae) issuer of mortgage-backed securities (MBS). Under these arrangements, before loans are originated through proceeds from warehouse lines of credit, we obtain either a contractual loan purchase commitment from either Freddie Mac or Fannie Mae or a confirmed forward trade commitment for the issuance and purchase of a Fannie Mae or Ginnie Mae MBS that will be secured by the loans. The warehouse lines of credit are generally repaid within a one-month period when Freddie Mac or Fannie Mae buys the loans or upon settlement of the Fannie Mae or Ginnie Mae MBS, while we retain the servicing rights. Loans are funded at the prevailing market rates. We elect the fair value option for all warehouse receivables. At December 31, 2025 and 2024, all of the warehouse receivables included in the accompanying consolidated balance sheets were either under commitment to be purchased by Freddie Mac or had confirmed forward trade commitments for the issuance and purchase of Fannie Mae or Ginnie Mae MBS that will be secured by the underlying loans.
Mortgage Servicing Rights
In connection with the origination and sale of mortgage loans with servicing rights retained, we record servicing assets or liabilities based on the fair value of the mortgage servicing rights on the date the loans are sold. Our MSRs are initially recorded at fair value. Subsequent to the initial recording, MSRs are amortized in proportion to and over the period that the servicing income is expected to be received based on projections and timing of estimated future net cash flows and assessed for impairment based on the fair value each reporting period. MSRs are recorded in other intangible assets in the accompanying consolidated balance sheets.
CBRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Our initial recording of MSRs at their fair value resulted in net gains, as the fair value of servicing contracts that result in MSR assets exceeded the fair value of servicing contracts that result in MSR liabilities. The net assets and net gains are presented in the accompanying consolidated financial statements. The amount of MSRs recognized during the years ended December 31, 2025, 2024 and 2023 was as follows (dollars in millions):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Beginning balance, mortgage servicing rights | $ | 486 | $ | 499 | $ | 561 | |||||||||||
| Mortgage servicing rights recognized | 139 | 125 | 82 | ||||||||||||||
| Mortgage servicing rights sold | — | — | — | ||||||||||||||
| Amortization expense | (146) | (138) | (144) | ||||||||||||||
| Ending balance, mortgage servicing rights | $ | 479 | $ | 486 | $ | 499 |
MSRs do not actively trade in an open market with readily available observable prices; therefore, fair value is determined based on certain assumptions and judgments, including the estimation of the present value of future cash flows realized from servicing the underlying mortgage loans. Management’s assumptions include the benefits of servicing (servicing fee income and interest on escrow deposits), inflation, the cost of servicing, prepayment rates, delinquencies, discount rates and the estimated life of servicing cash flows. The assumptions used are subject to change based on management’s judgments and estimates of changes in future cash flows and interest rates, among other things. The key assumptions used during the years ended December 31, 2025, 2024 and 2023 in measuring fair value were as follows:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Weighted-average discount rate | 14.3 | % | 13.6 | % | 13.0 | % | |||||||||||
| Weighted-average conditional prepayment rate | 11.6 | % | 11.8 | % | 12.0 | % |
The estimated fair value of our MSRs was $1.1 billion, $1.1 billion and $1.2 billion as of December 31, 2025, 2024 and 2023, respectively. We perform quarterly procedures to identify triggering events. Impairment is evaluated through a comparison of the carrying amount and fair value of the MSRs, and recognized with the establishment of a valuation allowance. We did not incur any impairment charges related to our MSRs during the years ended December 31, 2025, 2024 or 2023.
Included in revenue in the accompanying consolidated statements of operations are contractually specified servicing fees from loans serviced for others of $357 million, $329 million and $315 million for the years ended December 31, 2025, 2024 and 2023, respectively, and includes prepayment fees/late fees earned from loans serviced for others of $15 million, $9 million and $5 million for the years ended December 31, 2025, 2024 and 2023, respectively. Additionally, also recorded in revenue, was ancillary income of $136 million, $151 million and $108 million for the years ended December 31, 2025, 2024 and 2023, respectively, generated on the loan servicing float.
Accounting for Broker Draws
As part of our recruitment efforts relative to new U.S. brokers, we offer a transitional broker draw arrangement. Our broker draw arrangements generally last until such time as a broker’s pipeline of business is sufficient to allow the broker to earn sustainable commissions. This program is intended to provide the broker with a minimal amount of cash flow to allow adequate time for his or her training as well as time for him or her to develop business relationships. Similar to traditional salaries, the broker draws are paid irrespective of the actual revenues generated by the broker. Often these broker draws represent the only form of compensation received by the broker. Furthermore, it is not our general policy to pursue collection of unearned broker draws paid under this arrangement. As a result, we have concluded that broker draws are economically equivalent to salaries paid and accordingly charge them to compensation expense as incurred over the service period. The broker is also entitled to earn a commission on completed revenue transactions, less any amounts previously paid to the broker in the form of a draw.
CBRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Stock-Based Compensation
We account for all employee awards under the fair value recognition provisions of FASB ASC Topic 718, “Compensation – Stock Compensation” (Topic 718). Topic 718 requires the measurement of compensation cost at the grant date, based upon the estimated fair value of the award, and requires amortization of the related expense over the employee’s requisite service period. We do not estimate forfeitures, but instead recognize forfeitures when they occur. See Note 15 – Employee Benefit Plans for additional information on our stock-based compensation plans.
Income Per Share
Basic income per share attributable to CBRE Group, Inc. is computed by dividing net income attributable to CBRE Group, Inc. stockholders by the weighted-average number of common shares outstanding during each period. The computation of diluted income per share attributable to CBRE Group, Inc. generally further assumes the dilutive effect of potential common shares, which include certain contingently issuable shares. Contingently issuable shares consist of non-vested stock awards.
Income Taxes
Income taxes are accounted for under the asset and liability method in accordance with the “Accounting for Income Taxes” Topic of the FASB ASC (Topic 740). Deferred tax assets and liabilities are determined based on temporary differences between the financial reporting and tax basis of assets and liabilities and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured by applying enacted tax rates and laws and are released in the years in which the 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. Valuation allowances are provided against deferred tax assets when it is more likely than not that some portion or all the deferred tax asset will not be realized.
We utilize a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the available evidence indicates it is more likely than not that the position will be sustained upon examination, including resolution of related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount which is more than 50% likely of being realized upon ultimate settlement. See Note 16 – Income Taxes for additional information on income taxes.
Self-Insurance
Our wholly-owned captive insurance company, which is subject to applicable insurance rules and regulations, insures our exposure related to workers’ compensation insurance, general liability insurance and automotive insurance for our U.S. operations risk on a primary basis and we purchase excess coverage from unrelated insurance carriers. The captive insurance company also insures primary risk relating to professional indemnity claims globally. Given the nature of these types of claims, it may take several years for resolution and determination of the cost of these claims. We are required to estimate the cost of these claims in our financial statements.
The estimates that we utilize to record our potential losses on claims are inherently subjective, and actual claims could differ from amounts recorded, which could result in increased or decreased expense in future periods. As of December 31, 2025 and 2024, our reserves for claims under these insurance programs were $218 million and $197 million, respectively, of which $15 million and $4 million, respectively, represented our estimated current liabilities.
Contingencies
Pursuant to FASB ASC Topic 450, “Contingencies” (Topic 450), we evaluate whether any conditions existed as of the financial statement issuance date which may result in a loss contingent upon one or more future events occurring or not occurring. Assessing contingent liabilities involves significant judgment. If the assessment indicates that a loss is probable and the amount is reasonably estimable, we accrue an estimated liability in our financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability and an estimate of the range of potential losses, if determinable and material, would be disclosed. We determine the amount of estimated liability to accrue, if any, after thorough evaluation of key information available that could impact the size and timing of the potential loss on a case-by-case basis. Given the significant judgment involved with such estimates, the potential liability may change in the future as new information becomes available. We do not recognize gain contingencies until the contingency is completely resolved and the associated amounts are probable of collection.
CBRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Derivatives and Hedging Activities
We record derivative financial instruments at fair value in the accompanying consolidated balance sheets in either other liabilities or other assets. We do not net derivatives on our balance sheet. For derivatives designated as fair value hedges, the gain or loss on the derivative as well as the offsetting gain or loss on the hedged item attributable to the hedged risk are recognized in the same financial statement line item. For derivatives designated as net investment hedges, the gain or loss on the derivative is reported in accumulated other comprehensive loss as part of the cumulative translation adjustment. Accumulated gains and losses attributable to the designated net investment hedge are reclassified out of accumulated other comprehensive loss into earnings when the hedged net investment is either sold or substantially liquidated. Gains or losses on derivative financial instruments representing hedge components, which are excluded from the assessment of effectiveness, are recognized in earnings over the life of the hedge on a systematic and rational basis. Cash flows arising from derivative financial instruments are classified within the consolidated statements of cash flows within the same category that the cash flows from the item being hedged.
The accounting for changes in the fair value of derivatives depends on the intended use of the derivative and whether we have elected to apply hedge accounting in a qualified hedging relationship. We may enter into derivative contracts that are intended to economically hedge certain risks, even though hedge accounting does not apply or we may elect not to apply hedge accounting. Changes in the fair value of derivatives not designated in hedging relationships are recorded directly in earnings. We do not use derivatives for trading or speculative purposes.
Derivative financial instruments that are designated as hedging instruments must be highly effective in mitigating the designated changes in fair value or cash flows of the hedged item. We assess effectiveness at the inception of the hedge and continue to assess effectiveness on a quarterly basis, which includes determining whether the derivatives that are used in the hedging transactions have been and are expected to be highly effective in offsetting changes in the fair value or cash flows of the hedged items.
We use fixed to fixed and float to float cross-currency swaps to hedge our exposure to changes in foreign exchange rates on certain foreign investments as well as foreign currency denominated loans (see Note 12 – Long-Term Debt and Short-Term Borrowings for additional information on the term loan). As of December 31, 2025 and 2024, we had twenty-six and seven outstanding cross-currency swaps with a total fair value of $63 million and $43 million included in other assets and $292 million and none included in other liabilities, respectively.
See Note 8 – Derivatives and Hedging Activities for additional information on cross-currency swaps.
Employee Separation Benefits
One-time termination benefits are expensed at the date the company notifies the employee, unless the employee must provide future service, in which case the benefits are expensed ratably over the future service period. Ongoing benefits are expensed when restructuring activities are probable and the benefit amounts are estimable.
CBRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
3. New Accounting Pronouncements
Recently Adopted Accounting Pronouncements
In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-09, “Improvements to Income Tax Disclosures.” This ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid and is effective for annual periods beginning after December 15, 2024. The new requirements should be applied on a prospective basis with an option to apply them retrospectively. Early adoption is permitted. We adopted ASU 2023-09 prospectively in 2025 and have updated our income tax disclosures in our annual consolidated financial statements.
Recent Accounting Pronouncements Pending Adoption
In November 2024, the FASB issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.” This ASU requires public business entities to disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. This guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027 with early adoption permitted. These requirements should be applied on a prospective basis with an option to apply them retrospectively. We anticipate ASU 2024-03 will result in expanded disclosures related to our income statement expenses.
In May 2025, the FASB issued ASU 2025-03, “Business Combination (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity.” This ASU requires public business entities to assess which entity is the accounting acquirer for a business combination that is effected primarily by exchanging equity interest in which a Variable Interest Entity (VIE) is acquired. This guidance is effective for fiscal years and interim periods beginning after December 15, 2026, with early adoption permitted. These requirements should be applied on a prospective basis to any transaction that occurs after the initial application date. We do not expect the adoption of ASU 2025-03 to have a material impact on our consolidated financial statements and related disclosures.
In July 2025, the FASB issued ASU 2025-05, “Credit Losses (Topic 326): Financial Instruments.” This ASU provides a practical expedient to assume current economic conditions will not change for the remaining life of an asset when preparing forecasts as part of estimating expected credit losses. This guidance is effective for fiscal years and interim periods beginning after December 15, 2025, with early adoption permitted and should be applied on a prospective basis if the practical expedient is elected. We do not expect the adoption of ASU 2025-05 to have a material impact on our consolidated financial statements and related disclosures.
In September 2025, the FASB issued ASU 2025-06, “Intangibles—Goodwill and Other (Topic 350): Internal-use Software.” This ASU removes all references to prescriptive and sequential software development stages (referred to as “project stages”) throughout Subtopic 350-40 and requires the capitalization of software costs to begin when 1) management has authorized and committed to funding the software project and 2) it is probable that the project will be completed and the software will be used to perform the function intended. This guidance is effective for fiscal years and interim periods beginning after December 15, 2027, with early adoption permitted. These requirements should be applied using a prospective, modified transition, or retrospective approach. We are evaluating the impact that ASU 2025-06 will have on our consolidated financial statement disclosures.
In September 2025, the FASB issued ASU 2025-07, “Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606): Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract.” This ASU excludes from derivative accounting non-exchange-traded contracts with underlyings based on operations or activities specific to one of the parties to the contract. This guidance is effective for fiscal years and interim periods beginning after December 15, 2026, with early adoption permitted. These requirements may be applied prospectively or on a modified retrospective basis through a cumulative-effect adjustment to the opening balance of retained earnings. We do not expect the adoption of ASU 2025-07 to have a material impact on our consolidated financial statements and related disclosures.
CBRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In November 2025, the FASB issued ASU 2025-08, “Financial Instruments—Credit Losses (Topic 326): Purchased Loans.” This ASU introduces the concept of “purchased seasoned loans” through new seasoning guidance and expands the use of the gross-up approach for non-Purchased Credit Deteriorated loans. This guidance is effective for fiscal years and interim periods beginning after December 15, 2026, with early adoption permitted. The amendments must be applied prospectively to loans that are acquired on or after the date of initial application. We do not expect the adoption of ASU 2025-08 to have a material impact on our consolidated financial statements and related disclosures.
In November 2025, the FASB issued ASU 2025-09, “Derivatives and Hedging (Topic 815): Hedge Accounting Improvements.” This ASU clarifies and increases flexibility in hedge accounting and further aligns hedge accounting with the economics of an entity’s risk management activities through clarification of five primary issues. This guidance is effective for fiscal years and interim periods beginning after December 15, 2026, with early adoption permitted and should be applied on a prospective basis. We do not expect the adoption of ASU 2025-09 to have a material impact on our consolidated financial statements and related disclosures.
In December 2025, the FASB issued ASU 2025-10, “Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities.” This ASU provides authoritative guidance for the recognition, measurement, and presentation of government grants, aiming to reduce diversity in practice and improve consistency. This guidance is effective for fiscal years and interim periods beginning after December 15, 2028, with early adoption permitted. These requirements may be applied using a modified prospective, modified retrospective, or retrospective approach. We do not expect the adoption of ASU 2025-10 to have a material impact on our consolidated financial statements and related disclosures.
CBRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
4. Acquisitions
Pearce
On November 4, 2025, we acquired 100% ownership interest in Pearce Services, LLC (Pearce), a leading provider of advanced technical services for digital and power infrastructure. Pearce forms part of our BOE segment.
The Pearce acquisition was treated as a business combination under FASB Accounting Standards Codification (ASC) Topic 805, “Business Combinations,” and was accounted for using the acquisition method of accounting. We financed the acquisition with (i) cash on hand and (ii) borrowings under our existing commercial paper program, which were partially repaid with the net proceeds from the issuance of $750 million in aggregate principal amount of 4.900% senior notes in November 2025. See Note 12 – Long-Term Debt and Short-Term Borrowings for more information on the above-mentioned debt instruments.
The following summarizes the consideration transferred at closing for the Pearce acquisition (dollars in millions):
| Cash consideration | $ | 763 | |||
| Settlement of long-term debt | 280 | ||||
| Deferred and contingent consideration | 134 | ||||
| Other | 11 | ||||
| Total consideration | $ | 1,188 |
The purchase price includes a deferred consideration payment of $115 million, due on November 3, 2026. The transaction also includes contingent consideration related to a potential earnout payment of up to $115 million, which is subject to the achievement of certain performance thresholds through the calendar year 2027. In addition, certain Pearce performance-based stock compensation awards and certain transaction bonuses payable to certain executives participate in the deferred and contingent consideration payouts, provided the holders of such awards or bonuses remain employed with the Company up to the relevant payment date. The amounts of both the performance-based stock compensation awards and transaction bonuses vary based on a sliding scale according to the same thresholds as the contingent consideration. The fair values of the non-compensatory portion of the deferred consideration and contingent consideration were $103 million and $31 million, respectively, as of the acquisition date.
The following represents the summary of the excess purchase price over the fair value of net assets acquired (dollars in millions):
| Purchase price | $ | 1,188 | |||
| Less: Estimated fair value of net assets acquired | 580 | ||||
| Excess purchase price over estimated fair value of net assets acquired | $ | 608 |
The purchase accounting adjustments related to the Pearce acquisition have been recorded in the accompanying consolidated financial statements. The excess purchase price over the fair value of net assets acquired has been recorded to goodwill. The goodwill arising from the Pearce acquisition consists largely of the synergies and opportunities related to the digital and power infrastructure space. Of the goodwill generated, approximately $106 million is deductible for tax purposes.
The acquired assets and assumed liabilities of Pearce were recorded at their estimated fair values. The purchase price allocation for the business combination is primarily for intangible assets acquired, and subject to change within the respective measurement period, which will not extend beyond one year from the acquisition date. Measurement period adjustments will be recognized in the reporting period in which the adjustment amounts are determined. Any such adjustments may be material.
CBRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The following table summarizes the fair values assigned to the identified assets acquired and liabilities assumed at the acquisition date on November 4, 2025 (dollars in millions):
| Assets Acquired: | ||||||||
| Current assets | $ | 193 | ||||||
| Property, plant & equipment | 16 | |||||||
| Intangible assets | 600 | |||||||
| Goodwill | 608 | |||||||
| Right-of-use and other assets | 46 | |||||||
| Total assets acquired | 1,463 | |||||||
| Liabilities Assumed: | ||||||||
| Current liabilities | 126 | |||||||
| Deferred tax and other liabilities | 149 | |||||||
| Total liabilities assumed | 275 | |||||||
| Estimated Fair Value of Net Assets Acquired | $ | 1,188 |
In connection with the Pearce acquisition, below is a summary of the value allocated to the intangible assets acquired (dollars in millions):
| Asset Class | Amortization Period | Amount Assigned at Acquisition Date | ||||||||||||
| Customer relationships | 8-13 years | $ | 551 | |||||||||||
| Tradenames | 11 years | 48 | ||||||||||||
| Non-Compete agreements | 9-13 years | 1 | ||||||||||||
| Total identified intangible assets | $ | 600 |
The fair value of customer relationships and management agreements was determined using the Multi-Period Excess Earnings Method (MPEEM), a form of the Income Approach. The MPEEM is a specific application of the Discounted Cash Flow Method. The principle behind the MPEEM is that the value of an intangible asset is equal to the present value of the incremental cash flows attributable only to the subject intangible asset. This estimation used certain unobservable key inputs such as timing of projected cash flows, growth rates, expected contract renewal probabilities, discount rates, and the assessment of useful life.
