~~Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes~~ ☐ No ☒

~~Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes~~ ☐ No ☒

The foregoing risks and uncertainties, as well as those risks and uncertainties set forth in this Quarterly Report on this Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2022, may cause actual results and events to differ materially from the forward-looking statements. The information included herein is given as of the filing date of this Quarterly Report on Form 10-Q with the ~~Securities and Exchange Commission (the “SEC”),~~SEC, and future results or events could differ significantly from these forward-looking statements. We do not undertake to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

~~The following presents our cash, cash equivalents and restricted cash by category within the unaudited Condensed Consolidated Balance Sheets:~~

In ~~November 2016,~~October 2021, the FASB issued ASU No. ~~2016-18, Statement~~2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The standard improves the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to the recognition of ~~Cash Flows (Topic 230)—Restricted Cash, which~~an acquired contract liability, as well as payment terms and their effect on subsequent revenue recognized by the acquirer. The ASU requires ~~that~~companies to apply guidance in ASC 606, Revenue from Contracts with Customers, to recognize and measure contract assets and contract liabilities from contracts with customers acquired in a business combination, and, thus, creates an exception to the ~~statements of cash flows explain~~general recognition and measurement principle in ASC 805, Business Combinations. Newmark adopted the ~~change during~~standard on the ~~period in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. The new standard became~~required effective date beginning January 1, 2018 and required adoption on a retrospective basis. The effect of this guidance resulted in the inclusion of restricted cash in the cash and cash equivalents balance on Newmark’s unaudited condensed consolidated statements of cash flows.

In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805) Clarifying the definition of Business, which clarifies the definition of a business with the objective of providing additional guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The new standard became effective beginning January 1, 2018 on2023 using a prospective ~~basis. The adoption of this U.S. GAAP guidance did not have a material impact on Newmark’s unaudited condensed consolidated financial statements.~~

~~In May 2017, the FASB issued ASU No. 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting, which amends the scope of modification accounting~~transition method for share-based payment arrangements and provides guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting. Under this guidance, an entity would not apply modification accounting if the fair value, the vesting conditions, and the classification of the awards (as equity or liability) are the same immediately before and after the modification. The new standard became effective beginning January 1, 2018, on a prospective basis for awards modifiedbusiness combinations occurring on or after the ~~adoption~~effective date. The adoption of this guidance did not have a material impact on ~~Newmark’s~~the accompanying unaudited condensed consolidated financial statements.

~~(c)~~

~~New Accounting Pronouncements~~

In ~~February 2016,~~March 2022, the FASB issued ASU No. ~~2016-02, Leases~~2022-02, Financial Instruments—Credit Losses (Topic ~~842). This ASU requires lessees to recognize a right-of-use asset~~326): Troubled Debt Restructurings and lease liability for all leases with terms of more than 12 months. Recognition, measurement and presentation of expenses will depend on classification as finance or operating lease. The amendments also require certain quantitative and qualitative disclosures. Accounting guidance for lessors is largely unchanged.Vintage Disclosures. The guidance is intended to improve the decision usefulness of information provided to investors about certain loan refinancings, restructurings, and write-offs. The standard eliminates the recognition and measurement guidance on TDRs for creditors that have adopted ASC 326, Financial Instruments — Credit Losses and requires them to make enhanced disclosures about loan modifications for borrowers experiencing financial difficulty. The new guidance also requires public business entities to present current-period gross write-offs (on a current year-to-date basis for interim-period disclosures) by year of origination in their vintage disclosures. Newmark adopted the new standard on the required effective date beginning January 1, ~~2019, with early~~2023. The guidance for recognition and measurement of TDRs was applied using a prospective transition method, and the amendments related to disclosures will be applied prospectively. The adoption ~~permitted.~~of this guidance did not have a material impact on the accompanying unaudited condensed consolidated financial statements.

(c)New Accounting Pronouncements

In December 2022, the FASB issued ASU No. 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848. ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting provided optional guidance to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The ASU was effective upon issuance and generally could be applied through December 31, 2022. Because the current relief in ASC 848, Reference Rate Reform may not cover a period of time during which a significant number of modifications may take place, the amendments in ASU No. 2022-06 defer the sunset date from December 31, 2022 to December 31, 2024, after which entities will no longer be permitted to apply the relief in ASC 848. Management is currently evaluating the impact of the new ~~guidance~~standard on ~~Newmark’s~~the accompanying unaudited condensed consolidated financial statements.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires financial assets that are measured at amortized cost to be presented, net of an allowance for credit losses, at the amount expected to be collected over their estimated life. Expected credit losses for newly recognized financial assets, as well as changes to credit losses during the period, are recognized

(2) Limited Partnership Interests in earnings. For certain purchased financial assets with deterioration in credit quality since origination, the initial allowance for expected credit losses will be recorded as an increase to the purchase price. Expected credit losses, including losses on off-balance-sheet exposures such as lending commitments, will be measured based on historical experience, current conditions,Newmark Holdings and reasonable and supportable forecasts that affect the collectability of the reported amount. The new standard will become effective for Newmark beginning January 1, 2020, under a modified retrospective approach, and early adoption is permitted. Management is currently evaluating the impact of the new guidance on Newmark’s unaudited condensed consolidated financial statements.

In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, which eliminates the requirement to determine the fair value of individual assets and liabilities of a reporting unit to measure goodwill impairment. Under the amendments in the new ASU, goodwill impairment testing will be performed by comparing the fair value of the reporting unit with its carrying amount and recognizing an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. The new standard will become effective beginning January 1, 2020 and will be applied on a prospective basis, and early adoption is permitted. The adoption of this guidance will not have a material impact on Newmark’s unaudited condensed consolidated financial statements.

In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. The guidance intends to better align an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. To meet that objective, the amendments expand and refine hedge accounting for both nonfinancial and financial risk components and align the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. The new standard will become effective beginning January 1, 2019, with early adoption permitted, and will be applied on a prospective basis and modified retrospective basis. Management is currently evaluating the impact of the new guidance on Newmark’s unaudited condensed consolidated financial statements.

In February 2018, the FASB issued ASU No. 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The guidance helps organizations address certain stranded income tax effects in accumulated other comprehensive income resulting from the Tax Cuts and Jobs Act of 2017 by providing an option to reclassify these stranded tax effects to retained earnings in each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act (or portion thereof) is recorded. The new standard will become effective beginning January 1, 2019, with early adoption permitted. The guidance should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. Management is currently evaluating the transition method and the adoption of the new guidance is not expected to have a material effect on Newmark’s unaudited condensed consolidated financial statements.

BGC Holdings

~~(2)~~

~~Limited Partnership Interest in Newmark Holdings~~

Newmark is a holding company with no direct operations and conducts substantially all of its operations through its operating subsidiaries. Virtually all of Newmark’s consolidated net assets and net income are those of consolidated variable interest entities. Newmark Holdings is a consolidated subsidiary of Newmark for which Newmark is the general partner. Newmark and Newmark Holdings jointly own Newmark OpCo, the operating partnership. ~~Listed~~In connection with the Separation and BGC Holdings Distribution, holders of BGC Holdings partnership interests received partnership interests in Newmark Holdings, described below ~~are~~(see Note 25 — “Related Party Transactions”). These collectively represent all of the limited partnership interests in Newmark Holdings. The founding/working partner units, limited partnership units, limited partnership interests held by Cantor (“Cantor units”) and limited partnership interests held by BGC (“BGC units”), each as described below. In addition, BGC Partners and its operating subsidiaries hold limited partnership interest in Newmark Holdings due to the Investment in Newmark (see Note 25—Related Party Transactions). These collectively ~~represent all of the “limited partnership interests” in~~ BGC Holdings and Newmark Holdings.

~~BGC Holdings is a consolidated subsidiary of BGC, which along with BGC jointly own BGC U.S. OpCo and BGC Global OpCo, the two BCG operating partnerships.~~

As a result of the Separation, ~~and Distribution Agreement,~~ the limited partnership interests

in Newmark Holdings were distributed to the holders of limited partnership interests in BGC Holdings, whereby each holder of BGC Holdings limited partnership interests at that time ~~holds a BGC Holdings limited partnership interest and~~received a corresponding Newmark Holdings limited partnership interest, determined by the Contribution Ratio, which iswas equal to a BGC Holdings limited partnership interest multiplied by one divided by 2.2, ~~(the “contribution ratio”),~~ divided by the ~~exchange ratio (which is~~Exchange Ratio. Initially, the ~~ratio by which a Newmark Holdings limited partnership interest can be exchanged for Newmark Class A common stock). As of March 31, 2018, the exchange ratio~~Exchange Ratio equaled one, so that each Newmark Holdings limited partnership interest iswas exchangeable for one share of Newmark Class A common ~~stock,~~stock; however, such ~~exchange ratio~~Exchange Ratio is subject to adjustment. For reinvestment, acquisition or other purposes, Newmark may determine on a quarterly basis to distribute to its stockholders a smaller percentage of its income than Newmark Holdings distributes to its equity holders (excluding tax distributions from Newmark Holdings) of the cash that it received from Newmark OpCo. In such circumstances, the Separation and Distribution Agreement provides that the ~~exchange ratio~~Exchange Ratio will be reduced to reflect the amount of additional cash retained by Newmark as a result of the distribution of such smaller percentage, after the payment of taxes.

As of March 31, 2023, the Exchange Ratio equaled 0.9252.

Redeemable Partnership Interests

Founding/Working ~~Partner Units~~

~~Founding/working partners~~Partners have a limited partnership ~~interest~~interests in BGC Holdings and Newmark Holdings. Newmark accounts for ~~founding/working partner units (“FPUs”)~~FPUs outside of permanent capital as “Redeemable partnership interests,” ~~in Newmark’s~~on the accompanying unaudited condensed consolidated ~~statements~~ balance sheets. This classification is applicable to ~~founding/working partner units~~FPUs because these units are redeemable upon termination of a partner, including a termination of employment, which can be at the option of the partner and not within the control of the issuer.

~~Founding/working partner units~~

FPUs are held by limited partners who are primarily employees of BGC and generally receive quarterly allocations of net income. Upon termination of employment or otherwise ceasing to provide substantive services, the ~~founding/working partner units~~FPUs are generally redeemed, and the unit holders are no longer entitled to participate in the quarterly allocations of net income. ~~Since these~~These quarterly allocations of net income ~~are cash distributed on a quarterly basis and~~ are contingent upon services being provided by the unit holder ~~they~~and are reflected as a component of ~~“Net~~compensation expense under “Equity-based compensation and allocations of net income ~~(loss) attributable~~ to ~~non-controlling interests” in Newmark’s~~limited partnership units and FPUs” on the accompanying unaudited condensed consolidated statements of operations to the extent they relate to FPUs held by Newmark employees. There is no compensation expense related to ~~Newmark~~FPUs held by BGC employees.

Limited Partnership Units

Certain employees of Newmark ~~employees~~ hold limited partnership interests in Newmark Holdings and BGC Holdings (e.g., REUs, RPUs, PSUs, PSIs, HDUs, and LPUs, collectively the ~~“limited~~limited partnership ~~units”)~~units).

Prior to the Separation, certain employees of both BGC and Newmark generally received limited partnership units in BGC Holdings. As a result of the Separation, these employees were distributed limited partnership units in Newmark Holdings equal to a BGC Holdings limited partnership unit multiplied by the Contribution Ratio. In addition, in the BGC Holdings Distribution, these employees also received additional limited partnership units in Newmark Holdings. Subsequent to the Separation, Newmark employees generally have been granted limited partnership units in Newmark Holdings.

Generally, such limited partnership units receive quarterly allocations of net income ~~which are cash distributed~~ and generally are contingent upon services being provided by the unit holders. As prescribed in U.S. GAAP guidance, prior to the Spin-Off, the quarterly allocations of net income on such limited partnership units were reflected as a component of compensation expense under “Equity-based compensation and allocations of net income to limited partnership units and FPUs” on the accompanying unaudited condensed consolidated statements of operations. Following the Spin-Off, the quarterly allocations of net income on BGC Holdings and Newmark Holdings limited partnership units held by Newmark employees are reflected as a component of compensation expense under ~~“Allocations~~“Equity-based compensation and allocations of net income ~~and grant of exchangeability~~ to limited partnership ~~units” in Newmark’s~~units and FPUs” on the accompanying unaudited condensed consolidated statements of operations, and the quarterly allocations of net income on Newmark Holdings limited partnership units held by BGC employees are reflected as a component of “Net income (loss) attributable to noncontrolling interests” on the accompanying unaudited condensed consolidated statements of operations. From time to time, Newmark issues limited partnership units as part of the consideration for acquisitions.

Certain of these limited partnership units held by Newmark and BGC employees entitle the holders to receive post-termination payments equal to the notional amount of the units in four equal yearly installments after the holder’s termination. These limited partnership units are accounted for as post-termination liability awards and are included on the accompanying unaudited condensed consolidated balance sheets as part of “Accrued compensation”, and in accordance with U.S. GAAP guidance, Newmark records compensation expense for the awards based on the change in value at each reporting date inon the ~~Newmark’s~~accompanying unaudited condensed consolidated statements of operations as part of ~~“Compensation~~“Equity-based compensation and ~~employee benefits.~~allocations of net income to limited partnership units and FPUs.”

Certain Newmark employees hold Preferred Units. Each quarter, the net profits of ~~BGC Holdings and~~ Newmark Holdings are allocated to such units at a rate of either 0.6875% (which is 2.75% per calendar year) or such other amount as set forth in the award ~~documentation (the “Preferred Distribution”).~~documentation. These allocations are deducted before the calculation and distribution of the quarterly partnership distribution for the remaining partnership units and are generally contingent upon services being provided by the unit holder. The Preferred Units are not entitled to participate in partnership distributions other than with respect to the Preferred Distribution. Preferred Units may not be made exchangeable into Newmark’s Class A common stock and are only entitled to the Preferred Distribution, and accordingly are not included in Newmark’s fully diluted share count. The quarterly allocations of net income on Preferred Units are reflected in compensation expense under ~~“Allocations~~“Equity-based compensation and allocations of net income ~~and grant of exchangeability~~ to limited partnership ~~units” in Newmark’s~~units and FPUs” on the accompanying unaudited condensed consolidated statements of operations. After deduction of the Preferred Distribution, the remaining partnership units generally receive quarterly allocation of net income based on their weighted-average pro ~~rate~~rata share of economic ownership of the operating subsidiaries.

In addition, Preferred Units are granted in connection with the grant of certain limited partnership units, such as PSUs, that may be granted exchangeability to cover the withholding taxes owed by the unit holder, rather than issuing the gross amount of shares to employees, subject to cashless withholding of shares to pay applicable withholding taxes.

Certain Newmark employees hold “N Units” that do not participate in quarterly partnership distributions and are not allocated any items of profit or loss. N Units become distribution earning limited partnership units, ratably over a four-year vesting term, if certain revenue thresholds are met at the end of each vesting term.

Cantor Units

Cantor holds limited partnership interests in Newmark Holdings. Cantor ~~units~~Units are reflected as a component of “Noncontrolling ~~interest” in~~interests” on the ~~Newmark’s~~accompanying unaudited condensed consolidated balance sheets. Cantor receives quarterly allocations of net income (loss)~~, which~~

~~are cash distributed on a quarterly basis~~ and are reflected as a component of “Net income (loss) attributable to noncontrolling ~~interest” in Newmark’s~~interests” on the accompanying unaudited condensed consolidated statements of operations.

~~BGC~~

Exchangeable Preferred Limited Partnership Units

~~BGC~~

The EPUs were issued in four tranches and ~~its operating subsidiaries hold limited partnership interests~~were separately convertible by either RBC or Newmark into a fixed number of Newmark’s Class A common stock, subject to a revenue hurdle for Newmark in each of the fourth quarters of 2019 through 2022 for each of the four tranches, respectively. As the EPUs represented equity ownership of a consolidated subsidiary of Newmark, ~~Holdings. Such BGC units~~they have been ~~reflected as a component of~~included in “Noncontrolling ~~interest” in~~interests” on the Newmark’s unaudited condensed consolidated balance sheets. BGC and its operating subsidiaries received allocations of net income (loss), which will be cash distributed on a quarterly basis and will be reflected as a component of “Net income (loss) attributable to noncontrolling interest” in Newmark’s unaudited condensed consolidated statements of ~~operations.~~

changes in equity. The EPUs were entitled to a preferred payable-in-kind dividend, which was recorded as accretion to the carrying amount of the EPUs through retained earnings on the accompanying unaudited condensed consolidated statements of

changes in equity and are reductions to “Net income available to common stockholders” for the purpose of calculating earnings per share. (See Note 1 — “Organization and Basis of Presentation” for additional information). As of March 31, 2023 and December 31, 2022, there were no EPUs outstanding.

General

Certain of the limited partnership interests, described above, have been granted exchangeability into BGC and/or Newmark Class A common stock, and additional limited partnership interests may become exchangeable for BGC and/or Newmark Class A common stock. At the time exchangeability is granted, Newmark recognizes an expense based on the fair value of the award on that date, which is included in “Equity-based compensation and allocations of net income to limited partnership units and FPUs” on the accompanying unaudited condensed consolidated statements of operations. In addition, certain limited partnership interests have been granted the ~~limited~~right to exchange into a Newmark partnership unit with a capital account, such as HDUs. HDUs have a stated capital account which is initially based on the closing trading price of Newmark Class A common stock at the time the HDU is granted and are included in “Accrued Compensation” on the accompanying unaudited condensed consolidated balance sheets. HDUs participate in quarterly partnership distributions and are not exchangeable into shares of Class A common stock. Limited partnership interests held by Cantor in ~~BGC Holdings and~~ Newmark Holdings as of March 31, 2023 are ~~generally~~ exchangeable for ~~up to 34.6~~24.5 million shares ~~of BGC Class B common stock and/or up to the authorized amount~~ of Newmark Class B common stock. ~~In order for~~Subsequent to the Spin-Off, limited partnership interests in BGC Holdings held by a partner or Cantor to exchange a limited partnership interest in BGC Holdings or Newmark Holdings into a Class A or Class B common stock of BGC, such partner or Cantor must exchange both one BGC Holdings limited partnership interests and a number of Newmark Holdings limited partnership interests equal to a BGC Holdings limited partnership interest multiplied by the quotient obtained by dividing Newmark Class A and Class B common stock, Newmark OpCo interests, and Newmark Holdings limited partnership interests held by BGC as of such time by the number of BGC Class A and Class B common stock outstanding as of such time (the “distribution ratio”), divided by the exchange ratio. Initially the distribution ratio was equivalent to the contribution ratio (one divided by 2.2 or 0.4545), and as of immediately following the close of the first quarter of 2018 is equal to 0.4702. As a result of the change in the distribution ratio, certain BGC Holdings limited partnership interests no longer have a corresponding Newmark Holdings limited partnership interest. The exchangeability of these BGC Holdings limited partnership interests along with any new BGC Holdings limited partnership interests issued after the Separation and Distribution Agreement (together referred to as “standalone”) intomay become exchangeable for BGC Class A or Class B common stock ~~is contingent upon the Newmark spin-off. After the spin-off, these standalone BGC~~on a one-for-one basis, and limited partnership interests ~~can then~~in Newmark Holdings held by a partner or Cantor may become exchangeable ~~into BGC~~for a number of shares of Newmark Class A or Class B common ~~stock.~~

stock equal to the number of limited partnership interests multiplied by the Exchange Ratio at that time. As of March 31, 2023, the Exchange Ratio equaled 0.9252.

Each quarter, net income (loss) is allocated between the limited partnership interests and the common stockholders. In quarterly periods in which Newmark has a net loss, the loss ~~allocation for FPUs, limited partnership units (including BGC units and Cantor units)~~ is allocated to Cantor and reflected as a component of “Net income (loss) attributable to noncontrolling ~~interest” in Newmark’s~~interests” on the accompanying unaudited condensed consolidated statements of operations. In subsequent quarters in which Newmark has net income, the initial allocation of income to the limited partnership interests is allocated to Cantor, and reflected in, “Net income (loss) attributable to noncontrolling interests,” to recover any losses taken in earlier quarters, with the remaining income allocated to the limited partnership interests. This ~~income (loss)~~loss allocation process between limited partners and Cantor has no material impact on the net income (loss) allocated to common stockholders.

~~(3)~~

~~Summary of Significant Accounting Policies~~

(3) Summary of Significant Accounting Policies

For a detailed discussion about Newmark’s significant accounting policies, see Note 3 ~~Summary~~— “Summary of Significant Accounting Policies,” in ~~our~~Newmark’s consolidated financial statements included in Part II, Item 8 of ~~our~~Newmark’s Annual Report on Form 10-K for the year ended December 31, ~~2017. Other than the following, during the three months ended March 31, 2018, there~~2022. There were no significant changes made to Newmark’s significant accounting ~~policies.~~

~~Equity Investments:~~

Effective January 1, 2018, in accordance with the new guidance on recognition and measurement of equity investments, Newmark carries its marketable equity securities at fair value and recognizes any changes in fair value in net income (loss). Further, Newmark has elected to use a measurement alternative for its equity investments without a readily determinable fair value, pursuant to which these investments are initially recognized at cost and remeasured through earnings when there is an observable transaction involving the same or similar investment of the same issuer, or due to an impairment. See Note 6—Marketable Securities and Note 7—Cost and Equity Method Investments for additional information. Newmark had unrealized gains of $2.6 million related to Marketable securities and Investments carried under the measurement alternative for the three months ended March 31, 2018.

~~Revenue Recognition:~~

~~The accounting policy changes are attributable to the adoption of ASU No. 2014-09,~~ ~~Revenue from contracts with Customers~~ ~~and related amendments on January 1, 2018. These revenue recognition policy updates are applied prospectively in Newmark’s~~

unaudited condensed consolidated financial statements from January 1, 2018 onward. Financial information for the historical comparable periods was not revised and continues to be reported under the accounting standards in effect during those historical periods.

~~Management Services, Servicing Fees and Other~~

For certain revenues based, in part, on future contingent events (e.g., tenant move-in or payment of first month’s rent), Newmark’s performance obligation is typically satisfied at lease signing and, therefore, the portion of the commission that is contingent on a future event is recognized as revenue, if deemed not subject to significant reversal.

~~Segment:~~

Newmark has a single operating segment. Newmark is a real estate services firm offering services to commercial real estate tenants, owner occupiers, investors and developers, leasing and corporate advisory, investment sales and real estate finance, consulting, origination and servicing of commercial mortgage loans, valuation, project and development management and property and facility management. The chief operating decision maker regardless of geographic location evaluates the operating results of Newmark as total real estate services and allocates resources accordingly. For the three months ended March 31, 2018 and 2017, Newmark recognized revenues as follows (in thousands):

Three Months Ended March 31,

2018

2017

Leasing and other commissions

$
159,371

$
127,567

Capital markets

101,364

77,391

Gains from mortgage banking activities/origination, net

38,914

45,262

Management services, servicing fees and other

130,811

82,362

Revenues

$
430,460

$
332,582

~~(4)~~

~~Acquisitions~~

~~There were no acquisitions~~policies during the three months ended March 31, ~~2018.~~

On September 8, 2017, Newmark acquired from CCRE 100% of the equity of BPF. The Berkeley Point Acquisition has been determined to be a combination of entities under common control that resulted in a change in the reporting entity (see Note 1—Organization2023.

Revenue Recognition:

Management Services, Servicing Fees and ~~Basis of Presentation).~~

~~The assets~~Other:

Management services revenues include property management, facilities management, project management and liabilities of BPF have been recorded in Newmark’s unaudited condensed consolidated balance sheets at the seller’s historical carrying value. The excess of the purchase price over BPF’s net assets was accounted for as an equity transaction for the year ended December 31, 2017 (the period in which the transaction occurred). (See Note 1—Organizationvaluation and ~~Basis of Presentation for additional information.)~~

~~Deferred tax assets and liabilities~~appraisal. Management fees are recognized for the future tax consequences attributable to basis differences between the carrying amounts of existing assets and liabilities and their respective tax basis. Accordingly, a deferred tax asset of $108.6 million has been contributed to Newmark for the period ended December 31, 2017 for the basis difference between BPF’s net assets and its tax basis.

On January 13, 2017, Newmark acquired a San Francisco based advisory firm, Regency Capital Partners (“Regency”). Regency specializes in structured debt and equity for large office and multi-family developments.

On July 26, 2017, Newmark acquired an approximately 50% controlling interest in a joint venture. Cantor owns a noncontrolling interest of 25% of the company, which is headquartered in New York, NY and specializes in commercial real estate due diligence.

In September 2017, Newmark completed the acquisition of six former Integra Realty Resources offices (Washington DC, Baltimore, Willmington, DE, New York/New Jersey, Philadelphia and Atlanta offices). These firms specialize in valuation services, and the acquisition provides Newmark with greater geographic coverage.

For the year ended December 31, 2017, the following tables summarize the components of the purchase consideration transferred, and the preliminary allocation of the assets acquired and liabilities assumed, for all acquisitions other than the Berkeley

Point Acquisition, based on the fair values of the acquisition date. Newmark expects to finalize its analysis of the assets acquired and liabilities assumed within the first year of the acquisition, and therefore adjustments to assets and liabilities may occur.

As of the
Acquisition
Date

Assets

Cash and cash equivalents

$
3,903

Goodwill

64,291

Intangibles assets, net

3,188

Other assets

9,234

Total Assets

80,616

Current liabilities

Accounts payable, accrued expenses and other liabilities

7,119

Total Liabilities

7,119

Noncontrolling interest

19,145

Net assets acquired

$
54,352

The total consideration for acquisitions during the year ended December 31, 2017 was approximately $55.6 million in total fair value, comprised of cash, and BGC Holdings limited partnership units. The total consideration included contingent consideration of approximately 477,169 BGC’s Holding partnership units (with an acquisition date fair value of approximately $5.0 million) and $1.3 million in cash that may be issued contingent on certain targets being met through 2020. The excess of the consideration over the fair value of the net assets acquired has been recorded as goodwill of approximately $64.3 million, of which $45.4 million is deductible by Newmark for tax purposes.

These acquisitions are accounted for using the purchase method of accounting. The results of operations of these acquisitions have been included in Newmark’s unaudited condensed consolidated financial statements subsequent to their respective dates of acquisition, which in aggregate contributed $13.1 million to Newmark’s revenue for the year ended December 31, 2017.

~~(5)~~

~~Earnings Per Share and Weighted-Average Shares Outstanding~~

U.S. GAAP guidance—Earnings Per Share provides guidance on the computation and presentation of earnings per share (“EPS”). Basic EPS excludes dilution and is computed by dividing Net income (loss) available to common stockholders by the weighted-average number of shares of common stock outstanding and contingent shares for which all necessary conditions have been satisfied except for the passage of time. Net income (loss) is allocated to the Newmark’s outstanding common stock, FPUs, limited partnership units, Cantor units and BGC units (see Note 2—Limited Partnership Interest in Newmark Holdings).

~~The following is the calculation of Newmark’s basic EPS (in thousands, except per share data):~~

Three Months Ended March 31,

2018

2017

Basic earnings per share:

Net income available to common stockholders

$
19,997

$
36,711

Basic weighted-average shares of common stock outstanding

155,694

N/A

Basic earnings per share

0.13

N/A

Fully diluted EPS is calculated utilizing net income (loss) available to common stockholders plus net income allocations to the limited partnership interests in Newmark Holdings as the numerator. The denominator comprises Newmark’s weighted-average number of outstanding shares of common stock and, if dilutive, the weighted-average number of limited partnership interests and other contracts to issue shares of common stock, stock options and RSUs. The limited partnership interests generally are potentially exchangeable into shares of Class A common stock and are entitled to remaining earnings after the deduction for the Preferred Distribution; as a result, they are included in the fully diluted EPS computation to the extent that the effect would be dilutive.

~~The following is the calculation of Newmark’s fully diluted EPS (in thousands, except per share data):~~

Three Months Ended March 31,

2018

2017

Fully diluted earnings per share

Net income available to common stockholders

$
19,997

$
36,711

Allocations of net income to limited partnership
   interests in BGC Holdings and Newmark Holdings,
   net of tax

10,289

N/A

Net income for fully diluted shares

$
30,286

N/A

Weighted-average shares:

Common stock outstanding

155,694

N/A

Partnership units¹

90,222

N/A

Other

918

N/A

Fully diluted weighted-average shares of common
   stock outstanding

246,834

N/A

Fully diluted earnings per share

0.12

N/A

~~Partnership units collectively include founding/working partner units, limited partnership units, and Cantor units (see Note 2—Limited Partnership Interest in Newmark Holdings for more information).~~

~~For the quarter ended March 31, 2018, there were no potentially dilutive securities that would have had an anti-dilutive effect.~~

~~(6)~~

~~Marketable Securities~~

On June 28, 2013, BGC sold certain assets of its on-the-run, electronic benchmark U.S. Treasury platform (“eSpeed”) to Nasdaq. The total consideration received in the transaction included an earn-out of up to 14,883,705 shares of Nasdaq common stock to be paid ratably over 15 years, provided that Nasdaq, as a whole, produces at least $25.0 million in consolidated gross revenues each year. The earn-out was excluded from the initial gain on the divestiture and is recognized in income as it is realized and earned when these contingent events have occurred, consistent with the accounting guidance for gain contingencies (the “Nasdaq Earn-Out”). The remaining rights under the Nasdaq Earn-Out were transferred to Newmark on September 28, 2017. Any Nasdaq shares that were received by BGC prior to September 28, 2017 were not transferred to Newmark.

In connection with the Nasdaq Earn-Out, Newmark received 992,247 shares during the year ended December 31, 2017. Newmark will receive a remaining Earn-Out of up to 9,922,470 shares of Nasdaq common stock ratably over the next approximately 10 years, provided that Nasdaq, as a whole, produces at least $25.0 million in gross revenues each year. During the three months ended March 31, 2018, Newmark sold 650,000 shares of the Nasdaq shares received. In November of 2017, Newmark sold 242,247 shares and has 100,000 remaining shares as of March 31, 2018. During the three months ended March 31, 2018, the market value of the securities sold was $52.2 million. For the three months ended March 31, 2018, Newmark recognized a gain on the sale of these securities of $2.4 million. For the three months ended March 31, 2018, Newmark also recorded an unrealized gain of $0.8 million on the mark to market of these securities, which is included in “Other income, net” in Newmark’s unaudited condensed consolidated statement of operations. As of March 31, 2018 and December 31, 2017, Newmark had $8.6 million and $57.6 million, respectively included in “Marketable securities” on its unaudited condensed consolidated balance sheet (see Note 18—Securities Loans)

~~(7)~~

~~Cost and Equity Method Investments~~

Newmark has a 27% ownership in Real Estate LP a joint venture with Cantor in which Newmark has the ability to exert significant influence over the operating and financial policies. Accordingly, Newmark accounts for this investment under the equity method of accounting. For the three months ended March 31, 2018, Newmark recognized $3.2 million of equity income included in “Other income, net” in its unaudited condensed consolidated statements of operations. As of March 31, 2018 and December 31, 2017, Newmark had $104.7 million and $101.6 million, respectively in an equity method investment, and is included in “Other assets” in Newmark’s unaudited condensed consolidated balance sheets.

~~Investments Carried Under Measurements Alternative~~

Newmark had previously acquired investments for which it did not have the ability to exert significant influence over operating and financial policies of the investees. Prior to January 1, 2018, these investments were accounted for using the cost method in accordance with U.S. GAAP guidance, ~~Investments—Other. The carrying value of the cost method investments was $6.0 million and~~

is included in “Other assets” in the Newmark’s unaudited condensed consolidated balance sheets as of December 31, 2017. Newmark did not recognize any gain or loss relating to cost method investments for the three months ended March 31, 2017.

Effective January 1, 2018, these investments are accounted for using the measurement alternative in accordance with the new guidance on recognition and measurement. The carrying value of these investments was $13.6 million and is included in “Other assets” in the Newmark’s unaudited condensed statements balance sheets as of March 31, 2018. Newmark did not recognize any gains, losses, or impairments relating to investments carried under the measurement alternative for the three months ended March 31, 2018.

~~(8)~~

~~Capital and Liquidity Requirements~~

Newmark is subject to various capital requirements in connection with seller/servicer agreements that Newmark has entered into with the various GSEs. Failure to maintain minimum capital requirements could result in Newmark’s inability to originate and service loans for the respective GSEs and could have a direct material adverse effect on Newmark’s unaudited condensed consolidated financial statements. Management believes that, as of March 31, 2018 and December 31, 2017, Newmark has met all capital requirements. As of March 31, 2018, the most restrictive capital requirement was Fannie Mae’s net worth requirement. Newmark exceeded the minimum requirement by $426.0 million.

Certain of Newmark’s agreements with Fannie Mae allow Newmark to originate and service loans under Fannie Mae’s DUS Program. These agreements require Newmark to maintain sufficient collateral to meet Fannie Mae’s restricted and operational liquidity requirements based on a pre-established formula. Certain of Newmark’s agreements with Freddie Mac allow Newmark to service loans under Freddie Mac’s Targeted Affordable Housing Program (“TAH”). These agreements require Newmark to pledge sufficient collateral to meet Freddie Mac’s liquidity requirement of 8% of the outstanding principal of TAH loans serviced by Newmark. Management believes that, as of March 31, 2018 and December 31, 2017, Newmark has met all liquidity requirements.

In addition, as a servicer for Fannie Mae, GNMA and FHA, Newmark is required to advance to investors any uncollected principal and interest due from borrowers. At each of March 31, 2018 and December 31, 2017, outstanding borrower advances were approximately $0.1 million and are included in “Other assets” in Newmark’s unaudited condensed consolidated balance sheets.

~~(9)~~

~~Loans Held for Sale, at Fair Value~~

Loans held for sale represent originated loans that are typically sold within 45 days from the date of the mortgage loan is funded. Newmark initially and subsequently measures all loans held for sale at fair value on the accompanying unaudited condensed consolidated balance sheets. The fair value measurement falls within the definition of a Level 2 measurement (significant other observable inputs) within the fair value hierarchy. Electing to use fair value allows a better offset of the change in the fair value of the loan and the change in fair value of the derivative instruments used as economic hedges. Loans held for sale had a cost basis and fair value as follows (in thousands):

Cost Basis

Fair Value

March 31, 2018

$
950,514

$
965,639

December 31, 2017

$
360,440

$
362,635

~~As of March 31, 2018 and December 31, 2017, there were no loans held for sale that were 90 days or more past due or in nonaccrual status.~~

During the period prior to its sale, interest income on a loan held for sale is calculated in accordance with the terms of the individual loan. Interest income on loans held for sale was $4.7 million and $6.5 million for the three months ended March 31, 2018 and 2017, respectively. Interest income on loans held for sale in included in “Management services, servicing fees and other” in Newmark’s unaudited condensed consolidated statements of operations. During the three months ended March 31, 2018 and 2017, Newmark also recognized gains of $15.1 and $2.1 million, respectively, for the change in fair value on loans held for sale. These gains were included in “Gains from mortgage banking activity/originations, net” in Newmark’s unaudited condensed consolidated statements of operations.

~~(10)~~

~~Derivatives~~

Newmark accounts for its derivatives at fair value, and recognized all derivatives as either assets or liabilities in its unaudited condensed consolidated balance sheets. In its normal course of business, Newmark enters into commitments to extend credit for

mortgage loans at a specific rate (rate lock commitments) and commitments to deliver these loans to third-party investors at a fixed price (forward sale contracts). These transactions are accounted for as derivatives.

~~The fair value of derivative contracts, computed in accordance with the Newmark’s netting policy, is set forth below (in thousands):~~

March 31, 2018

December 31, 2017

Notional

Notional

Derivative contract

Assets

Liabilities

Amounts (1)

Assets

Liabilities

Amounts⁽¹⁾

Forwards

$
9,687

$
2,421

$
1,324,711

$
3,753

$
657

$
541,359

Rate lock commitments

8,750

8,980

374,197

2,923

2,390

180,918

Total

$
18,437

$
11,401

$
6,676

$
3,047

~~(1)~~

~~Notional amounts represent the sum of gross long and short derivative contracts, an indication of the volume of Newmark’s derivative activity, and does not represent anticipated losses.~~

The change in fair value of rate lock commitments and forward sale contracts related to mortgage loans are reported as part of “Gain from mortgage banking activities/originations, net” in Newmark’s unaudited condensed consolidated statements of operations. The change in fair value of rate lock commitments are disclosed net of expenses of $2.5 million and $0.8 million for the three months ended March 31, 2018 and 2017, which are reported as part of “Compensation and employee benefits” in the Newmark’s unaudited condensed consolidated statements of operations.

The fair value of Newmark’s derivatives for rate lock commitments and forward sale contracts are as follows (in thousands) and are included in “Gain from mortgage banking activities/originations, net” and “Compensation and employee benefits” in the unaudited condensed consolidated statements of operations:

Location of gain (loss) recognized

Three Months Ended March 31,

in income for derivatives

2018

2017

Derivatives not designed as hedging
instruments:

Rate lock commitments

Gains from mortgage banking
activities/originations, net

$
2,269

$
132

Rate lock commitments

Compensation and employee
benefits

(2,500
)

(807
)
Forward sale contracts

Gains from mortgage banking
activities/originations, net

7,266

3,317

$
7,035

$
2,642

~~Derivative assets and derivative liabilities are included in “Other current assets” and the current portion of “Accounts payable, accrued expenses and other liabilities,” respectively.~~

~~(11)~~

~~Credit Enhancement Receivable, Contingent Liability and Credit Enhancement Deposit~~

Newmark is a party to a Credit Enhancement Agreement (“CEA”), dated March 9, 2012, with German American Capital Corporation and Deutsche Bank Americas Holding Corporation (together, the “DB Entities”). On October 20, 2016, the DB Entities assigned the CEA to Deutsche Bank AG Cayman Island Branch, a Cayman Island Branch of Deutsche Bank AG (“DB Cayman”). Under the terms of these agreements, DB Cayman provides Newmark with varying levels of ongoing credit protection, subject to certain limits, for Fannie Mae and Freddie Mac loans subject to loss sharing (see Note 21—Financial Guarantee Liability) in Newmark’s servicing portfolio as of March 9, 2012. DB Cayman will also reimburse Newmark for any losses incurred due to violation of underwriting and serving agreements that occurred prior to March 9, 2012. For the three months ended March 31, 2018 and 2017 there were no reimbursements under this agreement.