The fair value of the tradenames was determined by using the Relief-from-Royalty Method, a form of the Income Approach, and relied on key unobservable inputs such as timing of the projected cash flows, growth rates, and royalty rates. The basic tenet of the Relief-from-Royalty Method is that without ownership of the subject intangible asset, the user of that intangible asset would have to make a stream of payments to the owner of the asset in return for the rights to use that asset. By acquiring the intangible asset, the user avoids these payments.
Supplemental pro forma information reflecting the impact of the Pearce acquisition is not provided as the acquisition did not have a material effect on the company’s results of operations.
Industrious
On January 16, 2025, we acquired the remaining 60% ownership interest that we did not already own in Industrious National Management Company, LLC (Industrious), a leading provider of flexible workplace solutions, increasing our ownership to 100%. Industrious forms part of our BOE segment.
The Industrious acquisition was treated as a business combination under FASB ASC Topic 805, “Business Combinations,” and was accounted for using the acquisition method of accounting. We financed the acquisition with (i) borrowings under our existing commercial paper program and (ii) cash on hand.
CBRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The following summarizes the consideration transferred at closing for the Industrious acquisition (dollars in millions):
| Cash consideration | $ | 369 | |||
| Fair value of existing equity method investment in Industrious | 373 | ||||
| Forgiveness of note receivable | 50 | ||||
| Other | 49 | ||||
| Total consideration | $ | 841 |
The following represents the summary of the excess purchase price over the fair value of net assets acquired (dollars in millions):
| Purchase price | $ | 841 | |||
| Less: Estimated fair value of net assets acquired | 249 | ||||
| Excess purchase price over estimated fair value of net assets acquired | $ | 592 |
The purchase accounting adjustments related to the Industrious acquisition have been recorded in the accompanying consolidated financial statements. The excess purchase price over the fair value of net assets acquired has been recorded to goodwill. The goodwill arising from the Industrious acquisition consists largely of the synergies and opportunities related to the flexible workplace solutions space. Of the goodwill generated, approximately $392 million is deductible for tax purposes.
The acquired assets and assumed liabilities of Industrious were recorded at their estimated fair values. The purchase price allocation for the business combination is primarily for intangible assets acquired, and subject to change within the respective measurement period which did not extend beyond one year from the acquisition date. Measurement period adjustments were recognized in the reporting period in which the adjustment amounts were determined.
The following table summarizes the fair values assigned to the identified assets acquired and liabilities assumed at the acquisition date on January 16, 2025 (dollars in millions):
| Assets Acquired: | ||||||||
| Current assets | $ | 98 | ||||||
| Property, plant & equipment | 42 | |||||||
| Intangible assets | 235 | |||||||
| Goodwill | 592 | |||||||
| Right-of-use and other assets | 694 | |||||||
| Total assets acquired | 1,661 | |||||||
| Liabilities Assumed: | ||||||||
| Current liabilities | 128 | |||||||
| Operating lease and other liabilities | 692 | |||||||
| Total liabilities assumed | 820 | |||||||
| Estimated Fair Value of Net Assets Acquired | $ | 841 |
In connection with the Industrious acquisition, below is a summary of the value allocated to the intangible assets acquired (dollars in millions):
| Asset Class | Amortization Period | Amount Assigned at Acquisition Date | ||||||||||||
| Customer relationships | 8 years | $ | 78 | |||||||||||
| Tradenames | 11-13 years | 137 | ||||||||||||
| Management agreements | 10 years | 20 | ||||||||||||
| Total identified intangible assets | $ | 235 |
The fair value of customer relationships and management agreements was determined using the Multi-Period Excess Earnings Method (MPEEM), a form of the Income Approach. The MPEEM is a specific application of the Discounted Cash Flow Method. The principle behind the MPEEM is that the value of an intangible asset is equal to the present value of the incremental cash flows attributable only to the subject intangible asset. This estimation used certain unobservable key inputs such as timing of projected cash flows, growth rates, expected contract renewal probabilities, discount rates, and the assessment of useful life.
CBRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The fair value of the tradenames was determined by using the Relief-from-Royalty Method, a form of the Income Approach, and relied on key unobservable inputs such as timing of the projected cash flows, growth rates, and royalty rates. The basic tenet of the Relief-from-Royalty Method is that without ownership of the subject intangible asset, the user of that intangible asset would have to make a stream of payments to the owner of the asset in return for the rights to use that asset. By acquiring the intangible asset, the user avoids these payments.
Supplemental pro forma information reflecting the impact of the Industrious acquisition is not provided as the acquisition did not have a material effect on the company’s results of operations.
Turner & Townsend
In early January 2025, we completed the combination of our project management business with our Turner & Townsend subsidiary, whereby we contributed CBRE’s project management businesses in exchange for an additional 10% ownership interest in the combined project management business (the Combined Project Management Business). Upon completion of the transaction, CBRE holds a 70% controlling interest in the Combined Project Management Business. The transaction was accounted for as a transfer under common control.
As part of the combination agreement, CBRE granted to the Turner & Townsend partners an option to require CBRE to purchase additional shares in the Combined Project Management Business, which is exercisable during the period between January 1, 2027 and March 31, 2030 (the Put Option). The price payable to the Turner & Townsend partners will be the fair value of the shares at the date the Put Option is exercised. As exercise of the Put Option is not solely in the control of the company, the interest in the Combined Project Management Business related to the Put Option has been classified as Mezzanine Equity on our balance sheet per ASC 480-10-S99, “Distinguishing liabilities from Equity – SEC Materials.” The shares in the Combined Project Management Business subject to the Put Option were valued at $433 million as of December 31, 2025 and was estimated based on discounted forecasted cash flows for the business. We have elected to recognize changes in the redemption value as they occur by adjusting the amount of the redeemable shares to their redemption value at the end of each period.
Other 2025 Acquisitions
During the year ended December 31, 2025, the company completed two in-fill business acquisitions, including one in the Advisory Services segment and one in the Project Management segment, with an aggregate purchase price of approximately $32 million in cash and non-cash consideration. Assets acquired and liabilities assumed are primarily working capital in nature. The results of operations of all acquisitions completed during the year ended December 31, 2025 have been included in the company’s consolidated financial results since their respective acquisition dates. These acquisitions were not significant in relation to the company’s consolidated financial results and, therefore, pro-forma financial information has not been presented.
The following table identifies the company’s allocation of purchase price to goodwill and other intangible assets by category for the combined in-fill acquisitions (dollars in millions):
| Amount Assigned at Acquisition Date | Weighted-Average Life (in years) | |||||||||||||
| Goodwill | $ | 33 | N/A | |||||||||||
| Customer relationships | 4 | 3 years | ||||||||||||
| Other intangible assets | 1 | 1 years | ||||||||||||
| Total | $ | 38 |
J&J Worldwide Services Acquisition
On February 27, 2024, we acquired a 100% ownership interest in J&J Worldwide Services (J&J), a leading provider of engineering services, base support operations and facilities maintenance for the U.S. federal government. J&J primarily serves the U.S. Department of Defense through long-term, fixed-price contracts and is reported as part of our BOE segment. The acquisition is consistent with key elements of our M&A strategy that focus on enhancing our technical services capabilities, increasing revenue resilience and secular growth, and expanding our government client base within our BOE segment.
The J&J acquisition was treated as a business combination under Topic 805 and was accounted for using the acquisition method of accounting. We financed the acquisition with (i) the issuance in February 2024 of $500 million in aggregate principal amount of 5.500% senior notes due April 1, 2029; (ii) borrowings under our existing revolving credit
CBRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
facility under our 2023 Credit Agreement; and (iii) cash on hand. See Note 12 – Long-Term Debt and Short-Term Borrowings for more information on the above-mentioned debt instruments.
The following summarizes the consideration transferred at closing for the J&J acquisition (dollars in millions):
| Cash consideration | $ | 808 | |||
| Deferred and contingent consideration | 11 | ||||
| Total consideration | $ | 819 |
The purchase price included $7 million of contingent consideration, representing the acquisition date fair value recognized for up to $250 million gross of potential future earnout payments based on the achievement of certain performance thresholds during calendar years 2025 and 2026. In 2025, we determined it was unlikely that the performance thresholds would be met and no contingent liability was recorded as of December 31, 2025.
The following represents the summary of the excess purchase price over the fair value of net assets acquired (dollars in millions):
| Purchase price | $ | 819 | |||
| Less: Estimated fair value of net assets acquired (see table below) | 355 | ||||
| Excess purchase price over estimated fair value of net assets acquired | $ | 464 |
The purchase accounting adjustments related to the J&J acquisition have been recorded in the accompanying consolidated financial statements. The excess purchase price over the fair value of net assets acquired and non-controlling interest has been recorded to goodwill. The goodwill arising from the J&J acquisition consists largely of the synergies and opportunities to deliver premier engineering services, base support operations and facilities maintenance services. Of the goodwill generated, approximately $115 million is deductible for tax purposes.
The acquired assets and assumed liabilities of J&J were recorded at their estimated fair values. The purchase price allocation for the business combination is primarily for intangibles, and subject to change within the respective measurement period which did not extend beyond one year from the acquisition date. Measurement period adjustments were recognized in the reporting period in which the adjustment amounts were determined.
The following table summarizes the fair values assigned to the identified assets acquired and liabilities assumed at the acquisition date on February 27, 2024 (dollars in millions):
| Assets Acquired: | ||||||||
| Current assets | $ | 138 | ||||||
| Property, plant & equipment | 11 | |||||||
| Intangible assets | 297 | |||||||
| Right-of-use and other assets | 35 | |||||||
| Total assets acquired | 481 | |||||||
| Liabilities Assumed: | ||||||||
| Current liabilities | 71 | |||||||
| Operating lease and other liabilities | 49 | |||||||
| Total liabilities assumed | 120 | |||||||
| Non-controlling Interest Acquired | 6 | |||||||
| Estimated Fair Value of Net Assets Acquired | $ | 355 |
CBRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In connection with the J&J acquisition, below is a summary of the value allocated to the intangible assets acquired (dollars in millions):
| Asset Class | Amortization Period | Amount Assigned at Acquisition Date | ||||||||||||
| Customer relationships | 9-12 years | $ | 174 | |||||||||||
| Backlog | 4-6 years | 111 | ||||||||||||
| Trademark | 3 years | 10 | ||||||||||||
| Technology | 5 years | 2 |
The fair value of customer relationships and backlog was determined using the Multi-Period Excess Earnings Method (MPEEM), a form of the Income Approach. The MPEEM is a specific application of the Discounted Cash Flow Method. The principle behind the MPEEM is that the value of an intangible asset is equal to the present value of the incremental cash flows attributable only to the subject intangible asset. This estimation used certain unobservable key inputs such as timing of projected cash flows, growth rates, expected contract renewal probabilities, discount rates, and the assessment of useful life.
The fair value of the trademark and the existing technology was determined by using the Relief-from-Royalty Method, a form of the Income Approach, and relied on key unobservable inputs such as timing of the projected cash flows, growth rates, and royalty rates. The basic tenet of the Relief-from-Royalty Method is that without ownership of the subject intangible asset, the user of that intangible asset would have to make a stream of payments to the owner of the asset in return for the rights to use that asset. By acquiring the intangible asset, the user avoids these payments.
Other 2024 Acquisitions
During the year ended December 31, 2024, the company completed nine in-fill business acquisitions, including three in the Advisory Services segment, three in the BOE segment, and three in the Project Management segment with an aggregate purchase price of approximately $315 million in cash and non-cash consideration. Assets acquired primarily relate to intangible assets (customer relationships, backlog, trademarks, and goodwill); other assets and liabilities assumed are working capital in nature. The results of operations of all acquisitions completed during the year ended 2024 have been included in the company’s consolidated financial results since their respective acquisition dates. These acquisitions were not significant in relation to the company’s consolidated financial results and, therefore, pro-forma financial information has not been presented.
The following table identifies the company’s allocation of purchase price to goodwill and other intangible assets by category for the combined in-fill acquisitions (dollars in millions):
| Amount Assigned at Acquisition Date | Weighted-Average Life (in years) | |||||||||||||
| Goodwill | $ | 130 | N/A | |||||||||||
| Customer relationships | 148 | 12 years | ||||||||||||
| Other intangible assets | 16 | 2 years | ||||||||||||
| Total | $ | 294 |
CBRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Other 2023 Acquisitions
During the year ended December 31, 2023, the company completed sixteen in-fill business acquisitions, including nine in the Advisory Services segment, three in the BOE segment, three in the Project Management segment and one in the Real Estate Investments segment, with an aggregate purchase price of approximately $312 million in cash and non-cash consideration. Assets acquired and liabilities assumed are primarily working capital in nature. The results of operations of all acquisitions completed during the year ended 2023 have been included in the company’s consolidated financial results since their respective acquisition dates. These acquisitions were not significant in relation to the company’s consolidated financial results and, therefore, pro-forma financial information has not been presented.
The following table identifies the company’s allocation of purchase price to goodwill and other intangible assets by category for the combined in-fill acquisitions (dollars in millions):
| Amount Assigned at Acquisition Date | Weighted-Average Life (in years) | |||||||||||||
| Goodwill | $ | 199 | N/A | |||||||||||
| Customer relationships | 75 | 10 years | ||||||||||||
| Other intangible assets | 7 | 4 years | ||||||||||||
| Total | $ | 281 |
CBRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
5. Warehouse Receivables & Warehouse Lines of Credit
A roll forward of our warehouse receivables is as follows (dollars in millions):
| Beginning balance at December 31, 2024 | $ | 561 | |||
| Origination of mortgage loans | 16,163 | ||||
| Gains (premiums on loan sales) | 33 | ||||
| Proceeds from sale of mortgage loans: | |||||
| Sale of mortgage loans | (15,102) | ||||
| Cash collections of premiums on loan sales | (33) | ||||
| Proceeds from sale of mortgage loans | (15,135) | ||||
| Net increase in mortgage servicing rights included in warehouse receivables | 8 | ||||
| Ending balance at December 31, 2025 | $ | 1,630 |
The following table is a summary of our warehouse lines of credit in place as of December 31, 2025 and 2024 (dollars in millions):
| December 31, 2025 | December 31, 2024 | |||||||||||||||||||||||||||||||||||||
| Lender | Current Maturity | Pricing | Maximum Facility Size | Carrying Value | Maximum Facility Size | Carrying Value | ||||||||||||||||||||||||||||||||
| JP Morgan Chase Bank, N.A. (JP Morgan) (1) | 2/10/2026 | daily floating Secured Overnight Financing Rate (SOFR) plus 1.40% | $ | 1,310 | $ | 804 | $ | 1,310 | $ | 306 | ||||||||||||||||||||||||||||
| JP Morgan (Business Lending Activity) (1) | 2/10/2026 | daily floating SOFR plus 2.75% | 15 | — | 15 | — | ||||||||||||||||||||||||||||||||
| JP Morgan (Bridge Loans) (1) | 2/10/2026 | daily floating SOFR plus 2.00% | 25 | — | 25 | — | ||||||||||||||||||||||||||||||||
| Fannie Mae Multifamily As Soon As Pooled Plus Agreement and Multifamily As Soon As Pooled Sale Agreement (ASAP) Program (2) | Cancelable anytime | 1-month Chicago Mercantile Exchange (CME) term SOFR plus 1.35%, with a SOFR floor of 0.25% | 1,200 | 221 | 650 | 1 | ||||||||||||||||||||||||||||||||
| TD Bank, N.A. (TD Bank) (3) | 7/15/2026 | daily floating SOFR plus 1.25%, with a SOFR adjustment of 0.10% | 600 | 131 | 900 | 103 | ||||||||||||||||||||||||||||||||
| Bank of America, N.A. (BofA) (4) | 5/20/2026 | daily floating SOFR plus 1.25%, with a SOFR adjustment of 0.10% | 350 | 335 | 350 | 142 | ||||||||||||||||||||||||||||||||
| BofA (4) | 5/20/2026 | daily floating SOFR plus 1.25%, with a SOFR adjustment of 0.10% | 250 | — | 250 | — | ||||||||||||||||||||||||||||||||
| Scotia Bank (5) | 12/4/2026 | daily floating SOFR plus a spread not to exceed 1.30% | 1,000 | 118 | — | — | ||||||||||||||||||||||||||||||||
| $ | 4,750 | $ | 1,609 | $ | 3,500 | $ | 552 |
(1)Effective December 12, 2025, this facility was renewed through February 10, 2026. The margin rate was decreased to 1.40% and the SOFR adjustment rate was deleted. As of December 31, 2025, both sublimits were not utilized. Effective February 10, 2026, this facility was renewed with a maximum aggregate principal amount of $1.4 billion, with a 2.00% margin rate for Bridge Loans and a 1.35% margin rate for other loans and a maturity date of February 9, 2027. On June 9, 2025, the Chase warehouse line was temporarily increased from $1.4 billion to $1.7 billion until July 18, 2025 and was not renewed upon expiration.
(2)Effective October 1, 2024, this facility transitioned to using 1-month CME term SOFR rate. On December 4, 2025, the Fannie Mae ASAP line capacity was temporarily increased from $650 million to $1.2 billion through January 30, 2026 and was not renewed upon expiration. Effective October 6, 2025, the Fannie Mae ASAP line capacity was temporarily increased from $650 million to $1.0 billion through October 30, 2025 and was not renewed upon expiration. On June 20, 2025, the Fannie Mae ASAP line capacity was temporarily increased from $650 million to $725 million through July 11, 2025 and was not renewed upon expiration. Effective August 1, 2025, the Fannie Mae ASAP line margin rate was reduced from 1.45% to 1.35%.
(3)Effective July 15, 2025, this facility was renewed with a maximum aggregate principal amount of $300 million, with an uncommitted $300 million temporary line of credit and a maturity date of July 15, 2026. There were no changes to the SOFR rate or the SOFR adjustment rate at renewal. Effective October 30, 2024, the accordion option was used to temporarily increase the line from $300 million to $600 million until January 28, 2025. The accordion option was not renewed upon expiration.
(4)Effective May 21, 2025, this facility was renewed to May 20, 2026 and there were no changes to the SOFR rate or the SOFR adjustment rate at renewal.
(5)Effective December 5, 2025, a warehouse facility agreement was entered into with Scotia Bank. The facility has a limit of $1.0 billion with a margin rate not to exceed 1.30%.
During the year ended December 31, 2025, we had a maximum of $2.1 billion of warehouse lines of credit principal outstanding.
CBRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
6. Variable Interest Entities
We hold variable interests in certain VIEs primarily in our Real Estate Investments (REI) segment which are not consolidated as it was determined that we are not the primary beneficiary. Our involvement with these entities is in the form of equity co-investments and fee arrangements. As of December 31, 2025 and 2024, our maximum exposure to loss related to the VIEs that are not consolidated was as follows (dollars in millions):
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Investments in unconsolidated subsidiaries | $ | 187 | $ | 192 | |||||||
| Other current assets | 1 | 13 | |||||||||
| Co-investment commitments | 35 | 37 | |||||||||
| Maximum exposure to loss | $ | 223 | $ | 242 | |||||||
7. Fair Value Measurements
FASB ASC Topic 820, “Fair Value Measurements and Disclosures,” (Topic 820) defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Topic 820 also establishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:
-
Level 1 – Quoted prices in active markets for identical assets or liabilities.
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Level 2 – Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
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Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.
The following tables present the fair value of assets and liabilities measured at fair value on a recurring basis as of December 31, 2025 and 2024 (dollars in millions):
| As of December 31, 2025 | |||||||||||||||||||||||
| Fair Value Measured and Recorded Using | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| Assets | |||||||||||||||||||||||
| Available for sale debt securities: | |||||||||||||||||||||||
| U.S. treasury securities | $ | 4 | $ | — | $ | — | $ | 4 | |||||||||||||||
| Corporate debt securities | — | 36 | — | 36 | |||||||||||||||||||
| Asset-backed securities | — | 7 | — | 7 | |||||||||||||||||||
| Total available for sale debt securities | 4 | 43 | — | 47 | |||||||||||||||||||
| Equity securities | 19 | — | — | 19 | |||||||||||||||||||
| Investments in unconsolidated subsidiaries | — | — | 19 | 19 | |||||||||||||||||||
| Warehouse receivables | — | 1,630 | — | 1,630 | |||||||||||||||||||
| Derivative assets | — | 63 | — | 63 | |||||||||||||||||||
| Total assets at fair value | $ | 23 | $ | 1,736 | $ | 19 | $ | 1,778 | |||||||||||||||
| Liabilities | |||||||||||||||||||||||
| Contingent consideration | — | — | 65 | 65 | |||||||||||||||||||
| Derivative liabilities | — | 292 | — | 292 | |||||||||||||||||||
| Total liabilities at fair value | $ | — | $ | 292 | $ | 65 | $ | 357 |
CBRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
| As of December 31, 2024 | |||||||||||||||||||||||
| Fair Value Measured and Recorded Using | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| Assets | |||||||||||||||||||||||
| Available for sale debt securities: | |||||||||||||||||||||||
| U.S. treasury securities | $ | 3 | $ | — | $ | — | $ | 3 | |||||||||||||||
| Corporate debt securities | — | 33 | — | 33 | |||||||||||||||||||
| Asset-backed securities | — | 7 | — | 7 | |||||||||||||||||||
| Total available for sale debt securities | 3 | 40 | — | 43 | |||||||||||||||||||
| Equity securities | 18 | — | — | 18 | |||||||||||||||||||
| Investments in unconsolidated subsidiaries | 100 | — | 412 | 512 | |||||||||||||||||||
| Warehouse receivables | — | 561 | — | 561 | |||||||||||||||||||
| Derivative assets | — | 43 | — | 43 | |||||||||||||||||||
| Other assets | — | — | 46 | 46 | |||||||||||||||||||
| Total assets at fair value | $ | 121 | $ | 644 | $ | 458 | $ | 1,223 | |||||||||||||||
| Liabilities | |||||||||||||||||||||||
| Contingent consideration | — | — | 36 | 36 | |||||||||||||||||||
| Total liabilities at fair value | $ | — | $ | — | $ | 36 | $ | 36 |
Fair value measurements for our available for sale debt securities are obtained from independent pricing services which utilize observable market data that may include quoted market prices, dealer quotes, market spreads, cash flows, the U.S. treasury yield curve, trading levels, market consensus prepayment speeds, credit information and the instrument’s terms and conditions.
During the year ended December 31, 2023, we recorded a gain of $34 million associated with remeasuring our 50% investment in a previously unconsolidated subsidiary to fair value as of the date we acquired the remaining 50% controlling interest. Fair value of this investment in unconsolidated subsidiary at acquisition date was $37 million, based upon the purchase price paid for the remaining 50% interest acquired, which falls under Level 3 of the fair value hierarchy. Such gain was reflected in other income in our Advisory Services segment in the accompanying consolidated statements of operations for the year ended December 31, 2023.
The equity securities are generally valued at the last reported sales price on the day of valuation or, if no sales occurred on the valuation date, at the mean of the bid and ask prices on such date. The above tables do not include $130 million and $148 million related to capital investments as of December 31, 2025 and 2024, respectively in certain non-public entities as they are non-marketable equity investments accounted for under the measurement alternative, which are measured at cost, with fair value adjustments for observable market transactions, minus impairment. These investments are included in “Other assets” in the accompanying consolidated balance sheets.
The fair values of the warehouse receivables are primarily calculated based on locked-in purchase prices. At December 31, 2025 and 2024, all of the warehouse receivables included in the accompanying consolidated balance sheets were either under commitment to be purchased by Freddie Mac or had confirmed forward trade commitments for the issuance and purchase of Fannie Mae or Ginnie Mae mortgage backed securities that will be secured by the underlying loans (see Note 2 – Significant Accounting Policies and Note 5 – Warehouse Receivables & Warehouse Lines of Credit). These assets are classified as Level 2 in the fair value hierarchy as a substantial majority of inputs are readily observable.
As of December 31, 2025 and 2024, investments in unconsolidated subsidiaries at fair value using NAV were $402 million and $378 million, respectively, and investments at fair value using NAV which are not accounted for under the equity method were $23 million and $21 million, respectively. These investments fall under the practical expedient rules that do not require them to be included in the fair value hierarchy and as a result have been excluded from the tables above.
CBRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The tables below present a reconciliation for assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) (dollars in millions):
| Investment in Unconsolidated Subsidiaries | Other Assets | Contingent Consideration (2) | |||||||||||||||
| Balance as of December 31, 2023 | $ | 477 | $ | 16 | $ | 36 | |||||||||||
| Transfer in (out) | — | — | — | ||||||||||||||
| Net change in fair value | (65) | 18 | (5) | ||||||||||||||
| Purchases/ Additions | — | 12 | 11 | ||||||||||||||
| Sales / Payments | — | — | (6) | ||||||||||||||
| Balance as of December 31, 2024 | 412 | 46 | 36 | ||||||||||||||
| Transfer in (out) | (14) | — | (3) | ||||||||||||||
| Net change in fair value | (6) | — | (14) | ||||||||||||||
| Purchases / Additions | — | — | 47 | ||||||||||||||
| Sales / Payments (1) | (373) | (46) | (1) | ||||||||||||||
| Balance as of December 31, 2025 | $ | 19 | $ | — | $ | 65 |
(1)As disclosed in Note 4 – Acquisitions, on January 16, 2025, we acquired the remaining 60% ownership interest in Industrious.
(2)As of December 31, 2025, a Monte Carlo model was used to estimate the fair value of Contingent Consideration related to the Pearce acquisition. The unobservable input used for volatility was 17.7% and for the discount rate was 4.4%.
Net change in fair value, included in the table above, is reported in Net income as follows:
| Category of Assets/Liabilities using Unobservable Inputs | Consolidated Financial Statements | |||||||
| Investments in unconsolidated subsidiaries | Equity income (loss) from unconsolidated subsidiaries | |||||||
| Other assets (liabilities) | Other income | |||||||
| Contingent consideration (short-term) | Accounts payable and accrued expenses | |||||||
| Contingent consideration (long-term) | Other liabilities |
FASB ASC Topic 825, “Financial Instruments,” requires disclosure of fair value information about financial instruments, whether or not recognized in the accompanying consolidated balance sheets. Our financial instruments are as follows:
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Cash and Cash Equivalents and Restricted Cash – These balances include cash and cash equivalents as well as restricted cash with maturities of less than three months. The carrying amount approximates fair value due to the short-term maturities of these instruments.
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Receivables, less Allowance for Doubtful Accounts – Due to their short-term nature, fair value approximates carrying value.
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Warehouse Receivables – These balances are carried at fair value. The primary source of value is either a contractual purchase commitment from Freddie Mac or a confirmed forward trade commitment for the issuance and purchase of a Fannie Mae or Ginnie Mae MBS (see Note 2 – Significant Accounting Policies and Note 5 – Warehouse Receivables & Warehouse Lines of Credit).
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Investments in Unconsolidated Subsidiaries – A portion of these investments are carried at fair value as discussed above. It includes our equity investment and related interests in both public and non-public entities. Our previous ownership of common shares in Altus Power, Inc. (Altus) was considered Level 1 and was measured at fair value using a quoted price in an active market. On April 16, 2025, Altus was acquired by a third-party and as a result we no longer hold any shares in Altus (see Note 11 – Investments in Unconsolidated Subsidiaries). Certain non-controlling equity investments are considered Level 3. Transfer out activities from Level 3 represents the reclassification of our alignment shares in Altus from Level 3 to Level 2.
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Available for Sale Debt Securities – Primarily held by our wholly-owned captive insurance company, these investments are carried at their fair value.
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Equity Securities – Primarily held by our wholly-owned captive insurance company, these investments are carried at their fair value.
CBRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
-
Other Assets – Includes the fair value of the unfunded commitment related to a revolving facility designated as Level 3. Valuations are based on discounted cash flow techniques, for which the significant inputs are the amount and timing of expected future cash flows, market comparables and recovery assumptions.
-
Derivative assets and liabilities – The fair value of cross-currency swaps reflects the net present value of expected payments and receipts under the swap agreement based on the market’s expectation of future spot foreign currency exchange rates. Additional inputs to the net present value calculation may include the contract terms, counterparty credit risk and discount rates. These financial instruments are designated as Level 2 under the fair value hierarchy (see Note 8 – Derivatives and Hedging Activities).
-
Contingent Consideration – The fair values of contingent consideration related to business acquisitions are estimated using Monte Carlo simulations or the probability-weighted present value of estimated future payments resulting from the achievement levels of financial targets.
-
Short-Term Borrowings – The majority of this balance represents outstanding amounts under our warehouse lines of credit of our wholly-owned subsidiary, CBRE Capital Markets, our commercial paper program, and our revolving credit facilities. Due to the short-term nature and/or variable interest rates of these instruments, fair value approximates carrying value (see Note 5 – Warehouse Receivables & Warehouse Lines of Credit and Note 12 – Long-Term Debt and Short-Term Borrowings).
-
Senior Term Loans and Senior Notes – The table below presents the estimated fair value and actual carrying value of our long-term debt (net of unamortized discount and unamortized debt issuance costs) as of December 31, 2025 and 2024 (dollars in millions). The estimated fair value is determined based on dealers’ quotes (which falls within Level 2 of the fair value hierarchy). The actual carrying value is presented net of unamortized debt issuance costs and discount (see Note 12 – Long-Term Debt and Short-Term Borrowings).
| Estimated Fair Value | Carrying Value | ||||||||||||||||||||||
| Financial instrument | December 31, 2025 | December 31, 2024 | December 31, 2025 | December 31, 2024 | |||||||||||||||||||
| Senior term loans due 2028 | $ | 1,239 | $ | 708 | $ | 1,322 | $ | 718 | |||||||||||||||
| 5.950% senior notes due 2034 | 1,068 | 1,033 | 977 | 976 | |||||||||||||||||||
| 4.900% senior notes due 2033 | 755 | — | 742 | — | |||||||||||||||||||
| 4.875% senior notes due 2026 | — | 600 | — | 599 | |||||||||||||||||||
| 4.800% senior notes due 2030 | 608 | — | 591 | — | |||||||||||||||||||
| 5.500% senior notes due 2035 | 516 | — | 494 | — | |||||||||||||||||||
| 5.500% senior notes due 2029 | 519 | 509 | 496 | 496 | |||||||||||||||||||
| 2.500% senior notes due 2031 | 454 | 426 | 493 | 492 |
- Notes Payable on Real Estate – As of December 31, 2025 and 2024, the carrying value of our notes payable on real estate, net of unamortized debt issuance costs, was $197 million and $196 million, respectively. These borrowings have either fixed interest rates or floating interest rates at spreads added to a market index. Although it is possible that certain portions of our notes payable on real estate may have fair values that differ from their carrying values, based on the terms of such loans as compared to current market conditions, or other factors specific to the borrower entity, we do not believe that the fair value of our notes payable is significantly different than their carrying value.
CBRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
8. Derivatives and Hedging Activities
We use fixed to fixed and float to float cross-currency swaps to hedge our exposure to changes in foreign exchange rates on certain foreign investments as well as foreign currency denominated loans. These swaps are designated as either net investment or fair value hedges. Derivative financial instruments that are not designated as hedges were immaterial as of December 31, 2025 and 2024.
We are exposed to credit risk in the event of nonperformance of counterparties, and we manage our exposure to credit risk by selecting major global banks and financial institutions as counterparties and monitor their credit ratings on an on-going basis. We do not enter into derivative transactions for trading or speculative purposes. Certain of these contracts are subject to credit support annexes (CSAs) which establish thresholds for posting collateral at certain future dates. There are currently no requirements for the company to post collateral.
None of our derivative transactions are subject to master netting arrangements that allow net settlement of contracts with the same counterparties.
The following table summarizes the fair value of outstanding cross-currency swaps as of December 31, 2025 and 2024 (dollars in millions):
| Derivative Assets | Derivative Liabilities | |||||||||||||||||||||||||||||||||||||
| Balance Sheet Line Item | Fair Value | Balance Sheet Line Item | Fair Value | |||||||||||||||||||||||||||||||||||
| December 31, 2025 | December 31, 2024 | December 31, 2025 | December 31, 2024 | |||||||||||||||||||||||||||||||||||
| Derivatives designated as hedging instruments (1) | ||||||||||||||||||||||||||||||||||||||
| Fair Value Hedge | Other current assets | $ | 2 | $ | 8 | Other current liabilities | $ | 1 | $ | — | ||||||||||||||||||||||||||||
| Fair Value Hedge | Other assets | — | 12 | Other liabilities | 51 | — | ||||||||||||||||||||||||||||||||
| Subtotal | 2 | 20 | 52 | — | ||||||||||||||||||||||||||||||||||
| Net Investment Hedge | Other current assets | 50 | 18 | Other current liabilities | — | — | ||||||||||||||||||||||||||||||||
| Net Investment Hedge | Other assets | 11 | 5 | Other liabilities | 240 | — | ||||||||||||||||||||||||||||||||
| Subtotal | 61 | 23 | 240 | — | ||||||||||||||||||||||||||||||||||
| Total Derivatives designated as Hedging | $ | 63 | $ | 43 | $ | 292 | $ | — |
(1)As of December 31, 2025 and 2024, the gross notional amount of currency swaps designated as fair value hedges was $473 million and $346 million, respectively; and the gross notional amount of currency swaps designated as net investment hedges was $3.9 billion and $1.0 billion, respectively.
Fair value hedges
On July 10, 2023 and March 14, 2025, we entered into cross-currency swaps, designated as fair value hedges, to manage foreign currency exposure from the Tranche A (USD) Term Loans and Incremental USD Term Loans entered into by Relam Amsterdam Holdings B.V., a Euro functional currency subsidiary (see Note 12 – Long-Term Debt and Short-Term Borrowings). As of December 31, 2025 and 2024, the total principal outstanding balance of the loans was $447 million, $24 million of which was current, and $346 million, $17 million of which was current, respectively. The swaps have an aggregate notional value of $447 million and $346 million as of December 31, 2025 and 2024, respectively, and will mature on July 10, 2028.
We also entered into two additional cross-currency swaps designated as fair value hedges to manage foreign currency exposure related to intercompany loans. The total notional amount of the swaps as of December 31, 2025 was $26 million.
We measure the effectiveness of fair value hedges on a spot-to-spot basis. Accordingly, the spot-to-spot change in the derivative fair values are recorded in the consolidated statements of operations. The fair value hedges offset the spot-to-spot change in the underlying loans, and as such, these hedges are deemed highly effective.
CBRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The gains and losses on outstanding fair value hedges resulting from the change in foreign currency rates for the year ended December 31, 2025 were losses of $50 million recorded in operating, administrative, and other on the consolidated statements of operations. These losses were offset by foreign currency transaction gains on the hedged loans resulting in no net loss for the year ended December 31, 2025. Additionally, gains of $7 million were reclassified from accumulated other comprehensive loss (AOCL) and recognized in interest expense, net of interest income on the consolidated statements of operations for the year ended December 31, 2025. Gains and losses for the years ended December 31, 2024 and December 31, 2023 were immaterial.
Net investment hedges
We have outstanding cross-currency swaps, designated as net investment hedges, to manage our foreign currency exposure to net investments of a USD subsidiary’s investments in Japanese yen, euro, and Canadian dollar functional currency foreign subsidiaries. As of December 31, 2025 and 2024, the total notional amount of these swaps was $1.4 billion and $1.0 billion, respectively. The swaps will mature between 2026 and 2035.
During the year ended December 31, 2025, a GBP denominated subsidiary entered into cross-currency swap agreements, designated as net investment hedges, to manage its foreign currency exposure to a EUR denominated subsidiary. The total notional amount of the swaps was £1.9 billion, £0.7 billion of which was scheduled to mature on February 15, 2040, and £1.2 billion of which was scheduled to mature on February 15, 2045. We subsequently amended the critical terms of the swaps to extend the maturity dates to August 15, 2040 and August 15, 2045.