~~Credit enhancement receivable~~

At March 31, 2018, Newmark had $18.9 billion of credit risk loans in its servicing portfolio with a maximum pre-credit enhancement loss exposure of $5.4 billion. Newmark had a form of credit protection from DB Cayman on $0.4 billion of credit risk loans with a maximum loss exposure coverage of $0.1 billion. The amount of the maximum loss exposure without any form of credit protection from DB Cayman was $5.3 billion.

At December 31, 2017, Newmark had $18.8 billion of credit risk loans in its servicing portfolio with a maximum pre-credit enhancement loss exposure of $5.3 billion. Newmark had a form of credit protection from DB Cayman on $4.2 billion of credit risk loans with a maximum loss exposure coverage of $1.2 billion. The amount of the maximum loss exposure without any form of credit protection from DB Cayman was $4.1 billion.

As of March 31, 2018, there was no credit enhancement receivable. Credit enhancement receivables as December 31, 2017 were $10 thousand are included in “Other assets” in Newmark’s unaudited condensed consolidated balance sheets.

~~Credit enhancement deposit~~

The CEA required the DB Entities to deposit $25 million into Newmark’s Fannie Mae restricted liquidity account (see Note 8—Capital and Liquidity Requirements), which Newmark is required to return to DB Cayman, less any outstanding claims, on March 9, 2021. The $25 million deposit is included in “Restricted cash” and the offsetting liability in “Other long-term liabilities” in Newmark’s unaudited condensed consolidated balance sheets.

~~Contingent liability~~

Under the CEA, Newmark is required to pay DB Cayman, on March 9, 2021, an amount equal to 50% of the positive difference, if any, between (a) $25 million, and (b) Newmark’s unreimbursed loss-sharing payments from March 9, 2012 through March 9, 2021 on Newmark’s servicing portfolio as of March 9, 2012.

Contingent liabilities as of March 31, 2018 and December 31, 2017 were $10.7 million and $10.7 million, respectively and are included in “Other liabilities” in Newmark’s unaudited condensed consolidated balance sheets.

~~(12)~~

~~Revenues from Contracts with Customers~~

~~The following table presents Newmark’s total revenues separately for its revenues from contracts with customers and our other sources of revenues (in thousands):~~

Three Months Ended
March 31,

2018

Revenues from contracts with customers:

Leasing and other commissions

$
159,371

Capital markets

101,364

Management services

96,933

Revenues

357,668

Other sources of revenue:

Gains from mortgage banking activities/originations, net⁽¹⁾

38,914

Servicing fees and other⁽¹⁾

33,878

Revenues

$
430,460

~~(1)~~

~~Although these items have customers under contract, they were recorded as other sources of revenue as they were excluded from the scope of ASU No. 2014-09.~~

The table below presents the impact to the Newmark’s condensed consolidated balance sheets and condensed consolidated statement of operations as a result of applying the new revenue recognition standard, as codified within ASC 606 (in thousands):

For the Three Months Ended March 31, 2018

As
Reported

Under Previous U.S. GAAP

Effect of Change
Higher/(Lower) (1)

Income Statement

Revenues

Leasing and other commissions

$
159,371

148,754

$
10,617

Capital Markets

101,364

101,364

—

Gains from mortgage banking activities/originations, net

38,914

38,914

—

Management services, servicing fees and other

130,811

112,424

18,387

Expenses

Compensation and employee benefits

252,695

247,053

5,642

Operating, administrative and other

$
75,427

57,040

$
18,387

~~(1)~~

~~The amounts reflect each affected financial statement line item as they would have been reported under U.S. GAAP, prior to the adoption of the new revenue standard.~~

March 31, 2018

As
Reported

Under Previous U.S. GAAP

Effect of Change
Higher/(Lower) (1)

Balance Sheet

Receivables, net

$
293,148

214,695

$
78,453

Liabilities

Accrued compensation

205,732

168,338

37,394

Current portion of accounts payable,
accrued expenses and other liabilities

$
165,746

148,466

$
17,280

~~(1)~~

~~The amounts reflect each affected financial statement line item as they would have been reported under U.S. GAAP, prior to the adoption of the new revenue standard~~

Revenue from contracts with customers is recognized when, or as, Newmark satisfies its performance obligations by transferring the promised goods or services to the customers as determined by when, or as, the customer obtains control of that good or service. A performance obligation may be satisfied over time or at a point in time. Revenue from a performance obligation satisfied over time is recognized by measuring Newmark’s progress in satisfying the performance obligation as evidenced by the transfer of the goods or services to the customer. Revenue from a performance obligation satisfied at a point in time is recognized at the ~~point in~~ time ~~when~~ the ~~customer obtains control over the promised good or service. The amount of~~related services have been performed, unless future contingencies exist. This also includes revenue recognized reflects the consideration Newmark expects to be entitled to in exchange for those promised goods or services (i.e., the “transaction price”). In determining the transaction price, Newmark must consider consideration promised in a contract that includes a variable amount, referred to as variable consideration, and estimate the amount of consideration due Newmark. Additionally, variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. In determining when to include variable consideration in the transaction price, Newmark considers all information (historical, current and forecast) that is available including the range of possible outcomes, the predictive value of past experiences, the time period of when uncertainties expect to be resolved and the amount of consideration that is susceptible to factors outside of Newmark’s influence, such as market volatility or the judgment and actions of third parties.

Newmark also uses third-party service providers in the provision of its services to customers. In instances where a third-party service provider is used, Newmark performs an analysis to determine whether Newmark is acting as a principal or an agent with respect to the services provided. To the extent that Newmark determines that it is acting as a principal, the revenue and the expenses incurred are recorded on a gross basis. In instances where Newmark has determined that it is acting as an agent, the revenue and expenses are presented on a net basis within the revenue line item.

In some instances, Newmark performs services for customers and incurs out-of-pocket expenses as part of delivering those services (such as travel, meals and lodging). Newmark’s customers agree to reimburse Newmark for those expenses, and those reimbursements are part of the contract’s transaction price. Consequently, these expenses and the reimbursements of such expenses from the ~~customer are presented on a gross basis because the services giving rise~~licensing of flexible workspaces to ~~the out-of-pocket expenses do not transfer a good~~

~~or service. The reimbursements are included~~its customers by Knotel and Deskeo. In addition, in ~~the transaction price when the costs are incurred and the reimbursements are due from the customer.~~

~~The following provides detailed information on the recognition of Newmark’s revenues from contracts with customers:~~

~~Leasing and other commissions. Newmark offers a diverse range of commercial real estate brokerage and advisory services, including tenant and agency representation. Newmark’s performance obligation is~~regard to match a qualified tenant with available landlord property. Commissions from real estate brokerage transactions are typically recognized at a point in time on the date the lease is signed. The date the lease is signed represents the transfer of control and satisfaction of the performance obligation as the tenant has been secured. The commission fees are either a fixed or variable based on a percentage of the aggregate rental fee payable over the lease term. Commission payments may be due entirely upon lease execution or may be paid in installments upon the resolution of a future contingency. In those cases, Newmark does not provide any further services after the first contingency has been met. Therefore, the performance obligation of securing a tenant has been fulfilled upon reaching the first contingency. Newmark records a receivable for future installments of the commission revenue subject to any constraints that may exist in instances where the commission is considered variable consideration.

~~Capital markets~~. Newmark provides investment sales and mortgage brokerage services to property owners to identify qualified purchasers or debt placement for an owner’s property in exchange for a commission. Newmark is compensated for its services of finding a qualified purchaser or lender for the owner’s property, the one performance obligation, as evidenced by the closing of the sale of the property. In some cases, the consideration is payable in separate installments upon reaching two separate contingencies, such as the closing of a construction loan and the subsequent consummation of the sale of the property. In those cases, Newmark does not provide any further services after the first contingency has been met. The transfer of control and satisfaction of the performance obligation occurs when Newmark obtains a qualified purchaser or lender, as evidenced by the closing of the sale of or loans to the property. Therefore, revenue is recognized at a point in time. Commission fees may be fixed or variable based on a percentage of the transaction amount. Commission payments may be due entirely upon closing, either through escrow or upon recordation of the deed. Consideration is variable if the payment is contingent on an event that may or may not occur after Newmark has satisfied its performance obligation. For example, if Newmark’s obligations are fulfilled upon execution of a purchase and sale agreement, but the commission is not payable until closing of the transaction, there would exist an element of variable consideration. In those instances, Newmark assesses whether the amount of variable consideration is constrained and, if so, the source of the uncertainty and expected resolution of that uncertainty. Accordingly, the variable consideration adjusted for any constraints, if any, should be recognized upon the sale of the property.

~~Management services, servicing fees and other.~~ In this business, Newmark provides property and facilities management services along with project management and other consulting services (collectively, “management services”), to customers who may also utilize Newmark’s commercial real estate brokerage services. As previously noted, servicing fees are not within the scope of the new revenue standard and a description of these services can be found in Note 3 Summary of Significant Accounting Policies.

Each type of management service (property, facility and project) generally represents a single performance obligation composed of a series of distinct services that are substantially the same and have the same pattern of transfer. Each task is an activity to fulfill the management service and are not separate promises that are distinct in the context of the contract. To meet the same pattern of transfer criterion, Newmark determined each distinct day of service represents a performance obligation that would be satisfied over time and has the same measure of progress. The customer simultaneously receives and consumes the benefits provided by Newmark’s performance as Newmark performs. Therefore, revenue is recognized over time using a time-elapsed method to measure progress.

Consideration received may be fixed or variable. Fixed consideration is included in the transaction price whereas variable consideration is subject to the revenue constraint and included in the transaction price only to the extent it is probable a significant reversal in the amount of cumulative revenue recognized will not occur in the future. For example, management fees subject to key performance indicators for an annual period are considered variable consideration due to the future contingency that performance indicators would not be met and Newmark would be required to return a portion of management fees already received. Accordingly, the entire transaction price, including the element of variable consideration adjusted for any constraints, is recognized over the term of the contracts. In some cases, Newmark has determined that it has a right to consideration from a customer in an amount that corresponds directly with the value to the customer of Newmark’s performance completed to date (for example, a service contract in which Newmark bills a fixed amount for each hour of service provided). Newmark has elected to use the practical expedient whereby an entity may recognize revenue in the amount to which the entity has a right to invoice.

In some instances, because project management services can cover many different types of projects and even include phases for a single project that vary in the services delivered, the performance obligation is the completion of a deliverable. In those instances, the satisfaction of the performance obligation occurs at a point in time (upon completion of the deliverable when the customer obtains control). Generally, the fee is due upon completion and delivery and, accordingly, is recognized at that time.

~~For~~ management and facility service contracts, the owner of the property will typically reimburse Newmark for certain expenses that are incurred on behalf of the owner, which comprise primarily on-site employee salaries and related benefit costs. The ~~reimbursement~~ amounts which are to be reimbursed per the terms of the services contract are recognized as revenue in the same period as the related expenses are incurred. In certain instances, Newmark subcontracts property management services to independent property managers, in which case Newmark passes a portion of its property management fee on to the subcontractor, and Newmark retains the balance. Accordingly, Newmark records these fees gross of the amounts paid to subcontractors, and the amounts paid to subcontractors are recognized as expenses in the same period.

Newmark ~~incurs expenses on behalf of customers for certain management services subject to reimbursement. Newmark concluded that it controls the services provided by a~~also uses third party ~~on behalf~~service providers in the provision of ~~customers and, therefore, acts~~its services to customers. In instances where a third-party service provider is used, Newmark performs an analysis to determine whether it is acting as a principal ~~under those contracts. For these service contracts,~~or an agent with respect to the services provided. To the extent that Newmark ~~presents~~determines that it is acting as a principal, the revenue and the expenses incurred are recorded on ~~behalf~~a gross basis. In instances where Newmark has determined that it is acting as an agent, the revenue and expenses are presented on a net basis within the revenue line item.

In some instances, Newmark performs services for customers and incurs out-of-pocket expenses as part of delivering those services. Newmark’s customers ~~along with corresponding reimbursement revenue~~agree to reimburse Newmark for those expenses, and those reimbursements are part of the

contract’s transaction price. Consequently, these expenses and the reimbursements of such expenses from the customer are presented on a gross basis because the services giving rise to the out-of-pocket expenses do not transfer a good or service. The reimbursements are included in the transaction price when the costs are incurred, and the reimbursements are due from the

customer.

Servicing fees are earned for servicing mortgage loans and are recognized on an accrual basis over the lives of the related mortgage loans. Also included in servicing fees are the fees earned on prepayments, interest and placement fees on borrowers’ escrow accounts and other ancillary fees. Other revenues include interest income on warehouse notes receivable.

Leasing and Other Commissions:

Commissions from real estate lease brokerage transactions are typically recognized at a point in time on the date the lease is signed, if deemed not subject to significant reversal. The date the lease is signed represents the transfer of control and satisfaction of the performance obligation as the tenant has been secured. Commission payments may be due entirely upon lease execution or may be paid in installments upon the resolution of a future contingency (e.g. tenant move-in or payment of first month’s rent).

Investment Sales

Investment sales revenue from real estate sales brokerage transactions are recognized at the time the service has been provided and the commission becomes legally due, except when future contingencies exist. In most cases, close of escrow or transfer of title is a future contingency, and revenue recognition is deferred until all contingencies are satisfied.

Commercial Mortgage Origination, net:

Fair value of expected net future cash flows from servicing and loan originations and related fees and sales premiums, net, are recognized when a derivative asset or liability is recorded upon the commitment to originate a loan with a borrower and sell the loan to an investor. The derivative is recorded at fair value and includes loan origination fees, sales premiums, and the estimated fair value of the expected net servicing cash flows. The revenue is recognized net of related fees and commissions to third-party brokers. Mortgage brokerage and debt placement revenue is earned and recognized when the sale of a property closes, and title passes from seller to buyer. The revenue is generated from the loan origination fees, sales premiums, and the estimated fair value of the expected net servicing cash flows.

Goodwill and Other Intangible Assets, Net:

Goodwill is the excess of the purchase price over the fair value of identifiable net assets acquired in a business combination. As prescribed in the U.S. GAAP guidance, Intangibles—Goodwill and Other, goodwill and other indefinite-lived intangible assets are not amortized, but instead are periodically tested for impairment. The Company reviews goodwill and other indefinite-lived intangible assets for impairment on an annual basis during the fourth quarter of each fiscal year or whenever an event occurs or circumstances change that could reduce the fair value of a reporting unit below its carrying amount. When reviewing goodwill for impairment, Newmark first assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill.

Intangible assets with definite lives are amortized on a straight-line basis over their estimated useful lives. Definite-lived intangible assets arising from business combinations include trademark and trade names, non-contractual customers, license agreements, non-compete agreements, and contractual customers.

Current Expected Credit Losses:

The accounting policy changes described below were updated pursuant to the adoption of ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326)—Measurement of Credit Losses on Financial Instruments and related amendments on January 1, 2020. These policy updates have been applied using the modified retrospective approach in the accompanying unaudited condensed consolidated financial statements from January 1, 2020 onward. Financial information for the historical comparable periods was not revised and continues to be reported under the accounting standards in effect during those historical periods. In accordance with the guidance in ASC Topic 326, Newmark presents its financial assets that are measured at amortized cost, net of an allowance for credit losses, which represents the amount expected to be collected over their estimated life. Expected credit losses for newly recognized financial assets carried at amortized cost and credit exposures on off-balance sheet financial guarantees, as well as changes to expected lifetime credit losses during the period, are recognized in earnings. The CECL methodology represents a significant change from prior U.S. GAAP and replaced the prior multiple impairment methods, which generally required that a loss be incurred before it was recognized. Within the life cycle of a loan or other financial asset in scope, the CECL methodology generally results in the earlier recognition of the provision for credit losses and the related allowance for credit losses than under prior U.S. GAAP. The CECL methodology’s impact on expected credit losses, among other things, reflects Newmark’s view of the current state of the economy, forecasted macroeconomic conditions and Newmark’s portfolios.

Financial guarantee liability:

Newmark’s adoption of ASC 326 impacted the expected credit loss reserving methodology for the financial guarantee liability provided to Fannie Mae under the Delegated Underwriting and Servicing Program and Freddie Mac’s Targeted Affordable Housing Program. The expected credit loss is modeled based on Newmark’s historical loss experience adjusted to reflect current economic conditions. A significant amount of judgment is required in the determination of the appropriate reasonable and supportable period, the methodology used to incorporate current and future macroeconomic conditions, determination of the probability of and exposure at default or non-payment, current delinquency status, loan size, terms, amortization types, and the forward-looking view of the primary risk drivers (debt-service coverage ratio and loan-to-value), all of which are ultimately used in measuring the quantitative components of the reserve. Beyond the reasonable and supportable period, Newmark estimates expected credit losses using its historical loss rates. In addition, Newmark reviews the reserves periodically and makes adjustments for certain external and internal qualitative factors, which may increase or decrease the reserves for credit losses. In order to estimate credit losses, assumptions about current and future economic conditions are incorporated into the model using multiple economic scenarios that are weighted to reflect the conditions at each measurement date. During the three months ended March 31, 2023 and 2022, there were increases in the CECL related provision of $1.6 million and $0.2 million, respectively. The balance of the financial guarantee liabilities was $29.3 million and $27.7 million as of March 31, 2023 and December 31, 2022, respectively, and is included in “Other long-term liabilities” on the accompanying unaudited condensed consolidated balance sheets.

Receivables, net:

Newmark has accrued commissions receivable from real estate brokerage transactions, management services and other receivables from contractual management assignments. Receivables are presented net of the CECL allowance as discussed above and are included in “Receivables, net” on the accompanying unaudited condensed consolidated balance sheets. For its CECL reserve, Newmark segregated its receivables into certain pools based on similar risk characteristics and further defined a range of potential loss rates for each pool based on aging. Newmark designed its methodology to allow for a range of loss rates in each pool such that changes in forward-looking conditions can be incorporated into the estimate. Each pool is assigned a loss rate that incorporates management’s view of current conditions and forward-looking conditions that inform the level of expected credit losses in each pool. The credit loss estimate includes specifically identified amounts for which payment has become unlikely. During the three months ended March 31, 2023 and 2022, there were increases (decreases) in the CECL related provision of $(0.1) million and $1.9 million, respectively. The balance of the reserve was $20.8 million and $20.9 million, respectively, as of March 31, 2023 and December 31, 2022 and is included in “Receivables, net” on the accompanying unaudited condensed consolidated balance sheets.

Loans, Forgivable Loans and Other Receivables from Employees and Partners, net:

Newmark has entered into various agreements with certain of its employees and partners, whereby these individuals receive loans which may be either wholly or in part repaid from the distribution earnings that the individual receives on some or all of their limited partnership units or may be forgiven over a period of time. The forgivable portion of these loans is not included in Newmark’s estimate of expected credit losses when employees meet the conditions for forgiveness through their continued employment over the specified time period and is recognized as compensation expense over the life of the loan. The amounts due from terminated employees that Newmark does not expect to collect are included in the allowance for credit losses. As of both March 31, 2023 and December 31, 2022, the balance of this reserve was $1.4 million, and is included in “Loans, forgivable loans and other receivables from employees and partners, net” on the accompanying unaudited condensed consolidated ~~statement~~balance sheets.

From time to time, Newmark may also enter into agreements with employees and partners to grant bonus and salary advances or other types of loans. These advances and loans are repayable in the time frame outlined in the underlying agreements. Newmark reviews loan balances each reporting period for collectability. If Newmark determines that the collectability of a portion of the loan balances is not expected, Newmark recognizes a reserve against the loan balances as compensation expense.

Segment:

Newmark has a single operating segment. Newmark is a real estate services firm offering services to commercial real estate tenants, investors, owners, occupiers, developers, leasing and corporate advisory, investment sales and real estate finance, consulting, origination and servicing of commercial mortgage loans, valuation, project and development management and property and facility management. The chief operating decision-maker evaluates the operating results of Newmark regardless of geographic location as total real estate services and allocates resources accordingly. Newmark recognized revenues as follows (in thousands):


	Three Months Ended March 31,
	2023		2022
Management services, servicing fees and other	$	212,292	$	233,120
Leasing and other commissions	193,306		198,952
Investment sales	71,993		152,113
Commercial mortgage origination, net	43,208		94,062
Revenues	$	520,799	$	678,247

(4) Acquisitions

On March 10, 2023, Newmark completed the acquisition of Gerald Eve, a U.K. based real estate advisory firm.

For the three months ended March 31, 2023, the following table summarizes the components of the purchase consideration transferred, and the preliminary allocation of the assets acquired, and liabilities assumed, for the acquisition. Newmark expects to finalize its analysis of the assets acquired and liabilities assumed within the first year of the acquisitions, and therefore adjustments to assets and liabilities may occur (in thousands):


	As of the Acquisition Date
Purchase Price



Cash	101,152
Contingent consideration	11,863
Accrued Liability	1,756
Total	$	114,771

Allocations
Cash	$	18,616
Goodwill	77,089
Other intangible assets, net	23,777
Receivables, net	31,365
Fixed Assets, net	6,279
Other assets	434
Right-of-use assets	19,473
Right-of-use liabilities	(20,925)
Accrued compensation	(20,680)
Accounts payable, accrued expenses and other liabilities	(20,657)



Total	$	114,771

The total consideration for the acquisition during the three months ended March 31, 2023, was $114.8 million in total fair value comprising cash of $101.2 million, contingent consideration of $11.9 million and an accrued liability of $1.8 million. The excess of the consideration over the fair value of the net assets acquired was recorded as goodwill of $77.1 million, of which approximately $55.9 million is deductible by Newmark for tax purposes.

This acquisition was accounted for using the purchase method of accounting. The results of operations of the acquisitions have been included on the accompanying unaudited condensed consolidated financial statements subsequent to the respective dates of acquisition, which in aggregate contributed $9.3 million to Newmark’s revenues for the three months ended March 31, 2023.

On April 1, 2022, Newmark completed the acquisitions of two companies: BH2, a London-based real estate advisory firm, and McCall & Almy, a multi-market tenant representation and real estate advisory firm.

On May 3, 2022, Newmark completed the acquisition of Open Realty Advisors and Open Realty Properties, which together operate as “Open Realty,” a retail real estate advisory firm.

The following table summarizes the components of the purchase consideration transferred, and the of the assets acquired, and liabilities assumed, for the acquisitions which occurred in 2022:


	As of the Acquisition Date
Purchase Price


Contingent consideration	7,322
Cash and stock issued at closing	65,533
Total	$	72,855

Allocations
Cash	$	1,286
Goodwill	50,756
Other intangible assets, net	19,633
Receivables, net	3,625

Other assets	290
Right-of-use Assets	4,305
Right-of-use Liabilities	(4,305)
Accrued Compensation	(2,175)
Accounts payable, accrued expenses and other liabilities	(560)



Total	$	72,855

The total consideration for the acquisitions during the year ended December 31, 2022, was $72.9 million in total fair value comprising cash of $65.5 million and contingent consideration of $7.3 million. The excess of the consideration over the fair value of the net assets acquired was recorded as goodwill of $50.8 million, of which approximately $35.1 million is deductible by Newmark for tax purposes.

These acquisitions were accounted for using the purchase method of accounting. The results of operations of the acquisitions have been included on the accompanying unaudited condensed consolidated financial statements subsequent to the respective dates of acquisition, which in aggregate contributed $17.8 million to Newmark’s revenues for the year ended December 31, 2022.

(5) Earnings Per Share and Weighted-Average Shares Outstanding

U.S. GAAP guidance — Earnings (Loss) Per Share provides guidance on the computation and presentation of earnings (loss) per share. Basic EPS excludes dilution and is computed by dividing Net income available to common stockholders by the weighted-average number of shares of common stock outstanding and contingent shares for which all necessary conditions have been satisfied except for the passage of time. Net income (loss) is allocated to Newmark’s outstanding common stock, FPUs, limited partnership units and Cantor Units (see Note 2 — “Limited Partnership Interests in Newmark Holdings and BGC Holdings”). In addition, in relation to the Newmark OpCo Preferred Investment, the EPUs issued in June 2018 and September 2018 were entitled to a preferred payable-in-kind dividend which is recorded as accretion to the carrying amount of the EPUs and was a reduction to net income available to common stockholders for the calculation of Newmark’s basic earnings per share and fully diluted earnings per share.

The following is the calculation of Newmark’s basic EPS (in thousands, except per share data):


	Three Months Ended March 31,
	2023		2022
Basic earnings per share:
Net income available to common stockholders	$	(10,350)	$	362
Basic weighted-average shares of common stock outstanding	172,561		188,881
Basic earnings per share	$	(0.06)	$	—

Fully diluted EPS is calculated utilizing net income available to common stockholders plus net income allocations to the limited partnership interests in Newmark Holdings as the numerator. The denominator comprises Newmark’s weighted-

average number of outstanding shares of Newmark Common Stock to the extent the related units are dilutive and, if dilutive, the weighted-average number of limited partnership interests and other contracts to issue shares of common stock, stock options and RSUs. The limited partnership interests generally are potentially exchangeable into shares of Newmark Class A common stock and are entitled to remaining earnings after the deduction for the Preferred Distribution; as a result, they are included in the fully diluted EPS computation to the extent that the effect would be dilutive.

The following is the calculation of Newmark’s fully diluted EPS (in thousands, except per share data):


	Three Months Ended March 31,
	2023		2022
Fully diluted earnings per share:
Net income available to common stockholders	$	(10,350)	$	362
Allocations of net income to limited partnership interests in Newmark Holdings, net of tax	—		76
Net income for fully diluted shares	$	(10,350)	$	438
Weighted-average shares:
Common stock outstanding	172,561		188,881


Partnership units (1)	—		56,220
RSUs (Treasury stock method)	—		5,757
Newmark exchange shares	—		1,957
Fully diluted weighted-average shares of common stock outstanding	172,561		252,815
Fully diluted earnings per share	$	(0.06)	$	—

(1)Partnership units collectively include FPUs, limited partnership units, and Cantor Units (see Note 2 — “Limited Partnership Interests in Newmark Holdings and BGC Holdings” for more information).

For the three months ended March 31, 2023 and 2022, 67.3 million and 0.1 million potentially dilutive securities, respectively, were excluded from the computation of fully diluted EPS because their effect would have been anti-dilutive.

(6) Stock Transactions and Unit Redemptions

As of March 31, 2023, Newmark has two classes of authorized common stock: Class A common stock and Class B common stock.

Class A Common Stock

Each share of Class A common stock is entitled to one vote. Newmark has 1.0 billion authorized shares of Class A common stock at $0.01 par value per share.

Changes in shares of Newmark’s Class A common stock outstanding were as follows:


	Three Months Ended March 31,
	2023	2022
Shares outstanding at beginning of period	150,384,605	168,272,371
Share issuances:
LPU redemption/exchange (1)	1,927,905	934,868
Issuance of Class A common stock for Newmark RSUs	985,540	1,019,474
Other	(155,240)	13,521
Treasury stock repurchases	—	(1,682,871)
Shares outstanding at end of period	153,142,810	168,557,363

(1)Because they were included in Newmark’s fully diluted share count, if dilutive, any exchange of LPUs into Class A common stock would not impact the fully diluted number of shares and units outstanding.

Class B Common Stock

Each share of Class B common stock is entitled to 10 votes and is convertible at any time into one share of Class A common stock.

As of March 31, 2023 and December 31, 2022, there were 21.3 million shares of Newmark Class B common stock outstanding.

Share Repurchases

On February 17, 2021, our Board increased its authorized share repurchases of Newmark Class A common stock and purchases of limited partnership interests in Newmark’s subsidiaries to $400.0 million. This authorization includes repurchases of shares or purchase of units from executive officers, other employees and partners, including of BGC and Cantor, as well as other affiliated persons or entities. On February 10, 2022, the Board and Audit Committee reauthorized the $400.0 million Newmark share repurchase and unit redemption authorization, which may include purchases from Cantor, its partners or employees or other affiliated persons or entities. On November 4, 2022, the Board and Audit Committee reauthorized the $400.0 million Newmark share repurchase and unit redemption authorization, which may include purchases from Cantor, its partners or employees or other affiliated persons or entities.

From time to time, Newmark may actively continue to repurchase shares and/or purchase units. During the three months ended March 31, 2023, Newmark did not repurchase shares of Class A common stock. As of March 31, 2023, Newmark had $392.3 million remaining from its share repurchase and unit purchase authorization.

Redeemable Partnership Interests

The changes in the carrying amount of FPUs follow (in thousands):


	March 31, 2023		December 31, 2022
Balance at beginning of period:	$	16,550	$	20,947
Income allocation	—		2,272
Distributions of income	—		(5,130)

Issuance and other	(618)		(1,539)
Balance at end of period	$	15,932	$	16,550

(7) Marketable Securities

On June 28, 2013, BGC sold certain assets of eSpeed, its on-the-run business, to Nasdaq. The total consideration received by BGC in the transaction included the Nasdaq Earn-out of up to 14,883,705 shares of Nasdaq shares to be paid ratably over 15 years, provided that Nasdaq, as a whole, produces at least $25.0 million in consolidated gross revenues each year. The Nasdaq Earn-out was excluded from the initial gain on the divestiture and is recognized in income as it is realized and earned when these contingent events have occurred, consistent with the accounting guidance for gain contingencies. BGC transferred the remaining rights under the Nasdaq Earn-out to Newmark on September 28, 2017. Any Nasdaq shares that were received by BGC prior to September 28, 2017 were not transferred to Newmark.

In connection with the Nasdaq Earn-out, Newmark received 992,247 shares during the years ended December 31, 2017 through 2020. In accordance with the terms of the agreement, Newmark would recognize the remaining Nasdaq Earn-out of up to 6,945,729 shares of Nasdaq shares ratably over approximately the next 7 years, provided that Nasdaq, as a whole, produces at least $25.0 million in gross revenues each year. On February 2, 2021, Nasdaq announced that it entered into a definitive agreement to sell its U.S. fixed income business to Tradeweb. On June 25, 2021, Nasdaq announced the closing of the sale of its U.S. fixed income business, which accelerated Newmark’s receipt of Nasdaq shares. Newmark received 6,222,340 Nasdaq shares, with a fair value of $1,093.9 million based on the closing price on June 30, 2021 included in “Other (loss) income, net” for the three months ended June 30, 2021.

On June 25, 2021, the SPV notified RBC of its decision to settle the third and fourth Nasdaq Forwards using the Nasdaq shares the SPV received on June 25, 2021. On July 2, 2021, Newmark settled the Nasdaq Forwards with 944,329 Nasdaq shares, with a fair value of $166.0 million based on the closing price of June 30, 2021, and retained 5,278,011 Nasdaq shares.

During the three months ended March 31, 2023, Newmark had no remaining Nasdaq shares. During the three months ended March 31, 2022, Newmark sold all of its remaining 2,497,831 Nasdaq shares. The gross proceeds of the Nasdaq shares sold was $437.8 million for the three months ended March 31, 2022. Newmark recorded realized gains (losses) on the mark-to-market of these securities of $0.0 million and $(7.5) million for the three months ended March 31, 2023 and 2022, respectively. Newmark recorded unrealized gains (losses) on the mark-to-market of these securities of $0.0 million and $(80.1) million for the three months ended March 31, 2023 and 2022, respectively. Realized and unrealized gains on the mark-to-market of these shares are included in “Other income, net” on the accompanying unaudited condensed consolidated statements of operations.

As of March 31, 2023 and December 31, 2022, Newmark had $0.4 million and $0.8 million, respectively, of marketable securities in public entities included in “Marketable securities” on the accompanying unaudited condensed consolidated balance sheets. Newmark did not recognize any realized gains (losses) on the mark-to-market of marketable securities in public entities for the three months ended March 31, 2023 and 2022. Newmark recorded unrealized gains (losses) on the mark-to-market of marketable securities in public entities of $(0.4) million and $0.0 million for the three months ended

March 31, 2023 and 2022, respectively. Realized and unrealized gains on the mark-to-market of these shares are included in “Other income, net” on the accompanying unaudited condensed consolidated statements of operations.

(8) Investments

Newmark has a 27% ownership in Real Estate LP, a joint venture with Cantor in which Newmark has the ability to exert significant influence over the operating and financial policies. Accordingly, Newmark accounts for this investment under the equity method of accounting. Newmark recognized equity income (loss) of $3.6 million and $0.0 million for the three months ended March 31, 2023 and 2022, respectively. Equity (loss) income is included in “Other income, net” on the accompanying unaudited condensed consolidated statements of operations. The carrying value of this investment was $94.9 million and $91.3 million as of March 31, 2023 and December 31, 2022, respectively, included in “Other assets” on the accompanying unaudited condensed consolidated balance sheets. On July 20, 2022, Newmark exercised its redemption option and expected to receive approximately $88.4 million from Cantor. In December 2022, the Audit Committee authorized a subsidiary of Newmark to rescind its July 20, 2022 written notice exercising the optional redemption of its 27.2% ownership interest in Real Estate LP and amended the joint venture agreement between Newmark and Real Estate LP to provide for a redemption option for this investment after July 1, 2023, with proceeds to be received within 20 days of the redemption notice. A payment of a $44.0 thousand administrative fee was made to Newmark in connection with such amendment.

Investments Carried Under Measurement Alternatives

Newmark has acquired investments in entities for which it does not have the ability to exert significant influence over operating and financial policies.

For the three months ended March 31, 2023 and 2022, Newmark recorded realized gains (losses) related to these investments of $0.0 million and $1.6 million, respectively. The changes in value are included as a part of “Other income (loss), net” on the accompanying unaudited condensed consolidated statements of operations. Additionally, the Company invested $0.0 million and $2.4 million for the three months ended March 31, 2023 and 2022, respectively. The carrying values of these investments were $8.7 million and $8.7 million as of March 31, 2023 and December 31, 2022, respectively, and are included in “Other assets” on the accompanying unaudited condensed consolidated balance sheets.

(9) Capital and Liquidity Requirements

Newmark is subject to various capital requirements in connection with seller/servicer agreements that Newmark has entered into with the various GSEs. Failure to maintain minimum capital requirements could result in Newmark’s inability to originate and service loans for the respective GSEs and could have a direct material adverse effect on the accompanying unaudited condensed consolidated financial statements. Management believes that, as of March 31, 2023 and December 31, 2022, Newmark had met all capital requirements. As of March 31, 2023 and December 31, 2022, the most restrictive capital requirement was the net worth requirement of the Fannie Mae. Newmark exceeded the minimum requirement by $444.5 million and $433.4 million, respectively, as of March 31, 2023 and December 31, 2022.

Certain of Newmark’s agreements with Fannie Mae allow Newmark to originate and service loans under the Fannie Mae DUS program. These agreements require Newmark to maintain sufficient collateral to meet Fannie Mae’s restricted and operational liquidity requirements based on a pre-established formula. Certain of Newmark’s agreements with the Freddie Mac allow Newmark to service loans under Freddie TAH. These agreements require Newmark to pledge sufficient collateral to meet Freddie Mac’s liquidity requirement of 8% of the outstanding principal of Freddie TAH loans serviced by Newmark. Management believes that, as of March 31, 2023 and December 31, 2022, Newmark had met all liquidity requirements.

In addition, as a servicer for Fannie Mae, the Government National Mortgage Association and Federal Housing Administration, Newmark is required to advance to investors any uncollected principal and interest due from borrowers. Outstanding borrower advances were $1.2 million and $1.3 million as of March 31, 2023 and December 31, 2022, respectively, and are included in “Other assets” on the accompanying unaudited condensed consolidated balance sheets.

(10) Loans Held for Sale, at Fair Value

Loans held for sale, at fair value represent originated loans that are typically financed by short-term warehouse facilities (see Note 19 — “Warehouse Facilities Collateralized by U.S. Government Sponsored Enterprises”) and sold within 45 days from the date the mortgage loan is funded. Newmark initially and subsequently measures all loans held for sale at fair value on the accompanying unaudited condensed consolidated balance sheets. The fair value measurement falls within the definition of a Level 2 measurement (significant other observable inputs) within the fair value hierarchy. Electing to use fair

value allows a better offset of the change in the fair value of the loans and the change in fair value of the derivative instruments used as economic hedges. Loans held for sale had a cost basis and fair value as follows (in thousands):


	March 31, 2023		December 31, 2022
Cost Basis	$	428,664	$	137,633
Fair Value	434,852		138,345

As of March 31, 2023 and December 31, 2022, all of the loans held for sale were either under commitment to be purchased by Freddie Mac or had confirmed forward trade commitments for the issuance and purchase of Fannie Mae or Ginnie Mae mortgage-backed securities that will be secured by the underlying loans. As of March 31, 2023 and December 31, 2022, there were no loans held for sale that were 90 days or more past due or in nonaccrual status.

Newmark records interest income on loans held for sale, in accordance with the terms of the individual loans, during the period prior to sale. Interest income on loans held for sale is included in “Management services, servicing fees and other” on the accompanying unaudited condensed consolidated statements of operations. Gains (losses) for fair value adjustments on loans held for sale is included in “Commercial mortgage origination, net” on the accompanying unaudited condensed consolidated statements of operations. Interest income and gains (losses) for fair value adjustments on loans held for sale were as follows (in thousands):


	Three Months Ended March 31,
	2023		2022
Interest income on loans held for sale	$	2,138	$	4,944
Gains recognized on change in fair value on loans held for sale	6,188		965

(11) Derivatives

Newmark accounts for its derivatives at fair value and recognizes all derivatives as either assets or liabilities on the accompanying unaudited condensed consolidated balance sheets. In its normal course of business, Newmark enters into commitments to extend credit for mortgage loans at a specific rate (rate lock commitments) and commitments to deliver these loans to third-party investors at a fixed price (forward sale contracts). In addition, Newmark had previously entered into the Nasdaq Forwards (see Note 1 - “Organization and Basis of Presentation”) that are accounted for as derivatives.

The fair value of derivative contracts, computed in accordance with Newmark’s netting policy, is set forth below (in thousands):


	March 31, 2023						December 31, 2022
Derivative contract	Assets		Liabilities		Notional Amounts(1)		Assets		Liabilities		Notional Amounts(1)
Rate lock commitments	$	10,076	$	4,805	$	329,291	$	3,181	$	8,754	$	140,697

Forward sale contracts	6,183		4,487		757,955		11,139		624		278,331
Total	$	16,259	$	9,292	$	1,087,246	$	14,320	$	9,378	$	419,028

(1)Notional amounts represent the sum of gross long and short derivative contracts, an indication of the volume of Newmark’s derivative activity, and do not represent anticipated losses.