The following table summarizes the impact of the outstanding net investment hedges in AOCL and the pre-tax impact on the consolidated statement of operations for the year ended December 31, 2025 (dollars in millions):
| Year Ended December 31, 2025 | ||||||||||||||
| Derivative instruments designated as net investment hedges: | ||||||||||||||
| Losses recognized in AOCL on cross-currency swaps | $ | (212) | ||||||||||||
| Gains recognized in income (amount excluded from effectiveness testing): | ||||||||||||||
| Interest income | $ | 47 |
The impact of the outstanding derivatives in AOCL and the pre-tax impact to the consolidated statement of operations for the years ended December 31, 2024 and December 31, 2023 was not material.
CBRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
9. Property and Equipment
Property and equipment consists of the following (dollars in millions):
| December 31, | ||||||||||||||||||||
| Useful Lives | 2025 | 2024 | ||||||||||||||||||
| Computer hardware and software | 2-10 years | $ | 1,692 | $ | 1,489 | |||||||||||||||
| Leasehold improvements | 1-15 years | 804 | 716 | |||||||||||||||||
| Furniture and equipment | 1-10 years | 475 | 351 | |||||||||||||||||
| Construction in progress | N/A | 215 | 153 | |||||||||||||||||
| Total cost | 3,186 | 2,709 | ||||||||||||||||||
| Accumulated depreciation and amortization | 2,137 | 1,795 | ||||||||||||||||||
| Property and equipment, net | $ | 1,049 | $ | 914 |
Depreciation and amortization expense associated with property and equipment was $320 million, $297 million and $290 million for the years ended December 31, 2025, 2024 and 2023, respectively. There were no asset impairment charges related to property and equipment during the years ended December 31, 2025, 2024 and 2023.
Construction in progress includes capitalizable costs incurred in relation to internally developed software and leasehold improvements that have not yet been placed in service.
10. Goodwill and Other Intangible Assets
We test each of our reporting units for goodwill impairment annually at October 1st, or upon a triggering event, in accordance with ASC Topic 350, “Intangibles – Goodwill and Other.” We performed the 2025, 2024 and 2023 annual assessments as of October 1 and determined that no impairment existed as the estimated fair value of our reporting units was in excess of their carrying value.
As of January 1, 2025, we reorganized our business into four reportable segments (see Note 20 – Segments for further discussion). This changed the composition of our reporting units which resulted in the reallocation of goodwill from our Advisory Services and Global Workplace Solutions reportable segments to our newly created BOE and Project Management reportable segments as of January 1, 2025. Additionally, the change in composition of our reporting units was considered a triggering event requiring an interim goodwill impairment test as of January 1, 2025. We determined that no impairment existed as the estimated fair values of our reporting units were in excess of their respective carrying values, both before and after the reorganization.
The following table summarizes the changes in the carrying amount of goodwill for the years ended December 31, 2025 and 2024 (dollars in millions):
| Advisory Services | Global Workplace Solutions | Building Operations & Experience | Project Management | Real Estate Investments | Total Consolidated | ||||||||||||||||||||||||||||||
| Balance as of December 31, 2023 | |||||||||||||||||||||||||||||||||||
| Goodwill | $ | 3,383 | $ | 2,260 | $ | — | $ | — | $ | 606 | $ | 6,249 | |||||||||||||||||||||||
| Accumulated impairment losses | (762) | (175) | — | — | (183) | (1,120) | |||||||||||||||||||||||||||||
| 2,621 | 2,085 | — | — | 423 | 5,129 | ||||||||||||||||||||||||||||||
| Acquisitions | 8 | 589 | — | — | — | 597 | |||||||||||||||||||||||||||||
| Foreign exchange movement | (33) | (60) | — | — | (12) | (105) | |||||||||||||||||||||||||||||
| Balance as of December 31, 2024 | |||||||||||||||||||||||||||||||||||
| Goodwill | 3,358 | 2,789 | — | — | 594 | 6,741 | |||||||||||||||||||||||||||||
| Accumulated impairment losses | (762) | (175) | — | — | (183) | (1,120) | |||||||||||||||||||||||||||||
| Balance as of December 31, 2024 (1) | 2,596 | 2,614 | — | — | 411 | 5,621 | |||||||||||||||||||||||||||||
| Reallocation | (290) | (2,614) | 1,578 | 1,326 | — | — | |||||||||||||||||||||||||||||
| Acquisitions | 37 | — | 1,195 | — | — | 1,232 | |||||||||||||||||||||||||||||
| Foreign exchange movement | 58 | — | 77 | 52 | 11 | 198 | |||||||||||||||||||||||||||||
| Balance as of December 31, 2025 | $ | 2,401 | $ | — | $ | 2,850 | $ | 1,378 | $ | 422 | $ | 7,051 |
(1) Beginning goodwill balance is presented net of prior accumulated impairment losses of $673 million, $175 million, $89 million, and $183 million related to the Advisory Services, BOE, Project Management, and REI segments, respectively.
CBRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Other intangible assets totaled $3.0 billion, net of accumulated amortization of $2.8 billion as of December 31, 2025, and $2.3 billion, net of accumulated amortization of $2.5 billion as of December 31, 2024 and are comprised of the following (dollars in millions):
| December 31, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | ||||||||||||||||||||
| Indefinite-lived intangible assets: | |||||||||||||||||||||||
| Management contracts | $ | 66 | $ | 58 | |||||||||||||||||||
| Trademarks | 322 | 309 | |||||||||||||||||||||
| 388 | 367 | ||||||||||||||||||||||
| Finite-lived intangible assets: | |||||||||||||||||||||||
| Customer relationships | 2,708 | $ | (1,226) | 2,021 | $ | (1,031) | |||||||||||||||||
| Mortgage servicing rights | 1,182 | (702) | 1,134 | (648) | |||||||||||||||||||
| Trademarks/Trade names | 539 | (216) | 342 | (177) | |||||||||||||||||||
| Management contracts | 84 | (84) | 133 | (133) | |||||||||||||||||||
| Other | 835 | (536) | 795 | (505) | |||||||||||||||||||
| 5,348 | (2,764) | 4,425 | (2,494) | ||||||||||||||||||||
| Total intangible assets | $ | 5,736 | $ | (2,764) | $ | 4,792 | $ | (2,494) |
Indefinite-lived intangible assets include management contracts identified as a result of the ING Group N.V. (ING) Real Estate Investment Management (REIM) operations in Europe and Asia, as well as substantially all of Clarion Real Estate Securities (CRES) acquisition in 2011 (collectively referred to as the REIM Acquisitions) relating to relationships with open-end funds, a trademark separately identified as a result of the CBRE Services, Inc. (CBRE Services) in 2001 (the 2001 Acquisition), a trade name separately identified in connection with the REIM Acquisitions and a trademark separately identified as part of the Turner & Townsend transaction.
Customer relationships relate to existing relationships acquired through acquisitions mainly in our BOE segment that are being amortized over useful lives of up to 20 years.
Mortgage servicing rights represent the carrying value of servicing assets in the U.S. in our Advisory Services segment. The mortgage servicing rights are being amortized over the estimated period that net servicing income is expected to be received, which is typically up to 10 years. See Mortgage Servicing Rights discussion within Note 2 – Significant Accounting Policies for additional information.
Amortizable trademarks are primarily from our 2015 acquisition of the Global Workplace Solutions business from Johnson Controls, Inc., which are being amortized over 20 years.
Amortizable management contracts consist primarily of asset management contracts relating to relationships with closed-end funds and separate accounts in the U.S., Europe and Asia that were separately identified as a result of the REIM Acquisitions. These management contracts have been fully amortized.
Other amortizable intangible assets mainly represent upfront transition costs incurred to obtain or fulfill contracts prior to services being rendered which primarily get amortized to cost of revenue over the life of the associated contract. It also includes a backlog and management agreements identified as intangible assets from the Turner & Townsend and Industrious acquisitions.
Amortization expense related to intangible assets, excluding amortization of transition costs, was $393 million, $363 million and $322 million for the years ended December 31, 2025, 2024 and 2023, respectively. The estimated annual amortization expense, excluding amortization of transition costs, for each of the years ending December 31, 2026 through December 31, 2030 and thereafter approximates $376 million, $322 million, $292 million, $260 million, $236 million and $885 million, respectively.
CBRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
11. Investments in Unconsolidated Subsidiaries
Investments in unconsolidated subsidiaries are accounted for under the equity method of accounting. Our investment ownership percentages in equity method investments vary, generally ranging from 1% to 50%. The following table represents the composition of investments in unconsolidated subsidiaries under the equity method of accounting and fair value option (dollars in millions):
| December 31, | |||||||||||
| Investment type | 2025 | 2024 | |||||||||
| Real estate investments (in projects and funds) | $ | 772 | $ | 702 | |||||||
| Investment in Altus: (1) | |||||||||||
| Class A common stock | — | 100 | |||||||||
| Alignment shares | — | 15 | |||||||||
| Subtotal | — | 115 | |||||||||
| Other (2) | 98 | 478 | |||||||||
| Total investment in unconsolidated subsidiaries | $ | 870 | $ | 1,295 | |||||||
(1)On April 16, 2025, Altus was acquired by a third-party.
(2)Consists of our investments in Industrious and other non-public entities. As disclosed in Note 4 – Acquisitions, on January 16, 2025, we acquired the remaining 60% ownership interest in Industrious.
Combined condensed financial information for the entities accounted for using the equity method is as follows (dollars in millions):
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Combined Condensed Balance Sheets Information: | |||||||||||
| Current assets | $ | 3,951 | $ | 3,804 | |||||||
| Non-current assets | 56,338 | 51,600 | |||||||||
| Total assets | $ | 60,289 | $ | 55,404 | |||||||
| Current liabilities | $ | 2,660 | $ | 3,378 | |||||||
| Non-current liabilities | 17,231 | 17,701 | |||||||||
| Total liabilities | $ | 19,891 | $ | 21,079 | |||||||
| Non-controlling interests | $ | 967 | $ | 951 |
| Year Ended December 31, | |||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||
| Combined Condensed Statements of Operations Information: | |||||||||||||||||||||||||||||
| Revenue | $ | 3,149 | $ | 4,026 | $ | 7,178 | |||||||||||||||||||||||
| Operating income | 1,216 | 1,479 | 4,984 | ||||||||||||||||||||||||||
| Net income (loss) (1) | 699 | (648) | 760 | ||||||||||||||||||||||||||
(1)Included in Net income (loss) are realized and unrealized earnings and losses in investments in unconsolidated investment funds and realized earnings and losses from sales of real estate projects in investments in unconsolidated subsidiaries. These realized and unrealized earnings and losses are not included in Revenue and Operating income.
During the year ended December 31, 2025, we recognized other-than-temporary losses of $57 million related to equity method investments. We also recognized $42 million non-cash asset impairment charges on real estate assets. During the year ended December 31, 2024, we recorded non-cash asset impairment charges of $9 million related to equity method investments. There were no asset impairment charges or other significant non-recurring fair value measurements recorded during the year ended December 31, 2023.
CBRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Our Real Estate Investments segment invests our own capital in certain real estate investment funds with clients. We provided investment management, property management, brokerage and other professional services in connection with these real estate investments and earned revenues from these unconsolidated subsidiaries of $274 million, $333 million and $279 million during the years ended December 31, 2025, 2024 and 2023, respectively. We had receivables of $91 million and $156 million at December 31, 2025 and 2024, respectively, from these entities. Additionally, in our development business, we earned development and construction management revenues and received reimbursements for costs from these unconsolidated subsidiaries of $98 million, $114 million and $165 million during the years ended December 31, 2025, 2024 and 2023. We had receivables of $14 million and $19 million at December 31, 2025 and 2024, respectively, from these entities.
12. Long-Term Debt and Short-Term Borrowings
Long-term debt and short-term borrowings consist of the following (dollars in millions):
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Long-Term Debt | |||||||||||
| Senior term loans due 2028 | $ | 1,325 | $ | 720 | |||||||
| 5.950% senior notes due 2034 | 1,000 | 1,000 | |||||||||
| 4.900% senior notes due 2033 | 750 | — | |||||||||
| 4.875% senior notes due 2026 | — | 600 | |||||||||
| 4.800% senior notes due 2030 | 600 | — | |||||||||
| 5.500% senior notes due 2035 | 500 | — | |||||||||
| 5.500% senior notes due 2029 | 500 | 500 | |||||||||
| 2.500% senior notes due 2031 | 500 | 500 | |||||||||
| Other | 6 | — | |||||||||
| Total long-term debt | 5,181 | 3,320 | |||||||||
| Less: current maturities of long-term debt | 71 | 36 | |||||||||
| Less: unamortized discount | 47 | 30 | |||||||||
| Less: unamortized debt issuance costs | 13 | 9 | |||||||||
| Total long-term debt, net of current maturities | $ | 5,050 | $ | 3,245 | |||||||
| Short-Term Borrowings | |||||||||||
| Warehouse lines of credit, with interest ranging from 4.99% to 5.88%, due 2026 | $ | 1,609 | $ | 552 | |||||||
| Commercial paper program, with interest ranging from 3.80% to 4.77% | 852 | 175 | |||||||||
| Revolving credit facilities, with interest of 7.50% | — | 132 | |||||||||
| Other | 4 | 47 | |||||||||
| Total short-term borrowings | $ | 2,465 | $ | 906 | |||||||
Future annual aggregate maturities of total consolidated gross debt (excluding unamortized discount, premium and debt issuance costs) at December 31, 2025 are as follows (dollars in millions):
| 2026 | 2027 | 2028 | 2029 | 2030 | Thereafter | ||||||||||||||||||||||||||||||
| Future maturities of total consolidated gross debt | $ | 2,536 | $ | 332 | $ | 928 | $ | 500 | $ | 600 | $ | 2,750 |
Long-Term Debt
We maintain credit facilities with third-party lenders, which we use for a variety of purposes. On July 10, 2023, CBRE Group, Inc. (CBRE Group), CBRE Services, Inc. (CBRE Services) and Relam Amsterdam Holdings B.V., a wholly owned subsidiary of CBRE Services (Relam Borrower), entered into a new 5-year senior unsecured Credit Agreement (2023 Credit Agreement) maturing on July 10, 2028, which refinanced and replaced a prior credit agreement. The 2023 Credit Agreement provides for a senior unsecured term loan credit facility comprised of (i) tranche A Euro-denominated term loans in an aggregate principal amount of €367 million (Tranche A (Euro) Loans) and (ii) tranche A U.S. Dollar-denominated term loans in an aggregate principal amount of $350 million (Tranche A (USD) Loans), both requiring quarterly principal payments beginning on December 31, 2024 and continuing through maturity on July 10, 2028. The proceeds of the term loans under the
CBRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2023 Credit Agreement were applied to the repayment of all remaining outstanding senior term loans under the prior 2022 Credit Agreement, the payment of related fees and expenses and other general corporate purposes.
On March 13, 2025, CBRE Group, CBRE Services and Relam Borrower entered into Amendment No. 1 to the 2023 Credit Agreement, which provided for, among other things, the ability of Relam Borrower to obtain incremental commitments and loans under the 2023 Credit Agreement in an aggregate principal amount of $750 million (or the Euro equivalent). On March 14, 2025, CBRE Group, CBRE Services and Relam Borrower entered into Amendment No. 2 and Incremental Assumption Agreement to the 2023 Credit Agreement, pursuant to which Relam Borrower incurred incremental term loans (i) denominated in Euros in the aggregate principal amount of €425 million (Incremental Euro Term Loans) and (ii) denominated in U.S. Dollars in the aggregate principal amount of $125 million (Incremental USD Term Loans). The Incremental Euro Term Loans have the same terms applicable to, and constitute the same class as, the Tranche A (Euro) Loans, and the Incremental USD Term Loans have the same terms applicable to, and constitute the same class as, the Tranche A (USD) Loans under the 2023 Credit Agreement. The proceeds of the Incremental Euro Term Loans and the Incremental USD Term Loans were used for working capital and other general corporate purposes (including the partial repayment of borrowings under the commercial paper program), and to pay fees and expenses incurred in connection with entering into the amendments to the 2023 Credit Agreement. On June 24, 2025, CBRE Group, CBRE Services and Relam Borrower entered into Amendment No. 3 to the 2023 Credit Agreement, for the purpose of, among other things, amending the financial covenants to remove the interest coverage ratio covenant and to increase certain baskets and thresholds in the 2023 Credit Agreement in a manner consistent with the terms of the Revolving Credit Agreements described below.
We entered into a cross-currency swap to hedge the associated foreign currency exposure related to the Tranche A (USD) Loans and the Incremental USD Term Loans. See Note 8 – Derivatives and Hedging Activities.
Borrowings denominated in euros under the 2023 Credit Agreement bear interest at a rate equal to (i) the applicable percentage plus (ii) at our option, either (1) the EURIBOR rate for the applicable interest period or (2) a rate determined by reference to Daily Simple Euro Short-Term Rate (ESTR). Borrowings denominated in U.S. dollars under the 2023 Credit Agreement bear interest at a rate equal to (i) the applicable percentage, plus (ii) at our option, either (1) a Term SOFR rate published by CME Group Benchmark Administration Limited for the applicable interest period plus 10 basis points (Adjusted Term SOFR) or (2) a base rate determined by the reference to the greatest of (x) the prime rate, (y) the federal funds rate plus 1/2 of 1% and (z) the sum of (A) a Term SOFR rate published by CME Group Benchmark Administration Limited for an interest period of one month and (B) 1.00%. The applicable rate for borrowings under the 2023 Credit Agreement is determined by reference to our Credit Rating (as defined in the 2023 Credit Agreement). As of December 31, 2025, we had (i) $877 million of euro term loan borrowings outstanding under the 2023 Credit Agreement (at an interest rate of 1.25% plus EURIBOR) and (ii) $445 million of U.S. Dollar term loan borrowings outstanding under the 2023 Credit Agreement (at an interest rate of 1.25% plus Adjusted Term SOFR), net of unamortized debt issuance costs, included in the accompanying consolidated balance sheets.
The term loan borrowings under the 2023 Credit Agreement are guaranteed on a senior basis by CBRE Group and CBRE Services.