The change in fair value of rate lock commitments and forward sale contracts related to mortgage loans are reported as part of “Commercial mortgage origination, net” on the accompanying unaudited condensed consolidated statements of operations. The change in fair value of rate lock commitments are disclosed net of $1.8 million and $1.3 million of expenses for the three months ended March 31, 2023 and 2022, respectively. The changes in fair value of rate lock commitments are reported as part of “Compensation and employee benefits” on the accompanying unaudited condensed consolidated statements of operations.

Gains and losses on derivative contracts, which are included on the accompanying unaudited condensed consolidated statements of operations were as follows (in thousands):


	Location of gains (losses) recognized in income for derivatives	Three Months Ended March 31,
		2023		2022
Derivatives not designed as hedging instruments:

Rate lock commitments	Commercial mortgage origination, net	7,067		(2,969)
Rate lock commitments	Compensation and employee benefits	(1,796)		(1,347)
Forward sale contracts	Commercial mortgage origination, net	1,696		21,516
Total		$	6,967	$	17,200

Derivative assets and derivative liabilities are included in “Other current assets,” “Other assets” and the “Accounts payable, accrued expenses and other liabilities,” on the accompanying unaudited condensed consolidated balance sheets.

(12) Revenues from Contracts with Customers

The following table presents Newmark’s total revenues separately for its revenues from contracts with customers and other sources of revenues (in thousands):


	Three Months Ended March 31,
	2023		2022
Revenues from contracts with customers:
Leasing and other commissions	$	193,306	$	198,952
Investment sales	71,993		152,113
Mortgage brokerage and debt placement	17,146		46,290
Management services	162,104		185,061
Total	444,549		582,416
Other sources of revenue(1):
Fair value of expected net future cash flows from servicing recognized at commitment, net	14,099		29,472
Loan originations related fees and sales premiums, net	11,963		18,300
Servicing fees and other	50,188		48,059
Total	$	520,799	$	678,247

(1)Although these items have customers under contract, they were recorded as other sources of revenue as they were excluded from the scope of ASU No. 2014-9.

Disaggregation of ~~Revenue~~

revenues

Newmark’s chief operating ~~decision maker~~decision-maker, regardless of geographic location, evaluates the operating results, including revenues, of Newmark as total real ~~estate. See~~estate services (see Note 3 ~~Summary~~— “Summary of Significant Accounting ~~Policies~~Policies” for further ~~discussion.~~

discussion).

Contract ~~Balances~~

balances

The timing of Newmark’s revenue recognition may differ from the timing of payment by its customers. Newmark records a receivable when revenue is recognized prior to payment and Newmark has an unconditional right to payment. Alternatively, when payment precedes the provision of the related services, Newmark records deferred revenue until the performance obligations are satisfied.

Newmark’s deferred revenue primarily relates to customers paying in advance or billed in advance where the performance obligation has not yet been satisfied. Deferred revenue is recorded as a contract liability. Deferred revenue at March 31, ~~2018~~2023 and ~~January 1, 2018~~December 31, 2022 was ~~$3.9~~$2.7 million and ~~$4.6~~$2.9 million, respectively. During the three months ended March 31, ~~2018,~~2023 and 2022, Newmark recognized revenue of ~~$1.8~~$1.5 million and $0.9 million, respectively, that was recorded as deferred revenue atin a previous period.

For Knotel and Deskeo, the ~~beginning~~Company’s remaining performance obligations that represent contracted customer revenues, that have not yet been recognized as revenue as of March 31, 2023, that will be recognized as revenue in future periods over the life of the ~~period.~~

~~Contract Costs~~

~~Newmark capitalizes costs to fulfill~~customer contracts, ~~associated~~in accordance with ~~different lines~~ASC 606, is approximately $180.8 million. Over half of ~~its business where~~ the ~~revenue~~remaining performance obligation as of March 31, 2023 is ~~recognized at a point in time and the costs are determined~~scheduled to be ~~recoverable. Capitalized costs~~recognized as revenue within the next twelve months, with the remaining to ~~fulfill a contract are~~be recognized atover the ~~point in time that~~remaining life of the ~~related revenue is recognized.~~

Atcustomer contracts, which extends through 2030.

Approximate future cash flows to be received over the next five years as of March 31, ~~2018, there were no capitalized costs recorded to fulfill a contract.~~

2023 are as follows (in thousands):

~~(13)~~

~~Gains from Mortgage Banking Activities/Originations, Net~~

~~Gains from~~


2023	$	81,637
2024	58,708
2025	28,645
2026	7,540
2027	2,677
Thereafter	1,601
Total	$	180,808

(13) Commercial Mortgage Origination, Net

Commercial mortgage ~~banking activities/originations,~~origination, net consists of the following activity (in thousands):

Three Months Ended March 31,

2018

2017

Loan originations related fees and sales premiums, net

$
17,817

$
15,952

Fair value of expected net future cash flows from servicing
recognized at commitment, net

21,097

29,310

Gains from mortgage banking activities/originations, net

$
38,914

$
45,262

~~(14)~~

~~Mortgage Servicing Rights, Net (MSR)~~


	Three Months Ended March 31,
	2023		2022
Fair value of expected net future cash flows from servicing recognized at commitment, net	$	14,099	$	29,472
Loan originations related fees and sales premiums, net	11,963		18,300
Mortgage brokerage and debt placement	17,146		46,290
Total	$	43,208	$	94,062

~~A summary~~

(14) Mortgage Servicing Rights,Net

The changes in the carrying amount of ~~the activity in mortgage servicing rights by class for the three months ended March 31, 2018 and 2017 is~~MSRs were as follows (in thousands):


	Three Months Ended March 31,							Three Months Ended March 31,
Mortgage Servicing Rights	2018			2017			Mortgage Servicing Rights	2023		2022
Beginning Balance	$	399,349		$	347,558		Beginning Balance	$	576,428	$	563,488
Additions		6,389			28,806		Additions	8,965		36,200
Purchases from an affiliate		509			—

Amortization		(19,294	)		(17,175	)	Amortization	(28,477)		(28,107)
Ending Balance	$	386,953		$	359,189		Ending Balance	$	556,916	$	571,581

Valuation Allowance							Valuation Allowance
Beginning Balance	$	(6,723	)	$	(7,742	)	Beginning Balance	$	(7,876)	$	(13,186)
Decrease		1,296			3,168
Decrease (increase)							Decrease (increase)	1,501		1,200
Ending Balance	$	(5,427	)	$	(4,574	)	Ending Balance	$	(6,375)	$	(11,986)
Net balance	$	381,526		$	354,615
Net Balance							Net Balance	$	550,541	$	559,595

Servicing fees are included in “Management services, servicing fees and other” ~~in Newmark’s~~on the accompanying unaudited condensed consolidated statements of operations and ~~are~~were as follows (in thousands):


	Three Months Ended March 31,					Three Months Ended March 31,
	2018		2017			2023		2022
Servicing fees	$	25,132	$	22,050	Servicing fees	$	36,906	$	35,945
Escrow interest and placement fees		2,967		1,459	Escrow interest and placement fees	10,091		1,017
Ancillary fees		827		1,323	Ancillary fees	931		5,674
Total servicing fees and escrow interest	$	28,926	$	24,832
Total					Total	$	47,928	$	42,636

During the three months ended March 31, 2018, Newmark recognized measurement period adjustments of approximately $(2.5) million. Newmark did not have any additions to goodwill as a result of acquisitions for the three months ended March 31, 2018. During the years ended December 31, 2017, Newmark recognized additional goodwill and measurement period adjustments of approximately $64.3 million and $0.4 million, respectively. See Note 4—Acquisitions for more information.

The fair value of the 2042 Promissory Notes was determined using observable market prices as these securities are traded and are considered Level 1 within the fair value hierarchy as they are deemed to be actively traded and the 2019 Promissory Notes are considered Level 2 within the fair value hierarchy.

On November 30, 2018, Newmark ~~recorded interest expense on its 2019 Promissory~~entered into the Cantor Credit Agreement (see Note and 2042 Promissory Note in the amount of $4.3 million and $2.3 million, respectively For the year ended December 31, 2017, Newmark recorded interest expense on its 2019 Promissory Note and 2042 Promissory Note in the amount of $0.8 million and $0.5 million, respectively. These Senior Notes are included in “Long-term debt payable to related parties” on Newmark’s unaudited condensed consolidated balance sheets.

25 — “Related Party Transactions” for a more detailed discussion).

~~(21)~~

~~Financial Guarantee Liability~~

(21) Financial Guarantee Liability

Newmark shares risk of loss for loans originated under the Fannie Mae DUS and Freddie TAH programs and could incur losses in the event of defaults under or foreclosure of these loans. Under the loss-share guarantee, Newmark’s maximum contingent liability to the extent of actual losses incurred is approximately 33% of the outstanding principal balance on Fannie Mae DUS or Freddie TAH loans. ~~Risk sharing~~Risk-sharing percentages are established on a loan-by-loan basis when originated, with most loans at 33% and “modified” loans at lower percentages. Under certain circumstances, ~~risk sharing~~risk-sharing percentages can be revised subsequent to origination or Newmark could be required to repurchase the loan. In the event of a loss resulting from a catastrophic event that is not required to be covered by borrowers’ insurance policies, Newmark can recover the loss under its mortgage impairment insurance policy. Any potential recovery is subject to the policy’s deductibles and limits.

At March 31, ~~2018,~~2023, the credit risk loans being serviced by Newmark on behalf of Fannie Mae and Freddie Mac had outstanding principal balances of $27.8 billion with a maximum potential loss of approximately $8.4 billion. At December 31, 2022, the credit risk loans being serviced by Newmark on behalf of Fannie Mae and Freddie Mac had outstanding principal balances of approximately ~~$18.9~~$27.6 billion with a maximum potential loss of approximately ~~$5.4 billion,~~$8.4 billion.

Newmark’s current estimate of ~~which $0.1 billion~~expected credit losses considers various factors, including, without being limited to, historical default and losses, current delinquency status, loan size, terms, amortization types, the forward-looking view of the primary risk drivers (debt-service coverage ratio and loan-to-value) based on forecasts of economic conditions and local market performance. During the three months ended March 31, 2023 and 2022, there were increases to the loss sharing liability of $2.8 million and $0.2 million, respectively. A loan is ~~covered by the Credit Enhancement Agreement (see Note 11—Credit Enhancement Receivable, Contingent Liability and Credit Enhancement Deposit).~~

~~At December~~considered to be delinquent once it is 60 days past due.

As of March 31, ~~2017, the credit risk loans being serviced by Newmark on behalf of Fannie Mae and Freddie Mac~~2023, there was one delinquent loan that had an outstanding principal ~~balances~~balance of ~~approximately $18.8 billion~~$7.3 million, with a maximum ~~potential~~ loss exposure of $2.4 million. Proceeds from the liquidation of the asset is estimated to be approximately ~~$5.3 billion,~~$7.4 million based on current estimate of ~~which $1.2 billion is covered by~~fair value. Newmark’s share of the ~~Credit Enhancement Agreement (see Note 11—Credit Enhancement Receivable, Contingent Liability and Credit Enhancement Deposit).~~

Atloss would approximate $0.5 million. During the

three months ended March 31, ~~2018 and~~2023, Newmark settled the ~~year ended~~one credit risk loan that was in foreclosure as of December 31, ~~2017, changes on~~2022. Newmark's share of the ~~estimated liability under~~loss was $1.2 million.

As of December 31, 2022, there was one loan in foreclosure that had an outstanding principal balance of $22.8 million, with a maximum loss exposure of $7.6 million. Proceeds from the ~~guarantee liability were as follows:~~

Financial guarantee liability (in thousands)

Balance at December 31, 2016

$
(413
)
Reversal of provision

359

Balance at December 31, 2017

$
(54
)
Increase to provision

(7
)
Balance at March 31, 2018

$
(61
)

~~In order to monitor and mitigate potential losses, Newmark uses an internally developed loan rating scorecard for determining which loans meet Newmark’s criteria~~liquidation of the asset is estimated to be ~~placed on a watch list. Newmark also calculates default probabilities~~approximately $20.0 million based on ~~internal ratings and expected losses on a loan-by-loan basis. This methodology uses a number~~current estimate of ~~factors including, but not limited to, debt service coverage ratios, collateral valuation, the condition~~fair value at December 31, 2022. Newmark's share of the ~~underlying assets, borrower strength and market conditions.~~

~~See Note 11—Credit Enhancement Receivable, Contingent Liability and Credit Enhancement Deposit for further explanation~~loss would approximate $1.5 million.

As of ~~credit protection provided by DB Cayman.~~ December 31, 2022, there was one delinquent loan that had an outstanding principal balance of $7.3 million, with a maximum loss exposure of $2.4 million. Proceeds from the liquidation of the asset is estimated to be approximately $4.2 million based on current estimate of fair value. Newmark’s share of the loss would approximate $1.1 million.

The provisions for ~~risk sharing~~risk-sharing were ~~include~~included in “Operating, administrative and other” ~~in Newmark’s~~on the accompanying unaudited condensed consolidated statements of operations ~~was~~ as follows (in thousands):

Three Months Ended March 31,

2018

2017

Increase (decrease) to financial guarantee liability

$
7

$
(5
)
Decrease to credit enhancement asset

10

4

Total expense

$
17

$
(1
)

~~(22)~~	~~Concentrations of~~
Balance, January 1, 2022		$	25,989

Provision for expected credit losses		1,740
Balance, December 31, 2022		27,729
Provision for expected credit losses		2,803
Credit ~~Risk~~ loss settlement		(1,248)
Balance, March 31, 2023		$	29,284

(22) Concentrations of Credit Risk

The lending activities of Newmark create credit risk in the event that counterparties do not fulfill their contractual payment obligations. In particular, Newmark is exposed to credit risk related to the Fannie Mae DUS and Freddie ~~Mac~~ TAH loans (see Note ~~21—Financial~~21 — “Financial Guarantee ~~Liability)~~Liability”). As of March 31, ~~2018, 26%~~2023, 20% and 11% of ~~$5.4~~$8.4 billion of the maximum loss ~~(see Note 21—Financial Guarantee Liability)~~ was for properties located in ~~California.~~California and Texas, respectively. As of December 31, ~~2017, 26%~~2022, 20% and 11% of ~~$5.3~~$8.4 billion of the maximum loss ~~(see Note 21—Financial Guarantee Liability)~~ was for properties located in ~~California.~~

California and Texas, respectively.

~~(23)~~

~~Escrow and Custodial Funds~~

(23) Escrow and Custodial Funds

In conjunction with the servicing of multifamily and commercial loans, Newmark holds escrow and other custodial funds. Escrow funds are held at unaffiliated financial institutions generally in the form of cash and cash equivalents. These funds amounted

to ~~approximately $0.8~~$0.9 billion and ~~$0.8~~$1.0 billion, as of March 31, ~~2018~~2023 and December 31, ~~2017,~~2022, respectively. These funds are held for the benefit of Newmark’s borrowers and are segregated in custodial bank accounts. These amounts are excluded from the assets and liabilities of Newmark.

~~(24)~~

~~Fair Value of Financial Assets and Liabilities~~

(24) Fair Value of Financial Assets and Liabilities

U.S. GAAP guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets and liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:

•Level 1 measurements—Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

•Level 2 measurements—Quoted prices in markets that are not active or financial instruments for which all significant inputs are observable, either directly or indirectly.

•Level 3 measurements—Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

As required by U.S. GAAP guidance, assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The following table sets forth by level within the fair value hierarchy financial assets and liabilities accounted for at fair value under U.S. GAAP guidance ~~at March 31, 2018 and December 31, 2017~~ (in thousands):

As of March 31, 2018

Level 1

Level 2

Level 3

Total

Assets:

Marketable securities

$
8,622

$
—

$
—

$
8,622

Loans held for sale

—

965,639

—

965,639

Rate lock commitments

—

—

8,750

8,750

Forwards

—

—

9,687

9,687

Total assets

$
8,622

$
965,639

$
18,437

#

$
992,698

Liabilities:

Accounts payable, accrued expenses and other
liabilities—contingent consideration

$
—

$
—

$
23,087

$
23,087

Rate lock commitments

—

—

8,980

8,980

Forwards

—

—

2,421

2,421

Total Liabilities

$
—

$
—

$
34,488

$
34,488

As of December 31, 2017

Level 1

Level 2

Level 3

Total

Assets:

Marketable securities

$
57,623

$
—

$
—

$
57,623

Loans held for sale

—

362,635

—

362,635

Rate lock commitments

—

—

2,923

2,923

Forwards

—

—

3,753

3,753

Total assets

$
57,623

$
362,635

$
6,676

$
426,934

Liabilities:

Accounts payable, accrued expenses and
other liabilities—contingent consideration

$
—

$
—

$
23,711

$
23,711

Rate lock commitments

—

—

2,390

2,390

Forwards

—

—

657

657

Total Liabilities

$
—

$
—

$
26,758

$
26,758


	As of March 31, 2023
	Level 1		Level 2		Level 3		Total
Assets:
Marketable securities	$	441	$	—	$	—	$	441
Loans held for sale, at fair value	—		434,852		—		434,852

Rate lock commitments	—		—		10,076		10,076

Forward sale contracts	—		—		6,183		6,183
Total	$	441	$	434,852	$	16,259	$	451,552
Liabilities:

Contingent consideration	—		—		20,985		20,985
Rate lock commitments	—		—		4,805		4,805
Forward sale contracts	—		—		4,487		4,487
Total	$	—	$	—	$	30,277	$	30,277


	As of December 31, 2022
	Level 1		Level 2		Level 3		Total
Assets:
Marketable securities	$	788	$	—	$	—	$	788
Loans held for sale, at fair value	—		138,345		—		138,345

Rate lock commitments	—		—		3,181		3,181

Forward sale contracts	—		—		11,139		11,139
Total	$	788	$	138,345	$	14,320	$	153,453
Liabilities:
Contingent consideration	$	—	$	—	$	8,343	$	8,343
Rate lock commitments	—		—		8,754		8,754
Forwards sale contracts	—		—		624		624
Total	$	—	$	—	$	17,721	$	17,721

There were no transfers among ~~level~~Level 1, Level 2 and ~~level~~Level 3 for the three months ended March 31, ~~2018~~2023 and ~~the year ended December 31, 2017.~~

2022, respectively.

~~Derivative instruments are outstanding for short periods of time (generally less than 60 days). A roll~~

Level 3 Financial Assets and Liabilities: Changes in Level 3 rate lock commitments, forward ~~of derivative instruments~~sale contracts and contingent consideration ~~(level 3) that require valuation based upon significant unobservable inputs is presented below~~measured at fair value on recurring basis were as follows (in thousands):

As of March 31, 2018

Opening
Balance

Total realized
and unrealized
(gains) losses
included in
Net income⁽¹⁾

Issuances

Settlements

Closing
Balance

Unrealized
(gains) losses
outstanding
as of
March 31, 2018

Accounts payable, accrued expenses and other
liabilities—contingent consideration

$
23,711

$
134

$
—

$
(758
)

$
23,087

$
134

Rate lock commitments and forwards, net

3,629

7,036

—

(3,629
)

7,036

7,036

$
27,340

$
7,170

$
—

$
(4,387
)

$
30,123

$
7,170


	As of March 31, 2023
	Opening Balance		Total realized and unrealized gains (losses) included in Net income		Additions		Settlements		Closing Balance		Unrealized gains (losses) outstanding
Assets:
Rate lock commitments	$	3,181	$	10,076	$	—	$	(3,181)	$	10,076	$	10,076
Forward sale contracts	11,139		6,183		—		(11,139)		6,183		6,183

Total	$	14,320	$	16,259	$	—	$	(14,320)	$	16,259	$	16,259

	Opening Balance		Total realized and unrealized gains (losses) included in Net income		Additions		Settlements		Closing Balance		Unrealized gains (losses) outstanding
Liabilities:
Contingent consideration	$	8,343	$	453	$	12,189	$	—	$	20,985	$	453
Rate lock commitments	8,754		4,805		—		(8,754)		4,805		4,805
Forward sale contracts	624		4,487		—		(624)		4,487		4,487
Total	$	17,721	$	9,745	$	12,189	$	(9,378)	$	30,277	$	9,745

As of March 31, 2017

Opening
Balance

Total realized
and unrealized
(gains) losses
included in
Net income⁽¹⁾

Issuances

Settlements

Closing
Balance

Unrealized
(gains) losses
outstanding
as of
March 31, 2017

Accounts payable, accrued expenses and other
liabilities—contingent consideration

$
38,713

$
438

$
—

$
(10,153
)

$
28,998

$
438

Rate lock commitments and forwards, net

10,254

2,462

—

(10,254
)

2,462

2,462

$
48,967

$
2,900

$
—

$
(20,407
)

$
31,460

$
2,900

~~(1)~~

~~Realized losses are reported in “Other income, net” in Newmark’s unaudited condensed consolidated statements of operations.~~


	As of December 31, 2022
	Opening Balance		Total realized and unrealized gains (losses) included in Net income		Additions		Settlements		Closing Balance		Unrealized gains (losses) outstanding
Assets:
Rate lock commitments	$	3,957	$	3,181	$	—	$	(3,957)	$	3,181	$	3,181
Forward sale contracts	4,544		11,139		—		(4,544)		11,139		11,139

Total	$	8,501	$	14,320	$	—	$	(8,501)	$	14,320	$	14,320

	Opening Balance		Total realized and unrealized gains (losses) included in Net income		Additions		Settlements		Closing Balance		Unrealized gains (losses) outstanding
Liabilities:
Contingent consideration	$	12,338	$	(1,893)	$	6,226	$	(8,328)	$	8,343	$	(1,893)
Rate lock commitments	2,836		8,754		—		(2,836)		8,754		8,754
Forward sale contracts	2,180		624		—		(2,180)		624		624
Total	$	17,354	$	7,485	$	6,226	$	(13,344)	$	17,721	$	7,485

Quantitative Information About Level 3 Fair Value Measurements

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

March 31, 2018

March 31, 2023						March 31, 2023
Level 3 assets and liabilities	Assets		Liabilities		Significant Unobservable Inputs	Level 3 assets and liabilities	Assets		Liabilities		Significant Unobservable Inputs	Range		Weighted Average
Accounts payable, accrued expenses and other liabilities:						Accounts payable, accrued expenses and other liabilities:
Contingent consideration	$	—	$	23,087	Discount rate—6.6% weighted average rate^(a)	Contingent consideration	$	—	$	20,985	Discount rate	4.0% - 11.8%	(1)	3.4%
											Probability of meeting earnout and contingencies	75.0% - 100.0%	(1)	99.3%

Derivative assets and liabilities:					Financial forecast information	Derivative assets and liabilities:

Forward sale contracts	$	9,687	$	2,421	Counterparty credit risk	Forward sale contracts	$	6,183	$	4,487	Counterparty credit risk	N/A		N/A
Rate lock commitments	$	8,750	$	8,980	Counterparty credit risk	Rate lock commitments	$	10,076	$	4,805	Counterparty credit risk	N/A		N/A

December 31, 2017
Level 3 assets and liabilities

Assets

Liabilities

Significant Unobservable Inputs
Accounts payable, accrued expenses and other
liabilities:

Contingent consideration

$
—

$
23,711

Discount rate—6.43% weighted average rate^(a)
Derivative assets and liabilities:

Financial forecast information
Forward sale contracts

$
3,753

$
657

Counterparty credit risk
Rate lock commitments

$
2,923

$
2,390

Counterparty credit risk

~~(a)~~

~~Newmark’s estimate of contingent consideration as of March 31, 2018 and December 31, 2017 was based on the acquired business’ projected future financial performance, including revenues.~~


December 31, 2022
Level 3 assets and liabilities	Assets		Liabilities		Significant Unobservable Inputs	Range		Weighted Average
Accounts payable, accrued expenses and other liabilities:
Contingent consideration	$	—	$	8,343	Discount rate	4.0% - 11.8%	(1)	5.1%
					Probability of meeting earnout and contingencies	75.0% - 100.0%	(1)	98.9%

Derivative assets and liabilities:

Forward sale contracts	$	11,139	$	624	Counterparty credit risk	N/A		N/A
Rate lock commitments	$	3,181	$	8,754	Counterparty credit risk	N/A		N/A

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

Valuation Processes - Level 3 Measurements

Both the rate lock commitments to borrowers and the forward sale contracts to investors are derivatives and, accordingly, are marked to fair value ~~through Newmark’s~~on the accompanying unaudited condensed consolidated statements of operations. The fair value of Newmark’s rate lock commitments to borrowers and loans held for sale and the related input levels includes, as applicable:

•The assumed ~~gain/~~gain or loss of the expected loan sale to the investor, net of employee benefits;

•The expected net future cash flows ~~associate~~associated with servicing the loan;

•The effects of interest rate movements between the date of the rate lock and the balance sheet date; and

•The nonperformance risk of both the counterparty and Newmark.

The fair value of Newmark’s ~~forward sales contracts~~Forward Sales Contracts to investors considers effects of interest rate movements between the trade date and the balance sheet date. The market price changes are multiplied by the notional amount of the ~~forward sales contracts~~Forward Sales Contracts to measure the fair value.

The fair value of Newmark’s rate lock commitments and forward sale contracts is adjusted to reflect the risk that the agreement will not be fulfilled. Newmark’s exposure to nonperformance in rate lock and forward sale contracts is represented by the contractual amount of those instruments. Given the credit quality of Newmark’s counterparties, the short duration of rate lock commitments and ~~forward sales contracts,~~Forward Sales Contracts, and Newmark’s historical experience with the agreements, management does not believe the risk of nonperformance by Newmark’s counterparties to be significant.

~~Sensitivity Analysis -~~

The Nasdaq Forwards were derivatives and, accordingly, were marked to fair value on the accompanying unaudited condensed consolidated statements of operations. The fair values of the Nasdaq Forwards were determined utilizing the following inputs, as applicable:

•The underlying number of shares and the related strike price;

•The maturity date; and

•The implied volatility of Nasdaq’s stock price.

The fair values of Newmark’s Nasdaq Forwards considered the effects of Nasdaq’s stock price volatility between the balance sheet date and the maturity date. The fair value is determined by the use of a Black-Scholes put option valuation model.

The fair value of Newmark’s contingent consideration is based on the discount rate of the Company's calculated-average cost of capital, as well as the probability of acquirees meeting earnout targets.

Information About Uncertainty of Level 3 Fair Value Measurements

The significant unobservable inputs used in the fair value of Newmark’s contingent consideration are the discount rate and probability of meeting earnout and contingencies. Significant increases (decreases) in the discount rate would have resulted in a significantly lower (higher) fair value measurement. Significant increases (decreases) in the probability of meeting earnout and contingencies would have resulted in a significantly higher (lower) fair value measurement. As of March 31, ~~2018~~2023 and December 31, ~~2017,~~2022, the present value of expected payments related to Newmark’s contingent consideration was ~~$26.7~~$21.0 million and ~~$23.7~~$8.3 million, respectively ~~(Note 28- Commitments~~(see Note 29 — “Commitments and ~~Contingencies)~~Contingencies”). ~~Valuations for contingent consideration~~As of March 31, 2023 and December 31, 2022, the undiscounted value of the payments, assuming that all contingencies are ~~conducted by Newmark. Each reporting period, Newmark updates unobservable inputs. Newmark has~~met, would be $43.1 million and $30.9 million, respectively.

Fair Value Measurements on a ~~formal process to review changes in~~Non-Recurring Basis

Equity investments carried under the measurement alternative are remeasured at fair value ~~for satisfactory explanation.~~

on a non-recurring basis to reflect observable transactions which occurred during the period. Newmark applied the measurement alternative to equity securities with the fair value of $8.7 million, which was included in “Other assets” on the accompanying unaudited condensed consolidated balance sheets as of both March 31, 2023 and December 31, 2022. These investments are classified within Level 2 in the fair value hierarchy, because their estimated fair value is based on valuation methods using the observable transaction price at the transaction date.

~~(25)~~

~~Related Party Transactions~~

(25) Related Party Transactions

(a)Service Agreements

Newmark receives administrative services, including but not limited to, treasury, legal, accounting, information technology, payroll administration, human resources, incentive compensation plans and other support, provided by ~~Cantor~~Cantor. Allocated expenses were $7.8 million and ~~BGC. For~~$6.8 million for the three months ended March 31, ~~2018~~2023 and ~~2017, allocated expenses were $6.9 million and $4.7 million,~~2022, respectively. These expenses are included as part of “Fees to related parties” ~~in Newmark’s~~on the accompanying unaudited condensed consolidated statements of operations.

(b)Loans, Forgivable Loans and Other Receivables from Employees and Partners

Newmark has entered into various agreements with certain employees and partners whereby these individuals receive loans which may be either wholly or in part repaid from the distribution of earnings that the individuals receive on some or all of their limited partnership interests or may be forgiven over a period of time. The forgivable portion of these loans is

recognized as compensation expense over the life of the loans. From time to time, Newmark may also enter into agreements with employees and partners to grant bonus and salary advances or other types of loans. These advances and loans are repayable in the timeframes outlined in the underlying agreements.

As of March 31, ~~2018~~2023 and December 31, ~~2017,~~2022, the aggregate balance of employee loans was ~~$226.7~~$605.9 million and ~~$209.6~~$500.8 million, respectively, and is included as “Loans, forgivable loans and other receivables from employees and partners, net” ~~in Newmark’s~~on the accompanying unaudited condensed consolidated balance sheets. Compensation expense for the ~~above mentioned~~above-mentioned employee loans for the three months ended March 31, ~~2018~~2023 and ~~2017~~2022 was ~~$6.0~~$25.4 million and ~~$2.0~~$18.9 million, respectively. The compensation expense related to these employee loans is included as part of “Compensation and employee benefits” ~~in Newmark’s~~on the accompanying unaudited condensed consolidated statements of operations.

Other Related Party Transactions

In February 2019, Newmark's Audit Committee authorized Newmark and its subsidiaries to originate and service GSE loans for Cantor and its affiliates (other than BGC) and service loans originated by Cantor and its affiliates (other than BGC) on prices, rates and terms no less favorable to Newmark and its subsidiaries than those charged by third parties. The authorization is subject to certain terms and conditions, including but not limited to: (i) a maximum amount up to $100.0 million per loan, (ii) a $250.0 million limit on loans that have not yet been acquired or sold to a GSE at any given time, and (iii) a separate $250.0 million limit on originated Fannie Mae Loans outstanding to Cantor at any given time.

On November 30, 2020, Newmark entered into an arrangement to assist View in the sale of its products and services to real estate clients in exchange for commissions. View is a Silicon Valley-based producer of high-efficiency dynamic glass that controls light, heat, and glare, providing unobstructed views and privacy using a low voltage control system. In connection with the arrangement, View also agreed to engage Newmark as its exclusive provider of real estate services for a period of at least five years. While View is not under common control with Newmark, it was, at the time that the agreement was executed, the target of a merger with CF Finance Acquisition Corp. II, a special purpose acquisition company sponsored by Cantor.

(c)Transactions with Cantor Commercial Real Estate, ~~Company,~~ L.P.

Newmark also has a referral agreement in place with CCRE, in which Newmark’s brokers are incentivized to refer business to CCRE through a revenue-share agreement. In connection with this revenue-share agreement, In connection with this revenue share agreement, Newmark recognized revenues of $60.9 thousand million for the three months ended March 31, 2017. Newmark did not recognize any revenue related to this agreement during the three months ended March 31, 2018. This revenue was recorded as part of “Commissions” in Newmark’s unaudited condensed consolidated statements of operations.

~~Newmark also~~ has a revenue-share agreement with CCRE, in which Newmark pays CCRE for referrals for leasing or other services. Newmark did not make any payments under this agreement to CCRE during the three months ended March 31, 2023 and 2022, respectively. Newmark did not recognize revenue for the three months ended March 31, ~~2018~~2023 and ~~2017, respectively.~~

2022, respectively in connection with this revenue-share agreement.

In addition, Newmark has a loan referral agreement in place with CCRE, in which either party can refer a loan to the other. ~~Revenue~~Newmark did not have any revenues from these referrals ~~were $3.7 million and $0.3 million~~ for the three months ended March 31, ~~2018~~2023 and ~~2017, respectively, and was~~2022, respectively. Such revenues are recognized in ~~“Gain from~~“Commercial mortgage ~~banking activities/originations,~~origination, net” ~~in Newmark’s~~on the accompanying unaudited condensed consolidated statements of operations. These ~~referrals~~referral fees are net of the broker fees and commissions paid to ~~CCRE of $0.7 million and $0.2 million for~~CCRE.

Newmark did not purchase any primary servicing rights during the three months ended March 31, ~~2018~~2023 and ~~2017,~~2022, respectively.

On September 8, 2017, BGC completed the Berkeley Point Acquisition, for an acquisition price of $875.0 million with $3.2 million of the acquisition price paid in units of BGC Holdings, pursuant to a Transaction Agreement, dated as of July 17, 2017, with Cantor and certain of Cantor’s affiliates, including CCRE and Cantor Commercial Real Estate Sponsor, L.P., the general partner of CCRE. In accordance with this Transaction Agreement, BPF made a distribution of $89.1 million to CCRE, for the amount that BPF’s net assets exceeded $508.6 million.

On March 11, 2015, Newmark and CCRE entered into a note receivable/payable that allows for advances to or from CCRE at an interest rate of 1-month LIBOR plus 1.0%. On September 8, 2017, the note receivable/payable was terminated, and all outstanding advances due were paid off. Newmark recognized interest expense of $2.1 for the three months ended March 31, 2017.

For the three months ended March 31, 2018, Newmark purchased the primary servicing rights for $0.3 billion of loans originated by CCRE for $0.5 million. Newmark did not purchase any servicing rights from CCRE for the three months ended March 31, 2017. Newmark also services loans for CCRE on a ~~“Fee~~“fee for service” basis, generally prior to a loan’s sale or securitization, and for which no ~~mortgage servicing right~~MSR is recognized. Newmark recognized ~~$0.9~~servicing revenues (excluding interest and placement fees) from servicing rights purchased from CCRE on a “fee for service” basis of $0.8 million, and ~~$1.0~~$0.9 million for the three months ended March 31, ~~2018~~2023 and ~~2017,~~2022, respectively, ~~of servicing revenues from (excludes interest and placement fees) loans purchased from CCRE on a “fee for service” basis,~~ which was included as part of “Management services, servicing fee and other” ~~in Newmark’s~~on the accompanying unaudited condensed consolidated statements of operations.

On July 22, 2019, CCRE Lending made a $146.6 million commercial real estate loan to a single-purpose company in which Barry Gosin, Newmark’s Chief Executive Officer, owns a 19% interest. This loan is secured by the single-purpose company’s interest in property in Pennsylvania that is subject to a ground lease. While CCRE Lending initially provided the full loan amount, on August 16, 2019, a third-party bank purchased approximately 80% of the loan value from CCRE Lending, with CCRE Lending retaining approximately 20%. This loan matures on August 6, 2029, and is payable monthly at a fixed interest rate of 4.38% per annum.

Transactions with Executive Officers and Directors

Executive Compensation

(i) Gosin Employment Agreement

On February 10, 2023, Mr. Gosin entered into an amended and restated employment agreement with Newmark OpCo and Newmark Holdings. In connection with the employment agreement, the Compensation Committee approved (i) for a term through at least 2024, with the term running through 2025, an annual cash bonus of $1,500,000; (ii) an upfront advance award of four tranches of 1,145,475 Newmark NPSUs each (calculated by dividing $10,000,000 by the Company’s stock price of $8.73 on February 10, 2023) attributable to each year of the term and (iii) the continued ability to receive discretionary bonuses, if any, subject to approval of the Compensation Committee. A copy of the employment agreement was attached as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on February 14, 2023 and is described in detail therein.

(ii) Rispoli Employment Agreement

On September 29, 2022, Mr. Rispoli entered into an employment agreement with Newmark OpCo and Newmark Holdings. In connection with the employment agreement, the Compensation Committee approved the following for Mr. Rispoli: (i) an award of 500,000 Newmark RSUs, divided into tranches of 100,000 RSUs each that vest on a seven-year schedule; and (ii) an award of 250,000 Newmark RSUs, divided into tranches of 50,000 RSUs each that vest on a seven-year schedule. A copy of the employment agreement was attached as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on October 3, 2022 and is described in detail therein.

In connection with signing the employment agreement on September 29, 2022, Mr. Rispoli received immediate exchangeability on 25% of his then currently held 88,079 non-exchangeable PSUs and 87,049 non-exchangeable PPSUs (such 25% totaled 23,560 PPSUs with a value of $283,527 and 20,221 PSUs), and will receive monetization rights on another 25% of such units held as of September 29, 2022, split pro-rata into one-fifth (1/5) increments, on or as soon as practicable after October 1 of each of 2023-2027, to the extent such units had not previously been given monetization rights, with each monetization contingent upon Mr. Rispoli performing substantial services exclusively for us or any affiliate, remaining a partner in Newmark Holdings, and complying with the terms of his employment agreement and any of his obligations to Newmark Holdings, us or any affiliate through such dates.

(iii) Other Executive Compensation

On December 21, 2021, the Compensation Committee approved: (i) the redemption of all of Mr. Gosin’s remaining 838,996 non-exchangeable Newmark PPSUs for $8,339,980 in cash and (ii) compensation of approximately $7,357,329 by way of the Company causing 478,328 of Mr. Gosin’s non-exchangeable Newmark PSUs to be redeemed for zero and issuing 446,711 shares of Newmark Class A common stock, based upon the closing price on the date the Committee approved the transaction (which was $16.47) and an Exchange Ratio of 0.9339. The estimated pre-tax value of this transaction is $15,697,309, less applicable taxes and withholdings, using a 53.13% tax rate for Mr. Gosin.

On December 21, 2021, Mr. Lutnick elected to redeem all of his 193,530 currently exchangeable Newmark PPSUs for a cash payment of $1,465,873. In addition, upon the Compensation Committee’s approval of the monetization of Mr. Gosin’s remaining non-exchangeable Newmark PPSUs and a number of Mr. Gosin’s non-exchangeable PSUs on December 21, 2021, Mr. Lutnick (i)elected to redeem 188,883 non-exchangeable Newmark PPSUs for a cash payment of $1,954,728, and 127,799 non-exchangeable Newmark NPPSUs for a cash payment of $1,284,376, both for which he previously waived, but now accepted under the Company’s standing policy for Mr. Lutnick; and (ii) received the right to monetize, and accepted the monetization of, his remaining 122,201 non-exchangeable Newmark NPPSUs for a cash payment of $1,228,124, under such standing policy.

In connection with the foregoing, Mr. Lutnick accepted the right to monetize approximately $4,406,915 by way of the Company causing 286,511 of Mr. Lutnick’s non-exchangeable Newmark PSUs to be redeemed for zero and issuing 267,572 shares of Newmark Class A common stock based upon the closing price on the date the Committee approved the transaction (which was $16.47) and a 0.9339 Exchange Ratio, under the Company’s standing policy applying to Mr. Lutnick, with such acceptance of rights granted in reference to Mr. Gosin’s December 2021 transactions to the extent necessary to effectuate the foregoing (and otherwise Mr. Lutnick waived all remaining rights, which shall be cumulative). The aggregate estimated pre-tax value of these transactions is $10,340,015, less applicable taxes and withholdings, using a 57.38% tax rate for Mr. Lutnick.

On June 28, 2021, in connection with the 2021 Equity Event, the Compensation Committee approved the specific transactions with respect to the Company’s executive officers set forth below. All of the transactions included in the 2021 Equity Event, with respect to Messrs. Lutnick, Gosin and Rispoli, were based on (i) the price for Newmark Class A common stock of $12.50 per share, as approved by the Compensation Committee; (ii) the price of BGC Partners Class A common stock of $5.86; and (iii) the price of Nasdaq common stock of $177.11.

On April 27, 2021, the Compensation Committee approved an additional monetization opportunity for Mr. Merkel: (i) 73,387 of Mr. Merkel’s 145,384 non-exchangeable Newmark Holdings PSUs were redeemed for zero, (ii) 19,426 of Mr. Merkel’s 86,649 non-exchangeable Newmark Holdings PPSUs were redeemed for a cash payment of $0.2 million, and (iii) 68,727 shares of Newmark Class A common stock were issued to Mr. Merkel. On the same day, the 68,727 shares of Newmark

Class A common stock were repurchased from Mr. Merkel at $10.67 per share, the closing price of Newmark Class A common stock on that date, under the Company's stock buyback program. The total payment delivered to Mr. Merkel was $0.8 million, less applicable taxes and withholdings.

On March 16, 2021, the Company redeemed 30,926 non-exchangeable Newmark Holdings PSUs held by Mr. Merkel for zero and in connection therewith issued 28,962 shares of Newmark Class A common stock. On the same day, the Company repurchased these shares from Mr. Merkel at the closing price of Newmark Class A common stock of $11.09 per share under the Company's stock buyback program. The total payment delivered to Mr. Merkel was $0.3 million, less applicable taxes and withholdings. The Compensation Committee approved these transactions.

On March 16, 2021, pursuant to the Newmark standing policy for Mr. Lutnick, the Compensation Committee granted exchange rights and/or monetization rights with respect to rights available to Mr. Lutnick. Mr. Lutnick elected to waive such rights one-time with such future opportunities to be cumulative. The aggregate number of Mr. Lutnick’s units for which he waived exchange rights or other monetization rights was 4,423,457 non-exchangeable Newmark Holdings PSUs/NPSUs, inclusive of the PSUs receiving an HDU conversion right and 1,770,016 non-exchangeable Newmark Holdings PPSUs with an aggregate determination amount of $21.6 million at that time, inclusive of the PPSUs receiving an HDU conversion right.

On March 16, 2021, the Compensation Committee granted Mr. Gosin exchange rights into shares of Newmark Class A common stock with respect to 526,828 previously awarded non-exchangeable Newmark Holdings PSUs and 30,871 non-exchangeable Newmark Holdings APSUs held by Mr. Gosin (which, based on the closing price of the Class A common stock of $11.09 per share on such date and using the Exchange Ratio of 0.9365, had a value of $5.8 million in the aggregate). In addition, on March 16, 2021, the Compensation Committee approved removing the sale restrictions on Mr. Gosin’s remaining 178,232 restricted shares of Class A common stock in BGC (which were originally issued in 2013) and associated 82,680 remaining restricted shares of Newmark Class A common stock (issued as a result of the Company spin-off in November 2018).

On March 16, 2021, the Compensation Committee granted Mr. Rispoli (i) exchange rights into shares of Newmark Class A common stock with respect to 6,043 previously awarded non-exchangeable Newmark Holdings PSUs held by Mr. Rispoli (which, based on the closing price of the Class A common stock of $11.09 per share on such date and using the Exchange Ratio of 0.9365, had a value of $0.1 million); and (ii) exchange rights into cash with respect to 4,907 previously awarded non-exchangeable Newmark Holdings PPSUs held by Mr. Rispoli (which had an average determination price of $15.57 per unit, for a total of $0.1 million in the aggregate to be paid for taxes when (i) is exchanged).

Howard W. Lutnick, Chairman

On December 27, 2021, the Compensation Committee approved a one-time bonus award to Mr. Lutnick, which was evidenced by the execution and delivery of a Retention Bonus Agreement, dated December 28, 2021, in consideration of his success in managing certain aspects of the Company’s performance as its principal executive officer and Chairman. The bonus award rewarded Mr. Lutnick for his efforts in delivering superior financial results for the Company and its stockholders, including in particular his success in creating substantial value for the Company and its stockholders in connection with creating, structuring, hedging and monetizing the forward share contract to receive over time shares of common stock of Nasdaqheld by the Company and the strong balance sheet and significant amount of income created from this. A principal reason for structuring the bonus award with a substantial portion to be paid out over three years was also to further incentivize Mr. Lutnick to continue to serve as both the Company’s principal executive officer and its Chairman for the benefit of the Company’s stockholders.

The Retention Bonus Agreement provides for an aggregate cash payment of $50 million, payable as follows: $20 million within three days of the date of the Retention Bonus Agreement (which payment was made on December 31, 2021), and $10 million within thirty days following vesting on each of the first, second and third anniversaries of the date of the Retention Bonus Agreement. Any entitlement to future amounts not vested will be forfeited immediately if, prior to the applicable anniversary date, Mr. Lutnick ceases to serve as both the Company’s Chairman and its principal executive officer, unless Mr. Lutnick ceasing to serve in either such capacity occurs pursuant to a “Vesting Termination,” as that term is defined in the Retention Bonus Agreement. Mr. Lutnick has purchased Newmark Class A common stock with the after-tax proceeds of the initial tranche of the bonus award. The Retention Bonus Agreement describes a “Vesting Termination” as (i) a termination of Mr. Lutnick’s employment by the Company without “Cause” (as that term is defined in the Retention Bonus Agreement) or (ii) an involuntary removal of Mr. Lutnick from the position of Chairman of the Board on or after the occurrence of a Change in Control (as that term is defined in the Change of Control Agreement, dated as of December 13, 2017, by and between Mr. Lutnick and the Company). In the event that Mr. Lutnick ceases to serve as both the Company’s Chairman and its principal executive officer pursuant to a Vesting Termination, any amounts not vested will immediately become fully vested. The Retention Bonus Agreement provides that Mr. Lutnick ceasing to serve as the Company’s Chairman and principal executive officer pursuant to his death or disability does not constitute a Vesting Termination. The provisions of Mr. Lutnick’s Change of Control Agreement do not apply to the bonus award. A copy of the Retention Bonus Agreement was attached as Exhibit 10.1

to the Company’s Current Report on Form 8-K filed with the SEC on December 29, 2021 and is described in detail under the heading “2021 Lutnick Award” in our proxy statement filed with the SEC on August 15, 2022.

On June 28, 2021, in connection with the 2021 Equity Event, the Newmark Compensation Committee approved the following for Mr. Lutnick: (i) the exchange of 279,725 exchangeable Newmark Holdings PSUs into 263,025 shares of Class A common stock of Newmark based on the then applicable Exchange Ratio of 0.9403; and $1,465,874 associated with Mr. Lutnick’s non-exchangeable 193,530 Newmark Holdings PPSUs was redeemed and used for tax purposes; (ii) the conversion of 552,482.62 non-exchangeable Newmark Holdings PSUs with H-Rights into 552,482.62 non-exchangeable Newmark Holdings HDUs and redemption of such HDUs for their Capital Account of $7,017,000, paid in the form of Nasdaq Shares issued at $177.11 per share (which was the Nasdaq closing price as of June 28, 2021); and $7,983,000 associated with Mr. Lutnick’s non-exchangeable Newmark Holdings PPSUs with H-Rights were redeemed and used for tax purposes; (iii) the exchange of 520,380 exchangeable BGC Holdings PSUs into 520,380 shares of Class A common stock of BGC Partners, and $1,525,705 associated with Mr. Lutnick’s exchangeable BGC Holdings PPSUs was redeemed and used for tax purposes; (iv) the redemption of 88,636 non-exchangeable BGC Holdings PSUs pursuant to Mr. Lutnick’s rights under his existing standing policy, and the issuance of 88,636 shares of Class A common stock of BGC Partners; (v) the conversion of 1,131,774 non-exchangeable BGC Holdings PSUs with H-Rights into 1,131,774 non-exchangeable BGC Holdings HDUs and $7,983,000 associated with Mr. Lutnick’s BGC Holdings PPSUs with H-Rights was redeemed and used for tax purposes in connection with the exercise of the exercise of the BGC Holdings HDUs; and (vi) the issuance of 29,059 shares of Class A common stock of Newmark. In accordance with Mr. Lutnick’s right under his existing standing policy, and in connection with the 2021 Equity Event, upon the approval of the Newmark Compensation Committee: (i) 2,909,819 non-exchangeable Newmark Holdings PSUs, pursuant to Mr. Lutnick’s rights under his existing standing policy, were redeemed and 2,736,103 shares of Class A common stock of Newmark, based upon the then applicable Exchange Ratio of 0.9403, were granted to Mr. Lutnick; and (ii) $8,798,546 associated with Mr. Lutnick’s rights under his existing standing policy was redeemed and used for tax purposes. See “Executive Compensation” in our proxy statement filed August 15, 2022 for additional information and definitions.

Barry M. Gosin, Chief Executive Officer

On September 20, 2021, the Compensation Committee approved a monetization opportunity for Mr. Gosin: all of Mr. Gosin’s 2,114,546 non-exchangeable BGC Holdings PSUs were redeemed for zero and 2,114,456 shares of BGC Class A common stock were issued to Mr. Gosin. Effective as of April 14, 2022, Mr. Gosin’s 905,371 BGC Holdings HDUs were redeemed for a cash payment of $3,521,893 based upon a price of $3.89 per unit, which was the closing price of BGC Partners Class A common stock on April 14, 2022.

On June 28, 2021, the Compensation Committee approved the following for Mr. Gosin, the Company’s Chief Executive Officer: (i) the exchange of 1,531,061.84 exchangeable Newmark Holdings units (comprised of 1,438,597.37 exchangeable Newmark Holdings PSUs and 92,464.47 exchangeable Newmark Holdings APSUs) into 1,439,658 shares of Class A common stock of Newmark based upon the then current Exchange Ratio of 0.9403; and $834,508 associated with Mr. Gosin’s exchangeable Newmark Holdings PPSUs was redeemed and used for tax purposes; (ii) the conversion of 443,871.60 non-exchangeable Newmark Holdings PSUs with H-Rights into 443,871.60 non-exchangeable Newmark Holdings HDUs, and redemption of such HDUs, less any taxes and withholdings in excess of $5,362,452, paid in the form of Nasdaq shares issued at $177.11 per share (which was the Nasdaq closing price as of June 28, 2021); and $5,362,452 in connection with Mr. Gosin’s Newmark Holdings PPSUs with H-Rights was redeemed and used for tax purposes; (iii) the exchange of 3,348,706 exchangeable BGC Holdings units (comprised of 3,147,085 exchangeable BGC Holdings PSUs and 201,621 exchangeable BGC Holdings APSUs) into 3,348,706 shares of Class A common stock of BGC Partners; and $298,273 associated with Mr. Gosin’s exchangeable BGC Holdings PPSUs was redeemed and used for tax purposes; (iv) the conversion of 1,592,016 non-exchangeable BGC Holdings PSUs with H-Rights into 1,592,016 non-exchangeable BGC Holdings HDUs, and $1,129,499 associated with Mr. Gosin non-exchangeable BGC Holdings PPSUs was redeemed and used for tax purposes; and (v) the issuance of 12,500 shares of Class A common stock of Newmark.

Michael J. Rispoli, Chief Financial Officer

On June 28, 2021, the Compensation Committee approved the following for Mr. Michael Rispoli, the Company’s Chief Financial Officer: (i) the exchange of 23,124 exchangeable Newmark Holdings PSUs into 21,744 shares of Class A common stock of Newmark based on the then current Exchange Ratio of 0.9403 and $208,407 associated with Mr. Rispoli’s exchangeable Newmark Holdings PPSUs was redeemed and used for tax purposes; (ii) 6,000 non-exchangeable Newmark Holdings PSUs were redeemed and an aggregate of 5,642 restricted shares of Newmark were issued to Mr. Rispoli based upon the then current Exchange Ratio of 0.9403, and $52,309 associated with Mr. Rispoli’s non-exchangeable Newmark Holdings PPSUs was redeemed and used for tax purposes; (iii) the conversion of 5,846.07 non-exchangeable Newmark Holdings PSUs with H-Rights into 5,846 non-exchangeable Newmark Holdings HDUs and the redemption of such HDUs, less any taxes and withholdings in excess of $60,750, paid in the form of Nasdaq shares issued at $177.11 per share (which was the Nasdaq closing price as of June 28, 2021); and $60,750 associated with Mr. Rispoli’s PPSUs with H-Rights was redeemed and used for tax purposes; (iv) the exchange of 36,985 exchangeable BGC Holdings PSUs into 36,985 shares of Class A common stock of

BGC, and $134,573 associated with Mr. Rispoli’s exchangeable BGC Holdings PPSUs was redeemed and used for tax purposes; and (v) the issuance of 383 shares of Class A common stock of Newmark.

Stephen M. Merkel, Chief Legal Officer

On June 28, 2021, the Compensation Committee also approved the following for Stephen M. Merkel, the Company’s Chief Legal Officer: (i) the redemption of 51,124.28 non-exchangeable Newmark Holdings PSUs and issuance of 48,072 shares of Newmark Class A common stock based upon their current Exchange Ratio of 0.9403; and (ii) the redemption of 46,349.87 non-exchangeable Newmark Holdings PPSUs for a cash payment of $0.3 million, to be remitted to the applicable tax authorities to the extent necessary in connection with the issuance of the shares above.

Retirement Fund Purchase

On April 27, 2021, a Keogh retirement account held by Mr. Lutnick purchased 5,154 shares of our Class A common stock from us at the closing price of Newmark Class A common stock on that date of $10.67 per share. The transaction was approved by our Audit Committee.

Transactions Related to Ordinary Course Real Estate Services

On November 4, 2020, the Audit Committee of the Board of Directors authorized entities in which executive officers have a non-controlling interest to engage Newmark to provide ordinary course real estate services to them as long as Newmark’s fees are consistent with the fees that Newmark ordinarily charges for these services.

CF Real Estate Finance Holdings, LP.

Contemporaneously with the acquisition of Berkeley Point, ~~Acquisition,~~ on September 8, 2017, Newmark invested $100.0 million in a newly formed commercial real estate-related financial and investment business, Real Estate LP, which is controlled and managed by Cantor. Real Estate LP may conduct activities in any real estate related business or asset backed securities related business or any extensions thereof and ancillary activities thereto. ~~In addition, Real Estate LP may provide short-term loans to related parties from time to time when funds in excess of amounts needed for investment opportunities are available.~~ As of March 31, ~~2018, $339.2 million had been loaned to related parties. As of March~~2023 and December 31, ~~2018,~~2022, Newmark’s investment iswas accounted for under the equity ~~method.~~

~~IPO~~

method (see Note 8 — “Investments”). Newmark holds a redemption option in which Real Estate LP can redeem in full Newmark’s investment in Real Estate LP in exchange for Newmark’s capital account balance in Real Estate LP as of such time.

Amendment of Real Estate LP Joint Venture Agreement and Payment of Administrative Fee

Transactions with Cantor Fitzgerald & Co., a wholly owned broker-dealer subsidiary of Cantor

On ~~December 13, 2017, prior~~June 18, 2018 and September 26, 2018, Newmark entered into transactions related to the ~~closing~~monetization of the ~~IPO, BGC, BGC Holdings, BGC U.S. OpCo,~~Nasdaq shares that Newmark Newmark Holdings, Newmark OpCo, Cantor, and BGC Global OpCo entered into the Separation and Distribution Agreement. The Separation and Distribution Agreement sets forth the agreements among BGC, Cantor, Newmark and their respective subsidiaries with respectwas scheduled to ~~the Separation and related matters. For additional information, see~~receive in 2019 through 2022 (see Note 1 — ~~Organization~~“Organization and Basis of ~~Presentation. In addition,~~Presentation”). Newmark paid $4.0 million in fees for services provided by CF&Co related to these monetization transactions. These fees were recorded as a deduction from the carrying amount of the EPUs.

On March 28, 2019, Newmark filed a registration statement on Form S-3 pursuant to which CF&Co may make offers and sales of Newmark's 6.125% Senior Notes in connection with ongoing market-making transactions which may occur from time to time. Such market-making transactions in these securities may occur in the ~~Separation and Newmark IPO, on December 13, 2017~~open market or may be privately negotiated at prevailing market prices at a ~~Registration Rights Agreement by and among Cantor, BGC and Newmark, an Amended and Restated Tax Receivable Agreement by and between Cantor and BGC, an Exchange Agreement~~

by and among Cantor, BGC and Newmark, and Administrative Services Agreement by and between Cantor and Newmark (see “Service Agreements” above), and a Tax Receivable Agreement by and between Cantor and Newmark were entered into.

~~As a result~~time of the Separation, the limited partnership interests in Newmark Holdings were distributed to the holders of limited partnership interests in BGC Holdings, including Cantor, whereby each holder of BGC Holdings limited partnership interestsresale or at that time now holds a BGC Holdings limited partnership interest and a corresponding Newmark Holdings limited partnership interest, which is equal to a BGC Holdings limited partnership interest multiplied by the contribution ratio, divided by the current exchange ratio. The exchange ratio is subject to adjustment, in accordance with the terms of the separation agreement (For additional information, see Note 2 — Limited Partnership Interests in Newmark Holdings.)

~~In addition~~related or negotiated prices. Neither CF&Co, nor any of our affiliates, has any obligation to make a ~~wholly owned subsidiary of Cantor, was an underwriter of the IPO. Pursuant to the underwriting agreement, Newmark paid~~market in Newmark's securities, and CF&Co ~~5.5% of the gross~~or any such other affiliate may discontinue market-making activities at any time without notice. Newmark does not receive any proceeds from ~~the sale of shares of Newmark Class A common stock sold~~market-making activities in these securities by CF~~&Co.~~&Co (or any of its affiliates). This registration statement expired in ~~connection with the IPO.~~

~~BGC’s Investment in Newmark Holdings~~

March 2022. On March ~~7, 2018, BGC Partners, L.P. and its operating subsidiaries purchased 16.6 million~~25, 2022, Newmark ~~Units of Newmark Holdings for approximately $242.0 million. The price per Newmark Unit~~filed a new Registration Statement on Form S-3 to replace the one that was based on the $14.57 closing price of Newmark’s Class A common stock on March 6, 2018 as reported on the NASDAQ Global Select Market. These newly-issued Newmark Units are exchangeable, at BGC’s discretion, into either shares of Class A common stock or shares of Class B common stock of Newmark. BGC made the Investment in Newmark pursuant to an Investment Agreement dated as of March 6, 2018 by and among BGC, BGC Holdings, BGC Partners, L.P., BGC Global Holdings, L.P., Newmark, Newmark Holdings and Newmark Partners, L.P. BGC’s investment in Newmark Holdings and related transactions were approved by the Audit Committees and Boards of Directors of BGC and Newmark. BGC and its subsidiaries funded the Investment in Newmark using the proceeds of its CEO sales program. Newmark used the proceeds to repay the balance of the outstanding principal amount under its Term Loan with Bank of America, N.A., as administrative agent, and a syndicate of lenders.

~~Payables to~~expiring.

(d)Other Related ~~Parties~~

Party Transactions

On ~~March 19,~~November 30, 2018, Newmark entered into the ~~“Intercompany~~Cantor Credit ~~Agreement” with BGC, which amended and restated the original intercompany credit agreement between the parties in relation to the Separation, dated as of December 13, 2017.~~Agreement. The ~~Intercompany~~Cantor Credit Agreement provides for each party to issue ~~revolving~~ loans to the other party inat the lender’s discretion. ~~The~~Pursuant to the Cantor Credit Agreement, the parties and their respective subsidiaries (with respect to Cantor, other than BGC and its subsidiaries) may borrow up to an aggregate principal amount of $250 million from each other from time to time at an interest rate ~~on the Intercompany Credit Agreement can be~~which is the higher of ~~BGC’s~~Cantor’s or Newmark’s ~~short term borrowings~~short-term borrowing rate then in effect, ~~at such time~~ plus ~~100 basis points, or such other interest rate as may be mutually agreed between BGC and Newmark. The interest rate~~1%. No amounts were outstanding as of March 31, ~~2018 was 4.99%. As~~2023 and 2022.

Payables to related parties were $1.3 million and $9.7 million as of March 31, ~~2018,~~2023 and December 31, 2022, respectively.

For a detailed discussion about Newmark’s Payables to related parties, see Note 1 — “Organization and Basis of Presentation”, Note 2 — “Limited Partnership Interests in Newmark and BGC Holdings” and Note 20 — “Debt”.

In January 2022, Cantor entered into an arrangement to sublease excess space from RKF Retail Holdings LLC, a subsidiary of Newmark. The deal was a six-month sublease of approximately 21,000 rentable square feet in New York City. Under the ~~amount outstanding under~~terms of the ~~Intercompany Facility~~sublease, Cantor paid all operating and tax expenses attributable to the lease. The sublease was ~~$202.0~~amended to provide for a rate of $81,600 per month based on the size of utilized space, in addition to terms extending on a month-to-month basis. In July 2022, the sublease was extended one year to June 30, 2023. Newmark received $0.3 million and ~~is included in “Current portion of payables to related parties” on the unaudited condensed consolidated balance sheets Newmark recorded interest expense of $1.0~~$0.2 million from Cantor for the three months ended March 31, ~~2018,~~2023 and 2022, respectively.

As part of the Knotel acquisition, Newmark assigned the rights to acquire certain Knotel assets to a subsidiary of Cantor, on the terms that if the subsidiary monetized the sale of these assets, Newmark would receive 10% of the proceeds of the sale after the subsidiary recoups its investment in the assets.

On June 28, 2021, the Audit Committee authorized Newmark to hire a son of its Chairman as a full-time employee of its Knotel business with an annual base salary of $125,000 and an annual discretionary bonus of up to 30% of base salary. The arrangement includes a potential profit participation consistent with other entrepreneurial arrangements in the event of certain liquidity events related to businesses developed by him. In June 2022, the Audit Committee approved ordinary course compensation adjustments and expense, travel and housing reimbursement for him in accordance with standard Company policies up to $250,000 in total compensation without further Committee review.

Cantor Rights to Purchase Cantor Units from Newmark Holdings

Cantor has a right to purchase from Newmark Holdings exchangeable limited partnership interests in the event that any Newmark Holdings Founding Partner interests that have not become exchangeable are redeemed by Newmark Holdings upon termination or bankruptcy of a Founding Partner or upon mutual consent of the general partner of Newmark Holdings and Cantor. Cantor has the right to purchase such Newmark Holdings exchangeable limited partnership interests at a price equal to the lesser of (1) the amount that Newmark Holdings would be required to pay to redeem and purchase such Newmark Holdings Founding Partner interests and (2) the amount equal to (a) the number of units underlying such Founding Partner interests, multiplied by (b) the Exchange Ratio as of the date of such purchase, multiplied by (c) the then-current market price of our Class A common stock. Cantor may pay such price using cash, publicly traded shares or other property, or a combination of the foregoing. If Cantor (or the other member of the Cantor group acquiring such limited partnership interests, as the case may be) so purchases such limited partnership interests at a price equal to clause (2) above, neither Cantor nor any member of the Cantor group nor Newmark Holdings nor any other person is obligated to pay Newmark Holdings or the holder of such Founding Partner interests any amount in excess of the amount set forth in clause (2) above.

In addition, the Newmark Holdings limited partnership agreement provides that (1) where either current, terminating or terminated partners are permitted by us to exchange any portion of their Founding Partner units and Cantor consents to such exchangeability, we will offer to Cantor the opportunity for Cantor to purchase the same number of new exchangeable limited partnership interests in Newmark Holdings at the price that Cantor would have paid for exchangeable limited partnership interests in the event we had redeemed the Founding Partner units; and (2) the exchangeable limited partnership interests to be offered to Cantor pursuant to clause (1) above would be subject to, and granted in accordance with, applicable laws, rules and regulations then in effect.

If Cantor acquires any units as a result of the purchase or redemption by Newmark Holdings of any Founding Partner interests, Cantor will be entitled to the benefits (including distributions) of the units it acquires from the date of termination or bankruptcy of the applicable Founding Partner. In addition, any such units will be exchangeable by Cantor for a number of shares of our Class B common stock or, at Cantor’s election, shares of our Class A common stock, in each case, equal to the then-current Exchange Ratio, on the same basis as the limited partnership interests held by Cantor, and will be designated as Newmark Holdings exchangeable limited partnership interests when acquired by Cantor. The Exchange Ratio was initially one, but is subject to adjustment as set forth in the Separation and Distribution Agreement and was 0.9252 as of March 31, 2023. This may permit Cantor to receive a larger share of income generated by our business at a less expensive price than through purchasing shares of our Class A common stock, which is ~~included~~a result of the price payable by Cantor to Newmark.

On May 17, 2022, Cantor purchased from Newmark Holdings an aggregate of (i) 184,714 exchangeable limited partnership interests for aggregate consideration of $763,064 as a result of the redemption of 184,714 Founding Partner interests, and (ii) 23,562 exchangeable limited partnership interests for aggregate consideration of $100,079 as a result of the exchange of 23,562 Founding Partner interests.

On October 25, 2022, Cantor purchased from Newmark Holdings an aggregate of (i) 104,701 exchangeable limited partnership interests for aggregate consideration of $446,647 as a result of the redemption of 104,701 Founding Partner interests, and (ii) 102,454 exchangeable limited partnership interests for aggregate consideration of $272,100 as a result of the exchange of 102,454 Founding Partner interests.

On April 16, 2023, Cantor purchased from Newmark Holdings an aggregate of (i) 309,631 exchangeable limited partnership interests for aggregate consideration of $1,282,265 as a result of the redemption of 309,631 Founding Partner interests, and (ii) 38,989 exchangeable limited partnership interests for aggregate consideration of $166,364 as a result of the exchange of 38,989 Founding Partner interests.

Following such purchases, as of April 30, 2023 there were no Founding Partner interests in ~~“Interest income, net”~~Newmark Holdings remaining in which the partnership had the right to redeem or exchange and with respect to which Cantor currently has the right to purchase an equivalent number of Cantor Units following such redemption or exchange.

First Amendment to Amended and Restated Agreement of Limited Partnership of Newmark Holdings

On March 10, 2023, Newmark Holdings entered into the LPA Amendment to the Newmark Holdings limited partnership agreement. The LPA Amendment revises certain restrictive covenants pertaining to the “Partner Obligations” and “Competitive Activity” provisions in the ~~unaudited condensed consolidated statement~~Newmark Holdings limited partnership agreement. Specifically, the LPA Amendment (i) reduces the length of ~~operations.~~

the post-termination period during which a partner must refrain from soliciting or doing business with customers, soliciting employees, engaging in a “Competing Business” (as defined therein), or otherwise refraining from harming the partnership; and (ii) revises the scope of the non-compete provisions under the “Partner Obligations” and “Competitive Activity” provisions in the Holdings LPA to cover “Competing Businesses” for which a partner performs the same or similar services as provided to a "Protected Affiliate" (as defined therein) and (a) involving a product, product line or type, or service of a “Protected Affiliate” within a specific geographic area, (b) involving a “Client” or a “Client Representative” (each as defined therein) of a Protected Affiliate, or (c) for which the disclosure of confidential information is likely to be inevitable. The LPA Amendment was approved by the Company’s Board of Directors and Audit and Compensation Committees.

Special Purpose Acquisition Company

As previously reported, in April 2021, Newmark OpCo and Cantor entered into various arrangements pursuant to which they agreed to co-sponsor a special purpose acquisition company, named Newmark Acquisition Corp., in which certain of the Company's executive officers are executive officers and are expected to be directors. Pursuant to a purchase agreement, Newmark OpCo purchased from Cantor a 75% equity interest in the Sponsor, for $18.8 thousand, with Cantor retaining the remaining 25% equity interest in the Sponsor. Pursuant to an amended and restated limited liability company agreement of the Sponsor, Newmark OpCo is the managing member of the Sponsor, and Newmark OpCo and Cantor have agreed to make additional equity contributions to the Sponsor in order to fund the obligations of the Sponsor with respect to the SPAC in proportion to their equity ownership in the Sponsor. Also, in April 2021, the Sponsor agreed to lend to the SPAC up to $0.3 million without interest in order to cover expenses related to any initial public offering of the SPAC. As of March 31, 2023 and December 31, ~~2017,~~2022, there was no outstanding balance on these loans.

Referral Fees to Cantor

In September 2021, the ~~related party receivables~~Audit Committee approved the payment of a referral fee from Newmark to CRCA, a subsidiary of Cantor, in relation to CRCA’s referral to Newmark of a sale and ~~current portion~~lease back transaction for a portfolio of ~~payables~~medical office properties. Newmark paid CRCA approximately $0.3 million for the referral of the portfolio sale. Newmark management negotiated the referral arrangement with CRCA in the ordinary course of business and the arrangement is reasonable and consistent with referral arrangements of its type between unrelated parties.

Additionally, in September 2021, the Audit Committee authorized Newmark and its subsidiaries to ~~related~~pay referral fees to Cantor and its subsidiaries (other than Newmark and its subsidiaries) in respect of referred business, pursuant to ordinary course arrangements in circumstances where Newmark would customarily pay referral fees to unrelated third parties ~~were $0.0 million~~ and ~~$34.2 million, respectively.~~

where Newmark is paying a referral fee to Cantor in an amount that is no more than the applicable percentage rate set forth in Newmark’s intra-company referral policies, as then in effect, with such fees to be at referral rates no less favorable to Newmark than would be paid to unrelated third parties.

Acquisition of Spring11 Ownership Interest from Cantor

In February 2023, Newmark's subsidiary, Newmark S11, entered into an equity purchase agreement with CFS11, a subsidiary of Cantor, pursuant to which Newmark acquired CFS11’s 33.78% ownership interest in Newmark S11 LP, LLC, the joint venture that owns a controlling interest in Spring11, for a total purchase price of $11,530,598. CFS11's 33.78% ownership in Newmark S11 LP, LLC was 25.62% of Spring11's economic interest. The transaction, which also included Newmark S11 buying the remaining noncontrolling interests from other third-party owners on substantially the same terms, resulted in Newmark S11 owning 100% of Spring11. The CFS11 transaction was approved by our Audit Committee.

(26)Income Taxes

~~Newmark’s~~

The accompanying unaudited condensed consolidated financial statements include U.S. federal, state and local income taxes on Newmark’s allocable share of its U.S. results of operations, as well as taxes payable to jurisdictions outside the U.S. In addition, certain of Newmark’s entities are taxed as U.S. partnerships and are subject to the ~~Unincorporated Business Tax (“UBT”)~~UBT in New York City. Therefore, the tax liability or benefit related to the partnership income or loss, except for UBT, rests with the partners (see Note ~~2—“Limited~~2 — “Limited Partnership ~~Interests in BGC Holdings and Newmark Holdings”~~Interests”, for discussion of partnership interests), rather than the partnership entity. Income taxes are accounted for using the asset and liability method, as prescribed in U.S. GAAP guidance for Income ~~Taxes.~~Taxes.

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the accompanying unaudited condensed consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax ~~bases.~~basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded against deferred tax assets if it is deemed more likely than not that those assets will not be realized.

~~Provisional amounts in effective rate~~

On December 22, 2017, “H.R.1,” formerly known as the Tax Cuts and Jobs Act of 2017 (the “2017 Tax Act”), was signed into law in the U.S. The 2017 Tax Act is expected to have a favorable impact on Newmark’s effective tax rate and net income as reported under generally accepted accounting principles both in the first quarter of 2018 and subsequent reporting periods to which the 2017 Tax Act is effective. Newmark is applying the guidance in SAB 118 when accounting for the enactment-date effects of the 2017 Tax Act. As of March 31, 2018, Newmark has not completed its accounting for all of the tax effects of the 2017 Tax Act. Newmark will continue to make and refine its calculations as additional analysis is completed.The final impact of the 2017 Tax Act may differ from Newmark’s estimate for the provision for income taxes, possibly materially, due to, among other factors, changes in interpretations, additional guidance that may be issued, unexpected negative changes in business and market conditions that could reduce certain tax benefits, and actions taken by Newmark as a result of the 2017 Tax Act.

Because of the complexity of the new Global Intangible Low-Taxed Income (“GILTI”) tax rules, Newmark continues to evaluate this provision of the 2017 Tax Act. Under U.S. GAAP, Newmark can elect an accounting policy choice to either (a) treat future taxes related to GILTI as a current period expense when incurred (“period cost method”) or (b) factor amounts related to GILTI into Newmark’s measurement of its deferred taxes (“deferred method”). Newmark’s accounting for the effects of the GILTI tax law provisions is incomplete at this time, and, therefore, Newmark is not yet able to reasonably estimate the effect of this provision of the 2017 Tax Act nor has an accounting policy decision been made with respect to GILTI. As of March 31, 2018, because Newmark is still evaluating the GILTI provisions as well as future taxable income that may be subject to GILTI, Newmark shall include GILTI related to current-year operations, if any, only in the Estimated Annualized Effective Tax Rate and have not provided additional GILTI on deferred items.

Pursuant to U.S. GAAP guidance on Accounting for Uncertainty in Income Taxes, Newmark provides for uncertain tax positions based upon management’s assessment of whether a tax benefit is more likely than not to be sustained upon examination by tax authorities. As of March 31, ~~2018,~~2023 and December 31, 2022, Newmark ~~had $0.2 million of~~did not have any unrecognized tax benefits which, if recognized, would affect the effective tax rate. ~~As of December 31, 2017, Newmark’s unrecognized tax benefits, excluding related interest and penalties, were $0.2 million, all of which, if~~Newmark recognized ~~would affect the effective tax rate. Newmark recognizes~~ interest and penalties related to income tax matters in ~~”Provision~~“Provision for income taxes”~~, in Newmark’s~~ on the accompanying unaudited condensed consolidated statements of operations. As of March 31, ~~2018,~~2023, Newmark ~~had approximately $45 thousand of~~has not accrued any tax-related interest and ~~penalties related to uncertain tax positions. As of December 31, 2017, there were $45 thousand of accrued interest~~penalties.

(27) Accounts Payable, Accrued Expenses and ~~penalties related to uncertain tax positions.~~

Other Liabilities

~~(27)~~

~~Accounts Payable, Accrued Expenses and Other Liabilities~~

The ~~current portion of~~ accounts payable, accrued expenses and other liabilities consisted of the ~~following:~~

following (in thousands):


	March 31,		December 31,
	2018		2017			March 31, 2023		December 31, 2022
Accounts payable and accrued expenses	$	85,571	$	79,376	Accounts payable and accrued expenses	$	252,239	$	208,168

Outside broker payable					Outside broker payable	76,281		82,002
Payroll taxes payable		20,416		12,673	Payroll taxes payable	85,728		92,247
Outside broker payable		41,242		23,361
Corporate taxes payable					Corporate taxes payable	12,090		22,864
Derivative liability					Derivative liability	9,292		9,378
Right-of-use liabilities					Right-of-use liabilities	98,776		96,860

Contingent consideration		7,116		6,504	Contingent consideration	1,768		65
Derivative liability		11,401		3,047
	$	165,746	$	124,961
Total					Total	$	536,174	$	511,584

Other long-term liabilities consisted of the ~~following:~~

following (in thousands):

	March 31,		December 31,
	2018		2017
						March 31, 2023		December 31, 2022
Accrued compensation					Accrued compensation	$	99,243	$	95,770
Payroll and other taxes payable					Payroll and other taxes payable	72,173		59,380
Financial guarantee liability					Financial guarantee liability	29,284		27,729
Deferred rent	$	41,841	$	41,875	Deferred rent	6,215		5,040
Payroll taxes payable		47,777		48,248
Accrued compensation		32,540		31,411
Credit enhancement deposit		25,000		25,000
Contingent consideration		15,971		17,207	Contingent consideration	19,217		8,278
Financial guarantee liability		61		54
	$	163,190	$	163,795
Other					Other	7,443		—
Total					Total	$	233,575	$	196,197

~~(28)~~

~~Compensation~~

(28) Compensation

Newmark’s Compensation Committee may grant various equity-based awards to employees of Newmark, including RSUs, restricted stock, ~~units,~~ limited partnership units and ~~exchange rights for~~ shares of ~~Newmark’s~~Newmark Class A common stock upon exchange or redemption of

Newmark Holdings limited partnership units (see Note ~~2—Limited~~2 — “Limited Partnership ~~Interest~~Interests in Newmark ~~Holdings)~~Holdings and BGC Holdings”). On December 13, 2017, as part of the Separation, the ~~Newmark Group, Inc. Long Term Incentive~~Equity Plan ~~(the “Newmark Equity Plan”)~~ was approved by Newmark’s then sole stockholder, BGC, for Newmark to issue up to 400.0 million ~~aggregate number~~shares of ~~shares of~~Newmark Class A common stock, of ~~Newmark,~~which 115.0 million were registered on Forms S-8 as of ~~which 50.0 million is registered,~~March 31, 2023, that may be delivered or cash-settled pursuant to awards granted during the life of the Newmark Equity Plan.