The 2023 Credit Agreement also requires us to maintain a maximum leverage ratio of total debt less available cash to consolidated EBITDA (as defined in the 2023 Credit Agreement) of 4.25x (and in the case of the first four full fiscal quarters following consummation of a qualified acquisition (as defined in the 2023 Credit Agreement), 4.75x) as of the end of each fiscal quarter. In addition, the 2023 Credit Agreement also contains other customary affirmative and negative covenants and events of default. We were in compliance with the covenants under this agreement as of December 31, 2025.
On November 13, 2025, CBRE Services issued $750 million in aggregate principal amount of 4.900% senior notes due January 15, 2033 (the 4.900% senior notes) at a price equal to 99.813% of their face value. The 4.900% senior notes are unsecured obligations of CBRE Services, senior to all of its current and future subordinated indebtedness. The 4.900% senior notes are guaranteed on a senior basis by CBRE Group. Interest accrues at a rate of 4.900% per year and is payable semi-annually in arrears on January 15 and July 15 of each year, beginning on July 15, 2026. The 4.900% senior notes are redeemable at our option, in whole or in part, on or after November 15, 2032 at a redemption price of 100% of the principal amount on that date, plus accrued and unpaid interest, if any, to, but excluding the date of redemption. At any time prior to November 15, 2032, we may redeem all or a portion of the notes at a redemption price equal to the greater of (1) 100% of the principal amount of the notes to be redeemed and (2) the sum of the present value at the date of redemption of the remaining scheduled payments of principal and interest thereon to November 15, 2032, assuming the notes matured on November 15, 2032, discounted to the date of redemption on a semi-annual basis at an adjusted rate equal to the treasury rate plus 15 basis
CBRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
points, minus accrued interest to the date of redemption, plus, in either case, accrued and unpaid interest, if any, to the redemption date.
On May 12, 2025, CBRE Services issued $600 million in aggregate principal amount of 4.800% senior notes due June 15, 2030 (the 4.800% senior notes) at a price equal to 99.065% of their face value. The 4.800% senior notes are unsecured obligations of CBRE Services, senior to all of its current and future subordinated indebtedness. The 4.800% senior notes are guaranteed on a senior basis by CBRE Group. Interest accrues at a rate of 4.800% per year and is payable semi-annually in arrears on June 15 and December 15 of each year, beginning on December 15, 2025.
On May 12, 2025, CBRE Services issued $500 million in aggregate principal amount of 5.500% senior notes due June 15, 2035 (the 2035 5.500% senior notes) at a price equal to 99.549% of their face value. The 2035 5.500% senior notes are unsecured obligations of CBRE Services, senior to all of its current and future subordinated indebtedness. The 2035 5.500% senior notes are guaranteed on a senior basis by CBRE Group. Interest accrues at a rate of 5.500% per year and is payable semi-annually in arrears on June 15 and December 15 of each year, beginning on December 15, 2025.
On February 23, 2024, CBRE Services issued $500 million in aggregate principal amount of 5.500% senior notes due April 1, 2029 (the 2029 5.500% senior notes) at a price equal to 99.837% of their face value. The 2029 5.500% senior notes are unsecured obligations of CBRE Services, senior to all of its current and future subordinated indebtedness. The 2029 5.500% senior notes are guaranteed on a senior basis by CBRE Group. Interest accrues at a rate of 5.500% per year and is payable semi-annually in arrears on April 1 and October 1 of each year, beginning on October 1, 2024.
On June 23, 2023, CBRE Services issued $1.0 billion in aggregate principal amount of 5.950% senior notes due August 15, 2034 (the 5.950% senior notes) at a price equal to 98.174% of their face value. The 5.950% senior notes are unsecured obligations of CBRE Services, senior to all of its current and future subordinated indebtedness. The 5.950% senior notes are guaranteed on a senior basis by CBRE Group. Interest accrues at a rate of 5.950% per year and is payable semi-annually in arrears on February 15 and August 15 of each year, beginning on February 15, 2024.
On March 18, 2021, CBRE Services issued $500 million in aggregate principal amount of 2.500% senior notes due April 1, 2031 (the 2.500% senior notes) at a price equal to 98.451% of their face value. The 2.500% senior notes are unsecured obligations of CBRE Services, senior to all of its current and future subordinated indebtedness. The 2.500% senior notes are guaranteed on a senior basis by CBRE Group. Interest accrues at a rate of 2.500% per year and is payable semi-annually in arrears on April 1 and October 1 of each year.
On August 13, 2015, CBRE Services issued $600 million in aggregate principal amount of 4.875% senior notes due March 1, 2026 (the 4.875% senior notes) at a price equal to 99.24% of their face value. We redeemed the 4.875% notes in full on May 28, 2025.
The indentures governing our outstanding senior notes described above (1) contain restrictive covenants that, among other things, limit our ability to create or permit liens on assets securing indebtedness, enter into sale/leaseback transactions and enter into consolidations or mergers, and (2) require that the notes be jointly and severally guaranteed on a senior basis by CBRE Group and any domestic subsidiary that guarantees the 2023 Credit Agreement or the Revolving Credit Agreements (as defined below). The indentures also contain other customary affirmative and negative covenants and events of default. We were in compliance with the covenants under our debt instruments as of December 31, 2025.
CBRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Short-Term Borrowings
We had short-term borrowings of $2.5 billion and $906 million as of December 31, 2025 and 2024, respectively, with related weighted-average interest rates of 4.6% and 5.8%, respectively, which are included in the accompanying consolidated balance sheets.
Revolving Credit Agreements
On June 24, 2025, we entered into a new 5-year senior unsecured Revolving Credit Agreement (the 5-Year Revolving Credit Agreement) which replaced our prior revolving credit agreement dated August 5, 2022. The 5-Year Revolving Credit Agreement provides for a senior unsecured revolving credit facility available to CBRE Services with commitments in an aggregate principal amount of up to $3.5 billion and a maturity date of June 24, 2030. Borrowings bear interest at (i) CBRE Services’ option, either (a) a Term SOFR rate published by CME Group Benchmark Administration Limited for the applicable interest period or (b) a base rate determined by reference to the greatest of (1) the prime rate determined by Wells Fargo, (2) the federal funds rate plus 1/2 of 1% and (3) the sum of (x) a Term SOFR rate published by CME Group Benchmark Administration Limited for an interest period of one month and (y) 1.00% plus (ii) a rate equal to an applicable rate (in the case of borrowings based on the Term SOFR rate, 0.630% to 1.100% and in the case of borrowings based on the base rate, 0.0% to 0.100%, in each case, as determined by reference to our Debt Rating (as defined in the 5-Year Revolving Credit Agreement)).
The 5-Year Revolving Credit Agreement requires us to pay a fee based on the total amount of the revolving credit facility commitment (whether used or unused). In addition, the 5-Year Revolving Credit Agreement also includes capacity for letters of credit not to exceed $300 million in the aggregate and capacity for swingline loans not to exceed $300 million in the aggregate.
The 5-Year Revolving Credit Agreement also requires us to maintain a maximum leverage ratio of total debt less available cash to consolidated EBITDA (as defined in the 5-Year Revolving Credit Agreement) of 4.25x (and in the case of the first four full fiscal quarters following consummation of a qualified acquisition (as defined in the 5-Year Revolving Credit Agreement), 4.75x) as of the end of each fiscal quarter. In addition, the 5-Year Revolving Credit Agreement also contains other customary affirmative and negative covenants and events of default. We were in compliance with the covenants under this agreement as of December 31, 2025.
As of December 31, 2025, no amount was outstanding under the revolving credit facility provided for by the 5-Year Revolving Credit Agreement. $17 million of letters of credit were outstanding as of December 31, 2025. As of December 31, 2024, $132 million was outstanding under this revolving credit facility. No letters of credit were outstanding as of December 31, 2024. Letters of credit are issued in the ordinary course of business and reduce the amount we may borrow under this revolving credit facility.
On June 24, 2025, we entered into a new 364-day senior unsecured Revolving Credit Agreement (the 364-Day Revolving Credit Agreement, and together with the 5-Year Revolving Credit Agreement, the Revolving Credit Agreements). The 364-Day Revolving Credit Agreement provides for a senior unsecured revolving credit facility available to CBRE Services with commitments in an aggregate principal amount of up to $1.0 billion and a maturity date of June 23, 2026. Borrowings bear interest at (i) CBRE Services’ option, either (a) a Term SOFR rate published by CME Group Benchmark Administration Limited for the applicable interest period or (b) a base rate determined by reference to the greatest of (1) the prime rate determined by Wells Fargo, (2) the federal funds rate plus 1/2 of 1% and (3) the sum of (x) a Term SOFR rate published by CME Group Benchmark Administration Limited for an interest period of one month and (y) 1.00%, plus (ii) a rate equal to an applicable rate (in the case of borrowings based on the Term SOFR rate, 0.645% to 1.125% and in the case of borrowings based on the base rate, 0.0% to 0.100%, in each case, as determined by reference to our Debt Rating (as defined in the 364-Day Revolving Credit Agreement)).
The 364-Day Revolving Credit Agreement requires us to pay a fee based on the total amount of the revolving credit facility commitment (whether used or unused).
The 364-Day Revolving Credit Agreement also requires us to maintain a maximum leverage ratio of total debt less available cash to consolidated EBITDA (as defined in the 364-Day Revolving Credit Agreement) of 4.25x (and in the case of the first four full fiscal quarters following consummation of a qualified acquisition (as defined in the 364-Day Revolving Credit Agreement), 4.75x) as of the end of each fiscal quarter. In addition, the 364-Day Revolving Credit Agreement also contains other customary affirmative and negative covenants and events of default. We were in compliance with the covenants under this agreement as of December 31, 2025.
CBRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As of December 31, 2025, no amount was outstanding under the revolving credit facility provided for by the 364-Day Revolving Credit Agreement.
Commercial Paper Program
On December 2, 2024, CBRE Services established a commercial paper program pursuant to which we may issue and sell up to $3.5 billion of short-term, unsecured and unsubordinated commercial paper notes with up to 397-day maturities, under the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended. Amounts available under the program may be borrowed, repaid and re-borrowed from time to time. Payment of the commercial paper notes is guaranteed on an unsecured and unsubordinated basis by CBRE Group The program notes and the guarantee rank pari passu with all other unsecured and unsubordinated indebtedness. The proceeds from issuances under the program may be used for general corporate purposes. As of December 31, 2025, we had $852 million in borrowings outstanding under our commercial paper program with a weighted-average annual interest rate of 3.84%. As of December 31, 2024, we had $175 million in borrowings outstanding under our commercial paper program. At any point in time, the company intends to maintain available commitments under the Revolving Credit Agreement in an amount at least equal to the amount of the commercial paper notes outstanding.
Turner & Townsend Revolving Credit Facility
Turner & Townsend maintains a £120 million revolving credit facility pursuant to a credit agreement dated March 31, 2022, with an additional accordion option of £20 million, that matures on March 31, 2027. As of December 31, 2025, no amount was outstanding under this revolving credit facility. As of December 31, 2024, $44 million (£35 million) was outstanding under this revolving credit facility.
Warehouse Lines of Credit
CBRE Capital Markets has warehouse lines of credit with third-party lenders for the purpose of funding mortgage loans that will be resold, and a funding arrangement with Fannie Mae for the purpose of selling a percentage of certain closed multifamily loans to Fannie Mae. These warehouse lines are recourse only to CBRE Capital Markets and related subsidiaries, based on the related deal type, which are secured by our related warehouse receivables. See Note 5 – Warehouse Receivables & Warehouse Lines of Credit for additional information.
CBRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
13. Leases
We are the lessee in contracts for office space tenancies, leased vehicles, office space in our flexible workplace solutions business, Industrious, and leases of land in our development business. As it relates to service arrangements, we monitor these types of contracts to evaluate whether they meet the definition of a lease.
Supplemental balance sheet information related to our leases is as follows (dollars in millions):
| December 31, | ||||||||||||||||||||
| Category | Classification | 2025 | 2024 | |||||||||||||||||
| Assets | ||||||||||||||||||||
| Operating (1) | Operating lease assets | $ | 2,062 | $ | 1,198 | |||||||||||||||
| Finance | Other assets | 334 | 260 | |||||||||||||||||
| Total leased assets | $ | 2,396 | $ | 1,458 | ||||||||||||||||
| Liabilities | ||||||||||||||||||||
| Current: | ||||||||||||||||||||
| Operating (2) | Operating lease liabilities | $ | 284 | $ | 200 | |||||||||||||||
| Finance | Other current liabilities | 69 | 43 | |||||||||||||||||
| Non-current: | ||||||||||||||||||||
| Operating (2) | Non-current operating lease liabilities | 2,121 | 1,307 | |||||||||||||||||
| Finance | Other liabilities | 167 | 122 | |||||||||||||||||
| Total lease liabilities | $ | 2,641 | $ | 1,672 | ||||||||||||||||
(1)Operating lease assets as of December 31, 2025 includes operating lease assets acquired from Industrious.
(2)Current and non-current operating lease liabilities as of December 31, 2025 include operating lease liabilities acquired from Industrious.
Components of lease cost are as follows (dollars in millions):
| Year Ended December 31, | ||||||||||||||||||||
| Component | Classification | 2025 | 2024 | |||||||||||||||||
| Operating lease cost | Cost of Revenue and Operating, administrative and other | $ | 319 | $ | 230 | |||||||||||||||
| Finance lease cost: | ||||||||||||||||||||
| Amortization of right-to-use assets | (1) | 53 | 41 | |||||||||||||||||
| Interest on lease liabilities | Interest expense | 4 | 3 | |||||||||||||||||
| Variable lease cost | (2) | 286 | 129 | |||||||||||||||||
| Sublease income | Revenue | (9) | (8) | |||||||||||||||||
| Total lease cost | $ | 653 | $ | 395 |
(1)Amortization costs of $37 million and $27 million from vehicle finance leases utilized in client outsourcing arrangements are included in the “Cost of revenue” line item in the accompanying consolidated statements of operations for the years ended December 31, 2025 and 2024, respectively. Amortization costs of $16 million and $14 million from all other finance leases are included in the “Depreciation and amortization” line item in the accompanying consolidated statements of operations for the years ended December 31, 2025 and 2024, respectively.
(2)Variable lease costs of $189 million and $33 million from leases in client outsourcing arrangements are included in the “Cost of revenue” line item in the accompanying consolidated statements of operations for the years ended December 31, 2025 and 2024, respectively. Variable lease costs of $97 million and $96 million from all other leases are included in the “Operating, administrative and other” line item in the accompanying consolidated statements of operations for the years ended December 31, 2025 and 2024, respectively. Variable lease costs increased over the previous year due to lease costs incurred by Industrious after the business combination.
CBRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Weighted-average remaining lease term and discount rate for our operating and finance leases are as follows:
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Weighted-average remaining lease term: | |||||||||||
| Operating leases (1) | 11 years | 39 years | |||||||||
| Finance leases (2) | 18 years | 60 years | |||||||||
| Weighted-average discount rate: | |||||||||||
| Operating leases (1) | 5.3% | 5.2% | |||||||||
| Finance leases (2) | 4.7% | 5.3% |
(1)Operating leases as of December 31, 2025 and 2024 include 90+ year leases on real estate under development. If excluded, the weighted-average remaining lease term would be 9 years as of December 31, 2025 and 2024 and weighted-average discount rate would be 4.8% and 4.3% as of December 31, 2025 and 2024, respectively.
(2)Finance leases as of December 31, 2025 and 2024 included a 99-year lease on real estate held for investment. If excluded, the weighted-average remaining lease term would be 3 years as of December 31, 2025 and 2024 and weighted-average discount rate would be 4.3% and 3.1%, as of December 31, 2025 and 2024, respectively. This excludes certain land leases up to 999 years held by our U.K. development business.
Maturities of lease liabilities by fiscal year as of December 31, 2025 are as follows (dollars in millions):
| Operating Leases | Finance Leases | ||||||||||
| 2026 | $ | 336 | $ | 72 | |||||||
| 2027 | 379 | 64 | |||||||||
| 2028 | 350 | 46 | |||||||||
| 2029 | 323 | 26 | |||||||||
| 2030 | 298 | 7 | |||||||||
| Thereafter | 1,991 | 294 | |||||||||
| Total remaining lease payments at December 31, 2025 | 3,677 | 509 | |||||||||
| Less: Interest | 1,272 | 273 | |||||||||
| Present value of lease liabilities at December 31, 2025 | $ | 2,405 | $ | 236 |
Supplemental cash flow information and non-cash activity related to our operating and finance leases are as follows (dollars in millions):
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||
| Operating cash outflows from operating leases | $ | 343 | $ | 238 | |||||||
| Operating cash outflows from finance leases | 6 | 4 | |||||||||
| Financing cash outflows from finance leases | 56 | 44 | |||||||||
| Right-of-use assets obtained in exchange for new operating lease liabilities (1) | 980 | 216 | |||||||||
| Right-of-use assets obtained in exchange for new finance lease liabilities | 120 | 113 | |||||||||
| Other non-cash increases in operating lease right-of-use assets (2) | 94 | 166 | |||||||||
| Other non-cash decreases in finance lease right-of-use assets (2) | (9) | (12) |
(1)Increase in right-of-use assets obtained in exchange for new operating lease liabilities for the year ended December 31, 2025 primarily relates to leases acquired in conjunction with the Industrious acquisition.
(2)The non-cash activity in the right-of-use assets resulted from lease modifications/remeasurements and terminations.
CBRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
14. Commitments and Contingencies
We are a party to a number of pending or threatened lawsuits arising out of, or incident to, our ordinary course of business. We believe that any losses in excess of the amounts accrued as liabilities on our consolidated financial statements are unlikely to be significant, but litigation is inherently uncertain and there is the potential for a material adverse effect on our consolidated financial statements if one or more matters are resolved in a particular period in an amount materially in excess of what we anticipated.
In January 2008, CBRE MCI, a wholly-owned subsidiary of CBRE Capital Markets, entered into an agreement with Fannie Mae under Fannie Mae’s Delegated Underwriting and Servicing Lender Program (DUS Program) to provide financing for multifamily housing with five or more units. Under the DUS Program, CBRE MCI originates, underwrites, closes and services loans without prior approval by Fannie Mae, and typically, is subject to sharing up to one-third of any losses on loans originated under the DUS Program. CBRE MCI has funded loans with unpaid principal balances of $50.5 billion at December 31, 2025, of which $47.6 billion is subject to such loss sharing arrangements. CBRE MCI, under its agreement with Fannie Mae, must post cash reserves or other acceptable collateral under formulas established by Fannie Mae to provide for sufficient capital in the event losses occur. As of December 31, 2025 and 2024, CBRE MCI had $165 million and $160 million, respectively, of letters of credit under this reserve arrangement and had recorded a liability of approximately $79 million and $63 million as of December 31, 2025 and 2024, respectively, for its loan loss guarantee obligation under such arrangement. Fannie Mae’s recourse under the DUS Program is limited to the assets of CBRE MCI, which assets totaled approximately $1.7 billion (including $1.1 billion of warehouse receivables, which are pledged against warehouse lines of credit and are therefore not available to Fannie Mae) at December 31, 2025.
CBRE Capital Markets participates in Freddie Mac’s Multifamily Small Balance Loan (SBL) Program. Under the SBL Program, CBRE Capital Markets has certain repurchase and loss reimbursement obligations. We could potentially be obligated to repurchase any SBL loan originated by CBRE Capital Markets that remains in default for 120 days following the forbearance period, if the default occurred during the first 12 months after origination and such loan had not been earlier securitized. In addition, CBRE Capital Markets may be responsible for a loss not to exceed 10% of the original principal amount of any SBL loan that is not securitized and goes into default after the 12-month repurchase period. CBRE Capital Markets must post a cash reserve or other acceptable collateral to provide for sufficient capital in the event the obligations are triggered. As of both December 31, 2025 and 2024, CBRE Capital Markets had posted a $5 million letter of credit under this reserve arrangement.
Letters of credit
We had outstanding letters of credit totaling $308 million as of December 31, 2025, excluding letters of credit for which we have outstanding liabilities already accrued on our consolidated balance sheets related to our subsidiaries’ outstanding reserves for claims under certain insurance programs as well as letters of credit related to operating leases. The CBRE Capital Markets letters of credit totaling $170 million as of December 31, 2025 referred to in the preceding paragraphs are included in the $308 million outstanding letters of credit as of such date. The remaining letters of credit are primarily executed by us in the ordinary course of business and expire at the end of each of the respective agreements.
Guarantees
We had guarantees totaling $203 million as of December 31, 2025, excluding guarantees related to pension liabilities, operating leases, consolidated indebtedness and other obligations for which we have outstanding liabilities already accrued on our consolidated balance sheets. The $203 million primarily represents guarantees executed by us in the ordinary course of business, including various guarantees of management and vendor contracts in our operations overseas, which expire at the end of each of the respective agreements.
In addition, as of December 31, 2025, we had issued numerous non-recourse carveout, completion and budget guarantees relating to development projects for the benefit of third parties. These guarantees are commonplace in our industry and are made by us in the ordinary course of our REI business. Non-recourse carveout guarantees generally require that our project-entity borrower not commit specified improper acts, with us potentially liable for all or a portion of such entity’s indebtedness or other damages suffered by the lender if those acts occur. Completion and budget guarantees generally require us to complete construction of the relevant project within a specified timeframe and/or within a specified budget, with us potentially being liable for costs to complete in excess of such timeframe or budget. While there can be no assurance, we do not expect to incur any material losses under these guarantees.
CBRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Performance and payment bonds
In the ordinary course of business, we are required by certain customers to provide performance and payment bonds for contractual commitments related to our projects. These bonds provide a guarantee to the customer that the company will perform under the terms of a contract and that we will pay our subcontractors and vendors. If we fail to perform under a contract or to pay our subcontractors and vendors, the customer may demand that the surety make payments or provide services under the bond. We must reimburse the surety for expenses or outlays it incurs. As of December 31, 2025 and 2024, outstanding performance and payment bonds approximated $1.0 billion and $808 million, respectively.
Deferred and contingent consideration
The purchase price for our business acquisitions often includes deferred and contingent consideration. As of December 31, 2025 and 2024, we had short-term deferred and contingent consideration of $149 million and $199 million, respectively, which was included within accounts payable and accrued expenses, and long-term deferred and contingent consideration of $130 million and $93 million, respectively, which was included within other liabilities in the accompanying consolidated balance sheets.
Indirect Taxes
The company is subject to indirect taxes, including sales and use tax in the United States and value-add tax in certain foreign jurisdictions in which it conducts business. The company had indirect tax liabilities primarily related to sales and use tax of $90 million and $91 million as of December 31, 2025 and 2024, respectively. Indirect tax liabilities are adjusted considering changing facts and circumstances, such as the closing of a tax examination, further interpretation of existing or new tax laws. We are currently under audit in several jurisdictions. In accordance with FASB ASC Topic 450, “Contingencies,” the company establishes accruals for contingencies, including uncertainties related to taxes not based on income, when the company believes it is probable that a loss has been incurred, and the amount of the loss can be reasonably estimated.
Other
An important part of the strategy for our REI segment involves co-investing our capital in certain real estate investments with our clients. For our investment funds, we generally co-invest a minority interest of the equity in a particular fund. As of December 31, 2025, we had aggregate future commitments of $216 million related to co-investment funds. Additionally, we make selective investments in real estate development projects on our consolidated account or co-invest with our clients with up to 50% of the project’s equity as a principal in unconsolidated real estate projects. We had unfunded capital commitments of $226 million and $56 million to consolidated and unconsolidated projects, respectively, as of December 31, 2025.
Also refer to Note 22 – Telford Fire Safety Remediation for the details relating to the provision associated with fire safety remediation efforts by our subsidiary, Telford Homes.
CBRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
15. Employee Benefit Plans
Stock Incentive Plans
2019 Equity Incentive Plan
Our 2019 Plan was adopted by our board of directors on March 1, 2019 and approved by our stockholders on May 17, 2019. The 2019 Plan authorizes the grant of stock-based awards to employees, directors and independent contractors. Unless terminated earlier, the 2019 Plan will terminate on March 1, 2029. A total of 9,900,000 shares of our Class A common stock are reserved for issuance under the 2019 Plan, less 189,499 shares granted under our 2017 Equity Incentive Plan (the 2017 Plan) between March 1, 2019, the date our board of directors approved the plan, and May 17, 2019, the date our stockholders approved the 2019 Plan. Additionally, shares underlying awards outstanding under the 2017 Plan at termination of such plan in May 2019 that were subsequently canceled, forfeited or terminated without issuance to the holder thereof will be available for reissuance under the 2019 Plan. On May 27, 2022, an additional 7,700,000 shares of our Class A common stock was reserved for issuance under the 2019 Plan. As of December 31, 2025, 996,395 shares were cancelled and 1,601,597 shares were withheld for payment of taxes under the 2017 Plan and added to the authorized pool for the 2019 Plan, bringing the total authorized amount under the 2019 Plan to 20,008,493 shares of our Class A common stock.
Shares underlying expired, canceled, forfeited or terminated awards under the 2019 Plan (other than awards granted in substitution of an award previously granted), plus those utilized to pay tax withholding obligations with respect to an award (other than an option or stock appreciation right) will be available for reissuance. Awards granted under the 2019 Plan are subject to a minimum vesting condition of one year, subject to certain exceptions as set forth in the form of grant notice and restricted stock unit agreement. As of December 31, 2025, assuming the maximum number of shares under our performance-based awards will later be issued, 8,564,507 shares remained available for future grants under this plan.
The number of shares issued or reserved pursuant to the 2019 Plan is subject to adjustment on account of a stock split of our outstanding shares, stock dividend, dividend payable in a form other than shares in an amount that has a material effect on the price of the shares, consolidation, combination or reclassification of the shares, recapitalization, spin-off, or other similar occurrences.
Non-Vested Stock Awards
We have issued non-vested stock awards, including RSUs and restricted shares, in our Class A common stock to certain of our employees, independent contractors and members of our board of directors. The following is a summary of the awards granted during the years ended December 31, 2025, 2024 and 2023.
*•*During the year ended December 31, 2025, we granted RSUs that are performance vesting in nature, with 901,834 reflecting the maximum number of RSUs that may be issued if all of the performance targets are satisfied at their highest levels, and 802,824 RSUs that are time vesting in nature.
*•*During the year ended December 31, 2024, we granted RSUs that are performance vesting in nature, with 826,883 reflecting the maximum number of RSUs that may be issued if all of the performance targets are satisfied at their highest levels, and 1,168,506 RSUs that are time vesting in nature.
*•*During the year ended December 31, 2023, we granted RSUs that are performance vesting in nature, with 896,742 reflecting the maximum number of RSUs that may be issued if all of the performance targets are satisfied at their highest levels, and 1,216,384 RSUs that are time vesting in nature.
Our annual performance-vesting awards generally vest in full three years from the grant date, based on our achievement against various performance targets. Our time-vesting awards generally vest 25% per year over four years from the grant date.
We granted RSUs under our 2019 Plan (Segment RSU Grant) to certain of our employees in Advisory Services and BOE segments in 2021 and 2022, with 1,630,846 reflecting the maximum number of RSUs that may be issued if all of the performance targets are satisfied at their highest levels, and 465,956 RSUs that are time vesting in nature. As a condition to this Segment RSU grant, each participant has agreed to execute a Restrictive Covenants Agreement. Each Segment RSU grant consisted of:
CBRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
*(i)*Segment Performance RSUs with respect to 33.3% of the total number of target RSUs subject to the grant. The actual number of Segment Performance RSUs that will vest is determined by measuring growth in certain segment specific metrics such as client operating profit, segment operating profit and major markets over a five-year measurement period commencing on January 1, 2022 and ending on December 31, 2026.
*(ii)*Time Vesting RSUs with respect to 33.3% of the total number of target RSUs subject to the grant, which cliff vests on November 10, 2026.
*(iii)*EPS Performance RSUs with respect to 33.3% of the total number of target RSUs subject to the grant. The actual number of EPS Performance RSUs that will vest is determined by measuring our cumulative adjusted earnings per share growth against the cumulative EPS growth, as reported under U.S. GAAP, to a comparative group comprised of each of the other companies comprising the S&P 500 on the grant date over a five-year measurement period commencing on January 1, 2022 and ending on December 31, 2026.
In February 2022, we made a special grant of RSUs under our 2019 Plan (2022 Special RSU grant) to our CEO, with 88,715 reflecting the maximum number of RSUs that may be issued if all of the performance targets are satisfied at their highest levels, and 25,347 RSUs that are time vesting in nature. As a condition to this 2022 Special RSU grant, the CEO has agreed to execute a Restrictive Covenants Agreement. This 2022 Special RSU grant consisted of:
*(i)*Total Shareholder Return (TSR) Performance RSUs with respect to 33.3% of the total number of target RSUs subject to the grant. The actual number of TSR Performance RSUs that will vest is determined by measuring our cumulative TSR against the cumulative TSR of each of the other companies comprising the S&P 500 on the Grant Date (the Comparison Group) over a five-year measurement period commencing on January 1, 2022 and ending on December 31, 2026. For purposes of measuring TSR, the initial value of our common stock was the average closing price of such common stock for the 60 trading days immediately preceding January 1, 2022, and the final value of our common stock will be the average closing price of such common stock for the 60 trading days immediately preceding December 31, 2026.
*(ii)*Time Based RSUs with respect to 33.3% of the total number of target RSUs subject to the grant, vesting on February 25, 2027.
*(iii)*EPS Performance RSUs with respect to 33.3% of the total number of target RSUs subject to the grant. The actual number of EPS Performance RSUs that will vest is determined by measuring our cumulative adjusted income per share growth against the cumulative EPS growth, as reported under U.S. GAAP (GAAP EPS), of each of the other members of the Comparison Group over a five-year measurement period commencing on January 1, 2022 and ending on December 31, 2026. These RSUs vest on December 31, 2026.
In March 2025, we issued a portion of the 2025 annual performance awards under our 2019 Plan with TSR conditions, with 393,019 reflecting the maximum number of RSUs that may be issued if all of the performance targets are satisfied at their highest levels.
In March 2024, we issued a portion of the 2024 annual performance awards under our 2019 Plan with TSR conditions, with 385,878 reflecting the maximum number of RSUs that may be issued if all of the performance targets are satisfied at their highest levels.
We estimated the fair value of the TSR Performance RSUs referred to above on the date of the grant using a Monte Carlo simulation with the following assumptions:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | ||||||||||||||||
| Volatility of common stock | 29.6 | % | 29.9 | % | |||||||||||||
| Expected dividend yield | 0.0 | % | 0.0 | % | |||||||||||||
| Risk-free interest rate | 3.9 | % | 4.2 | % |
CBRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
A summary of the status of our non-vested stock awards is presented in the table below:
| Shares/Units | Weighted-Average Market Value Per Share | ||||||||||
| Balance at December 31, 2022 | 7,413,079 | $ | 73.67 | ||||||||
| Granted | 1,664,755 | 78.46 | |||||||||
| Performance award achievement adjustments | 365,965 | 81.14 | |||||||||
| Vested | (4,001,675) | 59.62 | |||||||||
| Forfeited | (221,545) | 81.14 | |||||||||
| Balance at December 31, 2023 | 5,220,579 | 86.17 | |||||||||
| Granted | 1,609,510 | 95.89 | |||||||||
| Performance award achievement adjustments | (302,282) | 111.72 | |||||||||
| Vested | (1,729,161) | 75.67 | |||||||||
| Forfeited | (341,324) | 89.27 | |||||||||
| Balance at December 31, 2024 | 4,457,322 | 91.78 | |||||||||
| Granted | 1,283,802 | 147.09 | |||||||||
| Performance award achievement adjustments | 42,937 | 144.84 | |||||||||
| Vested | (970,852) | 87.92 | |||||||||
| Forfeited | (217,611) | 100.90 | |||||||||
| Balance at December 31, 2025 | 4,595,598 | 108.12 |
Total compensation expense related to non-vested stock awards was $120 million, $146 million and $96 million for the years ended December 31, 2025, 2024 and 2023, respectively. At December 31, 2025, total unrecognized estimated compensation cost related to non-vested stock awards was approximately $209 million, which is expected to be recognized over a weighted-average period of approximately 2 years.
Bonuses
We have bonus programs covering select employees, including senior management. Awards are based on the position and performance of the employee and the achievement of pre-established financial, operating and strategic objectives. The amounts charged to operating expense for bonuses were $882 million, $727 million and $697 million for the years ended December 31, 2025, 2024 and 2023, respectively.
401(k) Plan
Our CBRE 401(k) Plan (401(k) Plan) is a defined contribution savings plan that allows participant deferrals under Section 401(k) of the Internal Revenue Code (IRC). Most of our U.S. employees, other than qualified real estate agents having the status of independent contractors under section 3508 of the IRC of 1986, as amended, and non-plan electing union employees, are eligible to participate in the plan. The 401(k) Plan provides for participant contributions as well as a company match. A participant is allowed to contribute to the 401(k) Plan from 1% to 75% of his or her compensation, subject to limits imposed by applicable law. Active participants vest in company match contributions at 33% per year for each plan year they are employed. For 2025, 2024 and 2023, we contributed 67% on the first 6% of eligible compensation contributed to the plan (up to $6,000) for all employees regardless of base compensation or commissioned status. In connection with the 401(k) Plan, we recognized compensation expense of $113 million, $121 million and $108 million for the years ended December 31, 2025, 2024 and 2023, respectively.
Participants are entitled to invest up to 25% of their 401(k) account balance in shares of our common stock. As of December 31, 2025, approximately 0.9 million shares of our common stock were held as investments by participants in our 401(k) Plan.
CBRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Pension Plans
Certain of our non-U.S. subsidiaries maintain contributory defined benefit pension plans to provide retirement benefits to existing and former employees participating in these plans. We contribute annually to the plans to fund pension liabilities as actuarially determined and as required by applicable laws and regulations. Our contributions to these plans are invested by the plan trustees and, if these investments do not perform well in the future, we may be required to provide additional contributions to cover any pension underfunding.
During the fourth quarter of 2024, the trustees of the Advisory pension plan in the U.K. (the “Advisory Plan”) entered into a buy-in agreement with a third-party insurance company. The buy-in arrangement is an insurance contract providing substantially all future benefit plan payments to the pension plan participants. However, the primary benefit obligation remains with the Company. The buy-in arrangement also allowed for the future conversion into a buy-out arrangement where the insurance company would assume full responsibility for the pension plan obligations. In the fourth quarter of 2025, the Company implemented the buy-out arrangement with the insurance company for the Advisory Plan to fully settle the pension obligations associated with the plan. As a result, the Company has been fully discharged from its obligations to the affected participants in the Advisory Plan. As of December 31, 2024, the fair value of pension plan assets, projected benefit obligations, and items not yet recognized as a component of net periodic pension cost (benefit) included in accumulated other comprehensive loss in the Advisory Plan were $262 million, $236 million, and $125 million, respectively. Upon settlement, the Advisory Plan’s projected benefit obligation and the related plan assets were removed from the Company’s consolidated balance sheet. The Company recognized a non-cash settlement loss of $147 million in the consolidated statement of operations, resulting from the removal of the projected benefit obligation and plan assets, which included the release of $112 million of the cumulative pension liability adjustments included within accumulated other comprehensive loss in the accompanying consolidated balance sheet.
As of December 31, 2025, for all plans where total projected benefit obligations exceed plan assets, projected benefit obligations and the fair value of plan assets were $123 million and $47 million, respectively, and $113 million and $51 million as of December 31, 2024, respectively.
As of December 31, 2025, for all plans where total accumulated benefit obligations exceed plan assets, accumulated benefit obligations and the fair value of plan assets were $102 million and $47 million, respectively, and $96 million and $51 million as of December 31, 2024, respectively.
Net periodic pension cost (benefit) for all plans was $23 million, $18 million, and $20 million for the years ended December 31, 2025, 2024 and 2023, respectively.