On April 4, 2023, an additional 100.0 million shares were registeredon Forms S-8. As of March 31, 2023, awards with respect to 83.0 million shares had been granted and 317.0 million shares were available for future awards. Upon vesting of RSUs, issuance of restricted stock and exchange or redemption of limited partnership units, Newmark generally issues new shares of its Class A common stock.

Prior to the Separation, BGC’s Compensation Committee granted various equity-based awards to employees of Newmark, including RSUs, restricted stock, ~~units,~~ limited partnership units and exchange rights for shares of ~~BGC’s~~BGC Class A common stock upon exchange of ~~BGC’s~~BGC Holdings limited partnership units (see Note ~~2—Limited~~2 — “Limited Partnership ~~Interests~~interests in Newmark ~~Holdings)~~Holdings and BGC Holdings”).

~~(a)~~

~~Limited Partnership Units~~

As a result of the Separation, limited partnership interests in Newmark Holdings were distributed to the holders of limited partnership interests in BGC ~~Holdings, whereby each~~Holdings. Each holder of BGC Holdings limited partnership interests at that time held a BGC Holdings limited partnership interest and 0.4545 of a corresponding Newmark Holdings limited partnership ~~interest, which~~interest.

The Exchange Ratio is ~~equal to a BGC Holdings limited partnership interest multiplied by an amount calculated in accordance with~~ the BGC Holdings limited partnership agreement the distribution ratio, divided by an amount, as of March 31, 2018, is one-for-one, subject to adjustment, by which a Newmark Holdings limited partnership interest can be exchanged for a number of shares of Newmark Common Stock that a holder will receive upon exchange of one Newmark Holdings exchangeable unit (the Exchange Ratio was initially one, but is subject to adjustment as set forth in the Separation and Distribution Agreement and was 0.9252 as of March 31, 2023).

Newmark incurred compensation expense related to Class A common stock, ~~(the “exchange ratio”).~~

limited partnership units and RSUs held by Newmark employees as follows (in thousands):


	Three Months Ended March 31,
	2023		2022
Issuance of common stock and exchangeability expenses	$	24,583	$	8,983
Allocations of net income to limited partnership units and FPUs (1)	241		147
Limited partnership units amortization	4,861		3,274
RSU amortization	5,963		4,495
Equity-based compensation and allocations of net income to limited partnership units and FPUs	$	35,648	$	16,899

(1)Certain limited partnership units receive quarterly allocations of net income and are generally contingent upon services being provided by the unit holders, including the Preferred Distribution.

(a) Limited Partnership Units

A summary of the activity associated with limited partnership units held by Newmark employees ~~in BGC Holdings~~ is as follows:

	~~Number of~~ ~~Units~~
~~Balance at December 31, 2017~~		~~64,708,915~~
~~Redeemed/exchanged units~~		~~(353,054~~	)
~~Forfeited units~~		~~(18,233~~	)
~~Balance at March 31, 2018~~		~~64,337,628~~


	Newmark Units	BGC Units
Balance, January 1, 2022	18,419,613	8,663,930
Issued	15,402,041	25,032
Redeemed/exchanged units	(2,934,984)	(3,169,063)
Forfeited units/other	(198,716)	(60,511)
Balance, December 31, 2022(1)	30,687,954	5,459,388
Issued	3,290,471	—
Redeemed/exchanged units	(1,067,815)	(308,854)
Forfeited units/other	(50,005)	(999)
March 31, 2023 (2)	32,860,605	5,149,535

Total exchangeable units outstanding(1):
December 31, 2022	7,861,359	2,654,749
March 31, 2023	7,806,770	2,456,456

~~A summary of the activity of the number of share-equivalent limited~~

(1)The Limited Partnership Units table above also includes partnership units ~~and post IPO grants of Newmark LPU’s held by Newmark employees in Newmark Holdings is~~issued as ~~follows:~~

	~~Number of~~ ~~Units~~
~~Balance at December 31, 2017~~		~~29,413,143~~
~~Granted~~		~~3,767,619~~
~~Redeemed/exchanged units~~		~~(160,479~~	)
~~Forfeited units~~		~~(8,288~~	)
~~Balance at March 31, 2018~~		~~33,011,995~~

consideration for acquisitions. As of March 31, ~~2018 and December 31, 2017, Newmark employees had 64.3 million and 64.7 million BGC Holdings limited partnership units outstanding, respectively. In addition,~~2023, there were ~~33.0~~3.7 million ~~and 29.4 million limited~~ partnership units in Newmark Holdings outstanding, asof which 1.4 million units were exchangeable, and 4.6 million partnership units in BGC Holdings outstanding, of which 2.3 million were exchangeable. As of December 31, 2022, there were 3.9 million partnership units in Newmark Holdings outstanding, of which 1.5 million units were exchangeable, and 4.8 million partnership units in BGC Holdings outstanding, of which 2.5 million were exchangeable.

(2)As of March 31, ~~2018~~2023, the total Limited Partnership Units included 1.4 million Newmark Preferred Units and ~~December 31, 2017, respectively. As a result of~~35 thousand BGC Preferred Units held by Newmark employees.

The Limited Partnership Units table above includes both regular and Preferred Units. The Preferred Units are not entitled to participate in partnership distributions other than with respect to the ~~Newmark IPO and the related Separation and~~Preferred Distribution Agreement, BGC Holdings limited partnership units can only be exchanged into BGC Class A common stock with a number of Newmark Holdings limited partnership units equal to a BGC Holdings limited partnership unit multiplied by the distribution ratio and divided by the exchange ratio. Certain standalone BGC Holdings limited partnership units that do not have corresponding Newmark Holdings limited partnership units, may only become exchangeable into Class A common stock once the Distribution has occurred (see Note ~~2—Limited~~2 — “Limited Partnership Interests in BGC Holdings and Newmark ~~Holdings~~Holdings” for further ~~details~~information on Preferred Units). Subsequent to the Spin-Off, there are remaining partners who hold limited partnership interests in Newmark Holdings who are BGC employees, and there are remaining partners who hold limited partnership interests in BGC Holdings who are Newmark employees. These limited partnership interests represent interests that were held prior to the Newmark IPO or were distributed in connection with the Separation. Following the Newmark IPO, employees of Newmark and BGC received limited partnership interests in Newmark Holdings and BGC Holdings, respectively. As a result of the Spin-Off, as the existing limited partnership interests in Newmark Holdings held by BGC employees and the existing limited partnership interests in BGC Holdings held by Newmark employees are exchanged/redeemed, the related capital can be contributed to and from Cantor, respectively. The compensation expenses under GAAP related to the limited partnership interests are based on the ~~Separation~~company where the partner is employed. Therefore, compensation expenses related to the limited partnership interests of both Newmark and ~~Distribution Agreement Additionally, during~~BGC but held by a Newmark employee are recognized by Newmark. However, the ~~three months ended March 31, 2018, Newmark also has issued 3.8 million~~ Newmark Holdings limited partnership ~~units that~~interests held by BGC employees are ~~redeemable for~~included in the Newmark ~~Class A common stock.~~

~~During~~share count and the ~~three months ended March 31, 2018,~~ BGC ~~granted exchangeability on 1.5 million and 0.7 million~~Holdings limited partnership interests held by Newmark employees are included in the BGC share count.

A summary of units held by Newmark employees redeemed in ~~BGC Holdings and~~connection with the issuance of Newmark Holdings, respectively. During the three months ended March 31, 2017 BGC granted exchangeability on 0.6 million limited partnership units in BGC Holdings to Newmark employees. For the three months ended March 31, 2018 and 2017 Newmark incurred compensation expense of $21.7 million and $6.0 million, respectively related to the exchangeability granted in each period. For the three months ended March 31, 2018, there was no expense related to grants of exchangeability on limited partnership units in Newmark Holdings.

As of March 31, 2018 and December 31, 2017, the number of share-equivalent limited partnership units exchangeable into shares of BGC’s Class A common stock at the discretion of the unit holder was 17.2 million and 12.3 million, respectively. The number of share-equivalent limited partnership units exchangeable into shares ofor BGC Class A common stock ~~as of March 31, 2018 represent 17.2 million limited partnership units in BGC Holdings and 8.1 million limited partnership units in~~(at the current Exchange Ratio) or granted exchangeability for Newmark Holdings exchangeable together into 17.2 million shares of BGC Class A common stock. Due to the change in the exchange ratio during the first quarter of 2018 there are 0.7 million standalone BGC units as of March 31, 2018 that are exchangeable intoor BGC Class A common stock ~~contingent upon~~is as follows:


	Three Months Ended March 31,
	2023	2022
BGC Units	16,276	34,557
Newmark Units	2,728,278	532,598
Total	2,744,554	567,155

Compensation expense related to the issuance of Newmark ~~spinoff. The number of share-equivalent limited partnership units exchangeable into shares of~~or BGC Class A common stock asand grants of ~~December 31, 2017 represented 12.3 million~~exchangeability on Newmark Holdings and ~~5.6 million of~~BGC Holdings limited partnership units ~~in BGC Holdings and~~to Newmark ~~Holdings, respectively, exchangeable together into 12.3 million shares of BGC Class A common stock.~~

~~As of March 31, 2018, the notional value of the limited~~employees is as follows (in thousands):


	Three Months Ended March 31,
	2023		2022
Issuance of common stock and exchangeability expenses	$	24,583	$	8,983

Limited partnership units with a post-termination ~~pay-out amount~~payout held by ~~executives and non-executive~~Newmark employees ~~awarded~~are as follows (dollars in lieu of cash compensation for salaries, commissions and/or discretionary or guaranteed bonuses, was approximately $139.2 million. The number of outstanding limited partnership units with a post-termination pay-out represent 13.8 million limited partnership units in BGC Holdings and 6.3 million limited partnership units in Newmark Holdings, of which approximately 6.6 million units in BGC Holdings and 3.0 million units in Newmark Holdings were unvested. As of March 31, 2018, the aggregate estimated fair value of these limited partnership units was approximately $28.6 million. In addition, beginning January 1, 2018, the Company began granting standalone limited partnership units in Newmark Holdings to Newmark employees. As of March 31, 2018, the notional value of the limited partnership units with a post-termination pay-out amount held by executives and non-executive employees, awarded in lieu of cash compensation for salaries, commissions and/or discretionary or guaranteed bonuses, was approximately $21.6 million. The number of outstanding limited partnership units with a post-termination pay-out represent 1.5 million limited partnership units in Newmark Holdings, of which approximately 1.1 million units in Newmark Holdings were unvested. As of March 31, 2018, the aggregate estimated fair value of these limited partnership units was approximately $2.1 million. As of December 31, 2017, the notional value of the limited partnership units with a post-termination pay-out amount held by executives and non-executive employees, awarded in lieu of cash compensation for salaries, commissions and/or discretionary or guaranteed bonuses, was approximately $232.9 million. The number of outstanding limited partnership units with a post-termination pay-out as of December 31, 2017 was approximately 23.4 million, of which approximately 13.2 million were unvested. As of December 31, 2017, the number of outstanding limited partnership units with a post-termination pay-out represent 23.4 million and 10.6 million of limited partnership units in BGC Holdings and Newmark Holdings, respectively, of which approximately 13.2 million and 6.0 million units in BGC Holdings and Newmark Holdings, respectively, were unvested. As of December 31, 2017, the aggregate estimated fair value of these limited partnership units was approximately $39.2 million.

Certain of the limited partnership units with a post-termination pay-out have been granted in connection with Newmark’s acquisitions. As of March 31, 2018 and December 31, 2017, the aggregate estimated fair value of these acquisition related limited partnership units was $6.7 million and $14.3 million, respectively. The liability for such acquisition-related limited partnership units is includedthousands):


	March 31, 2023		December 31, 2022

Notional Value	$	151,951	$	144,045
Estimated fair value of the post-termination payout(1)	$	46,657	$	42,706


Outstanding limited partnership units in Newmark Holdings	15,284,618		14,277,213
Outstanding limited partnership units in Newmark Holdings - unvested	1,477,145		2,155,668
Outstanding limited partnership units in BGC Holdings	44,928		44,928

(1)Included in “Other ~~long term~~long-term liabilities” on ~~Newmark’s~~the accompanying unaudited condensed consolidated balance sheets.

Compensation expense related to limited partnership units held by Newmark employees with a post-termination pay-out amount is recognized over the ~~stated~~ service period. These units ~~generally~~can vest ~~between three and five~~for periods up to seven years from the ~~date of grant.~~grant date. Newmark recognized compensation expense ~~(benefit), before associated income taxes,~~ related to these limited partnership units that were not redeemed as follows (in thousands):


	Three Months Ended March 31,
	2023		2022
Limited partnership units amortization	$	4,861	$	3,274

The grant of ~~$(8.7) million and $5.8 million~~exchange rights of HDUs to Newmark employees are as follows (in thousands):


	March 31, 2023		December 31, 2022

Notional Value	$	8,189	$	8,189
Estimated fair value of limited partnership units (1)	$	8,064	$	8,065

(1)Included in “Other long-term liabilities” on the accompanying unaudited condensed consolidated balance sheets.

During the three months ended March 31, ~~2018~~2023 and ~~2017, respectively. These are included in “Compensation and employee benefits” in Newmark’s unaudited condensed consolidated statements of operations.~~

~~Certain~~2022, there was no compensation expense related to these limited partnership units ~~generally~~held by Newmark employees.

During the three months ended March 31, 2023 and 2022, respectively, Newmark employees were granted 1.1 million and 0.9 million N Units, that are excluded from the table above, since these units are not considered share-equivalent limited partnership units and are not included in the fully diluted share count. The N Units do not receive quarterly allocations of net income and remain unvested. Upon vesting, which occurs if the certain thresholds are ~~cash distributed on a quarterly basis and generally contingent upon services being provided by~~met, the ~~unit holders. The allocation of income~~N Units are converted to equivalent limited partnership units ~~was $4.1 million~~that receive quarterly certain income distributions and ~~$4.6 million for~~can be granted exchange rights or redeemed at a later date, at which time these N Units would be reflected as a share-equivalent grant in the tables above. During the three months ended March 31, ~~2018~~2023 and ~~2017, respectively. This expense is included within “Allocations of net income~~2022, 2.5 million and ~~grant of exchangeability to~~2.4 million, N Units, respectively, vested and were converted into distribution earning limited partnership ~~units”~~units and were therefore included in ~~Newmark’s unaudited condensed consolidated statements of operations.~~

the fully diluted share count.

~~(b)~~

~~Restricted Stock Units~~

(b) Restricted Stock Units

A summary of the activity associated with Newmark and BGC RSUs ~~in BGC~~held by Newmark employees is as ~~follows:~~

follows (fair value amount in thousands):

Balance at December 31, 2017

346,538

$
9.56

1.85

Delivered units

(95,773
)

9.17

Forfeited units

(9,470
)

9.95

Balance at March 31, 2018

241,295

$
9.67

1.69


	Newmark RSUs(1)						BGC RSUs(2)
	Restricted Stock Units	Weighted- Average Grant Date Fair Value Per Share		Fair Value Amount		Weighted- Average Remaining Contractual Term (Years)	Restricted Stock Units	Weighted- Average Grant Date Fair Value Per Share		Fair Value Amount		Weighted- Average Remaining Contractual Term (Years)
Balance, January 1, 2022	10,721,457	$	8.30	$	89,025	4.96	5,375	$	3.85	$	21	1.16
Granted	3,350,516	12.15		40,710			4,191	4.28		18
Settled units (delivered shares)	(2,464,570)	8.33		(20,526)			(2,638)	3.69		(10)
Forfeited units	(343,541)	10.11		(3,474)			—	—		—
Balance, December 31, 2022	11,263,862	$	9.39	$	105,735	4.75	6,928	$	4.17	$	29	1.62
Granted	720,242	6.95		5,008			—	—		—
Settled units (delivered shares)	(1,227,539)	9.65		(12,325)			—	—		—
Forfeited units	(128,004)	10.53		(1,347)			—	—		—
Balance, March 31, 2023	10,628,561	$	9.18	$	97,071	4.84	6,928	$	4.17	$	29	1.62

(1)Beginning January 1, 2018, Newmark began granting stand-alone Newmark RSUs to Newmark employees with the awards vesting ratably over the two- to nine-year vesting period into shares of Newmark Class A common stock.

(2) RSUs granted to these individuals generally vest over a two to four year period.

The fair value of Newmark and BGC RSUs ~~awarded to~~held by Newmark employees ~~and directors~~ is determined on the date of grant based on the market value ~~of BGC’s Class A common stock~~ (adjusted if appropriate based upon the award’s eligibility to receive dividends), and is recognized, net of the effect of estimated forfeitures, ratably over the vesting period. Newmark uses historical data, including historical forfeitures and turnover rates, to estimate expected forfeiture rates for ~~both employees and directors~~ RSUs. Each RSU is settled infor one share of ~~BGC’s~~BGC or Newmark Class A common stock, as applicable, upon completion of the vesting period. ~~Future RSU awards will be settled in one share of~~

Compensation expense related to Newmark ~~Class A common stock upon completion of the vesting period.~~

~~During the three months ended March 31, 2017,~~and BGC ~~granted 0.3 million, of~~ RSUs with aggregate estimated grant date fair values of $2.8 million to employees and directors of Newmark. These RSUs were awarded in lieu of cash compensation for salaries, commissions and/or discretionary or guaranteed bonuses. RSUs granted to these individuals generally vest over a two- to four-year period.

are as follows (in thousands):


	Three Months Ended March 31,
	2023		2022
RSU amortization	$	5,963	$	4,495

As of March 31, ~~2018 and December 31, 2017, the aggregate estimated grant date fair value of outstanding RSUs was $2.3 million and $3.3 million, respectively.~~

Compensation expense related to RSUs, before associated income taxes, was approximately $0.3 million and $0.3 million for the three months ended March 31, 2018 and 2017, respectively. As of March 31, 20182023, there was ~~approximately $2.5~~$98.2 million total unrecognized compensation expense related to unvested ~~RSUs.~~

Newmark may pay certain bonuses in the form of deferred cash compensation awards, which generally vest over a future service period. The total compensation expense recognized in relation to the deferred cash compensation awards for the three months March 31, 2018RSUs.

(29) Commitments and ~~2017 were $1.1 million~~Contingencies

(a)Contractual Obligations and ~~$0.2 million, respectively.~~ Commitments

As of March 31, ~~2018~~2023 and December 31, 2017, the total liability for the deferred cash compensation awards was $0.6 million and $0.4 million, respectively, and is included in “Accounts payable and accrued expenses” in Newmark’s unaudited condensed consolidated balance sheets.

~~(29)~~

~~Commitments and Contingencies~~

~~Contractual Obligations and Commitments~~

~~As of March 31, 2018 and December 31, 2017,~~2022, Newmark was committed to fund approximately ~~$437 million~~$0.5 billion and ~~$244 million,~~$0.3 billion, respectively, which is the total remaining draws on construction loans originated by Newmark under the HUD 221(d)4, 220 and 232 programs, rate locked loans that have not been funded, forward commitments, as well as the funding for Fannie Mae structured transactions. Newmark also has corresponding commitments to sell these loans to various investors as they are funded.

~~Lease Commitments~~

Newmark is obligated for minimum rental payments under various non-cancelable operating leases, principally for office space, expiring at various dates through 2031. Certain of the leases contain escalation clauses that require payment of additional rent to the extent of increases in certain operating or other costs.

Rent expense for the three months ended March 31, 2018 and 2017 was $10.2 million and $9.8 million, respectively. Rent expense is reported in “Operating, administrative and other” in Newmark’s unaudited condensed consolidated statements of operations.

(b) Contingent Payments Related to Acquisitions

Newmark completed acquisitions ~~in 2014, 2015, 2016 and 2017 for which~~from 2019 through the first quarter of 2023 with contingent ~~cash~~ consideration ~~may be issued on certain targets being met through 2020~~ of ~~$12.4~~$21.0 million. The contingent equity instruments ~~are issued by~~ and ~~are recorded as a payable to related party on Newmark’s unaudited condensed consolidated balance sheet. The contingent~~ cash liability is recorded at fair value ~~as deferred consideration~~in “Accounts payable, accrued expenses and other liabilities” on Newmark’s unaudited condensed consolidated balance ~~sheet.~~

sheets.

In the ordinary course of business, various legal actions are brought and are pending against Newmark and its subsidiaries in the U.S. and internationally. In some of these actions, substantial amounts are claimed. Newmark is also involved, from time to time, in reviews, examinations, investigations and proceedings by governmental and self-regulatory agencies (both formal and informal) regarding Newmark’s businesses, which may result in regulatory, civil and criminal judgments, settlements, fines, penalties, injunctions or other relief. The following generally does not include matters that Newmark has pending against other parties which, if successful, would result in awards in favor of Newmark or its ~~subsidiaries:~~

subsidiaries.

Employment, Competitor-Related and Other Litigation

From time to time, Newmark and its subsidiaries are involved in litigation, claims and ~~arbitrations~~arbitration in the U.S. and internationally relating to various employment matters, including with respect to termination of employment, hiring of employees currently or previously employed by competitors, terms and conditions of employment and other matters. In light of the competitive nature of the real estate services industry, litigation, claims and arbitration between competitors regarding employee hiring are not uncommon.

Legal reserves are established in accordance with U.S. GAAP guidance on Accounting for Contingencies, when a material legal liability is both probable and reasonably estimable. Once established, reserves are adjusted when there is more information available or when an event occurs requiring a change. The outcome of such items cannot be determined with certainty. Newmark is unable to estimate a possible loss or range of loss in connection with specific matters beyond its current accrual and any other amounts disclosed. Management believes that, based on currently available information, the final outcome of these current pending matters will not have a material adverse effect on Newmark’s unaudited condensed consolidated financial statements and disclosures taken as a whole.

Risks and Uncertainties

Newmark generates revenues by providing financial intermediary and brokerage activities and commercial real estate services to institutional customers. Revenues for these services are transaction-based. As a result, revenues could vary based on the transaction volume of global financial and real estate markets. Additionally, financing is sensitive to interest rate fluctuations, which could have an impact on Newmark’s overall profitability.

(30)Subsequent Events

~~First Quarter 2018 Dividend~~

On May ~~2, 2018, Newmark’s Board of Directors~~4, 2023, Newmark declared a qualified quarterly ~~cash~~ dividend of ~~$0.09~~$0.03 per share ~~for the first quarter of 2018,~~ payable on ~~June 5, 2018~~May 26, 2023 to ~~Newmark~~ Class A and Class B common stockholders of record as of May ~~21, 2018.~~

19, 2023. The ex-dividend date will be May 18, 2023.

ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of Newmark’s financial condition and results of operations should be read together with Newmark’s accompanying unaudited condensedconsolidated financial statements and related notes, as well as the ~~risk factors and the cautionary statements~~“Special Note Regarding Forward-Looking Information” relating to forward-looking statements within the meaning of Section 27A of the Securities Act ~~of 1933, as amended (the “Securities Act”),~~ and Section 21E of the ~~Securities~~ Exchange Act ~~of 1934, as amended (the “Exchange Act”),~~ included ~~in Newmark’s Annual Report on Form 10-K and~~elsewhere in this report. When used herein, the terms ~~“Newmark Knight Frank,”~~ “Newmark,” the “Company,” “we,” “us,” and “our” refer to Newmark Group, Inc., and its consolidated subsidiaries.

The terms “producer,” “broker,” “salesperson” and “front-office personnel” are synonymous. These terms refer to customer-facing employees that are directly compensated based wholly or in part on the revenues they contribute to generating.

This discussion summarizes the significant factors affecting our results of operations and financial condition during the three months ended March 31, ~~2018~~2023 and ~~2017.~~2022. We operate in one reportable segment, real estate services. This discussion is provided to increase the understanding of, and should be read in conjunction with, our accompanying unaudited condensed consolidated financial statements and the notes thereto included elsewhere in this report.

Overview ~~and Business Environment~~

Newmark is a ~~rapidly growing, high-margin, full-service~~leading adviser and service provider to large institutional investors, global corporation, and other owners and occupiers of commercial real estate services business. Since 2011, the year in which we were acquired by BGC Partners, Inc. (“BGC”), we have been the fastest growing U.S. commercial real estate services firm (when compared with our publicly traded U.S. peers), with a revenue compound annual growth rate of 37.7%.estate. We offer a ~~full suite~~diverse array of integrated services and products ~~for both owners and occupiers across~~designed to meet the ~~entire commercial real estate industry.~~ full needs of our clients.

Our investor/owner services and products ~~include~~ include:

•capital markets, which consists of investment sales and commercial mortgage brokerage (including the placement of debt, ~~and~~equity raising, structured finance, and loan sales on behalf of third parties),

•agency leasing, ~~property management,~~

•valuation and advisory,

•property management,

•business rates,

•due diligence consulting and ~~underwriting~~other advisory services,

•services related to the GSEs and ~~government-sponsored enterprise (which we refer to as “GSE”)~~FHA, including multifamily lending and loan ~~servicing.~~ servicing, and

•flexible workspace solutions for owners.

Our occupier services and products ~~include~~ include:

•tenant representation leasing,

•GCS, which includes real estate, ~~management technology systems,~~ workplace and occupancy strategy, ~~global~~ corporate consulting services, project management, lease administration and facilities ~~management. We enhance these services~~management,

•business rates, and ~~products through innovative real estate technology~~

•flexible workspace solutions for occupiers.

Our goal is to lead with our extraordinary talent, data, and ~~data~~ analytics, ~~that enable~~which together allow us to provide the best of strategic and specialized advice. This combination enables our revenue-generating employees, including brokers, originators, and other customer-facing professionals to be highly productive and to help clients to increase their efficiency and profits bywhile optimizing their real estate ~~portfolio.~~ portfolios.

We have relationships with many of the world’s largest commercial property owners, real estate developers and investors, as well as Fortune 500 and Forbes Global 2000 companies. For the ~~three months~~year ended December 31, 2022 and for the quarter ended March 31, ~~2018,~~2023 we generated revenues of ~~$430.5~~over $2.7 billion and $521 million, ~~representing growth of 29.4% versus the same period in the prior year.~~

~~We generate revenues~~respectively, primarily from commissions on leasing and capital markets transactions, consulting and technology user fees, property and facility management fees, and mortgage origination and loan servicing fees.

Newmark was founded in New York City in 1929, with an emphasis on local investor/owner and occupier services and became known for having dedicated, knowledgeable, and client-focused advisors/intermediaries. Our acquisition by Cantor Fitzgerald's subsidiary BGC in 2011 and its subsequent investments in our business contributed to Newmark's dramatic growth. This growth ~~to date has been focused in North America. We have more~~continued following our 2017 IPO. Between 2011 and 2022, we increased our total revenues by over 1,000%, or a CAGR of 25%. This improvement was greater than ~~4,900 employees, including over 1,550 revenue-generating producers in over 120 offices in 90 cities. In addition, Newmark has licensed its name to 21~~any of our publicly traded commercial real estate ~~providers~~services peers listed in the U.S. or U.K. that ~~operate out~~reported revenues over this period.

Due to our long-term record of ~~37 offices~~growth, we are now a top commercial real estate services platform in ~~certain locations, where~~the United States with a rapidly expanding international footprint driven by the following since the Newmark ~~does not~~IPO:

•Leading Capital Markets Platform: Between 2017 and 2022, we more than doubled our investment sales volumes and increased our total debt volumes by 160%. In comparison, U.S. investment sales increased by 50% over the same period, while U.S. commercial and multifamily origination volumes grew by 34%, according to RCA and/or the MBA. We believe that our strong capital markets business provides us with extraordinary and valuable insight across the commercial real estate markets.

•Strong Increase in Predictable Revenue: We have ~~its own offices.~~successfully grown our more recurring businesses across “Management services, servicing fees and other”, which increased at a 19% CAGR, or from 24% of total revenues in 2017 to 34% in 2022.

•International Expansion: Our ~~partner, Knight Frank, operates out~~continued expansion into non-U.S. geographies through acquisitions, hiring, and other organic growth has resulted in our international revenues improving at an approximately 68% CAGR, or from less than 1% of ~~nearly 300 offices.~~

~~The discussion~~total revenues to over 7% in 2022. We intend to continue to opportunistically expand, with a particular focus on key markets in Europe, the Middle East, and Asia, while continuing to augment our presence in the Americas.

We aim to build the number one capital markets platform in the U.S., while expanding our investment sales and debt businesses internationally, which we expect to have a continued multiplier effects on our revenue streams across the Company, including in GSE/FHA origination and loan servicing, V&A, property management, our underwriting, asset management, and servicing platform, and leasing. We expect this virtuous circle to continue the above growth trends over time.

We believe our success has been driven by a unique combination of strategies and tactics, including:

•Expertise and Knowledge: Our comprehensive platform and in-depth knowledge of local, national, and global real estate markets, coupled with our strong understanding of commercial real estate as an asset class, ability to adapt to the evolving market and to shifts in the demand for our services, and deep relationships with users and owners empower us to supply an array of solutions for our clients.

•Attracting and Retaining Talent: Newmark’s strong culture of innovation, and collaboration has helped us hire and retain over 2,000 of the industry’s most talented professionals over the past decade, while encouraging their innovative and entrepreneurial natures and empowering them through our technology, data analytics, and infrastructure. We believe this makes them better at what they do while strengthening client relationships and enabling our professionals to deliver higher returns for them.

•Culture of Ownership: Our broad-based employee ownership, which was collectively 27% of our ~~financial results reflects only those~~fully diluted shares as of March 31, 2023, helps to drive talent to our platform, encourages an ownership mindset and shared long-term vision, and promotes cross-selling in an environment where our professionals work together within and across business lines to productively and creatively to solve our clients’ real estate needs. We also believe it serves to align the interests of employees and outside shareholders.

•Flat Organization: Our professionals and clients have open and consistent access to our senior leadership team, in what we believe is a flatter and more transparent organizational structure than our competitors. This cooperative culture aids our flexibility to collaborate across our business practices and markets to provide world-class client service.

•Revenue per Employee: Newmark’s focus is on higher revenue and higher margin businesses, ~~owned~~which helps make our professionals among the most productive in the industry. For example, based on the most recently available public disclosures, we believe Newmark’s total average revenue per employee in 2022 was more than 80% higher than the average for our U.S.-listed full-service publicly traded commercial real estate services competitors.

•Acquisitions: We have acquired over 55 companies since 2011 with attractive expected returns across what were then new and complementary business lines. Approximately 42% of our top-line improvement between 2011 and 2022 was due to acquisitions, and we have grown the revenues of these acquired companies by usan average of 49% since they became part of our platform.

Our exclusive FDIC mandate to sell Signature Bank’s $60 billion dollar loan portfolio, which was announced on April 3, 2023, exemplifies our strength in managing large and ~~does not include~~complex transactions. We believe that this portfolio represents the ~~results~~largest real estate loan sale in U.S. history and demonstrates the capacity and depth of Newmark. Loan advisory services are becoming increasingly significant for ~~Knight Frank or~~us. According to Trepp, almost $2.6 trillion dollars of U.S. commercial and multifamily loans mature over the next five years, with banks holding 55%.

During the quarter, we acquired the remainder of Spring11, increasing the size of our overall asset management and servicing portfolio to approximately $169 billion. Our V&A business recently launched its Bank Credit Risk Solutions practice, which provides risk assessment and stress testing services for ~~the independently owned offices that use~~banks, and is seeing a significant increase in activity. Loan advisory, asset management and servicing, and this new V&A practice should help offset some ~~variation~~ of the declines our investment sales and mortgage brokerage business may experience as a result of the recent decline in commercial real estate lending activity by banks and other lends. In addition, these businesses, together with investment sales, mortgage brokerage, and GSE/FHA origination, provide Newmark ~~name~~with tremendous insight into commercial and multifamily capital markets. We believe that this combination helps us to better advise our clients across property types and service lines.

Business Environment

As discussed in greater detail in “Economic Outlook in the United States” and “Market Statistics,” transaction and investment volumes in the commercial real estate industry declined significantly from record levels a year earlier due to the rapid rise in interest rates. We expect industry volumes to bounce back relatively quickly once interest rates have stabilized.

We believe that during stressed or challenging times, our clients value having a true partner like Newmark as an advisor. We believe our partnership and collaboration with our clients during uncertain times has helped develop long lasting relationships and gain market share over time. Despite slower industry transactional activity levels thus far in 2023 versus record levels in 2021 and the first half of 2022, we continue to see strong client dialogue and engagement as owners and occupiers seek our advice with respect to executing on their strategic and real-estate focused objectives.

For example, institutional investors have accumulated near record amounts of undeployed real-estate focused capital, with Preqin estimating that there was nearly $400 billion of investible dry powder held by global closed-end funds at real estate focused institutions as of March 31, 2023. This is in addition to the significant amount of real estate assets held by other types of investors and owners. According to the most recent data from RCA, the overall size of the professionally managed global real estate investment market was $11.4 trillion in 2021. In addition, nearly $2.6 trillion of commercial and multifamily debt needs to be refinanced between 2023 and 2027, according to the MBA and Trepp LLC, with approximately $1.4 trillion of this due in 2023 or 2024. Our capital markets clients have sought and we believe will seek our counsel with respect to addressing their related investing and financing needs.

We believe factors such as these will drive strong levels of capital markets activity over the intermediate and long-term time horizons, even as volumes remain muted in the near-term. We expect our professionals to not only provide our clients with innovative capital markets solutions, but to offer integrated services from our experts across leasing, V&A, property management, and other areas of Newmark that can aid our customers. By using a collaborative and multidisciplinary approach, we can provide our clients with extensive industry, and product expertise along regional, national, and increasingly global reach across a wide variety of property types.

Key Business Drivers

We continue to invest in the business by adding high profile and talented producers and other revenue-generating professionals. Historically, newly hired commercial real estate producers tend to achieve dramatically higher productivity in their ~~branding or marketing.~~

~~Over the past several~~second and third years with our company, although we ~~expanded~~incur related expenses immediately. As newly hired producers increase their production, our commission revenue and earnings growth accelerate, thus reflecting our operating leverage.

We are a leading capital markets ~~capabilities through the strategic addition of many prolific, accomplished capital markets brokers~~business in ~~key markets throughout~~ the United States. We have access to many of the world’s largest owners of commercial real estate, and we believe this will drive growth throughout the life cycle of each real estate asset by allowing us to provide best-in-class agency leasing and property management during the ownership period. We also ~~provide~~supply investment sales and arrange debt and equity financing to assist owners in maximizing the return on investment in each of their real estate assets. Specifically, with respect to multifamily assets, we are a leading GSE lender by loan origination volume and servicer with a servicing portfolio of ~~$58.8~~$70.1 billion as of March 31, ~~2018~~2023 (of which ~~approximately 6.2% relates to~~80.5% is higher margin primary servicing, 17.1% is limited servicing, and 2.4% is special servicing). This servicing portfolio provides a steady stream of income over the life of the serviced loans.

In addition to our traditional servicing business, we acquired the remainder of Spring11, which recently launched an asset management and servicing business with a focus on bank, fund, and commercial mortgage-backed securities clients. The addition of this new business dramatically increased the size of Newmark's limited servicing portfolio and overall servicing portfolio to $110.7 billion and $168.8 billion, respectively, as of quarter-end. We believe that for the industry, commercial and multifamily loan servicers earn 40 to 50 basis points for Fannie Mae loans, 8 to 10 basis points on Freddie Mac, approximately 15 basis points for FHA/Ginnie Mae, and 1 to 3 basis points for special and/or primary limited servicing. Spring11's limited servicing portfolio currently earns closer to the low end of the latter range, but is targeting higher fees over time as it adds more services.

With respect to our overall business, our near-term goals include becoming number one in capital markets in the United States. This is partly because our investment sales and debt businesses have ~~also begun~~historically had a ~~dramatic expansion~~multiplier effect that drives outsized growth across many of our ~~valuation and appraisal business from which we expect to see significant growth, particularly in conjunction with our increasingly robust~~other businesses. When overall capital markets ~~platform.~~

~~We continue to invest~~activity rebounds, we believe that our market share, revenues, and earnings can therefore outperform the industry across our suite of services. While the macroeconomic environment may be challenging in the ~~business~~short term, we remain excited about our market position and our future. We are also focused on increasing the percentage of our total revenues from our recurring and/or predictable businesses, such as servicing, V&A, GCS, and property management, as well as our flexible workspace platform. Our goals also include increasing cross-selling opportunities with and between many of these businesses and our capital markets and leasing businesses. We expect this to create a virtuous circle that will produce growth trends over time.

Economic Outlook in the United States

Following a 2.8% contraction in 2020, U.S. gross domestic product expanded by ~~adding dozens~~5.9% and 2.1%, respectively, in 2021 and 2022, according to the U.S. Department of Commerce. According to the most recent estimates from the same source, U.S. GDP expanded at annualized rates of 2.6% and 1.1%, respectively, in the fourth quarter of 2022 and first quarter of 2023. The most recent period's GDP growth was driven by various factors, including increases in consumer spending, exports, federal government spending, state and local government spending, and nonresidential fixed investment that were partly offset by decreases in private inventory investment and residential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased. The current consensus is that U.S. GDP will remain relatively flat in 2023, grow slowly in 2024, and then resume growth more in-line with pre-pandemic levels thereafter. For example, as of April 30, 2023, the Bloomberg consensus of economists was for U.S. GDP to expand (contract) at respective annualized rates of 0.3%, (0.6)%, and (0.3)% in the second through fourth quarters of 2023. The consensus is for GDP to grow by 1.2% for all of 2023, and then by 0.8% in 2024 and 2.0% in 2025. For context, over the ten years ended December 31, 2019, U.S. real GDP grew at an average of almost 2.3% per year, measured in chain linked 2012 dollars.

According to the U.S. Bureau of Labor Statistics, the monthly average of non-farm payroll employment increased by a seasonally adjusted monthly average of 606 thousand, net, during 2021, which was the highest such figure since record keeping began. Based the same source, strong job growth continued in 2022, with average monthly gains averaging 399 thousand on the same basis. Their revised estimate is that 330 thousand jobs were created in the first quarter of 2023. For context, this seasonally adjusted monthly figure averaged 141 thousand over the ten years ending December 31, 2019. The U.S. unemployment rate (based on U3) held relatively steady at 3.5% in March 2023, compared with 3.9% in December 2021 and a high ~~profile~~of 14.8% in April of 2020, and ~~talented brokers~~thus ended the quarter at the same rate as in February 2020. In comparison, the last time the U.S. unemployment rate was near these low levels was 1969, when unemployment reached 3.4%.