The following table provides amounts recognized related to all of our defined benefit pension plans within the following captions on our consolidated balance sheets (dollars in millions):
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Other assets, net | $ | 69 | $ | 64 | |||||||
| Other liabilities | 75 | 70 |
The following table presents estimated future benefit payments as of December 31, 2025. We will fund these obligations from the assets held by these plans. If the assets these plans hold are not sufficient to fund these payments, the company will fund the remaining obligations (dollars in millions):
| 2026 | 2027 | 2028 | 2029 | 2030 | Thereafter | ||||||||||||||||||||||||||||||
| Estimated future benefit payments for defined benefit plans | $ | 45 | $ | 40 | $ | 39 | $ | 40 | $ | 41 | $ | 213 |
CBRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
16. Income Taxes
Provision for Income Taxes
The components of income before provision for income taxes consisted of the following (dollars in millions):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Domestic | $ | 868 | $ | 326 | $ | 665 | |||||||||||
| Foreign | 726 | 892 | 612 | ||||||||||||||
| Total | $ | 1,594 | $ | 1,218 | $ | 1,277 |
Our tax provision (benefit) consisted of the following (dollars in millions):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Current provision: | |||||||||||||||||
| Federal | $ | 185 | $ | 48 | $ | 98 | |||||||||||
| State | 74 | 60 | 31 | ||||||||||||||
| Foreign | 327 | 268 | 242 | ||||||||||||||
| Total current provision | 586 | 376 | 371 | ||||||||||||||
| Deferred provision: | |||||||||||||||||
| Federal | (71) | (57) | (4) | ||||||||||||||
| State | (16) | (33) | 4 | ||||||||||||||
| Foreign | (182) | (104) | (121) | ||||||||||||||
| Total deferred provision | (269) | (194) | (121) | ||||||||||||||
| Total provision for income taxes | $ | 317 | $ | 182 | $ | 250 |
Effective Tax Rate
The following is a reconciliation of the difference between the U.S. statutory federal income tax rate and our effective tax rate (dollars in millions):
| Year Ended December 31, 2025 | ||||||||||||||
| Amount | Percent | |||||||||||||
| U.S. Federal statutory tax rate | $ | 335 | 21 | % | ||||||||||
| State and local income tax, net of federal (national) income tax effect (1) | 46 | 3 | % | |||||||||||
| Foreign tax effects | ||||||||||||||
| Bermuda | ||||||||||||||
| Statutory rate difference between Bermuda and United States | (21) | (1) | % | |||||||||||
| Tax Credits | (53) | (3) | % | |||||||||||
| Other foreign jurisdictions | 54 | 3 | % | |||||||||||
| Effect of cross-border tax laws | ||||||||||||||
| Foreign Tax Credits | (40) | (3) | % | |||||||||||
| Tax credits | (7) | — | % | |||||||||||
| Nontaxable or nondeductible items | 20 | 1 | % | |||||||||||
| Changes in unrecognized tax benefits | (8) | (1) | % | |||||||||||
| Other adjustments | (9) | (1) | % | |||||||||||
| Effective Tax Rate | $ | 317 | 20 | % |
(1)State and local income taxes in California, New York and New York City made up the majority (greater than 50 percent) of the domestic state and local income taxes, net of federal (national) effect category.
CBRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
| Year Ended December 31, | ||||||||||||||
| 2024 | 2023 | |||||||||||||
| Federal statutory tax rate | 21 | % | 21 | % | ||||||||||
| Foreign rate differential | (1) | (1) | ||||||||||||
| State taxes, net of federal benefit | 2 | 2 | ||||||||||||
| Nontaxable or nondeductible items | 1 | 3 | ||||||||||||
| Reserves for uncertain tax positions | (4) | — | ||||||||||||
| Tax credits | (5) | (5) | ||||||||||||
| Other | 1 | (1) | ||||||||||||
| Effective tax rate | 15 | % | 19 | % |
Income Taxes Paid
The table below presents amounts of income taxes paid, net of refunds, by jurisdiction (dollars in millions):
| Year Ended December 31, 2025 | ||||||||||||||||||||
| U.S. Federal | $ | 210 | ||||||||||||||||||
| U.S. State and local | 66 | |||||||||||||||||||
| Total U.S. | 276 | |||||||||||||||||||
| Foreign | ||||||||||||||||||||
| India | 42 | |||||||||||||||||||
| United Kingdom | 76 | |||||||||||||||||||
| All other foreign jurisdictions | 205 | |||||||||||||||||||
| Total Foreign | 323 | |||||||||||||||||||
| Total cash income taxes paid, net of refunds | $ | 599 |
Deferred Taxes
Cumulative tax effects of temporary differences are shown below (dollars in millions):
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Assets: | |||||||||||
| Tax losses and tax credits | $ | 959 | $ | 747 | |||||||
| Operating lease liabilities | 640 | 407 | |||||||||
| Bonus and deferred compensation | 404 | 372 | |||||||||
| Bad debt and other reserves | 191 | 130 | |||||||||
| All other | 182 | 139 | |||||||||
| Deferred tax assets, before valuation allowance | 2,376 | 1,795 | |||||||||
| Less: Valuation allowance | (442) | (396) | |||||||||
| Deferred tax assets | 1,934 | 1,399 | |||||||||
| Liabilities: | |||||||||||
| Property and equipment | (23) | (34) | |||||||||
| Unconsolidated affiliates and partnerships | (128) | (104) | |||||||||
| Capitalized costs and intangibles | (694) | (555) | |||||||||
| Operating lease assets | (574) | (351) | |||||||||
| All other | (57) | (64) | |||||||||
| Deferred tax liabilities | (1,476) | (1,108) | |||||||||
| Net deferred tax assets | $ | 458 | $ | 291 |
As of December 31, 2025, there were deferred tax assets before valuation allowances of approximately $657 million related to U.S. federal, state, and foreign net operating losses (NOLs). The majority of the NOLs are carried forward indefinitely and primarily related to the foreign jurisdictions. In certain foreign jurisdictions, NOLs expire each year beginning in 2025. The utilization of NOLs may be subject to certain limitations under U.S. federal, state and foreign laws. As of December 31, 2025, we had an interest limitation carryforward of approximately $220 million in the U.S. and foreign
CBRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
jurisdictions that can be carried forward indefinitely. As of December 31, 2025, we had U.S. federal and state capital losses carryforward, net of reserves for uncertain tax position, of approximately $58 million which will begin to expire after 2027, and approximately $26 million of foreign tax credits, which will expire after 2033. We have recorded a valuation allowance for deferred tax assets where we believe that it is more likely than not that the tax attributes will not be utilized.
We determined as of December 31, 2025, $442 million of deferred tax assets do not satisfy the realization criteria set forth in Topic 740. Accordingly, a valuation allowance has been recorded for this amount. If released, the entire amount would result in a benefit to continuing operations. During the year ended December 31, 2025, our valuation allowance increased by approximately $46 million, which was primarily attributed to foreign currency translation. We believe it is more likely than not that future operations will generate sufficient taxable income to realize the benefit of our deferred tax assets recorded as of December 31, 2025, net of valuation allowance.
At December 31, 2025, we have undistributed earnings of certain foreign subsidiaries of approximately $4.9 billion for which we have indefinitely reinvested and not recognized deferred taxes. As of December 31, 2025, we have recorded $34 million of deferred tax liability relating to book over tax basis in Turner & Townsend undistributed earnings and for any subsidiaries not considered indefinitely reinvested.
Uncertain Tax Positions
The total amount of gross unrecognized tax benefits was approximately $364 million and $347 million as of December 31, 2025 and 2024, respectively. The increase of $17 million resulted from an accrual of gross unrecognized tax benefits of $35 million, and a release of $18 million of gross unrecognized tax benefits due to the expiration of statute of limitations in various tax jurisdictions. The total amount of unrecognized tax benefits that would affect our effective tax rate, if recognized, is $233 million as of December 31, 2025.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (dollars in millions):
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Beginning balance, unrecognized tax benefits | $ | (347) | $ | (413) | |||||||
| Gross increases - tax positions in prior period | (7) | (9) | |||||||||
| Gross decreases - tax positions in prior period | — | 3 | |||||||||
| Gross increases - current-period tax positions | (28) | (21) | |||||||||
| Decreases relating to settlements | — | 80 | |||||||||
| Reductions as a result of lapse of statute of limitations | 18 | 11 | |||||||||
| Foreign exchange movement | — | 2 | |||||||||
| Ending balance, unrecognized tax benefits | $ | (364) | $ | (347) |
Our continuing practice is to recognize accrued interest and/or penalties related to income tax matters within income tax expense. During the years ended December 31, 2025 and 2024, we accrued an additional $8 million and $4 million, respectively, in interest and penalties associated with uncertain tax positions. As of December 31, 2025, we have recognized a liability for interest and penalties of $18 million.
We conduct business globally and file income tax returns in the U.S. federal jurisdiction and in multiple state, local, and foreign tax jurisdictions. We are under audit by various states and cities including California, New York, New York City, and Texas. We are also under audit by various foreign tax jurisdictions including France, Germany, and Spain. With limited exception, our significant U.S. state and foreign tax jurisdictions are no longer subject to audit by the various tax authorities for tax years prior to 2015 and 2018, respectively.
On July 4, 2025, the U.S. federal government enacted H.R.1, the One Big Beautiful Bill Act (OBBBA), a budget reconciliation package that changes the U.S. federal income tax laws, including extensions of various expiring provisions from the Tax Cuts and Jobs Act of 2017. The 2025 impacts of the OBBBA are insignificant based on our current operations.
CBRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
17. Stockholders’ Equity
Our board of directors is authorized, subject to any limitations imposed by law, without the approval of our stockholders, to issue a total of 25,000,000 shares of preferred stock, in one or more series, with each such series having rights and preferences including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences, as our board of directors may determine. As of December 31, 2025 and 2024, no shares of preferred stock have been issued.
Our board of directors is authorized to issue up to 525,000,000 shares of Class A common stock, $0.01 par value per share (common stock), of which 295,731,478 shares and 302,052,229 shares were issued and outstanding as of December 31, 2025 and 2024, respectively.
Stock Repurchase Program
On November 21, 2024, our board of directors authorized an additional $5.0 billion to our existing $4.0 billion share repurchase program (as amended, the 2024 program) bringing the total authorized amount under the 2024 program to a total of $9.0 billion as of December 31, 2025. The board also extended the term of the 2024 program through December 31, 2029.
During the year ended December 31, 2025, we repurchased 7,052,481 shares of our common stock with an average price of $135.52 per share for an aggregate of $956 million under the 2024 program. During the years ended December 31, 2024 and 2023, we repurchased 5,110,624 and 7,867,348 shares of our common stock for an aggregate of $644 million and $650 million, respectively. As of December 31, 2025, we had approximately $4.9 billion of capacity remaining under the 2024 program.
Our stock repurchase program does not obligate us to acquire any specific number of shares. Under this program, shares may be repurchased in privately negotiated and/or open market transactions, including under plans complying with Rule 10b5-1 under the Securities Exchange Act of 1934. Our stock repurchases have been funded with cash on hand and we intend to continue funding future repurchases with existing cash. We may utilize our stock repurchase programs to continue offsetting the impact of our stock-based compensation program and on a more opportunistic basis if we believe our stock presents a compelling investment compared to other discretionary uses. The timing of any future repurchases and the actual amounts repurchased will depend on a variety of factors, including the market price of our common stock, general market and economic conditions and other factors.
18. Income Per Share Information
The calculations of basic and diluted income per share attributable to CBRE Group, Inc. stockholders are as follows (dollars in millions, except share and per share data):
| Year Ended December 31, | |||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||
| Basic Income Per Share | |||||||||||||||||||||||||||||
| Net income attributable to CBRE Group, Inc. stockholders | $ | 1,157 | $ | 968 | $ | 986 | |||||||||||||||||||||||
| Weighted-average shares outstanding for basic income per share | 298,157,861 | 305,859,458 | 308,430,080 | ||||||||||||||||||||||||||
| Basic income per share attributable to CBRE Group, Inc. stockholders | $ | 3.88 | $ | 3.16 | $ | 3.20 | |||||||||||||||||||||||
| Diluted Income Per Share | |||||||||||||||||||||||||||||
| Net income attributable to CBRE Group, Inc. stockholders | $ | 1,157 | $ | 968 | $ | 986 | |||||||||||||||||||||||
| Weighted-average shares outstanding for basic income per share | 298,157,861 | 305,859,458 | 308,430,080 | ||||||||||||||||||||||||||
| Dilutive effect of contingently issuable shares | 2,593,680 | 2,174,154 | 4,120,862 | ||||||||||||||||||||||||||
| Weighted-average shares outstanding for diluted income per share | 300,751,541 | 308,033,612 | 312,550,942 | ||||||||||||||||||||||||||
| Diluted income per share attributable to CBRE Group, Inc. stockholders | $ | 3.85 | $ | 3.14 | $ | 3.15 | |||||||||||||||||||||||
For the years ended December 31, 2025, 2024 and 2023, 7,668, 9,222 and 338,711, respectively, of contingently issuable shares were excluded from the computation of diluted income per share because their inclusion would have had an anti-dilutive effect.
CBRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
19. Revenue from Contracts with Customers
We account for revenue with customers in accordance with FASB ASC Topic 606, “Revenue from Contracts with Customers” (Topic 606). Revenue is recognized when or as control of the promised services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to receive in exchange for those services.
Disaggregated Revenue
The following tables represent a disaggregation of revenue from contracts with customers by type of service and/or segment (dollars in millions):
| Year Ended December 31, 2025 | |||||||||||||||||||||||||||||||||||
| Advisory Services | Building Operations & Experience | Project Management | Real Estate Investments | Corporate, other and eliminations | Consolidated | ||||||||||||||||||||||||||||||
| Topic 606 Revenue: | |||||||||||||||||||||||||||||||||||
| Facilities management | $ | — | $ | 20,645 | $ | — | $ | — | $ | — | $ | 20,645 | |||||||||||||||||||||||
| Property management | — | 2,579 | — | — | (50) | 2,529 | |||||||||||||||||||||||||||||
| Project management | — | — | 7,657 | — | — | 7,657 | |||||||||||||||||||||||||||||
| Advisory leasing | 4,497 | — | — | — | — | 4,497 | |||||||||||||||||||||||||||||
| Advisory sales | 2,120 | — | — | — | — | 2,120 | |||||||||||||||||||||||||||||
| Valuation | 815 | — | — | — | — | 815 | |||||||||||||||||||||||||||||
| Other portfolio services | 354 | — | — | — | — | 354 | |||||||||||||||||||||||||||||
| Commercial mortgage origination (1) | 251 | — | — | — | — | 251 | |||||||||||||||||||||||||||||
| Loan servicing (2) | 164 | — | — | — | — | 164 | |||||||||||||||||||||||||||||
| Investment management | — | — | — | 602 | — | 602 | |||||||||||||||||||||||||||||
| Development services | — | — | — | 266 | — | 266 | |||||||||||||||||||||||||||||
| Topic 606 Revenue | 8,201 | 23,224 | 7,657 | 868 | (50) | 39,900 | |||||||||||||||||||||||||||||
| Out of Scope of Topic 606 Revenue: | |||||||||||||||||||||||||||||||||||
| Commercial mortgage origination | 300 | — | — | — | — | 300 | |||||||||||||||||||||||||||||
| Loan servicing | 339 | — | — | — | — | 339 | |||||||||||||||||||||||||||||
| Development services (3) | — | — | — | 11 | — | 11 | |||||||||||||||||||||||||||||
| Total Out of Scope of Topic 606 Revenue | 639 | — | — | 11 | — | 650 | |||||||||||||||||||||||||||||
| Total Revenue | $ | 8,840 | $ | 23,224 | $ | 7,657 | $ | 879 | $ | (50) | $ | 40,550 |
CBRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
| Year Ended December 31, 2024 | |||||||||||||||||||||||||||||||||||
| Advisory Services | Building Operations & Experience | Project Management | Real Estate Investments | Corporate, other and eliminations | Consolidated | ||||||||||||||||||||||||||||||
| Topic 606 Revenue: | |||||||||||||||||||||||||||||||||||
| Facilities management | $ | — | $ | 18,232 | $ | — | $ | — | $ | — | $ | 18,232 | |||||||||||||||||||||||
| Property management | — | 1,976 | — | — | (17) | 1,959 | |||||||||||||||||||||||||||||
| Project management | — | — | 6,809 | — | — | 6,809 | |||||||||||||||||||||||||||||
| Advisory leasing | 3,895 | — | — | — | — | 3,895 | |||||||||||||||||||||||||||||
| Advisory sales | 1,767 | — | — | — | — | 1,767 | |||||||||||||||||||||||||||||
| Valuation | 751 | — | — | — | — | 751 | |||||||||||||||||||||||||||||
| Other portfolio services | 389 | — | — | — | — | 389 | |||||||||||||||||||||||||||||
| Commercial mortgage origination (1) | 196 | — | — | — | — | 196 | |||||||||||||||||||||||||||||
| Loan servicing (2) | 160 | — | — | — | — | 160 | |||||||||||||||||||||||||||||
| Investment management | — | — | — | 650 | — | 650 | |||||||||||||||||||||||||||||
| Development services | — | — | — | 373 | — | 373 | |||||||||||||||||||||||||||||
| Topic 606 Revenue | 7,158 | 20,208 | 6,809 | 1,023 | (17) | 35,181 | |||||||||||||||||||||||||||||
| Out of Scope of Topic 606 Revenue: | |||||||||||||||||||||||||||||||||||
| Commercial mortgage origination | 234 | — | — | — | — | 234 | |||||||||||||||||||||||||||||
| Loan servicing | 337 | — | — | — | — | 337 | |||||||||||||||||||||||||||||
| Development services (3) | — | — | — | 15 | — | 15 | |||||||||||||||||||||||||||||
| Total Out of Scope of Topic 606 Revenue | 571 | — | — | 15 | — | 586 | |||||||||||||||||||||||||||||
| Total Revenue | $ | 7,729 | $ | 20,208 | $ | 6,809 | $ | 1,038 | $ | (17) | $ | 35,767 |
| Year Ended December 31, 2023 | |||||||||||||||||||||||||||||||||||
| Advisory Services | Building Operations & Experience | Project Management | Real Estate Investments | Corporate, other and eliminations | Consolidated | ||||||||||||||||||||||||||||||
| Topic 606 Revenue: | |||||||||||||||||||||||||||||||||||
| Facilities management | $ | — | $ | 16,131 | $ | — | $ | — | $ | — | $ | 16,131 | |||||||||||||||||||||||
| Property management | — | 1,676 | — | — | (17) | 1,659 | |||||||||||||||||||||||||||||
| Project management | — | — | 6,300 | — | — | 6,300 | |||||||||||||||||||||||||||||
| Advisory leasing | 3,468 | — | — | — | — | 3,468 | |||||||||||||||||||||||||||||
| Advisory sales | 1,606 | — | — | — | — | 1,606 | |||||||||||||||||||||||||||||
| Valuation | 716 | — | — | — | — | 716 | |||||||||||||||||||||||||||||
| Other portfolio services | 376 | — | — | — | — | 376 | |||||||||||||||||||||||||||||
| Commercial mortgage origination (1) | 138 | — | — | — | — | 138 | |||||||||||||||||||||||||||||
| Loan servicing (2) | 174 | — | — | — | — | 174 | |||||||||||||||||||||||||||||
| Investment management | — | — | — | 592 | — | 592 | |||||||||||||||||||||||||||||
| Development services | — | — | — | 345 | — | 345 | |||||||||||||||||||||||||||||
| Topic 606 Revenue | 6,478 | 17,807 | 6,300 | 937 | (17) | 31,505 | |||||||||||||||||||||||||||||
| Out of Scope of Topic 606 Revenue: | |||||||||||||||||||||||||||||||||||
| Commercial mortgage origination | 162 | — | — | — | — | 162 | |||||||||||||||||||||||||||||
| Loan servicing | 267 | — | — | — | — | 267 | |||||||||||||||||||||||||||||
| Development services (3) | — | — | — | 15 | — | 15 | |||||||||||||||||||||||||||||
| Total Out of Scope of Topic 606 Revenue | 429 | — | — | 15 | — | 444 | |||||||||||||||||||||||||||||
| Total Revenue | $ | 6,907 | $ | 17,807 | $ | 6,300 | $ | 952 | $ | (17) | $ | 31,949 |
(1)We earn fees for arranging financing for borrowers with third-party lender contacts. Such fees are in scope of Topic 606.