The ten-year Treasury yield increased by 113 basis points to approximately 3.5% as of March 31, 2023, compared with a year-earlier. As of year end 2022, ten-year Treasury yields still remained below their 50-year average of approximately 6.0%, despite the recent increase. On September 22, 2023 and November 2, 2022, the FOMC announced two separate increases to the upper bound of their target range for the federal funds rate of 75 basis points each, in order to curb inflation. The FOMC increased the upper bound by another 50 basis points, 25 basis points, and 25 basis points, respectively, in December of 2022, February of 2023, and March 2023.

The FOMC said that it may further increase the target range based on subsequent data in order to return annual inflation to its long-term goal of 2% over time. This increase in inflation is due in part to tight labor market conditions as well as to other ~~revenue-generating professionals. Historically, newly hired~~factors, such as continued supply chain issues related to the pandemic as well as higher commodity prices due largely to the Ukraine-Russia conflict. The FOMC has previously stated that it plans to continue reducing the $8.5 trillion portfolio of securities it holds (as of May 3, 2023), including long-term agency mortgage-backed securities and U.S. Treasuries. These securities were purchased as part of the Federal Reserve's quantitative easing program designed to hold down long-term interest rates, and the FOMC previously indicated that a maximum of $60 billion in Treasury purchases and $35 billion in mortgage-backed securities purchases would be allowed to roll off, phased in over three months starting June 1, 2022. Although the Federal Reserve's balance sheet has increased since the beginning of March 2023 due to its emergency loans to banks as a result of the recent failures of First Republic Bank, Silicon Valley Bank and Signature Bank, the latest projections from the New York Federal Reserve Bank show the central bank’s holdings falling to $6 trillion by 2025.

Economists generally expect long-term U.S. interest rates to stabilize or decline slightly over the next few quarters versus 3.5% as of the end of the first quarter of 2023, but to remain below the long-term historical averages for the foreseeable future (as discussed above). For example, as of April 30, 2023, the Bloomberg consensus was for the ten-year Treasury yield to be approximately 3.6%, 3.5%, 3.4%, and 3.3% by the ends of the second quarter of 2023, the third quarter of 2023, the fourth quarter of 2023, and calendar year 2024, respectively. While short-term yields are expected to be considerably above where they were compared with low levels seen for most of the period from the end of 2008 through early 2022, they are expected to stabilize and gradually fall from more recent levels. While the upper bound of the Fed Funds Target rate averaged 0.64% from December 31, 2008 through February 28, 2022, it was 5.00% as of March 31, 2023. The Bloomberg consensus is for this Target rate to be 5.25%, 5.20%, 5.10%, and 3.60%, respectively, by the ends of the second quarter of 2023, the third quarter of 2023,

the fourth quarter of 2023, and calendar year 2024. Following the most recent FOMC rate increase and the release of subsequent economic data, the Treasury futures market indicated that traders expect similar or somewhat lower short term rates over the near term. As of May 7, 2023, CME Fed Fund Futures implied rates of approximately 5.1% after the June 14, 2023 FOMC meeting, gradually falling to 4.1% by the January 31, 2024 meeting. For additional context, the upper bound of the Fed Funds Target rate averaged 4.91% and 3.11% over the 50 and 25 years ended December 31, 2022, respectively.

Market Statistics

Commercial real estate capital markets transactions involving financing generally utilize medium- or long-term debt, and the interest rates for such debt tend to correlate with movements in benchmark rates with similar tenors, including U.S. Treasuries. Such benchmark rates can be meaningfully impacted by movements in key short-term rates, such as the Fed Funds Target rate. Sudden increases in short term interest rates can therefore have pronounced effects on the commercial mortgage origination and investment sales volumes. In 2022, global benchmark interest rates rose at the fastest pace since at least the early 1990s, according to Fitch, which led to challenging market conditions across commercial real estate ~~brokers tend to achieve dramatically higher productivity in their second~~capital markets for Newmark and ~~third years with our company, although we incur related expenses immediately. As our newly hired brokers increase their production, we expect our commission revenue~~the industry. In addition, volumes were, and earnings growth to strongly accelerate, thus reflecting our operating leverage. We expect our overall profitability to increase as we increase the size and scale of our business. Our pre-tax margins arelikely will be, impacted by the mix of revenues generated. For example, Gains from mortgage banking activities/originations, net, which includes revenues related to commercial mortgage origination, tends to have higher pre-tax margins than Newmarkrecent increase in interest rate and credit spread volatility, the expected pullback in real estate lending activity as a ~~whole.~~response to recent bank failures, as well as the gap between commercial real estate buyer and seller expectations.

According to preliminary estimates from CoStar Realty Information, Inc., value-weighted prices for U.S. commercial real estate declined by 5.2% over the twelve months ended March 31, 2023. This was the third consecutive quarterly slowdown as measured by this index, with land and industrial prices holding up better than other property types. Separately, RCA currently estimates that first quarter 2023 U.S. investment sales declined by 56% year-on-year. In ~~addition, capital markets, which~~

~~includes~~comparison, Newmark's quarterly investment sales ~~commercial mortgage broking,~~volumes decreased by 61%. According to data from RCA, Newmark's average investment sales transaction size was approximately 45% larger than the weighted average of brokered U.S. deals in 2022. We believe that larger deal sizes are more likely to require debt financing, and ~~other real estate-related financial services, generally has larger transactions~~ that ~~occur with less frequency and~~such financing became more ~~seasonality when~~difficult given the recent sharp rise in interest rates. We have gained market share in U.S. investment sales, however, compared with leasing advisory. Capital markets transactions tend to have higher pre-tax margins than leasing advisory transactions, while leasing advisory revenues are generally more predictable than revenues from capital markets. Property and facilities management, along with certain of our other Global Corporate Services (“GCS”) products, generally havebefore the most predictable and steady revenues, although pre-tax earnings margins for property and facilities management are at the lower end of those for our business as a whole. When management services clients agree to give us exclusive rights to provide real estate services for their facilities or properties, it is for an extended period of time, which provides us with stable and foreseeable sources of revenues. Newmark’s revenues are balanced between businesses that are relatively less predictable and contractual sources that are very predictable. Approximately 42% of our revenues and other income forpandemic. Our U.S. investment sales volumes were up by approximately 18% over the trailing twelve months ended March 31, ~~2018~~2023 versus fiscal year 2019, while RCA’s U.S. volumes increased by 6% over the same timeframe.

Newmark's total debt volumes were ~~generated~~down by our most predictable and recurring sources, including agency leasing, valuation, GCS, management services, income related to the receipt of Nasdaq shares, and loan servicing. Another approximately 23% was generated by our moderately recurring tenant representation leasing business. The remaining 35% of revenues and other income was generated by our more transactional investment sales, mortgage broking, and GSE lending platforms.

~~Berkeley Point Acquisition~~

On July 18, 2017, BGC announced that it agreed to acquire Berkeley Point Financial LLC and its subsidiary (together referred to as “Berkeley Point” or “BPF”) from an affiliate of Cantor Fitzgerald, L.P. (“Cantor”). This affiliate of Cantor had acquired Berkeley Point on April 10, 2014. Berkeley Point is a leading commercial real estate finance company focused on the origination and sale of multifamily and other commercial real estate loans through government-sponsored and government-funded loan programs, as well us the servicing of commercial real estate loans, including those it originates. The acquisition of Berkeley Point was completed on September 8, 2017 (the “Berkeley Point Acquisition”). The total consideration for the Berkeley Point Acquisition was $875 million, subject to certain adjustments at closing.

~~On December 13, 2017, in connection with the Separation~~ ~~(as defined below), the assets and liabilities of BPF were transferred to Newmark. This transaction has been determined to be a combination of entities under common control that resulted in a change~~67.8% in the reporting entity. Accordingly, our financial results have been recast to include the financial results of BPF in the current and prior periods as if BPF had always been consolidated. We believe that the addition of Berkeley Point will significantly increase the scale and scope of our business and generate substantial revenue synergies.

~~Initial Public Offering~~

On December 13, 2017, prior to the closing of Newmark’s initial public offering (the “IPO”); BGC, BGC Holdings, L.P. (“BGC Holdings”), BGC Partners, L.P. (“BGC U.S. OpCo”), Newmark, Newmark Holdings, L.P. (“Newmark Holdings”), Newmark Partners, L.P. (“Newmark OpCo”) and, solely for the provisions listed therein, Cantor and BGC Global Holdings, L.P. (“BGC Global OpCo”) entered into a Separation and Distribution Agreement (the “Separation and Distribution Agreement”). The Separation and Distribution Agreement sets forth the agreements among BGC, Cantor, Newmark and their respective subsidiaries regarding, among other things:

the principal corporate transactions pursuant to which BGC, BGC Holdings and BGC U.S. OpCo and their respective subsidiaries (other than the Newmark Group (defined below), the “BGC Group”) transferred to Newmark, Newmark Holdings and Newmark OpCo and their respective subsidiaries (the “Newmark Group”) the assets and liabilities of the BGC Group relating to BGC’s Real Estate Services business (the “Separation”);

~~the proportional distribution of interests in Newmark Holdings to holders of interests in BGC Holdings;~~

~~the IPO;~~

~~the assumption and repayment of indebtedness by the BGC Group and the Newmark Group, as further described below;~~

the pro rata distribution of the shares of Newmark Class A common stock and the shares of Newmark Class B common stock held by BGC (the “Distribution” or the “Spin-off’), pursuant to which shares of Newmark Class A common stock held by BGC would be distributed to the holders of shares of Class A common stock of BGC and shares of Newmark Class B Common Stock held by BGC would be distributed to the holders of shares of Class B common stock of BGC (which are currently Cantor and another entity controlled by Howard W. Lutnick), which distribution is intended to qualify as generally tax-free for U.S. federal income tax purposes; provided that the determination of whether, when and how to proceed with the Distribution shall be entirely within the discretion of BGC; and

~~other agreements governing the relationship between BGC, Newmark and Cantor.~~

~~In connection with the Separation and the IPO, on December 13, 2017, the applicable parties entered into the following additional agreements:~~

~~an Amended and Restated Agreement of Limited Partnership of Newmark Holdings, dated as of December 13, 2017;~~

~~an Amended and Restated Agreement of Limited Partnership of Newmark OpCo, dated as of December 13, 2017, as amended;~~

~~a Second Amended and Restated Agreement of Limited Partnership of BGC U.S. OpCo, dated as of December 13, 2017;~~

~~a Second Amended and Restated Agreement of Limited Partnership of BGC Global OpCo, dated as of December 13, 2017;~~

~~a Registration Rights Agreement, dated as of December 13, 2017, by and among Cantor, BGC and Newmark;~~

~~a Transition Services Agreement, dated as of December 13, 2017, by and between BGC and Newmark;~~

~~a Tax Matters Agreement, dated as of December 13,2017, by and among BGC, BGC Holdings, BGC U.S. OpCo, Newmark, Newmark Holdings and Newmark OpCo;~~

~~an Amended and Restated Tax Receivable Agreement, dated as of December 13, 2017, by and between Cantor and BGC;~~

~~an Exchange Agreement, dated as of December 13, 2017, by and among Cantor, BGC and Newmark;~~

~~an Administrative Services Agreement, dated as of December 13, 2017, by and between Cantor and Newmark; and~~

~~a Tax Receivable Agreement, dated as of December 13, 2017, by and between Cantor and Newmark.~~

Immediately prior to the Separation, the limited partnership interests in Newmark Holdings were distributed to the holders of limited partnership interests in BGC Holdings, whereby each holder of BGC Holdings limited partnership interests at that time received a BGC Holdings limited partnership interest and a corresponding Newmark Holdings limited partnership interest, equal to a BGC Holdings limited partnership interest multiplied by one divided by 2.2 (the “contribution ratio”), divided by the ratio by which a Newmark Holdings limited partnership interest can be exchanged for a number of Newmark Class A common stock (the “exchange ratio.”) Initially, the exchange ratio equaled one, so that each Newmark Holdings limited partnership interest is exchangeable for one Newmark Class A common stock, however, the exchange ratio is subject to adjustment. For example, for reinvestment, acquisition or other purposes, Newmark has determined on a quarterly basis to distribute to its stockholders a smaller percentage than Newmark Holdings distributes to its equity holders (excluding tax distributions from Newmark Holdings) of cash that it received from Newmark OpCo. In such circumstances, the Separation and Distribution Agreement provides that the exchange ratio will be reduced to reflect the amount of additional cash retained by Newmark as a result of the distribution of such smaller percentage, after the payment of taxes.

On December 19, 2017, Newmark closed its IPO of 20 million shares of Newmark’s Class A common stock at a price to the public of $14.00 per share. A registration statement relating to these securities was filed with, and declared effective by, the U.S. Securities and Exchange Commission. In addition, Newmark granted the underwriters a 30-day option to purchase up to an additional 3 million shares of Newmark’s Class A common stock at the IPO price, less underwriting discounts and commissions (the “overallotment option”). Subsequent to the IPO, the underwriters exercised the overallotment option in full. Upon the closing of the overallotment option, which occurred on December 26, 2017, Newmark’s public stockholders owned approximately 9.8% of Newmark’s 234.2 million fully diluted shares outstanding. Newmark received aggregate net proceeds of $295.4 million from the IPO, after deducting underwriting discounts and commissions and estimated offering expenses.

Accordingly, our financial results reflect the agreements discussed above related to the IPO. In addition, since the IPO, we have improved the credit profile of Newmark. The combination of our lower long-term debt and higher total equity have improved our credit ratios with specific regard to debt to equity. Newmark intends to continue to benefit from these strengths and ~~pursue its own credit rating. We aim to obtain an investment grade rating to assist us in refinancing our $812.5 million of long-term debt owed to or guaranteed by BGC.~~

On March 7, 2018, BGC Partners and its operating subsidiaries purchased 16.6 million newly issued exchangeable limited partnership units (the “Newmark Units”) of Newmark Holdings for approximately $242.0 million (“BGC’s Investment in Newmark”). The price per Newmark Unit was based on the $14.57 closing price of Newmark’s Class A common stock on March 6, 2018 as

reported on the NASDAQ Global Select Market. These newly-issued Newmark Units are exchangeable, at BGC’s discretion, into either shares of Class A common stock or shares of Class B common stock of Newmark. BGC’s Investment in Newmark was made pursuant to an Investment Agreement, dated as of March 6, 2018, by and among BGC, BGC Holdings, BGC Partners, L.P., BGC Global Holdings, L.P., Newmark, Newmark Holdings and Newmark Partners, L.P. BGC’s Investment in Newmark and related transactions were approved by the Audit Committees and Boards of Directors of BGC and Newmark. BGC and its operating subsidiaries funded BGC’s Investment in Newmark using the proceeds of BGC’s CEO sales program. Newmark used the proceeds to repay the balance of the outstanding principal amount under its unsecured senior term loan credit agreement with Bank of America, N.A., as administrative agent, and a syndicate of lenders. In addition, upon the spin-off, these Newmark Units will be exchanged into Newmark Class A or Class B common stock, and will be included as part of the Newmark Distribution to holders of shares of BGC Class A or Class B common stock.

On March 19, 2018, Newmark and BGC Partners entered into an Amended and Restated Intercompany Credit Agreement (the “Intercompany Credit Agreement”) and on the same date Newmark borrowed $150.0 million from BGC pursuant to the facilities under the Intercompany Credit Agreement. The interest rate as of March 31, 2018 was LIBOR plus 3.25%, or 4.99%, which may be adjusted based on the higher of BGC’s or Newmark’s short-term borrowing rate then in effect at such time plus 100 basis points, or such other interest rate as may be mutually agreed between BGC and Newmark.. Newmark has transferred these proceeds to its restricted cash account pledged for the benefit of Fannie Mae. As of March 31, 2018, Newmark’s total net borrowings under the Intercompany Credit Agreement are $202.0 million.

BGC expects to pursue a distribution to its stockholders of all of the Class A shares common and Class B common shares of Newmark (collectively, the “Newmark common shares”) that BGC then owns in a manner that is intended to qualify as generally tax-free for U.S. federal income tax purposes (the “spin-off”). As currently contemplated, shares of Class A common stock of Newmark held by BGC would be distributed to the holders of shares of Class A common stock of BGC, and shares of Class B common stock of Newmark held by BGC would be distributed to that holders of shares of Class B common stock of BGC. Key steps that Newmark plans to take towards the tax-free spin-off include: first, Newmark intends to attain its own credit rating; and second, Newmark expects to repay or refinance its $812.5 million of long-term debt owed to or guaranteed by BGC. This is necessary for the spin-off to be tax free. Newmark’s management is planning to begin the process of pursuing its own credit rating now that BGC’s credit watch has been resolved.

~~Had the spin-off occurred immediately following the close of the first~~ quarter of 2018, the ratio of Newmark common shares to be distributed in respect of each BGC common share would have been approximately 0.4702. However, the exact ratio of Newmark common shares to be distributed in respect of each BGC common share in the spin-off will depend on, among other things, the number of BGC common shares outstanding and the number of Newmark common shares (including Newmark common shares underlying units of Newmark OpCo) owned by BGC as of the record date of the spin-off. The spin-off is subject to a number of conditions, and BGC may determine not to proceed with the spin-off if the BGC board of directors determines, in its sole discretion, that the spin-off is not in the best interest of BGC and its stockholders. Accordingly, the spin-off may not occur on the expected timeframe, or at all.

~~Nasdaq Transaction~~

On June 28, 2013, BGC sold certain assets of its on-the-run, electronic benchmark U.S. Treasury platform (“eSpeed”) to Nasdaq. The total consideration received in the transaction included an earn-out of up to 14,883,705 shares of Nasdaq common stock to be paid ratably over 15 years, provided that Nasdaq, as a whole, produces at least $25.0 million in consolidated gross revenues each year. The earn-out was excluded from the initial gain on the divestiture and is recognized in income as it is realized and earned when these contingent events have occurred, consistent with the accounting guidance for gain contingencies (the “Nasdaq Earn-out”). The remaining rights under the Nasdaq Earn-out were transferred to Newmark on September 28, 2017. Any Nasdaq shares that were received by BGC prior to September 28, 2017 were not transferred to Newmark.

In connection with the Nasdaq Earn-out, Newmark received 992,247 shares during the year ended December 31, 2017. Newmark will receive a remaining earn-out of up to 9,922,470 shares of Nasdaq common stock ratably over the next approximately 10 years, provided that Nasdaq, as a whole, produces at least $25.0 million in gross revenues each year. In November of 2017, Newmark sold 242,247 shares of the 992,247 Nasdaq shares received. During the first quarter of 2018, Newmark sold an additional 650,000 Nasdaq shares.

~~Growth Drivers~~

The key drivers of revenue growth for U.S. commercial real estate services companies include the overall health of the U.S. economy, the institutional ownership of commercial real estate as an investible asset class and the ability to attract and retain talent. In addition, in our capital markets business growth is driven by the availability of credit to purchasers of and investors in commercial real estate. In our multifamily business, delayed marriages, an aging population and immigration to the U.S. are increasing a pressing need for new apartments, with an estimated 4.6 million needed by 2030, according to a recent study commissioned by the National Multifamily Housing Council and the National Apartment Association. This should continue to drive investment sales, GSE multifamily lending and other mortgage brokerage and growth in our servicing portfolio for the foreseeable future. Berkeley Point’s origination business is impacted by the lending caps imposed by the Federal Housing Finance Agency. As of March 31, 2018, the industry-wide caps are set at $70 billion, excluding loans exempt from the caps, such as loans in the affordable and underserved market segments, or that finance water and energy efficiency improvements. These excluded categories can make up a significant portion of the overall market. For example, in 2017, more than half of the loan production reported by Fannie Mae and Freddie Mac was excluded from the Federal Housing Finance Agency lending caps.

~~Economic Growth in the United States~~

The U.S. economy expanded by 2.3% during the first quarter of 2018, according to a preliminary estimate from the U.S. Department of Commerce. This growth compares with an increase of 1.2% during the first quarter of 2017. The consensus is for U.S. gross domestic product to expand by 2.5% and 2.1% in 2019 and 2020, respectively, according to a recent Bloomberg survey of economists. This moderate pace of growth should help keep interest rates and inflation low by historical standards.

~~The Bureau of Labor Statistics reported that employers added a monthly average of 202,000 net new payroll jobs during the first quarter of 2018, which was above~~versus the prior year period’s 177,000 and the seasonally adjusted average of 182,000 per month in 2017. Despite the return to pre-recession unemployment rates (4.1% as of March 2018), the number of long-term unemployed and the labor force participation rate (the latter of which is near a 39-year low) remained disappointing for many economists, but these indicators are less important to commercial real estate than job creation.

~~The 10-year Treasury yield ended the first quarter of 2018 at 2.74%,~~period. However, our total debt volumes were up ~~35 basis points from the year-earlier date. In addition, 10-year Treasury yields have remained well below their 50-year average of~~by approximately ~~6.32%, in large part due to market expectations that the Federal Open Market Committee (“FOMC”) will only moderately raise the federal funds rate~~23% over the next few years. Interest rates are also relatively low due to even lower or negative benchmark government interest rates in much of the rest of the developed world, which makes U.S. government bonds relatively more attractive.

The combination of moderate economic growth and low interest rates that has been in place since the recession ended has been a powerful stimulus for commercial real estate, delivering steady absorption of space and strong investor demand for the yields available through both direct ownership of assets and publicly traded funds. Steady economic growth and low interest rates have helped push vacancy rates down for the office, apartment, retail and industrial markets over the current economic expansion, now in its ninth year. Construction activity, though it is ramping up, remains low compared with prior expansion cycles and low relative to demand and absorption, which means that property leasing markets continue to tighten. Overall, demand for commercial real estate remains strong. While the vast majority of new supply is going to just the top 10-15 markets, there is healthy demand among investors for well positioned suburban value add assets in secondary and tertiary markets, according to NKF Research. Asking rental rates posted moderate gains across all property types during 2017.

~~The following key trends drove the commercial real estate market during the first three~~trailing twelve months ~~of 2018:~~

~~Sustained U.S. employment growth and rising home values have fueled the economy and generated demand for commercial real estate space across all major sectors;~~

~~Technology, professional and business services and healthcare continued to power demand for office space, although technology occupiers have turned more cautious;~~

~~Oil prices rose sharply in the first quarter of 2018, but Houston and other energy-focused office markets continued to deal with excess vacancies and generous lease concessions;~~

E-commerce and supply-chain optimization pushed 2017 industrial absorption to 31 consecutive quarters of positive net absorption, creating tenant and owner-user demand for warehouses and distribution centers;

~~Apartment rents benefited from sustained job growth, and underlying demographic trends towards urban living among two key age groups: millennials and baby boomers; and~~

~~Continued corporate employment growth, combined with increased leisure travel, generated demand for hotel room-nights.~~

The recently enacted U.S. tax cuts could lift growth, along with leasing activity. Rising inflation and interest rates, a byproduct of faster growth, could deliver a mixed outcome: Rising interest rates could pressure cap rates, but stronger rent growth and sustained investor demand could support property values.

~~Market Statistics~~

Although overall industry metrics are not necessarily correlated to our, they do provide some indication of the general direction of the business. The U.S commercial property market continues to display strength as commercial property prices continue to rise, as per CoStar. According to RCA, U.S. commercial real estate sales volumes increased by 5.9% year-over-year, bolstered by strong performance in key primary markets. U.S. commercial real estate activity is growing again, after a decline in activity in the beginning of 2017 related to the election and general political uncertainty. Institutional-grade U.S. commercial real estate capitalization rates have not moved by more than 10 basis points, even in this period of interest rate uncertainty. On average, capitalization rates offered a 297 basis point premium over the 10-year Treasury yield in the first quarter, well above the pre-recession low of 165 basis points. If the U.S. economy expands at the moderate pace envisioned by many economists and the Federal Reserve, we would expect this to fuel the continued expansion of demand for commercial real estate. The spread between local 10-year benchmark government bonds and U.S. cap rates was even wider with respect to major countries including Japan, Canada, Germany, the U.K. and France during the quarter. This should continue to make U.S. commercial real estate a relatively attractive investment for non-U.S. investors.

~~According to RCA, prices for commercial real estate were down by 6.3% quarter-over-quarter for the quarter~~ ended March 31, 2018. During the quarter, the dollar volume of significant property sales totaled approximately $109 billion in the U.S., representing one of the strongest starts in the past 10 years. According to a May 2018 MBA forecast, originations of commercial/multifamily loans of all types were estimated to be down 2% year-over-year in terms of dollar volume for the2023 versus fiscal year ending December 31, 2018. In comparison, our real estate capital markets businesses, which includes investment sales and commercial mortgage brokerage, increased its revenues by 31% year-over-year, primarily due to organic growth. Our2019. Newmark’s loan origination volumes are driven more by the GSE multifamily financing volumes than the activity level of the overall commercial mortgage market. ~~During~~Overall industry GSE multifamily origination volume decreased by nearly 47% in the ~~three~~first quarter of 2023 compared with a year earlier, per the GSEs. In comparison, Newmark's GSE/FHA origination volumes declined by 46.1% over the same period, while our total debt volumes in multifamily were down by 71.7%. Certain GSE multifamily volume statistics for the industry are based on when loans are sold and/or securitized, and typically lag those reported by the MBA or by Newmark and its competitors by 30 to 45 days.

Although neither Trepp LLC nor the MBA have released first quarter 2023 origination figures, we believe that we have gained significant market share in commercial real estate debt since prior to the pandemic. According to data or estimates from RCA, the MBA, and Newmark Research, U.S. debt originations have grown by 42% and U.S. investment sales volumes have increased 12% between 2015 and the trailing twelve months ended March 31, ~~2018, GSE~~2023. Over the same timeframe, Newmark expanded its total debt volumes by nearly 300% and grew its investment sales volumes by 212%.

Given the recent increase in interest rates and recent pullback in lending by banks discussed above, we anticipate overall U.S. investment sales and mortgage brokerage volumes to decline year-on-year until at least the fourth quarter of 2023. For context, the MBA recently estimated that commercial and multifamily ~~volumes decreased 19% year-over-year. In comparison, our loan origination volume decreased~~lending will decline by ~~14% and our revenues from mortgage banking activities decreased by 14%.~~

According to NKF Research, the combined average vacancy rate for office, industrial, and retail properties ended the first quarter at 8.1%, down from 8.2% a year earlier, only a modest 10 basis point drop over the past 12 months. Rents for all property types in the U.S. ~~continued to improve slightly across all three sectors. NKF Research estimates that overall U.S. leasing activity~~by 15% in ~~quarter grew moderately from a year ago. In comparison, revenues from our leasing and other commissions business increased~~2023 but increase by ~~24.9%.~~

~~Regulatory Environment~~

~~See “Regulatory Requirements” herein for information related to our regulatory environment.~~

~~Liquidity~~

~~See “Financial Position, Liquidity and Capital Resources” herein for information related to our liquidity and capital resources.~~

~~Hiring and Acquisitions~~

~~Key drivers of our revenue are producer headcount and average revenue per producer. We~~32% in 2024. However, we believe that ~~our strong technology platform and unique partnership structure have enabled us~~as interest rates begin to ~~use both acquisitions and recruiting~~stabilize and/or fall, industry capital markets activity will begin to ~~profitably increase our front-office revenue per producer.~~

rebound, likely beginning in the fourth quarter of 2023. We ~~have invested significantly to capitalize on~~also think that the current ~~business~~challenging market conditions have created an opportunity for Newmark to solidify its position as the platform of choice for many of the real estate industry’s top professionals. When activity rebounds, we expect our market share, revenues, and earnings to outperform the industry. While the macroeconomic environment through acquisitions, technology spending and the hiring of new brokers, salespeople, managers and other front-office personnel. The business climate for these acquisitions has been competitive, and it is expected that these conditions will persist for the foreseeable future. We have been able to attract businesses and brokers, salespeople, managers and other front-office personnel to our platform as we believe they recognize that we have the scale, technology, experience and expertise to succeedmay be challenging in the ~~current business environment. See “Business—Our History” in Part I, Item 1 of~~short-term, we remain excited about our ~~Annual Report on Form 10-K for a description of~~market position and our ~~acquisitions since 2012.~~

As of March 31, 2018, our producer headcount was over 1,550 brokers and salespeople. For the three months ended March 31, 2018, average revenue generated per producer increased by 15% for the same period from a year ago to approximately $192,000. This growth can be attributed to increased sales and leasing activity and to the ramp up of brokers we hired over the past year.

future.

On September 8, 2017, we completed our acquisition of Berkeley Point. Berkeley Point is principally engaged in the origination, funding, sale and servicing of multifamily and commercial mortgage loans.

Financial Overview

Revenues

We derive generally revenues from the following four sources:

•Management Services, Servicing Fees and Other. We provide commercial services to tenants and landlords. In this business, we provide property and facilities management services along with project management, valuation and advisory services and other consulting services, as well as technology, to customers who may also utilize our

commercial real estate brokerage services, and flexible workspace solutions. Servicing fees are derived from the servicing of loans originated by us as well as loans originated by third parties.

•Leasing and Other Commissions. We offer a diverse range of commercial real estate brokerage and advisory services, including tenant and agency representation, which includes comprehensive lease negotiations, strategic planning, site selection, lease auditing, ~~appraisal services~~ and other financial and market analysis.

~~Capital Markets~~•Investment Sales. Our real estate capital markets business specializes in the arrangement of acquisitions and dispositions of commercial properties, as well as providing other financial services, including the arrangement of debt and equity financing, and loan sale advisory.

~~Gains from~~•Commercial Mortgage ~~Banking Activities/Originations, Net.~~ ~~Gains~~Origination, net. We offer services and products to facilitate debt financing for our clients and customers. Commercial mortgage origination revenue is comprised of commissions generated from mortgage ~~banking activities/~~brokerage and debt and equity placement services, as well as the origination ~~are~~fees and premiums derived from the origination of GSE/FHA loans with borrowers and the sale of those loans to investors.

Our commercial mortgage origination revenue also includes the revenue recognized for the fair value of expected net future cash flows from servicing recognized at commitment.

~~Management Services, Servicing Fees and Other~~. We provide commercial services to tenants and landlords in several key U.S. markets. In this business, we provide property and facilities management services along with project management and other consulting services, as well as technology, to customers who may also utilize our commercial real estate brokerage services. Servicing fees are derived from the servicing of loans originated by us as well as loans originated by third parties.

Fees are generally earned when a lease is ~~signed in leasing.~~signed. In many cases, landlords are responsible for paying the fees. In capital markets, fees are earned and recognized when the sale of a property closes, and title passes from seller to buyer for investment sales and when debt or equity is funded to a vehicle for debt and equity transactions. ~~Gains from mortgage banking activities/origination,~~Loan originations related fees and sales premiums, net, are recognized when a derivative asset is recorded upon the commitment to originate a loan with a borrower and sell the loan to an investor. The derivative is recorded at fair value and includes loan origination fees, sales premiums and the estimated fair value of the expected net servicing cash flows. ~~Gains from mortgage banking activities/origination,~~Loan originations related fees and sales premiums, net, are recognized net of related fees and commissions to affiliates or third-party brokers. For loans we broker, revenues are recognized when the loan is closed.

Net income (loss) attributable to noncontrolling interests decreased by $6.4 million, to $(6.0) million for the ~~change in Newmark’s corporate structure related~~three months ended March 31, 2023 as compared to the ~~Separation and IPO.~~

~~QUARTERLY RESULTS OF OPERATIONS~~

~~The following table sets forth our unaudited quarterly results~~three months ended March 31, 2022, due to allocation of ~~operations for~~ the indicated periods (in thousands). Results of any period are not necessarily indicative of results for a full year and may, in certain periods, be affected by seasonal fluctuations in our business. Certain reclassifications have been madeloss to ~~prior period amounts to conform to the current period’s presentation.~~

March 31,
2018²

December 31,
2017²

September 30,
2017^1,2

June 30,
2017¹

March 31,
2017¹

December 31,
2016¹

September 30,
2016¹

June 30,
2016¹

Revenues:

Commissions

$
260,735

$
312,992

$
256,918

$
239,848

$
204,958

$
245,348

$
230,204

$
206,361

Gains from mortgage banking
   activities/origination, net

38,914

41,737

45,455

73,546

45,262

54,378

65,378

43,597

Management services, servicing fees
   and other

130,811

105,847

95,848

91,677

82,362

87,860

77,046

70,178

Total revenues

430,460

460,576

398,221

405,071

332,582

387,586

372,628

320,136

Expenses:

Compensation and employee benefits

252,695

295,577

270,943

238,518

215,145

231,910

239,690

203,432

Allocations of net income and grant of
   exchangeability to limited
   partnership units

25,809

61,940

18,217

23,851

10,649

32,315

16,568

10,484

Total compensation and
   employee benefits

278,504

357,517

289,160

262,369

225,794

264,225

256,258

213,916

Operating, administrative and other

75,427

60,064

52,313

59,404

47,382

53,115

44,546

44,092

Fees to related parties

6,894

6,531

5,355

4,167

4,718

2,348

5,821

4,770

Depreciation and amortization

22,513

24,438

29,922

23,218

18,237

13,841

20,918

17,090

Total operating expenses

383,338

448,550

376,750

349,158

296,131

333,529

327,543

279,868

Other income (losses), net:

Other income (loss)

5,707

(2,029
)

77,264

(715
)

(593
)

(684
)

17,849

(813
)
Total other income (losses), net

5,707

(2,029
)

77,264

(715
)

(593
)

(684
)

17,849

(813
)
Income (loss) from operations

52,829

9,997

98,735

55,198

35,858

53,373

62,934

39,455

Interest (Expense) Income, net

(13,409
)

(1,453
)

1,724

1,381

1,134

1,021

1,009

1,010

Income before income taxes and
   noncontrolling interests

39,420

8,544

100,459

56,579

36,992

54,394

63,943

40,465

Provision (benefit) for income taxes

6,933

54,082

1,989

1,422

(15
)

2,010

1,125

324

Consolidated net income (loss)

32,487

(45,538
)

98,470

55,157

37,007

52,384

62,818

40,141

Less: Net income (loss) attributable to
   noncontrolling interest

12,490

633

(337
)

12

296

(69
)

(556
)

(190
)
Net income (loss) available to
   common stockholders

$
19,997

$
(46,171
)

$
98,807

$
55,145

$
36,711

$
52,453

$
63,374

$
40,331

1	Financial results have been retrospectively adjusted to include the financial results of Berkeley Point. See “Berkeley Point Acquisition and Related Transactions” herein for a summary of the impact on Newmark’s Quarterly and Annual Results of Operations.

noncontrolling interests.

2	~~Amounts include the gains related to the Nasdaq Earn-out associated with the Nasdaq transaction recorded in Other income (loss).~~

Financial Position, Liquidity and Capital Resources

Overview

The primary source of liquidity for our business is the cash on our balance sheet, cash flow provided by ~~our operations. Prior~~operations, and the $600.0 million revolving Credit Facility. In addition, the Company has the option to ~~the Separation and IPO, our cash was transferred to BGC Partners to support~~redeem its overall cash management strategy. Transfers of cash to and from BGC Partners’ cash management system have been reflected in related party receivables and payables in the historical unaudited condensed consolidated balance sheets and in payments to and borrowings from related parties in the financing section of the unaudited condensed consolidated statements of cash flows. Cash and equity issued for acquisitions have been reflected in BGC Partners’ net$94.9 million investment in the ~~historical unaudited condensed consolidated balance sheets and statement of changes in invested equity.~~

~~Following the completion~~Real Estate LP joint venture, after July 1, 2023, with proceeds to be received within 20 days of the Separation and IPO, we maintain separate cash management and financing functions for operations. Additionally, our capital structure, long-term commitments and sources of liquidity will change significantly from our historical capital structure, long-term commitments and sources of liquidity.

redemption notice.

In connection with the Separation, we assumed from BGC Partners the Term Loan and the Converted Term Loan. Newmark OpCo also assumed from BGC U.S. OpCo the BGC Notes. We contributed all of the net proceeds of the IPO to Newmark OpCo in exchange for a number of units representing Newmark OpCo limited partnership interests equal to the number of shares issued by us in the IPO. Newmark OpCo used all of such net proceeds to partially repay intercompany indebtedness owed by Newmark OpCo to us in respect of the Term Loan (which intercompany indebtedness was originally issued by BGC U.S. OpCo and will be assumed by Newmark OpCo in connection with the separation). On March 7, 2018, BGC, including through its subsidiary invested $242.0 million in Newmark limited partnership interests. Newmark has used the proceeds from this transaction plus all of the repayment from Newmark OpCo, and cash on hand to repay in full the $270.7 million remaining balance of the Term Loan. Following the IPO, in the event that any member of Newmark receives net proceeds from the incurrence of indebtedness for borrowed money or an equity issuance (in each case subject to certain exceptions), Newmark OpCo will be obligated to use such net proceeds to repay the remaining intercompany indebtedness owed by Newmark OpCo to us in respect of the Converted Term Loan (which in turn we will use to repay the Converted Term Loan). Following the repayment of the remaining amount outstanding on the Converted Term Loan, in the event that any member of the Newmark Group receives net proceeds from the incurrence of indebtedness for borrowed money (subject to certain exceptions), Newmark OpCo will be obligated to use such net proceeds to repay the BGC Notes. In addition, we will be obligated to repay any remaining amounts under the BGC Notes prior to the distribution. We intend to replace the financing provided by the Converted Term Loan and BGC Notes that remain outstanding with new senior term loans (which may be secured or unsecured), new senior unsecured notes, other long- or short-term financing or a combination thereof.

Our future capital requirements will depend on many factors, including our ~~rate of sales~~ growth, the expansion of our sales and marketing activities, our expansion into other markets and our results of operations. To the extent that existing cash, cash from operations and credit facilities ~~(including the Intercompany Credit Agreement with BGC)~~ are insufficient to fund our future activities, we may need to raise additional funds through public equity or debt financing.

~~Balance Sheet~~

As of March 31, 2023, our debt consisted of our 6.125% Senior Notes with a carrying amount of $548.4 million and a $225.0 million outstanding balance on the Credit Facility.

Financial Position

Total assets were $4.4 billion at March 31, ~~2018 were $3,057.1 million as compared to $2,273.0 million~~2023 and $3.9 billion at December 31, ~~2017.~~ 2022.

Total liabilities were $2.9 billion at March 31, ~~2018~~2023 and December 31, 2017 were $2,503.5 million and $2,029.6 million, respectively. $603.0 million of the increase in total assets, and $590.0 million of the increase in total liabilities can be attributed to loans held for sale and related borrowings from our warehouse facilities. Additionally, the Company’s long-term debt was reduced by $270.7 million, its current portion of payables to related parties increased by $163.0 million and its restricted cash increased by $191.6 million.

~~Liquidity~~

Prior to December 13, 2017, the date of the Separation, BGC Partners funded our growth through contributing acquired companies and related party payables. The related party payables are net of related party receivables which were generated from our earnings as BGC Partners sweeps our excess cash to manage treasury centrally. Additionally, prior to its acquisition by BGC, Berkeley Point and its parent company, Cantor Commercial Real Estate Company, L.P. (which we refer to as “CCRE”), loaned money to each other. In connection with the Separation and IPO, Newmark settled its intercompany payable to BGC. Subsequent to the IPO, Newmark’s total net borrowings under the credit facility between BGC and Newmark were $202.0 million as of March 31, 2018, which are reflected as current portion of payables to related parties on the March 31, 2018 balance sheet. The total net payable to related parties at March 31, 2018 was $197.2 million as compared to a net payable$2.4 billion at December 31, ~~2017 of $34.2 million. Loans held for sale were financed from the warehouse notes payable, net at~~2022.

Liquidity

At March 31, ~~2018. Fees to related parties that are charged by BGC Partners~~2023, we had cash and ~~Cantor to Newmark are reflected as~~ cash ~~flows from operating activities in the unaudited condensed consolidated Statement~~equivalents of ~~Cash Flows for each period presented. For the three months ended March 31, 2018, these fees and charges totaled $6.9~~$210.7 million. Additionally, prior to the Berkeley Point Acquisition, Berkeley Point loaned excess cash to CCRE to fund CCRE’s lending business. These amounts are presented as investing activities on the Statement of Cash Flows for all periods presented. All other amounts sent to or from BGC Partners are reflected as cash flows from financing activities in the unaudited condensed consolidated Statement of Cash Flows for each period presented.

~~For the three months ended March 31, 2018, net cash used in operating activities was $590.4~~we have a $600.0 million and for the three months ended March 31, 2017, net cash provided by operating activities was $296.4 million. Cash flows from operating activities included $6.0 million of cash paid to BGC Partners, related to grant of exchangeability to limited partnership units for the three months ended March 31, 2017. As of the Separation and IPO, these charges became non-cash in nature to the extent they relate to limited partnership units in Newmark, and therefore are excluded from cash outflows from operating activities.committed senior unsecured revolving Credit Facility. We expect to generate cash flows from operations to fund our business ~~operations~~ and ~~growth strategy~~ to meet our short-term liquidity requirements, which we define as those arising within the next 12twelve months. ~~We also expect that proceeds from new debt financing combined with~~On November 15, 2023, the 6.125% Senior Notes will mature. The Company intends to either refinance these notes prior to maturity or use cash on hand, cash flows from operations, and our Credit Facility to settle such amounts.

Debt

Debt consisted of the following (in thousands):


	March 31, 2023		December 31, 2022
	2023		2022
6.125% Senior Notes	$	548,434	$	547,784
Credit Facility	225,000		—
Total	$	773,434	$	547,784

6.125% Senior Notes

On November 2, 2018, Newmark announced the pricing of an offering of $550.0 million aggregate principal amount of 6.125% Senior Notes due 2023, which closed on November 6, 2018. The 6.125% Senior Notes were offered and sold in a private offering exempt from the registration requirements under the Securities Act. The 6.125% Senior Notes are general senior unsecured obligations of Newmark. These 6.125% Senior Notes were priced at 98.94% to yield 6.375%. The 6.125% Senior Notes bear an interest rate of 6.125% per annum, payable on each May 15 and November 15, beginning on May 15, 2019, and will ~~be sufficient~~mature on November 15, 2023. The 6.125% Senior Notes were subsequently exchanged for notes with substantially similar terms that were registered under the Securities Act.

Credit Facility

On November 28, 2018, Newmark entered into the Credit Agreement by and among Newmark, the several financial institutions from time to ~~fund our operations, growth strategy~~time party thereto, as lenders, and ~~dividends and distributions to meet our long-term liquidity requirements.~~

Bank of America N.A., as administrative agent. The Credit Agreement provided for a $250.0 million Credit Facility.

~~Prior~~

On February 26, 2020, Newmark entered into an amendment to the ~~Separation,~~Credit Agreement, increasing the size of the Credit Facility to $425.0 million and extending the maturity date to February 26, 2023. The interest rate on the Credit Facility was

reduced to LIBOR plus 1.75% per annum, subject to a pricing grid linked to Newmark’s credit ratings from S&P Global Ratings and Fitch.

On March 16, 2020, Newmark entered into a second amendment to the Credit Agreement, increasing the size of the Credit Facility to $465.0 million. The interest rate on the Credit Facility was LIBOR plus 1.75% per annum, subject to a pricing grid linked to Newmark’s credit ratings from S&P Global Ratings and Fitch.

On March 10, 2022, Newmark amended and restated the Credit Agreement, as amended. Pursuant to the amended and restate Credit Agreement, the lenders agreed to: (a) increase the amount available to the Company under the Credit Facility to $600.0 million, (b) extend the maturity date of the Credit Facility to March 10, 2025, and (c) improve pricing to 1.50% per annum with respect to Term SOFR (as defined in the amended and restated Credit Agreement) borrowings.

Borrowings under the Credit Facility bear interest at a per annum rate equal to, at the Company’s option, either (a) Term SOFR for interest periods of one or three months, as selected by the Company, or upon the consent of all lenders, such other period that is 12 months or less (in each case, subject to availability), as selected by the Company, plus an applicable margin, or (b) a base rate equal to the greatest of (i) the federal funds rate plus 0.50%, (ii) the prime rate as established by the Administrative Agent, and (iii) Term SOFR plus 1.00%, in each case plus an applicable margin. The applicable margin will initially be 1.50% with respect to Term SOFR borrowings in (a) above and 0.50% with respect to base rate borrowings in (b) above. The applicable margin with respect to Term SOFR borrowings in (a) above will range from 1.00% to 2.125% depending upon the Company’s credit rating, and with respect to base rate borrowings in (b) above will range from 0.00% to 1.125% depending upon the Company’s credit rating. The Credit Agreement also provides for certain upfront and arrangement fees and for an unused facility fee. As of March 31, 2023 and December 31, 2022, there were $225.0 million and $0.0 million, respectively, of borrowings outstanding under the Credit Facility.

Cantor Credit Agreement

On November 30, 2018, Newmark entered into an unsecured credit agreement with Cantor. The Cantor Credit Agreement provides for each party to issue loans to the other party in the lender’s discretion. Pursuant to the Cantor Credit Agreement, the parties and their respective subsidiaries (with respect to Cantor, other than BGC and its subsidiaries) may borrow up to an aggregate principal amount of $250.0 million from each other from time to time at an interest rate which is the higher of Cantor or Newmark’s short-term borrowing rate then in effect, plus 1.0%. As of March 31, 2023, and December 31, 2022 there were no borrowings outstanding under the Cantor Credit Agreement.

Warehouse Facilities Collateralized by U.S. Government Sponsored Enterprises

As of March 31, 2023, Newmark had $1.6 billion of committed loan funding, $400.0 million of uncommitted loan funding available through three commercial banks, and an uncommitted $400.0 million Fannie Mae loan repurchase facility. Consistent with industry practice, these warehouse facilities are short-term, requiring annual renewal. These warehouse facilities are collateralized by an assignment of the underlying mortgage loans originated under various lending programs and third-party purchase commitments and are recourse only to our wholly-owned subsidiary, Berkeley Point Capital, LLC. As of March 31, 2023 and December 31, 2022 we ~~received~~had $0.4 billion and $0.1 billion, respectively, outstanding under “Warehouse facilities collateralized by U.S. Government Sponsored Enterprises” on our accompanying unaudited condensed consolidated balance sheets.

Leases

Total lease liability as of March 31, 2023 was $751.1 million. Of the ~~rights~~total amount, $198.5 million of lease liability is within our flexible workspace business whereby the liability is ring-fenced in SPVs with only $36.6 million of guarantees and/or letters of credit with exposure to ~~10,914,717~~Newmark. In addition, Newmark had contracted future customer revenues and sub-lease income as of March 31, 2023 amounting to approximately $197.0 million.

Cash Flows

Cash flows from operations excluding activity from loan originations and sales, net were as follows (in thousands):


	Three Months Ended March 31,
		2023		2022
Net cash provided by (used in) operating activities		$	(398,840)	$	502,155
Add back:
Net activity from loan originations and sales		290,319		(499,810)



Net cash provided by (used in) operating activities excluding activity from loan originations and sales (1)		$	(108,521)	$	2,345

(1) Includes loans for new hires and producers in the amount of $128.9 million and $9.7 million for the three months ended March 31, 2023 and 2022, respectively. Excluding these loans, net cash provided by operating activities excluding loan originations and sales would be $20.4 million and $12.0 million for the three months ended March 31, 2023 and 2022, respectively.

Cash Flows for the Three Months Ended March 31, 2023

For the three months ended March 31, 2023, we used $398.8 million of cash from operations. Excluding activity from loan originations and sales, cash used from operating activities for the three months ended March 31, 2023 was $108.5 million, primarily related to $128.9 million used for long-term producer contracts. Cash used in investing activities was $118.1 million, consisting of cash paid for acquisitions and purchases of fixed assets. Cash provided by financing activities of $498.7 million primarily related to $225.0 million of Credit Facility borrowings and net principal borrowings on warehouse facilities of $290.3 million.

Cash Flows for the Three Months Ended March 31, 2022

For the three months ended March 31, 2022, we generated $502.2 million of cash from operations. However, excluding activity from loan originations and sales, cash from operating activities for the three months ended March 31, 2022 was $2.3 million. The $2.3 million can be primarily attributed to consolidated net income plus realized and unrealized losses related to the Nasdaq shares, less normal use of ~~which 992,247~~working capital in the first quarter. Cash provided by investing activities was $426.8 million, ~~were~~primarily related to $437.8 million of proceeds from the sale of Nasdaq shares. Cash used in financing activities of $677.5 million primarily related to net principal payments on warehouse facilities of $479.0 million, $140.0 million related to repurchase agreements and securities loaned, and $30.9 million of treasury stock repurchases.

Nasdaq Monetization Transactions

On June 28, 2013, BGC sold certain assets of its on-the-run, electronic benchmark U.S. Treasury platform, eSpeed, to Nasdaq. The total consideration received in ~~2017~~the transaction included $750.0 million in cash paid upon closing and the ~~remaining 9,922,470 million~~Nasdaq Earn-out of up to 14,883,705 shares of Nasdaq shares ~~will~~to be ~~received~~paid ratably over ~~approximately the next 10~~15 years (subject to acceleration and present value discount as discussed below), provided that Nasdaq, as a whole, produces at least $25.0 million in consolidated gross revenues each year. The remaining rights under the Nasdaq Earn-out were transferred to Newmark on September 28, 2017. During the third and fourth quarters of 2021, Newmark sold 2,780,180 shares of Nasdaq for gross proceeds of $516.5 million. During the first quarter of 2022, Newmark sold all of its remaining 2,497,831 Nasdaq shares ~~not yet~~for gross proceeds of $437.8 million. In the aggregate from September 2017 through March 31, 2022, Newmark received 10.2 million shares of Nasdaq, of which Newmark sold 7.6 million shares of Nasdaq and delivered 2.6 million shares of Nasdaq to RBC. For further information regarding sales of Nasdaq shares and realized and unrealized gains (losses) on such shares, see Note 7 — “Marketable Securities” to our accompanying unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Exchangeable Preferred Partnership Units and Forward Contracts

On June 18, 2018, Newmark’s principal operating subsidiary, Newmark OpCo, issued $175.0 million of EPUs in a private transaction to RBC. Newmark received $152.9 million of cash with respect to this transaction.

On September 26, 2018, Newmark entered into a second agreement to issue $150.0 million of additional EPUs to RBC, similar to the June 18, 2018 transaction. Newmark received $113.2 million of cash with respect to this transaction.

The EPUs were ~~valued at approximately $855.5~~issued in four tranches and were separately convertible by either RBC or Newmark into a fixed number of shares of Newmark Class A common stock, subject to a revenue hurdle in each of the fourth quarters of 2019 through 2022 for each of the respective four tranches. The ability to convert the EPUs into Newmark Class A common stock was subject to the SPV's option to settle the postpaid forward contracts as described below. As the EPUs represented equity ownership of a consolidated subsidiary of Newmark, they have been included in “Noncontrolling interests” on our accompanying unaudited condensed consolidated balance sheets and unaudited condensed consolidated statements of changes in equity. The EPUs were entitled to a preferred payable-in-kind dividend, which was recorded as accretion to the carrying amount of the EPUs through “Retained earnings” on our accompanying unaudited condensed consolidated statements of changes in equity and are reductions to “Net income (loss) available to common stockholders” for the purpose of calculating earnings per share.

Contemporaneously with the issuance of the EPUs, an SPV that is a consolidated subsidiary of Newmark entered into four variable postpaid forward contracts with RBC. The SPV was an indirect subsidiary of Newmark whose sole assets were the Nasdaq Earn-out shares for 2019 through 2022. Each of the Nasdaq Forwards provided the SPV the option to settle using up to 992,247 Nasdaq shares, to be received by the SPV pursuant to the Nasdaq Earn-out (see Note 7 — “Marketable Securities” to

our accompanying unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q), or Newmark Class A common stock, in exchange for either cash or redemption of the EPUs, notice of which must be provided to RBC prior to November 1 of each year from 2019 through 2022 (subject to acceleration due to Nasdaq's transaction with Tradeweb).

In September 2020, the SPV notified RBC of its decision to settle the second Nasdaq Forward using the Nasdaq shares the SPV received in November 2020 in exchange for the second tranche of the EPUs, which resulted in a payable to RBC that was settled upon receipt of Nasdaq Earn-out shares. The fair value of the Nasdaq shares that Newmark received was $121.9 million. On November 30, 2020, Newmark settled the second Nasdaq Forward with 741,505 Nasdaq shares, with a fair value of $93.5 million, and Newmark retained 250,742 Nasdaq shares.

In September 2019, the SPV notified RBC of its decision to settle the first Nasdaq Forward using the Nasdaq shares the SPV received in November 2019 in exchange for the first tranche of the EPUs, which resulted in a payable to RBC that was settled upon receipt of Nasdaq Earn-out shares. The fair value of the Nasdaq shares that Newmark received was $98.6 million. On December 2, 2019, Newmark settled the first Nasdaq Forward with 898,685 Nasdaq shares, with a fair value of $93.5 million, and Newmark retained 93,562 Nasdaq shares.

Acceleration of Nasdaq Earn-out

On February 2, 2021, Nasdaq announced that it entered into a definitive agreement to sell its U.S. fixed income business to Tradeweb. On June 25, 2021, Nasdaq announced the closing of the sale of its U.S. fixed income business, which accelerated Newmark’s receipt of Nasdaq shares. Newmark received 6,222,340 Nasdaq shares, with a fair value of $1,093.9 million based on the closing ~~share~~price on June 30, 2021, included in “Other (loss) income, net” for the three months ended June 30, 2021.

On June 25, 2021, the SPV notified RBC of its decision to settle the third and fourth Nasdaq Forwards using the Nasdaq shares the SPV received on June 25, 2021. On July 2, 2021, Newmark settled the third and the fourth Nasdaq Forwards with 944,329 Nasdaq shares, with a fair value of $166.0 million based on the closing price of June 30, 2021.

2021 Equity Event and Share Count Reduction

In connection with the acceleration of the Nasdaq Earn-out, on June 28, 2021, the Compensation Committee approved a plan to expedite the tax deductible exchange and redemption of a substantial number of limited partnership units held by partners of the Company in the 2021 Equity Event. The 2021 Equity Event also accelerated certain compensation expenses resulting in $428.6 million of compensation charges in the second quarter of 2021. These partnership units were settled using a $12.50 share price. In July 2021, the Compensation Committee approved increasing to $13.01 the price to settle certain units at an incremental cost of $15.9 million, which was recorded as compensation charges in the third quarter of 2021.

Some of the key components of the approved plan were as follows:

•8.3 million and 8.0 million compensatory limited partnership units, respectively, of Newmark Holdings and BGC Holdings held by our partners who are employees were redeemed or exchanged.

•23.2 million and 17.4 million compensatory limited partnership units, respectively, of Newmark Holdings and BGC Holdings held by our partners who are independent contractors were redeemed or exchanged. We also accelerated the payment of related withholding taxes to them with respect to their Newmark units. Independent contractors received one BGC Class A common share for each redeemed non-preferred BGC unit or cash and are responsible for paying any related withholding taxes.

•Partners with nonexchangeable non-preferred compensatory units exchanged or redeemed in connection with the 2021 Equity Event generally received restricted Class A common shares of Newmark and/or BGC to the extent tax deductible. A portion of the BGC Class A common shares received by independent contractors were unrestricted to facilitate their payment of withholding taxes.

•The issuance of Newmark Class A common stock related to the 2021 Equity Event reflected the June 28, 2021 Exchange Ratio of 0.9403.

•Newmark Holdings and BGC Holdings limited partnership interests with rights to convert into HDUs for cash were also redeemed in connection with the 2021 Equity Event.

Refer to the section "Certain Other Related Party Transactions" below for the specific transactions with respect to our executive officers which are included in the above summary.

Acquisitions

On March ~~29, 2018 (the last day~~10, 2023, Newmark completed the acquisition of ~~trading for~~Gerald Eve, a U.K. based real estate advisory firm.

In the first quarter of ~~2018)~~2023, the Company acquired the approximately 49% of Spring11 that it did not own, having held a controlling stake since 2017. Spring11 provides commercial real estate due diligence, consulting, and advisory services to a variety of clients, including lenders, investment banks and investors, and has been recorded as part of “management services.”

On April 1, 2022, Newmark completed the acquisitions of two businesses: BH2, a London-based real estate advisory firm, and McCall & Almy, a multi-market tenant representation and real estate advisory firm.

On May 3, 2022, Newmark completed the acquisition of Open Realty Advisors and Open Realty Properties, which together operate as “Open Realty”, a retail real estate advisory firm.

On March 24, 2021, Newmark acquired the business of Knotel, a global flexible workspace provider. Newmark agreed to provide approximately $19.8 million of debtor-in-possession financing as part of a $70 million credit bid to acquire the business through Knotel’s Chapter 11 sales process, subject to approval of the U.S. Bankruptcy Court. On March 18, 2021, the United States Bankruptcy Court approved the transaction under Section 363 of the United States Bankruptcy Code.

On September 6, 2021, Newmark acquired Deskeo, France's leader in flexible and serviced workspace for enterprise clients. Based in Paris, France Deskeo adds over 50 locations to Newmark's international flexible workspace portfolio.

See Note 4 — “Acquisitions” to our accompanying unaudited condensed consolidated financial statements included in Part I, Item 1 of the Quarterly Report on Form 10-Q for additional information.

Debt and Credit Agreements

On November 6, 2018, Newmark closed its offering of $550.0 million aggregate principal amount of 6.125% Senior Notes due 2023. The 6.125% Senior Notes are general senior unsecured obligations of Newmark. The 6.125% Senior Notes, which were priced on November 1, 2018 at 98.94% to yield 6.375%, were offered and sold by Newmark in a private offering exempt from the registration requirements under the Securities Act. Newmark received net proceeds of $537.6 million, net of debt issue costs and debt discount. The 6.125% Senior Notes bear an interest rate of 6.125% per annum, payable on each May 15 and November 15, beginning on May 15, 2019 and will mature on November 15, 2023. The 6.125% Senior Notes were subsequently exchanged for notes with substantially similar terms that were registered under the Securities Act. As of March 31, 2023 and December 31, 2022, the carrying amount of the 6.125% Senior Notes was $548.4 million and $547.8 million, respectively.

On November 28, 2018, Newmark entered into the Credit Agreement by and among Newmark, the several financial institutions from time to time party thereto, as lenders, and Bank of America N.A., as administrative agent. The Credit Agreement provided for a $250.0 million three year unsecured senior revolving Credit Facility.

On February 26, 2020, Newmark entered into an amendment to the Credit Agreement, increasing the size of the Credit Facility to $425.0 million and extending the maturity date to February 26, 2023. The interest rate on the Credit Facility was reduced to LIBOR plus 1.75% per annum, subject to a pricing grid linked to Newmark’s credit ratings from S&P Global Ratings and Fitch.

On March 10, 2022, Newmark amended and restated the Credit Agreement, as amended. Pursuant to the amended and restated Credit Agreement, the lenders agreed to: (a) increase the amount available to the Company under the Credit Facility to $600.0 million, (b) extend the maturity date of the Credit Facility to March 10, 2025, and (c) improve pricing to 1.50% per annum with respect to Term SOFR (as defined in the amended and restated Credit Agreement) borrowings.

Administrative Agent, and (iii) Term SOFR plus 1.00%, in each case plus an applicable margin. The applicable margin will initially be 1.50% with respect to Term SOFR borrowings in (a) above and 0.50% with respect to base rate borrowings in (b) above. The applicable margin with respect to Term SOFR borrowings in (a) above will range from 1.00% to 2.125% depending upon the Company’s credit rating, and with respect to base rate borrowings in (b) above will range from 0.00% to 1.125% depending upon the Company’s credit rating. The Credit Agreement also provides for certain upfront and arrangement fees and for an unused facility fee.

On June 16, 2020, the Company’s Board of Directors and its Audit Committee authorized a debt repurchase program for the repurchase by the Company in the amount of up to $50.0 million of the Company’s 6.125% Senior Notes and any future debt securities issued by the Company hereafter. Repurchases of Company debt securities, if any, are expected to reduce future cash interest payments, as well as future amounts due at maturity or upon redemption.

Under the authorization, the Company may make repurchases of Company debt securities for cash from time to time in the open market or in privately negotiated transactions upon such terms and at such prices as management may determine. Additionally, the Company is authorized to make any such repurchases of Company debt securities through CF&Co (or its affiliates), in its capacity as agent or principal, or such other broker-dealers as management shall determine to utilize from time to time upon customary market terms or commissions.

As of March 31, 2023, the Company had $50.0 million remaining from its debt repurchase authorization.

On June 19, 2020, Newmark established a $125.0 million sublimit line of credit to fund potential principal and interest servicing advances on its Fannie Mae portfolio during the forbearance period related to the Coronavirus Aid, Relief, and Economic Security Act. The sublimit is now included within the Company’s existing $450 million warehouse facility due June 14, 2023. The advance line provides 100% of the principal and interest advance payment at a rate of SOFR plus 1.80% and will be collateralized by Fannie Mae's commitment to repay advances. There were no outstanding draws under this sublimit as of March 31, 2023. Newmark did not have any Fannie Mae loans in forbearance as of March 31, 2023.

On November 30, 2018, Newmark entered into the Cantor Credit Agreement. The Cantor Credit Agreement provides for each party to issue loans to the other party in the lender’s discretion. Pursuant to the Cantor Credit Agreement, the parties and their respective subsidiaries (with respect to Cantor, other than BGC Partners and its subsidiaries) may borrow up to an aggregate principal amount of $250.0 million from each other from time to time at an interest rate which is the higher of Cantor’s or Newmark’s short-term borrowing rate then in effect, plus 1.0%. As of March 31, 2023 and December 31, 2022, the Company did not have any outstanding balances under this facility.

Credit Ratings

As of March 31, 2023, our public long-term credit ratings and associated outlooks are as follows:

Rating

Outlook

Fitch Ratings Inc.

BBB-

Stable

JCRA

BBB+

Stable

Kroll Bond Rating Agency

BBB-

Stable

S&P Global Ratings

BB+

Positive

Credit ratings and associated outlooks are influenced by several factors, including but not limited to: operating environment, earnings and profitability trends, the prudence of funding and liquidity management practices, balance sheet size composition and resulting leverage, cash flow coverage of interest, composition and size of the capital base, available liquidity, outstanding borrowing levels and the firm’s competitive position in the industry. A credit rating and/or the associated outlook can be revised upward or downward at any time by a rating agency if such rating agency decides that circumstances warrant such a change. Any reduction in our credit ratings and/or the associated outlook could adversely affect the availability of debt financing on terms acceptable to us, as well as the cost and other terms upon which we are able to obtain any such financing. In addition, credit ratings and associated outlooks may be important to customers or counterparties when we compete in certain markets and when we seek to engage in certain transactions. The interest rate on our 6.125% Senior Notes may increase by up to 2% in the event of credit ratings downgrades.

Certain Other Related Party Transactions

Transactions with Executive Officers and Directors

Gosin Employment Agreement

Rispoli Employment Agreement

In connection with signing the employment agreement on September 29, 2022, Mr. Rispoli received immediate exchangeability on 25% of his then currently held 88,079 non-exchangeable PSUs and 87,049 non-exchangeable PPSUs (such 25% totaled 23,560 PPSUs with a value of $283,527 and 20,221 PSUs), and will receive monetization rights on another 25% of such units held as of September 29, 2022, split pro-rata into one-fifth (1/5) increments, on or as soon as practicable after October 1 of each of 2023-2027, to the ~~Nasdaq payment yet~~extent such units had not previously been given monetization rights, with each monetization contingent upon Mr. Rispoli performing substantial services exclusively for us or any affiliate, remaining a partner in Newmark Holdings, and complying with the terms of his employment agreement and any of his obligations to Newmark Holdings, us or any affiliate through such dates.

Other Executive Compensation

On December 21, 2021, the Compensation Committee approved: (i) the redemption of all of Mr. Gosin’s remaining 838,996 non-exchangeable Newmark PPSUs for $8,339,980 in cash and (ii) compensation of approximately $7,357,329 by way of the Company causing 478,328 of Mr. Gosin’s non-exchangeable Newmark PSUs to be ~~received~~redeemed for zero and issuing 446,711 shares of Newmark Class A common stock, based upon the closing price on the date the Committee approved the transaction (which was $16.47) and an Exchange Ratio of 0.9339. The estimated pre-tax value of this transaction is ~~not reflected in our liquidity position or on our balance sheet. The receipt~~$15,697,309, less applicable taxes and withholdings, using a 53.13% tax rate for Mr. Gosin.

shares of our Class A common stock were issued to Mr. Merkel. On the same day, the 68,727 shares of our Class A common stock were repurchased from Mr. Merkel at $10.67 per share, the closing price of our Class A common stock on that date, under our stock buyback program. The total payment delivered to Mr. Merkel was $0.8 million, less applicable taxes and withholdings.

On March 16, 2021, pursuant to the Newmark standing policy for Mr. Lutnick, the Compensation Committee granted exchange rights and/or monetization rights with respect to rights available to Mr. Lutnick. Mr. Lutnick elected to waive such rights one-time with such future opportunities to be ~~reflected~~cumulative. The aggregate number of Mr. Lutnick’s units for which he waived exchange rights or other monetization rights is 4,423,457 non-exchangeable Newmark Holdings PSUs/NPSUs, inclusive of the PSUs receiving an HDU conversion right and 1,770,016 non-exchangeable Newmark Holdings PPSUs with an aggregate determination amount of $21.6 million at that time, inclusive of the PPSUs receiving an HDU conversion right.

On March 16, 2021, the Company redeemed 30,926 non-exchangeable Newmark Holdings PSUs held by Mr. Merkel for zero and in connection therewith issued 28,962 shares of our ~~earnings~~Class A common stock. On the same day, the Company repurchased these shares from Mr. Merkel at the closing price of our Class A common stock of $11.09 per share under our stock buyback program. The total payment delivered to Mr. Merkel was $0.3 million, less applicable taxes and ~~is expected~~withholdings. The Compensation Committee approved these transactions.

On March 16, 2021, the Compensation Committee granted Mr. Gosin exchange rights into shares of Class A common stock with respect to ~~result in increases in our liquidity. We currently expect to receive more than $875.0~~526,828 previously awarded non-exchangeable Newmark Holdings PSUs and 30,871 non-exchangeable Newmark Holdings APSUs held by Mr. Gosin (which, based on the closing price of the Class A common stock of $11.09 per share on such date and using the Exchange Ratio of 0.9365, had a value of $5.8 million in ~~additional Nasdaq~~the aggregate). In addition, on March 16, 2021, the Compensation Committee approved removing the sale restrictions on Mr. Gosin’s remaining 178,232 restricted shares of Class A common stock ~~over time (stock value based on May 2, 2018 closing price)~~in BGC (which were originally issued in 2013) and associated 82,680 remaining restricted shares of Newmark Class A common stock (issued as a result of the ~~Nasdaq Earn-out, which is not reflected~~Company spin-off in ~~our balance sheet.~~

November 2018).

On ~~September 8, 2017, BGC completed~~March 16, 2021, the ~~Berkeley Point Acquisition. Berkeley Point is a leading commercial real estate finance company focused~~Compensation Committee granted Mr. Rispoli (i) exchange rights into shares of Newmark Class A common stock with respect to 6,043 previously awarded non-exchangeable Newmark Holdings PSUs held by Mr. Rispoli (which, based on the origination and sale of multifamily and other commercial real estate loans through government-sponsored and government-funded loan programs, as well as the servicing of commercial real estate loans, including those it originates. BGC acquired allclosing price of the ~~outstanding membership interests~~Class A common stock of ~~Berkeley Point Financial LLC~~$11.09 per share on such date and using the Exchange Ratio of 0.9365, had a value of $0.1 million); and (ii) exchange rights into cash with respect to 4,907 previously awarded non-exchangeable Newmark Holdings PPSUs held by Mr. Rispoli (which had an average determination price of $15.57 per unit, for a total of $76,407 in the aggregate to be paid for taxes when (i) is exchanged).

Howard W. Lutnick, Chairman

On December 27, 2021, the Compensation Committee approved a one-time bonus award to Mr. Lutnick, which was evidenced by the execution and delivery of a Retention Bonus Agreement, dated December 28, 2021, and described below, in consideration of his success in managing certain aspects of the Company’s performance as its principal executive officer and Chairman. The bonus award rewarded Mr. Lutnick for his efforts in delivering superior financial results for the Company and its stockholders, including in particular his success in creating substantial value for the Company and its stockholders in connection with creating, structuring, hedging and monetizing the forward share contract to receive over time shares of common stock of Nasdaq held by the Company and the strong balance sheet and significant amount of income created from this. A principal reason for structuring the bonus award with a substantial portion to be paid out over three years was also to further incentivize Mr. Lutnick to continue to serve as both the Company’s principal executive officer and its Chairman for the benefit of the Company’s stockholders. The bonus award is the subject of legal challenge. See the heading "Legal Proceedings" below.

The Retention Bonus Agreement provides for an ~~acquisition price~~aggregate cash payment of ~~$875~~$50 million, ~~with $3.2~~payable as follows: $20 million within three days of the ~~acquisition price paid with 247,099 partnership units~~date of the Retention Bonus Agreement (which payment was made on December 31, 2021), and $10 million within thirty days following vesting on each of the first, second and third anniversaries of the date of the Retention Bonus Agreement. Any entitlement to future amounts not vested will be forfeited immediately if, prior to the applicable anniversary date, Mr. Lutnick ceases to serve as both the Company’s Chairman and its principal executive officer, unless Mr. Lutnick ceasing to serve in ~~BGC Holdings~~either such capacity occurs pursuant to a ~~Transaction~~“Vesting Termination,” as that term is defined in the Retention Bonus Agreement. Mr. Lutnick has purchased Newmark Class A common stock with the after-tax proceeds of the initial tranche of the bonus award. The Retention Bonus Agreement describes a “Vesting Termination” as (i) a termination of Mr. Lutnick’s employment by the Company without “Cause” (as that term is defined in the Retention Bonus Agreement) or (ii) an involuntary removal of Mr. Lutnick from the position of Chairman of the Board on or after the occurrence of a Change in Control (as that term is defined in the Change of Control Agreement, dated as of ~~July 17,~~December 13, 2017, by and between Mr. Lutnick and the Company). In the event that Mr. Lutnick ceases to serve as both the Company’s Chairman and its principal executive officer pursuant to a Vesting Termination, any amounts not vested will immediately become fully vested. The Retention Bonus Agreement provides that Mr. Lutnick ceasing to serve as the Company’s Chairman and principal executive officer pursuant to his death or disability does not constitute a Vesting Termination. The provisions of Mr. Lutnick’s Change of

Control Agreement do not apply to the bonus award. A copy of the Retention Bonus Agreement was attached as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with ~~Cantor~~the SEC on December 29, 2021 and ~~certain Cantor’s affiliates, including CCRE~~is described in detail under the heading “2021 Lutnick Award” in our proxy statement filed with the SEC on August 15, 2022.

2021 Equity Event

The specific transactions approved by the Compensation Committee, in connection with the 2021 Equity Event, with respect to our executive officers are set forth below. All of the transactions included in the 2021 Equity Event with respect to Messrs. Lutnick, Gosin and ~~Cantor Commercial Real Estate Sponsor, L.P.,~~Rispoli, are based on (i) the ~~general partner~~price for Newmark Class A common stock of ~~CCRE.~~$12.50 per share, as approved by the Compensation Committee; (ii) the price of BGC Partners Class A common stock of $5.86; and (iii) the price of Nasdaq common stock of $177.11.

On June 28, 2021, in connection with the 2021 Equity Event, the Newmark Compensation Committee approved the following for Mr. Lutnick: (i) the exchange of 279,725 exchangeable Newmark Holdings PSUs into 263,025 shares of Class A common stock of Newmark based on the then applicable Exchange Ratio of 0.9403; and $1,465,874 associated with Mr. Lutnick’s non-exchangeable 193,530 Newmark Holdings PPSUs was redeemed and used for tax purposes; (ii) the conversion of 552,482.62 non-exchangeable Newmark Holdings PSUs with H-Rights into 552,482.62 non-exchangeable Newmark Holdings HDUs and redemption of such HDUs for their Capital Account of $7,017,000, paid in the form of Nasdaq Shares issued at $177.11 per share (which was the Nasdaq closing price as of June 28, 2021); and $7,983,000 associated with Mr. Lutnick’s non-exchangeable Newmark Holdings PPSUs with H-Rights were redeemed and used for tax purposes; (iii) the exchange of 520,380 exchangeable BGC Holdings PSUs into 520,380 shares of Class A common stock of BGC Partners, and $1,525,705 associated with Mr. Lutnick’s exchangeable BGC Holdings PPSUs was redeemed and used for tax purposes; (iv) the redemption of 88,636 non-exchangeable BGC Holdings PSUs pursuant to Mr. Lutnick’s rights under his existing standing policy, and the issuance of 88,636 shares of Class A common stock of BGC Partners; (v) the conversion of 1,131,774 non-exchangeable BGC Holdings PSUs with H-Rights into 1,131,774 non-exchangeable BGC Holdings HDUs and $7,983,000 associated with Mr. Lutnick’s BGC Holdings PPSUs with H-Rights was redeemed and used for tax purposes in connection with the exercise of the exercise of the BGC Holdings HDUs; and (vi) the issuance of 29,059 shares of Class A common stock of Newmark. In accordance with ~~this Transaction Agreement, Berkeley Point made~~Mr. Lutnick’s right under his existing standing policy, and in connection with the 2021 Equity Event, upon the approval of the Newmark Compensation Committee: (i) 2,909,819 non-exchangeable Newmark Holdings PSUs, pursuant to Mr. Lutnick’s rights under his existing standing policy, were redeemed and 2,736,103 shares of Class A common stock of Newmark, based upon the then applicable Exchange Ratio of 0.9403, were granted to Mr. Lutnick; and (ii) $8,798,546 associated with Mr. Lutnick’s rights under his existing standing policy was redeemed and used for tax purposes. See “Executive Compensation” in our proxy statement filed August 15, 2022 for additional information and definitions.

Barry M. Gosin, Chief Executive Officer

On September 20, 2021, the Compensation Committee approved a ~~distribution~~monetization opportunity for Mr. Gosin: all of ~~$89.1~~Mr. Gosin’s 2,114,546 non-exchangeable BGC Holdings PSUs were redeemed for 0 and 2,114,456 shares of BGC Class A common stock were issued to Mr. Gosin. Effective as of April 14, 2022, Mr. Gosin’s 905,371 BGC Holdings HDUs were redeemed for a cash payment of $3,521,893 based upon a price of $3.89 per unit, which was the closing price of BGC Partners Class A common stock on April 14, 2022.

On June 28, 2021, the Compensation Committee approved the following for Barry M. Gosin, the Company’s Chief Executive Officer: (i) the exchange of 1,531,061.84 exchangeable Newmark Holdings units (comprised of 1,438,597.37 exchangeable Newmark Holdings PSUs and 92,464.47 exchangeable Newmark Holdings APSUs) into 1,439,658 shares of Class A common stock of Newmark based upon the then current Exchange Ratio of 0.9403; and $834,508 associated with Mr. Gosin’s exchangeable Newmark Holdings PPSUs was redeemed and used for tax purposes; (ii) the conversion of 443,871.60 non-exchangeable Newmark Holdings PSUs with H-Rights into 443,871.60 non-exchangeable Newmark Holdings HDUs, and redemption of such HDUs, less any taxes and withholdings in excess of $5,362,452, paid in the form of Nasdaq shares issued at $177.11 per share (which was the Nasdaq closing price as of June 28, 2021); and $5,362,452 in connection with Mr. Gosin’s Newmark Holdings PPSUs with H-Rights was redeemed and used for tax purposes; (iii) the exchange of 3,348,706 exchangeable BGC Holdings units (comprised of 3,147,085 exchangeable BGC Holdings PSUs and 201,621 exchangeable BGC Holdings APSUs) into 3,348,706 shares of Class A common stock of BGC Partners; and $298,273 associated with Mr. Gosin’s exchangeable BGC Holdings PPSUs was redeemed and used for tax purposes; (iv) the conversion of 1,592,016 non-exchangeable BGC Holdings PSUs with H-Rights into 1,592,016 non-exchangeable BGC Holdings HDUs, and $1,129,499 associated with Mr. Gosin non-exchangeable BGC Holdings PPSUs was redeemed and used for tax purposes; and (v) the issuance of 12,500 shares of Class A common stock of Newmark.