(2)Loan servicing fees earned from servicing contracts for which we do not hold mortgage servicing rights are in scope of Topic 606.
(3)Out of scope revenue for development services represents selling profit from transfers of sales-type leases in the scope of FASB ASC Topic 842, “Leases.”
Contract Assets and Liabilities
We had contract assets totaling $565 million ($462 million of which was current) and $489 million ($400 million of which was current) as of December 31, 2025 and 2024, respectively. During the year ended December 31, 2025, our contract
CBRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
assets increased by $76 million, primarily driven by the acquisition of Pearce within our BOE segment, and growth in our Advisory Services segment attributable to lease and sales.
We had contract liabilities totaling $448 million (all of which was current) and $375 million (all of which was current) as of December 31, 2025 and 2024, respectively. During the year ended December 31, 2025, our contract liabilities increased by $73 million, primarily driven by the acquisition of Pearce and Industrious, and continued growth across EMEA. During the year ended December 31, 2025, we recognized revenue of $320 million, that was included in the contract liability balance at December 31, 2024.
Contract Costs
We capitalized $78 million, $56 million and $40 million, respectively, of transition costs during the years ended December 31, 2025, 2024 and 2023. We recorded amortization of transition costs of $43 million, $36 million and $37 million, respectively, during the years ended December 31, 2025, 2024 and 2023.
CBRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
20. Segments
In January 2025, we combined our project management business with our Turner & Townsend majority-owned subsidiary and created a fourth reportable segment, Project Management. In addition, on January 16, 2025, we acquired full ownership of Industrious, a provider of premium flexible workplace solutions and established a new business segment, BOE, comprised of enterprise and local facilities management, property management and digital infrastructure.
In connection with the transactions described above, we reorganized our operations around and publicly report our financial results on four reportable segments – Advisory Services, BOE, Project Management and REI. We have recast prior period segment results to conform with the current presentation. In addition, we also have a “Corporate, other and eliminations” segment. Our Corporate segment primarily consists of corporate costs for leadership and certain other central functions. We track our strategic non-core equity investments in “other” which is considered an operating segment and reported together with Corporate as it does not meet the aggregation criteria for presentation as a separate reportable segment. These activities are not allocated to the other business segments. Corporate and other also includes eliminations related to inter-segment revenue.
Segment operating profit (SOP) is the measure reported to Robert Sulentic, CBRE’s Chair and Chief Executive Officer (CEO), who is our chief operating decision maker (CODM) for purposes of assessing performance and allocating resources to each segment. The CODM uses SOP results compared to prior periods and previously forecasted amounts to assess performance and identify trends of ongoing operations within each segment. SOP excludes the impact of certain costs and charges that may obscure the underlying performance of our businesses and related trends, including restructuring charges and other costs incurred, which are outside the ordinary course of business. SOP represents earnings, inclusive of amounts attributable to non-controlling interests, before net interest expense, write-off of financing costs on extinguished debt, income taxes, depreciation and amortization, and asset impairments. In addition, management excludes the following costs from SOP (Other segment adjustments):
-
integration and other costs related to acquisitions,
-
carried interest incentive compensation expense (reversal) to align with the timing of associated revenue,
-
charges related to indirect tax audits and settlements,
-
net results related to the wind-down of certain businesses,
-
the impact of fair value adjustments related to unconsolidated equity investments,
-
business and finance transformation,
-
non-cash pension buy-out settlement loss,
-
costs associated with efficiency and cost-reduction initiatives,
-
costs incurred related to legal entity restructuring,
-
provision associated with Telford’s fire safety remediation efforts, and
-
a one-time gain associated with remeasuring an investment in an unconsolidated subsidiary to fair value as of the date the remaining controlling interest was acquired.
There have been no significant changes to the measurement methods of expenses or methods of allocating expenses to segments during 2025.
CBRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Summarized financial information by segment is as follows (dollars in millions):.
| Year Ended December 31, 2025 | Advisory Services | Building Operations & Experience | Project Management | Real Estate Investments | Corporate, other and eliminations (3) | Consolidated | |||||||||||||||||||||||||||||
| Revenue | $ | 8,840 | $ | 23,224 | $ | 7,657 | $ | 879 | $ | (50) | $ | 40,550 | |||||||||||||||||||||||
| Pass-through costs (1) | 50 | 12,529 | 4,167 | — | — | 16,746 | |||||||||||||||||||||||||||||
| Cost of revenue, excluding pass-through costs | 5,247 | 8,370 | 2,453 | 161 | 7 | 16,238 | |||||||||||||||||||||||||||||
| Operating expenses and allocations | 1,866 | 1,353 | 501 | 1,061 | 762 | 5,543 | |||||||||||||||||||||||||||||
| Other adjustments to segment operating profit (loss): | |||||||||||||||||||||||||||||||||||
| Equity (loss) income from unconsolidated subsidiaries | — | (11) | — | 48 | 3 | 40 | |||||||||||||||||||||||||||||
| Other income | 6 | 11 | 2 | — | — | 19 | |||||||||||||||||||||||||||||
| Gain on disposition of real estate | — | — | — | 432 | 27 | 459 | |||||||||||||||||||||||||||||
| Other segment adjustments (2) | 151 | 122 | 23 | 187 | 285 | 768 | |||||||||||||||||||||||||||||
| Segment operating profit (loss) | $ | 1,834 | $ | 1,094 | $ | 561 | $ | 324 | $ | (504) | $ | 3,309 | |||||||||||||||||||||||
| Year Ended December 31, 2024 | Advisory Services | Building Operations & Experience | Project Management | Real Estate Investments | Corporate, other and eliminations (3) | Consolidated | |||||||||||||||||||||||||||||
| Revenue | $ | 7,729 | $ | 20,208 | $ | 6,809 | $ | 1,038 | $ | (17) | $ | 35,767 | |||||||||||||||||||||||
| Pass-through costs (1) | 61 | 11,168 | 3,670 | — | — | 14,899 | |||||||||||||||||||||||||||||
| Cost of revenue, excluding pass-through costs | 4,416 | 7,066 | 2,180 | 224 | 26 | 13,912 | |||||||||||||||||||||||||||||
| Operating expenses and allocations | 1,793 | 1,194 | 439 | 862 | 723 | 5,011 | |||||||||||||||||||||||||||||
| Other adjustments to segment operating profit (loss): | |||||||||||||||||||||||||||||||||||
| Equity (loss) income from unconsolidated subsidiaries | (8) | 6 | — | 117 | (134) | (19) | |||||||||||||||||||||||||||||
| Other income | 2 | 4 | 2 | 6 | 25 | 39 | |||||||||||||||||||||||||||||
| Gain on disposition of real estate | — | — | — | 142 | — | 142 | |||||||||||||||||||||||||||||
| Other segment adjustments (2) | 49 | 104 | (22) | 44 | 305 | 480 | |||||||||||||||||||||||||||||
| Segment operating profit (loss) | $ | 1,502 | $ | 894 | $ | 500 | $ | 261 | $ | (570) | $ | 2,587 | |||||||||||||||||||||||
| Year Ended December 31, 2023 | Advisory Services | Building Operations & Experience | Project Management | Real Estate Investments | Corporate, other and eliminations (3) | Consolidated | |||||||||||||||||||||||||||||
| Revenue | $ | 6,907 | $ | 17,807 | $ | 6,300 | $ | 952 | $ | (17) | $ | 31,949 | |||||||||||||||||||||||
| Pass-through costs (1) | 50 | 10,178 | 3,445 | — | — | 13,673 | |||||||||||||||||||||||||||||
| Cost of revenue, excluding pass-through costs | 3,946 | 5,892 | 1,981 | 186 | (3) | 12,002 | |||||||||||||||||||||||||||||
| Operating expenses and allocations | 1,769 | 1,081 | 468 | 784 | 460 | 4,562 | |||||||||||||||||||||||||||||
| Other adjustments to segment operating profit (loss): | |||||||||||||||||||||||||||||||||||
| Equity income from unconsolidated subsidiaries | 2 | 2 | 1 | 216 | 27 | 248 | |||||||||||||||||||||||||||||
| Other income | 38 | 8 | 2 | — | 13 | 61 | |||||||||||||||||||||||||||||
| Gain on disposition of real estate | — | — | — | 27 | — | 27 | |||||||||||||||||||||||||||||
| Other segment adjustments (2) | 44 | 49 | 20 | 14 | 66 | 193 | |||||||||||||||||||||||||||||
| Segment operating profit (loss) | $ | 1,226 | $ | 715 | $ | 429 | $ | 239 | $ | (368) | $ | 2,241 | |||||||||||||||||||||||
(1)Pass-through costs represent certain costs incurred associated with subcontracted third-party vendor work performed for clients. These costs are reimbursable by clients and the corresponding amounts owed are reflected within Revenue.
(2)Other segment adjustments, as defined above.
(3)Eliminations represent revenue from transactions between operating segments.
CBRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
| Year Ended December 31, | |||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||
| Depreciation and Amortization | |||||||||||||||||||||||||||||
| Advisory Services | $ | 274 | $ | 259 | $ | 272 | |||||||||||||||||||||||
| Building Operations & Experience (1) | 269 | 234 | 158 | ||||||||||||||||||||||||||
| Project Management | 104 | 111 | 121 | ||||||||||||||||||||||||||
| Real Estate Investments | 12 | 13 | 15 | ||||||||||||||||||||||||||
| Corporate, other and eliminations | 70 | 57 | 56 | ||||||||||||||||||||||||||
| Total depreciation and amortization | $ | 729 | $ | 674 | $ | 622 | |||||||||||||||||||||||
| Equity income (loss) from unconsolidated subsidiaries | |||||||||||||||||||||||||||||
| Advisory Services | $ | — | $ | (8) | $ | 2 | |||||||||||||||||||||||
| Building Operations & Experience | (11) | 6 | 2 | ||||||||||||||||||||||||||
| Project Management | — | — | 1 | ||||||||||||||||||||||||||
| Real Estate Investments | 48 | 117 | 216 | ||||||||||||||||||||||||||
| Corporate, other and eliminations | 3 | (134) | 27 | ||||||||||||||||||||||||||
| Equity income (loss) from unconsolidated subsidiaries | $ | 40 | $ | (19) | $ | 248 | |||||||||||||||||||||||
(1)Excludes $75 million, $56 million and $59 million for the years ended December 31, 2025, 2024 and 2023, respectively, of amortization on vehicle finance leases utilized in client outsourcing arrangements and amortization of transition costs recorded in Cost of Revenue line item in the accompanying consolidated statement of operations.
Reconciliation of total segment operating profit to net income is as follows (dollars in millions):
| Year Ended December 31, | ||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||||||||||||||
| Net income attributable to CBRE Group, Inc. | $ | 1,157 | $ | 968 | $ | 986 | ||||||||||||||||||||||||||
| Net income attributable to non-controlling interests | 120 | 68 | 41 | |||||||||||||||||||||||||||||
| Net income | 1,277 | 1,036 | 1,027 | |||||||||||||||||||||||||||||
| Adjustments to increase (decrease) net income: | ||||||||||||||||||||||||||||||||
| Depreciation and amortization | 729 | 674 | 622 | |||||||||||||||||||||||||||||
| Interest expense, net of interest income | 216 | 215 | 149 | |||||||||||||||||||||||||||||
| Write-off of financing costs on extinguished debt | 2 | — | — | |||||||||||||||||||||||||||||
| Provision for income taxes | 317 | 182 | 250 | |||||||||||||||||||||||||||||
| Integration and other costs related to acquisitions | 303 | 93 | 62 | |||||||||||||||||||||||||||||
| Carried interest incentive compensation expense (reversal) to align with the timing of associated revenue | 10 | 8 | (7) | |||||||||||||||||||||||||||||
| Charges related to indirect tax audits and settlements | (1) | 76 | — | |||||||||||||||||||||||||||||
| Net results related to the wind-down of certain businesses (1) | 74 | — | — | |||||||||||||||||||||||||||||
| Impact of fair value non-cash adjustments related to unconsolidated equity investments | 2 | 9 | — | |||||||||||||||||||||||||||||
| Business and finance transformation | 101 | — | — | |||||||||||||||||||||||||||||
| Non-cash pension buy-out settlement loss | 147 | — | — | |||||||||||||||||||||||||||||
| Costs associated with efficiency and cost-reduction initiatives | — | 259 | 159 | |||||||||||||||||||||||||||||
| Costs incurred related to legal entity restructuring | — | 2 | 13 | |||||||||||||||||||||||||||||
| Provision associated with Telford’s fire safety remediation efforts (2) | 132 | 33 | — | |||||||||||||||||||||||||||||
| One-time gain associated with remeasuring an investment in an unconsolidated subsidiary to fair value as of the date the remaining controlling interest was acquired | — | — | (34) | |||||||||||||||||||||||||||||
| Total segment operating profit | $ | 3,309 | $ | 2,587 | $ | 2,241 | ||||||||||||||||||||||||||
(1) In 2025, management made the decision to wind down the legacy Telford Homes’ construction self-delivery business. In addition, management made the decision to wind down certain businesses within the BOE Segment.
(2)See Note 22 – Telford Fire Safety Remediation for additional information.
Our CODM is not provided with total asset information by segment and accordingly, does not measure or allocate total assets on a segment basis. As a result, we have not disclosed any asset information by segment.
CBRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Geographic Information
Revenue in the table below is allocated based upon the country in which services are performed (dollars in millions):
| Year Ended December 31, | |||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||
| Revenue | |||||||||||||||||||||||||||||
| United States | $ | 22,848 | $ | 20,162 | $ | 17,458 | |||||||||||||||||||||||
| United Kingdom | 5,709 | 4,968 | 4,393 | ||||||||||||||||||||||||||
| All other countries | 11,993 | 10,637 | 10,098 | ||||||||||||||||||||||||||
| Total revenue | $ | 40,550 | $ | 35,767 | $ | 31,949 | |||||||||||||||||||||||
21. Related Party Transactions
The accompanying consolidated balance sheets include loans to related parties, primarily employees other than our executive officers, of $697 million and $780 million as of December 31, 2025 and 2024, respectively. The majority of these loans represent sign-on and retention bonuses issued or assumed in connection with acquisitions and prepaid commissions as well as prepaid retention and recruitment awards issued to employees. These loans are at varying principal amounts, bear interest at rates up to 5.30% per annum and mature on various dates through 2035.
See Note 11 – Investments in Unconsolidated Subsidiaries for additional details on related party revenue and receivables disclosure for the REI segment.
22. Telford Fire Safety Remediation
On April 28, 2022, Telford Homes signed the U.K. government’s non-binding Fire Safety Pledge (the Pledge) to comply with the Building Safety Act of 2022 (BSA). The BSA introduced new laws related to building safety and the remediation of historic building safety defects, effectively requiring developers to remediate certain buildings with critical fire safety issues. The BSA also retrospectively amended the Defective Premises Act of 1972 (DPA) to allow claims to be made within a 30-year limitation period for dwellings completed before June 28, 2022. On March 16, 2023, Telford Homes entered into a legally binding agreement with the U.K. government to take responsibility for performing or funding remediation works relating to certain life-critical fire-safety issues on all Telford Homes-constructed buildings of 11 meters in height or greater in England constructed in the last 30 years (in-scope buildings) and withdraw Telford Homes-developed buildings from the government-sponsored funds or reimburse the government funds for the cost of remediation.
The accompanying consolidated balance sheets include an estimated liability of approximately $321 million (of which $126 million was current) and $204 million (of which $102 million was current) as of December 31, 2025 and 2024, respectively, related to the remediation efforts. The current liability includes estimates related to remediation activities we plan to perform within one year and the net amounts that the U.K. government has already paid or quantified through the Building Safety Fund (BSF) for remediation of Telford-constructed buildings. The remaining balance represents estimates developed by Telford’s management and/or third-party experts for the remaining in-scope buildings. The increase in the estimated liability during the fourth quarter of 2025 reflects higher estimated costs resulting from significant developments and new information obtained including feedback from the U.K. Government regulator. Specifically, recent feedback received from the regulator indicated a much greater scope of remediation work than initially expected, applying to both previously included and newly identified in-scope buildings. Risk assessments completed in the fourth quarter of 2025 confirmed that extensive internal works are now anticipated for nearly all buildings in-scope, not just the highest-risk ones, with higher estimated costs for buildings requiring major façade works. As a result of these developments and due to the increased uncertainties, our provision increased by $117 million as of December 31, 2025, compared to the prior year.
The estimated remediation costs for in-scope buildings remain subjective, highly complex and dependent on a number of variables outside of Telford Homes’ control. These include, but are not limited to, individual remediation requirements for each building, the time required for the remediation to be completed, cost of construction or remediation materials, availability of construction materials, potential discoveries made during remediation that could necessitate incremental work, investigation costs, availability of qualified fire safety engineers, potential business disruption costs, potential changes to or new regulations and regulatory approval. We will continue to closely monitor these developments and will update estimates as additional information becomes available regarding regulatory expectations, design specifications and contractor pricing.
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