Michael J. Rispoli, Chief Financial Officer

Holdings PSUs were redeemed and an aggregate of 5,642 restricted shares of Newmark were issued to Mr. Rispoli based upon the then current Exchange Ratio of 0.9403, and $52,309 associated with Mr. Rispoli’s non-exchangeable Newmark Holdings PPSUs was redeemed and used for tax purposes; (iii) the conversion of 5,846.07 non-exchangeable Newmark Holdings PSUs with H-Rights into 5,846 non-exchangeable Newmark Holdings HDUs and the redemption of such HDUs, less any taxes and withholdings in excess of $60,750, paid in the form of Nasdaq shares issued at $177.11 per share (which was the Nasdaq closing price as of June 28, 2021); and $60,750 associated with Mr. Rispoli’s PPSUs with H-Rights was redeemed and used for tax purposes; (iv) the exchange of 36,985 exchangeable BGC Holdings PSUs into 36,985 shares of Class A common stock of BGC, and $134,573 associated with Mr. Rispoli’s exchangeable BGC Holdings PPSUs was redeemed and used for tax purposes; and (v) the issuance of 383 shares of Class A common stock of Newmark.

Stephen M. Merkel, Chief Legal Officer

On June 28, 2021, the Compensation Committee also approved the following for Stephen M. Merkel, the Company’s Chief Legal Officer: (i) the redemption of 51,124.28 non-exchangeable Newmark Holdings PSUs and issuance of 48,072 shares of Newmark Class A common stock based upon the then-current Exchange Ratio of 0.9403; and (ii) the redemption of 46,349.87 non-exchangeable Newmark Holdings PPSUs for a cash payment of $0.3 million, to ~~CCRE related~~be remitted to the ~~Berkeley Point Acquisition, for~~applicable tax authorities to the ~~amount~~extent necessary in connection with the issuance of the shares above.

Retirement Fund Purchase

On April 27, 2021, a Keogh retirement account held by Mr. Lutnick purchased 5,154 shares of our Class A common stock from us at the closing price of our Class A common stock on that ~~Berkeley Point’s net assets, inclusive~~date of ~~certain fair value adjustments, exceeded $508.6 million.~~ $10.67 per share. The transaction was approved by our Audit Committee.

CF Real Estate Finance Holdings, LP.

Contemporaneously with the acquisition of Berkeley Point, ~~Acquisition,~~ on September 8, 2017, ~~the Company~~Newmark invested ~~$100~~$100.0 million in a newly formed commercial real estate-related financial and investment business, Real Estate LP, which is controlled and managed by Cantor. Real Estate LP may conduct activities in any real estate related business or asset backed ~~securities-related~~securities related business or any extensions thereof and ancillary activities thereto. ~~In addition, Real Estate LP may provide short-term loans to related parties from time to time when funds in excess~~As of ~~amounts needed for~~March 31, 2023 and 2022, Newmark’s investment ~~opportunities are available. The Company’s investment is~~was accounted for under the equity ~~method. In connection with these aforementioned transactions, BGC entered into~~method (see Note 8 — “Investments”). Newmark holds a ~~$400 million two-year unsecured senior revolving credit facility and a $575 million unsecured senior term loan maturing on the second anniversary of the Berkeley Point Acquisition closing date.~~

On October 23, 2017, we filed a registration statement on Form S-1 with the SEC relating to the IPO of our Class A common stock. On December 19, 2017 BGC Partners, Inc. and Newmark Group, Inc. announced the closing of the offering of 20 million shares of Newmark’s Class “A” common stock to the public at a price of $14.00 per share less underwriting discounts and commissions. On December 26, 2017, BGC and Newmark announced that the underwriters of Newmark’s IPO exercisedredemption option in which Real Estate LP can redeem in full ~~their overallotment option to purchase an additional 3 million shares of~~ Newmark’s Class A common stock at the initial public offering price of $14.00 per share less underwriting discounts and commissions. As a result, Newmark received aggregate net proceeds of $295.4 million from the IPO after deducting underwriting discounts and commissions and estimated offering expenses. The proceeds of the IPO were used to repay the Term Loan. Following some period after the IPO; BGC may, subject to market and other conditions, distribute the shares that BGC holds of Newmark Group, Inc. pro rata to BGC’s stockholders in a manner intended to qualify as tax-free for U.S. federal income tax purposes.

As of March 31, 2018, our liquidity, which we define as cash and cash equivalents, and marketable securities, less securities loaned, was approximately $48.1 million. This does not include the approximately (i) $190.0 million of excess funds maintained in our restricted liquidity account pledged for the benefit of Fannie Mae and (ii) more than $875.0 million in additional Nasdaq stock (stock value based on the May 2, 2018 closing price) that we expect to receive over time. We expect to use our considerable financial resources to repay debt, profitably hire, make accretive acquisitions, pay dividends, and/or repurchase shares and units of Newmark, all while maintaining or improving our investment grade rating.

~~Term Loan and Converted Term Loan~~

~~In connection with the Berkeley Point Acquisition and BGC Partners’~~ investment in Real Estate LP ~~on September 8, 2017, BGC Partners entered into an unsecured senior term loan credit~~in exchange for Newmark’s capital account balance in Real Estate LP as of such time.

Amendment of Real Estate LP Joint Venture Agreement and Payment of Administrative Fee

In December 2022, the Audit Committee authorized a subsidiary of Newmark to rescind its July 20, 2022 written notice exercising the optional redemption of its 27.2% ownership interest in Real Estate LP and amended the joint venture agreement ~~(which we refer~~between Newmark and Real Estate LP to as the “Term Loan Credit Agreement”) with Bank of America, N.A., as administrative agent (which we refer to as the “Administrative Agent”), and a syndicate of lenders. The Term Loan Credit Agreement providesprovide for a ~~term loan~~redemption option for this investment after July 1, 2023, with proceeds to be received within 20 days of upthe redemption notice. A payment of a $44.0 thousand administrative fee was made to ~~$575.0 million (which we refer to as the “Term Loan”). During the year ended December 31, 2017,~~Newmark in connection with such amendment.

Pre-IPO intercompany agreements

In December 2017, prior to our Separation and Newmark IPO, all intercompany arrangements and agreements that were previously approved by the Term Loan, BGC Partners lent the proceeds of the Term Loan to BGC U.S. OpCo, and BGC U.S. OpCo issued a promissory note with an aggregate principal amount of $575.0 million to BGC Partners (which we refer to as the “Intercompany Term Loan Note”). Pursuant to the terms of the Intercompany Term Loan Note, all of the rights and obligations of BGC Partners under the Intercompany Term Loan Note are the same as the rights and obligations of the lenders with respect to payment under the Term Loan, and all of the rights and obligations of BGC U.S. OpCo under the Intercompany Term Loan Note are the same as the rights and obligationsAudit Committee of BGC Partners with respect to ~~payment under~~BGC Partners and its subsidiaries and Cantor and its subsidiaries were also approved by our Board of Directors with respect to the ~~Term Loan. On November 22, 2017, we entered~~relationships between us and our subsidiaries and Cantor and its subsidiaries following our IPO on the terms and conditions approved by the BGC Audit Committee during such time that our business was owned by BGC Partners. These arrangements include, but are not limited to, the following: (i) an authorization to provide Cantor real estate and related services, including real estate advice, brokerage, property or facilities management, valuation and advisory and other services; (ii) an authorization to enter into brokerage and similar agreements with respect to the provision of ordinary course brokerage services in circumstances in which such entities customarily provide brokerage services to third-party customers; (iii) an authorization to enter into agreements with Cantor and/or its affiliates, to provide services, including finding and reviewing suitable acquisition or partner candidates, structuring transactions and negotiating and due diligence services in connection with acquisitions and other business strategies in commercial real estate and other businesses from time to time; and (iv) an arrangement to jointly manage exposure to changes in foreign exchange rates.

Services Agreement with Cantor Fitzgerald Europe (DIFC Branch)

As the Company does not yet have a presence in Dubai, in May 2020, the Audit Committee of the Company authorized Newmark & Co, a subsidiary of Newmark, to enter into an ~~amendment to the Term Loan Credit Agreement (which we refer to as the “Term Loan Amendment”),~~agreement with Cantor Fitzgerald Europe (DIFC Branch) pursuant to which Cantor Fitzgerald Europe (DIFC Branch) will employ and support an individual who is a resident of Dubai in ~~connection with~~order to enhance Newmark’s capital markets platform, in exchange for a fee. Cantor Fitzgerald Europe (DIFC Branch) and Newmark & Co. negotiated a Services Agreement memorializing the ~~Separation and prior to~~arrangement between the ~~closing~~parties. The Services Agreement provides that Newmark & Co. will reimburse Cantor Fitzgerald Europe (DIFC Branch) for the individual’s fully allocated

costs, plus a mark-up of 7%. In addition, the Audit Committee of the ~~IPO, we assumed~~Company authorized the ~~obligations of BGC Partners under the Term Loan. In connection with our assumption of BGC Partners’ rights~~Company and ~~obligations under the Term Loan, BGC Partners~~

~~assigned~~its subsidiaries to us, and we assumed, all of BGC Partners’ rights and obligations under the Intercompany Term Loan Note and, pursuant to the separation, Newmark OpCo assumed all of BGC U.S. OpCo’s rights and obligations under the Intercompany Term Loan Note. During the three months ended March 31, 2018 the Term Loan Credit Agreement was repaid in full.

~~Also in connection with the Berkeley Point Acquisition and BGC Partners’ investment in Real Estate LP, on September 8, 2017, BGC Partners entered~~enter into an unsecured senior revolving credit agreement (which we refer to as the “Revolving Credit Agreement”) with the Administrative Agent and a syndicate of lenders. The Revolving Credit Agreement provides for revolving loans of up to $400.0 million (which we refer to as the “Revolving Credit Facility”). As of March 31, 2018, there were $400.0 million of borrowings outstanding under the Revolving Credit Facility. As of December 31, 2017, the pricing was increased by 50 basis points until the Term Loan Facility is paid in full, and if there are any amounts outstanding under the term loan facility as of June 30, 2018, the pricing shall increase by an additional 75 basis points (125 basis points in the aggregate) until the term loan facility is paid in full. From and after the repayment in full of the Term Loan Facility, the pricing shall return to the levels previously described. In connection with the $400.0 million borrowings, the proceeds of which BGC Partners lent to BGC U.S. OpCo, BGC U.S. OpCo issued a promissory note with an aggregate principal amount of $400.0 million to BGC Partners (which we refer to as the “Intercompany Revolver Note”). Pursuant to the terms of the Intercompany Revolver Note, all of the rights and obligations of BGC Partners under the Intercompany Revolver Note are the same as the rights and obligations of the lenders with respect to payment under the Revolving Credit Facility, and all of the rights and obligations of BGC U.S. OpCo under the Intercompany Revolver Note are the same as the rights and obligations of BGC Partners with respect to payment under the Revolving Credit Facility. On November 22, 2017, we entered into an amendment to the Revolving Credit Agreement (which we refer to as the “Revolver Amendment”), pursuant to which the then outstanding borrowings of BGC Partners under the Revolving Credit Facility were converted into a term loan (which we refer to as the “Converted Term Loan”) and thereafter, in connection with the Separation and prior to the closing of the IPO, we assumed the obligations of BGC Partners as borrower under the Converted Term Loan. BGC Partners remained the borrower under the Revolving Credit Facility for any future draws and, as long as there is any principal amount outstanding under the Converted Term Loan, we guaranteed the obligations of BGC Partners under the Revolving Credit Facility. In connection with our assumption of the Converted Term Loan, BGC Partners assigned to us, and we assumed, all of BGC Partners’ rights and obligations under the Intercompany Revolver Note and, pursuant to the Separation, Newmark OpCo assumed all of BGC U.S. OpCo’s rights and obligations under the Intercompany Revolver Note.

Under the Revolving Credit Agreement, as amended, BGC Partners guaranteed our repayment obligations under the Converted Term Loan. As long as the Converted Term Loan remains unpaid in any portion, we will guarantee any draws by BGC Partners under the Revolving Credit Facility. Once the Converted Term Loan has been paid in full, we will no longer have obligations as a borrower or as a guarantor under the Revolving Credit Agreement. Upon repayment, no portion of the Term Loan or the Converted Term Loan may be reborrowed by us.

Pursuant to the Separation and Distribution Agreement, (a) Newmark Group, Inc. will indemnify, defend and hold harmless the members of the BGC Partners group and each of their respective directors, officers, general partners, managers and employees from and against any and all losses of such persons to the extent relating to, arising out of or resulting from payments made to satisfy any guarantee by a member of the BGC Partners group to a third personsimilar arrangements in respect of any jurisdiction, in the Term Loan Credit Agreement or the Converted Term Loan and (b) BGC Partners will indemnify, defend and hold harmless the members of the Newmark group and each of their respective directors, officers, general partners, managers and employees from and against any and all losses of such persons to the extent relating to, arising out of or resulting from payments made to satisfy any guarantee by a member of the Newmark group to a third person in respect of borrowings under the Revolving Credit Agreement other than the Converted Term Loans. In addition, (a) Newmark OpCo will indemnify, defend and hold harmless thefuture, with Cantor ~~group, the BGC Partners group and the Newmark group (other than Newmark OpCo~~ and its ~~subsidiaries)~~subsidiaries, provided that the applicable agreements contain customary terms for arrangements of this type and ~~each of their respective directors, officers, general partners, managers and employees, from and against all liabilities to~~that the ~~extent relating to, arising out of~~mark-up charged by the party employing one or ~~resulting from any guarantee~~more individuals for the benefit of ~~any member~~the other is between 3% and 7.5%, depending on the level of the Newmark group by any member of the BGC Partners group that survives following the Separation and (b) BGC U.S. OpCo and BGC Global OpCo will indemnify, defend and hold harmless the Cantor group, the Newmark group and the BGC Partners Group (other than BGC U.S. OpCo , BGC Global OpCo and their respective subsidiaries) and each of their respective directors, officers, general partners, managers and employees from and against all liabilities to the extent relating to, arising out of or resulting from any guaranteesupport required for the benefit of any member of the BGC Partners group by any member of the Newmark group that survives following the Separation, including, in each case, any guarantee under the Term Loan Credit Agreement or the Revolving Credit Agreement.

~~The Converted Term Loan will mature on September 8, 2019. The outstanding amounts under the Converted Term Loan will bear interest at a per annum rate equal~~employed individual(s).

Sublease to at our option, either (a) LIBOR for interest periods of one, two, three or six months, as selected by us, or upon the consent of all applicable lenders, such other period that is 12 months or less (in each case, subject to availability), as selected by us, plus an applicable margin, or (b) a base rate equal to the greatest of (i) the federal funds rate plus 0.5%, (ii) the prime rate as established by the Administrative Agent, and (iii) one-month LIBOR plus 1.0%, in each case plus an applicable margin. The applicable margin will initially be 2.25% with respect to LIBOR borrowings in (a) above and 1.25% with respect to base

Cantor Fitzgerald, L.P.

rate borrowings in (b) above. The applicable margin with respect to LIBOR borrowings in (a) above will range from 1.5% to 3.25% depending upon BGC Partners’ credit rating, and with respect to base rate borrowings in (b) above will range from 0.5% to 2.25% depending upon BGC Partners’ credit rating. In addition, (x) if there are any amounts outstanding under the Term Loan as of December 31, 2017, the pricing shall increase by 0.50% until the Term Loan is paid in full, and (y) if there are any amounts outstanding under the Term Loan as of June 30, 2018, the pricing shall increase by an additional 0.75% (and 1.25% in the aggregate) until the Term Loan is paid in full. Since the repayment in full of the Term Loan, the pricing for the Converted Term Loan has returned to the levels described above, as applicable. On March 31, 2018, the interest rate on the Term Loan and the Converted Term Loan was one-month LIBOR plus 2.25%, which was approximately 3.99% per annum.

~~The Revolving Credit Agreement also contain certain other customary affirmative and negative covenants and events of default that apply to us.~~

Pursuant to the Term Loan Credit Agreement the Converted Term Loan Credit Agreement and the Separation and Distribution Agreement, both the Term Loan and the Converted Term Loan were subject to a mandatory prepayment requirement by an amount equal to 100% of net cash proceeds of our IPO and all other material debt and equity issuances (and certain asset sales), in each case subject to customary exceptions. We contributed all of the net proceeds of the IPO to Newmark OpCo in exchange for a number of units representing Newmark OpCo limited partnership interests equal to the number of shares issued by us in the IPO. Newmark OpCo used all of such net proceeds, plus proceeds from BGC’s investment on March 7, 2018, of $242.0 million in Newmark limited partnership interests and cash on hand to repay in full the Term Loan (which intercompany indebtedness was originally issued by BGC U.S. OpCo and was assumed by Newmark OpCo in connection with the Separation).

The Term Loan Credit Agreement and the Converted Term Loan Credit Agreement and the Separation and Distribution Agreement also require us to apply net cash proceeds of material debt issuances after repayment in full of the Term Loan and Converted Term Loan (and subject to certain exceptions) to repay the BGC Notes.

~~Berkeley Point Warehouse Facilities~~

As of March 31, 2018, Berkeley Point had $950 million of committed loan funding available through three commercial banks and an uncommitted $325 million Fannie Mae loan repurchase facility. Consistent with industry practice, Berkeley Point’s existing warehouse facilities are short-term, requiring annual renewal. If any of the committed facilities are terminated or are not renewed or the uncommitted facility is not honored, we would be required to obtain replacement financing.

~~2042 Promissory Note~~

On June 26, 2012, BGC issued an aggregate of $112.5 million principal amount of its 8.125% Senior Notes due 2042 (the “8.125% BGC Senior Notes”). In connection with the issuance of the 8.125% BGC Senior Notes, BGC lent the proceeds of the 8.125% BGC Senior Notes to BGC U.S. OpCo, and BGC U.S. OpCo issued an amended and restated promissory note, effective as of June 26, 2012, with an aggregate principal amount of $112.5 million payable to BGC (the “2042 Promissory Note”). In connection with the Separation, on December 13, 2017, Newmark OpCo assumed all of BGC U.S. OpCo’s rights and obligations under the 2042 Promissory Note.

~~2019 Promissory Note~~

On December 9, 2014, BGC issued an aggregate of $300.0 million principal amount of its 5.375% Senior Notes due 2019 (the “5.375% BGC Senior Notes”). In connection with the issuance of the 5.375% BGC Senior Notes, BGC lent the proceeds of the 5.375% BGC Senior Notes to BGC U.S. OpCo, and BGC U.S. OpCo issued an amended and restated promissory note, effective as of December 9, 2014, with an aggregate principal amount of $300.0 million payable to BGC (the “2019 Promissory Note” and, together with the 2042 Promissory Note, the “BGC Notes”). In connection with the Separation, on December 13, 2017, Newmark OpCo assumed all of BGC U.S. OpCo’s rights and obligations under the 2019 Promissory Note.

~~Intercompany Credit Agreement~~

~~In connection with the Separation on December 13, 2017, BGC~~January 2022, Cantor entered into an ~~unsecured senior credit~~ agreement ~~with~~to sublease excess space from RKF Retail Holdings LLC, a subsidiary of Newmark, ~~(the “Original Credit Agreement”), which~~for a period of six months until June 30, 2022 at a rate of $0.1 million per month. In July 2022, the sublease was ~~amended~~extended one year to June 30, 2023. Newmark received $0.3 million and ~~restated, as Intercompany Credit Agreement, on March 19, 2018. The Intercompany Credit Agreement provides for each party to issue revolving loans to the other party in the lender’s discretion.~~

The Intercompany Credit Agreement eliminates certain provisions from the Original Credit Agreement but the facility maturity date and the interest rate applicable to loans outstanding under the Intercompany Credit Facility remain the same.

~~On March 19, 2018, Newmark borrowed $150.0~~$0.2 million from BGC pursuant to the facilities under the Intercompany Credit Agreement. The interest rate as of March 31, 2018 was 4.99%, which may be adjusted based on the higher of BGC’s or Newmark’s short-term borrowing rate then in effect at such time plus 100 basis points, or such other interest rate as may be mutually agreed between BGC and Newmark.. Newmark has transferred these proceeds to its restricted cash account pledged for the benefit of Fannie Mae. As of March 31, 2018, Newmark’s total net borrowings under the Intercompany Credit Agreement are $202.0 million.

~~Cash Flows~~Cantor for the three months ended March 31, ~~2018~~

~~For~~2023 and 2022, respectively.

Our fully diluted weighted-average share counts as of each of March 31, 2023 and 2022 were as follows (in thousands)

Three Months Ended March 31, 2018

Common stock outstanding⁽¹⁾

155,694

Partnership units⁽²⁾

90,222

RSUs (Treasury stock method)

275

Other

643

Total⁽³⁾

$
246,834

Common stock consisted of Class A shares, Class B shares and contingent shares for which all necessary conditions have been satisfied except for the passage of time. For the quarter ended March 31, 2018, the weighted-average number of Class A shares was 138.7 million shares, Class B shares was 15.8 million shares and approximately 1.6 million shares of contingent Class A common stock and limited partnership units were included in our fully diluted EPS computation because the conditions for issuance had been met by the end of the period.

Partnership units collectively include founding/working partner units, limited partnership units, and Cantor units (see Note 2—“Limited Partnership Interests in Newmark Holdings,” to our unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information).


	March 31,
	2023	2022
Common stock outstanding(1)	172,561	188,881
Partnership units(2)	65,150	56,220
RSUs (Treasury stock method)	1,757	5,757
Newmark exchange shares	418	1,957

Total(3)	239,886	252,815

3	~~For the quarter ended March 31, 2018, all potentially dilutive securities were included in the computation of fully diluted earnings per share.~~

(1)Common stock consisted of Class A shares and Class B shares. For the three months ended March 31, 2023, the weighted-average number of Class A shares was 151.3 million shares and Class B shares was 21.3 million that were included in our fully diluted EPS computation because the conditions for issuance had been met by the end of the period.

~~CONTINGENT PAYMENTS RELATED TO ACQUISITIONS~~

(2)Partnership units collectively include FPUs, limited partnership units, and Cantor Units, (see Note 2 — “Limited Partnership Interests in Newmark Holdings and BGC Holdings”, to our unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information). In general, these partnership units are potentially exchangeable into shares of Newmark Class A common stock. In addition, partnership units held by Cantor are generally exchangeable into shares of Newmark Class A common stock and/or for up to 24.5 million shares of Newmark Class B common stock. These partnership units also generally receive quarterly allocations of net income, after the deduction of the Preferred Distribution, based on their weighted-average pro rata share of economic ownership of the operating subsidiaries. As a result, these partnership units are included in the fully diluted share count calculation shown above.

(3)For the three months ended March 31, 2023, the weighted-average share count did not include any potentially anti-dilutive securities, which were excluded in the computation of fully diluted earnings per share.

Our fully diluted period-end (spot) share count as of each of March 31, 2023 and 2022 were as follows (in thousands):


	March 31,
	2023	2022
Common stock outstanding	174,428	189,843
Partnership units	64,084	55,556
Newmark RSUs	1,757	5,757
Newmark exchange shares	373	1,955
Other	—	378
Total	240,642	253,489

Contingent Payments Related to Acquisitions

Newmark completed acquisitions ~~in 2014, 2015, 2016 and 2017 for which~~from 2019 through the first quarter of 2023 with contingent cash consideration ~~may be issued on certain targets being met through 2020~~ of ~~$12.4~~$21.0 million. The contingent equity instruments ~~are issued by~~ and ~~are recorded as a payable to related party on the unaudited condensed consolidated balance sheet. The contingent~~ cash liability is recorded at fair value ~~as deferred consideration~~in “Accounts payable, accrued expenses and other liabilities” on ~~the~~Newmark’s accompanying unaudited condensed consolidated balance ~~sheet.~~

~~EQUITY METHOD INVESTMENTS~~

sheets.

Equity Method Investments

Newmark has an investment in Real Estate LP, a joint venture with Cantor in which Newmark has a less than majority ownership interest and has the ability to exert significant influence over the operating and financial policies. As of March 31, ~~2018,~~2023, Newmark had ~~$104.7~~$94.9 million in anthis equity method investment, which represents a 27% ownership in Real Estate LP.

~~Contractual Obligations~~ Newmark holds a redemption option in which Real Estate LP will redeem in full Newmark’s investment in Real Estate LP in exchange for Newmark’s capital account balance in Real Estate LP as of such time. In December 2022, the Audit Committee authorized a subsidiary of Newmark to rescind its July 20, 2022 written notice exercising the optional redemption of its 27.2% ownership interest in Real Estate LP and ~~Commitments~~

~~The following table summarizes certain~~amended the joint venture agreement between Newmark and Real Estate LP to provide for a redemption option for this investment after July 1, 2023, with proceeds to be received within 20 days of the redemption notice. A payment of a $44.0 thousand administrative fee was made to Newmark in connection with such amendment (see Note 8 — “Investments” for more information).

Registration Statements

On March 28, 2019, we filed a registration statement on Form S-3 pursuant to which CF&Co may make offers and sales of our ~~contractual obligations~~6.125% Senior Notes in connection with ongoing market-making transactions which may occur from time to time. Such market-making transactions in these securities may occur in the open market or may be privately negotiated at prevailing market prices at a time of resale or at related or negotiated prices. Neither CF&Co, nor any of our affiliates, has any obligation to make a market in our securities, and CF&Co or any such other affiliate may discontinue market-making activities at any time without notice. Newmark does not receive any proceeds from market-making activities in these securities by CF&Co (or any of its affiliates). This registration statement expired in March 2022. On March 25, 2022, we filed a new market-making Registration Statement on Form S-3 to replace the one that was expiring.

We have an effective registration statement on Form S-4, with respect to the offer and sale of up to 20.0 million shares of our Class A common stock from time to time in connection with business combination transactions, including acquisitions of other businesses, assets, properties or securities. As of March 31, 2023, we have issued 1.7 million shares of our Class A common stock under this registration statement.

Construction Loans

As of March 31, 2023 and December 31, ~~2017 (in thousands):~~

Total

Less than
1 Year

1-3
Years

3-5
Years

More than
5 Years

Operating leases⁽¹⁾

$
328,697

$
36,624

$
69,410

$
61,940

$
160,723

Warehouse facility

360,440

360,440

—

—

—

Long-term debt⁽²⁾

812,500

—

700,000

—

112,500

Intercompany Credit Agreement

202,000

202,000

—

—

—

Total contractual obligations

$
1,703,637

$
599,064

$
769,410

$
61,940

$
273,223

~~(1)~~

Operating leases are related to rental payments under various non-cancelable leases principally for office space, net of sublease payments to be received. The total amount of sublease payments to be received is approximately $2.9 over the life of the agreement.

2022, Newmark was committed to fund approximately $0.5 billion and $0.3 billion, respectively, which is the total remaining draws on construction loans originated by Newmark under the HUD 221(d)4, 220 and 232 programs, rate locked loans that have not been funded, and forward commitments, as well as the funding for Fannie Mae structured transactions. Newmark also has corresponding commitments to sell these loans to various purchasers as they are funded.

~~(2)~~

Long-term debt reflects long-term borrowings of $400.0 million under Newmark’s Term Loan: the issuance of $112.5 million of the 2042 Promissory Notes due June 26, 2042, and $300.0 million of the 2019 Promissory Notes due December 9, 2019. See Note 20–“Long-Term Debt” for more information regarding these obligations.

Legal Proceedings

On August 5, 2022, Robert Garfield filed a complaint in the Delaware Court of Chancery, captioned Robert Garfield v. Howard W. Lutnick, et al. (Case No. 2022-0687), against the members of the Board and Mr. Lutnick in his capacity as Chairman of the Board and controlling stockholder. This derivative complaint alleges that in connection with the December 2021 bonus award, payable over a 3-year period, granted to Mr. Lutnick: (i) the Board breached its fiduciary duty, (ii) neither the award nor the approval process employed by the Compensation Committee were entirely fair to the Company and its stockholders, and (iii) the members of the Compensation Committee did not exercise independent judgment. The complaint alleges that Mr. Lutnick breached his fiduciary duty as Chairman and controlling shareholder by forcing the Company to grant the award and by accepting it. The complaint seeks rescission of the award and other compensation, as well as damages and other relief.

On October 7, 2022, Cardinal Capital Management, LLC filed a complaint in the Court of Chancery, captioned Cardinal Capital Management, LLC v. Howard W. Lutnick, et al. (Case No. 2022-0909-SG), against Mr. Lutnick, the members of the Compensation Committee in 2021, who were Virginia S. Bauer, Kenneth A. McIntyre and Michael Snow as members of the Compensation Committee, and Barry Gosin, Michael Rispoli and Stephen Merkel, as Newmark's executive officers. The derivative complaint alleges that in connection with the Company’s June 2021 partnership units exchange for Mr. Lutnick and Officers and the December 2021 bonus award, payable over a 3-year period, granted to Mr. Lutnick: (i) the Compensation Committee and Officers breached their fiduciary duties and wasted corporate assets; and (ii) Mr. Lutnick and the Officers were unjustly enriched. The complaint also alleges that Mr. Lutnick breached his fiduciary duty as Chairman and controlling shareholder, and wasted corporate assets, by forcing the Company to grant the award and by accepting it. The complaint seeks recoupment of the partnership units exchange and the bonus award, as well as damages and other relief.

On December 13, 2022, the Court of Chancery entered an order consolidating the Garfield and Cardinal actions into a single, consolidated action deemed to have commenced on August 5, 2022, when the Garfield action was filed. On January 10, 2023, plaintiffs filed a consolidated amended complaint, whose claims, as well as requested relief, mirror the claims and relief sought in the Cardinal action in all material respects. The Company’s position is that the partnership units exchange was appropriate and in the best interests of the Company, and that the bonus award was properly approved by the Compensation Committee comprised of independent directors (which does not include Mr. Lutnick) after careful consideration of his contributions to the Company, including the Company’s superior financial results, and following an extensive process that included advice from independent legal counsel and an independent compensation. The Company believes the lawsuit has no merit. However, as with any litigation, the outcome cannot be determined with certainty.

On March 9, 2023, a purported class action complaint was filed against Cantor, BGC Holdings, and Newmark Holdings in the U.S. District Court for the District of Delaware (Civil Action No. 1:23-cv-00265). The collective action, which was filed by seven former limited partners on their own behalf and on behalf of other similarly situated limited partners, alleges a claim for breach of contract against all defendants on the basis that the defendants failed to make payments due under the relevant partnership agreements. Specifically, the plaintiffs allege that the non-compete and economic forfeiture provisions upon which the defendants relied to deny payment are unenforceable under Delaware law. The plaintiffs allege a second claim against Cantor and BGC Holdings for antitrust violations under the Sherman Act on the basis that the Cantor and BGC Holdings partnership agreements constitute unreasonable restraints of trade. In that regard, the plaintiffs allege that the non-compete and economic forfeiture provisions of the Cantor and BGC Holdings partnership agreements, as well as restrictive covenants included in partner separation agreements, cause anticompetitive effects in the labor market, insulate Cantor and BGC Holdings from competition, and limit innovation. The plaintiffs seek a determination that the case may be maintained as a class action, an injunction prohibiting the allegedly anticompetitive conduct, and monetary damages of at least $5,000,000. The Company believes the lawsuit has no merit. However, as with any litigation, the outcome cannot be determined with certainty.

Critical Accounting Policies and Estimates

The preparation of our accompanying unaudited condensed consolidated financial statements in conformity with U.S. GAAP guidance requires management to make estimates and assumptions that affect the reported amounts of the assets and liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities in our accompanying unaudited condensed consolidated financial statements. These accounting estimates require the use of assumptions about matters, some which are highly uncertain at the time of estimation. To the extent actual experience differs from the assumptions used, our accompanying unaudited condensed consolidated balance sheets, ~~condensed~~ consolidated statements of operations and ~~condensed~~ consolidated statements of cash flows could be materially affected. We believe that of our significant accounting policies, the following policies involve a higher degree of judgment and complexity.

Revenue Recognition

We derive our revenues primarily through commissions from brokerage services, ~~gains from~~commercial mortgage ~~banking activities/originations,~~origination, net, revenues from real estate management services, servicing fees and other revenues. Revenue from contracts with customers is recognized when, or as, ~~the Company satisfies its~~we satisfy our performance obligations by transferring the promised goods or services to the customers as determined by when, or as, the customer obtains control of that good or service. A performance obligation may be satisfied over time or at a point in time. Revenue from a performance obligation satisfied over time is recognized by measuring ~~the Company’s~~our progress in satisfying the performance obligation as evidenced by the transfer of the goods or services to the customer. Revenue from a performance obligation satisfied at a point in time is recognized at the point in time when the customer obtains control over the promised good or service.

The amount of revenue recognized reflects the consideration we expect to be entitled to in exchange for those promised goods or services (i.e., the “transaction price”). In determining the transaction price, we consider consideration promised in a contract that includes a variable amount, referred to as variable consideration, and estimate the amount of consideration due ~~the Company.~~to us. Additionally, variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. In determining when to include variable consideration in the transaction price, ~~the Company considers~~we consider all information (historical, current and forecast) that is available, including the range of possible outcomes, the predictive value of past experiences, the time period of when uncertainties ~~expect~~are expected to be resolved and the amount of consideration that is susceptible to factors outside of ~~the Company’s~~our influence.

We also use third-party service providers in the provision of its services to customers. In instances where a third-party service provider is used, ~~the Company performs~~we perform an analysis to determine whether ~~the Company is~~we are acting as a principal or an agent with respect to the services provided. To the extent that ~~the Company determines that it is~~we are acting as a principal, the revenue and the expenses incurred are recorded on a gross basis. In instances where ~~the Company has determined that it is~~we are acting as an agent, the revenue and expenses are presented on a net basis within the revenue line item.

In some instances, ~~the Company performs~~we perform services for customers and ~~incurs~~incur out-of-pocket expenses as part of delivering those services. ~~The Company’s~~Our customers agree to reimburse ~~the Company~~us for those expenses, and those reimbursements are part of the contract’s transaction price. Consequently, these expenses and the reimbursements of such expenses from the customer are presented on a gross basis because the services giving rise to the out-of-pocket expenses do not transfer a good or service. The reimbursements are included in the transaction price when the costs are incurred, and the reimbursements are due from the customer.

MSRs, Net

We initially recognize and measure the rights to service mortgage loans at fair value and subsequently measure them using the amortization method. We recognize rights to service mortgage loans as separate assets at the time the underlying originated mortgage loan is sold, and the value of those rights is included in the determination of the gains on loans held for sale. Purchased MSRs, including MSRs purchased from CCRE, are initially recorded at fair value, and subsequently measured using the amortization method.

We receive up to a 3-basis point servicing fee and/or up to a 1-basis point surveillance fee on certain Freddie Mac loans after the loan is securitized in a Freddie Mac pool. The Freddie Mac Strip is also recognized at fair value and subsequently measured using the amortization method, but is recognized as a MSR at the securitization date.

MSRs are assessed for impairment, at least on an annual basis, based upon the fair value of those rights as compared to the amortized cost. Fair values are estimated using a valuation model that calculates the present value of the future net servicing cash flows. In using this valuation method, we incorporate assumptions that management believes market participants would use in estimating future net servicing income. The fair value estimates are sensitive to significant assumptions used in the valuation model such as prepayment rates, cost of servicing, escrow earnings rates, discount rates and servicing multiples, which are affected by expectations about future market or economic conditions derived, in part, from historical data. It is reasonably possible that such estimates may change. We amortize the MSRs in proportion to, and over the period of, the projected net servicing income. For purposes of impairment evaluation and measurement, we stratify MSRs based on predominant risk characteristics of the underlying loans, primarily by investor type (Fannie Mae/Freddie Mac, FHA/Ginnie Mae, commercial mortgage-backed securities and other). To the extent that the carrying value exceeds the fair value of a specific MSR strata, a valuation allowance is established, which is adjusted in the future as the fair value of MSRs increases or decreases. Reversals of valuation allowances cannot exceed the previously recognized impairment up to the amortized cost.

Equity-Based and Other Compensation

Discretionary Bonus: A portion of our compensation and employee benefits expense comprises discretionary bonuses, which may be paid in cash, equity, partnership awards or a combination thereof. We accrue expense in a period based on revenues in that period and on the expected combination of cash, equity and partnership units. Given the assumptions used in estimating discretionary bonuses, actual results may differ.

~~Restricted Stock Units:~~

RSUs: We account for equity-based compensation under the fair value recognition provisions of U.S. GAAP guidance. ~~Restricted stock units (which we refer to as “RSUs”)~~RSUs provided to certain employees are accounted for as equity awards, and in accordance with U.S. GAAP guidance, we are required to record an expense for the portion of the RSUs that is ultimately expected to vest. Further, U.S. GAAP guidance requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Because significant assumptions are used in estimating employee turnover and associated forfeiture rates, actual results may differ from our estimates under different assumptions or conditions.

The fair value of RSU awards to employees is determined on the date of grant, based on the fair value of ~~BGC Partners’~~our Class A common stock. Generally, RSUs granted by us as employee compensation do not receive dividend equivalents; as such, we adjust the fair value of the RSUs for the present value of expected forgone dividends, which requires us to include an estimate of expected dividends as a valuation input. This grant-date fair value is amortized to expense ratably over the awards’ vesting periods. For RSUs with graded vesting features, we have made an accounting policy election to recognize compensation cost on a ~~straight line~~straight-line basis. The amortization is reflected as non-cash equity-based compensation expense in our accompanying unaudited condensed consolidated statements of operations.

Restricted Stock: Restricted stock provided to certain employees is accounted for as an equity award, and as per U.S. GAAP guidance, we are required to record an expense for the portion of the restricted stock that is ultimately expected to vest. We have granted restricted stock that is not subject to continued employment or service; however, transferability is subject to compliance with our and our affiliates’ customary non-compete obligations. Such shares of restricted stock are generally saleable by partners in 5 to 10 years. Because the restricted stock is not subject to continued employment or service, the grant-date fair value of the restricted stock is expensed on the date of grant. The expense is reflected as non-cash equity-based compensation expense in our accompanying unaudited condensed consolidated statements of operations.

Limited Partnership Units: Limited partnership units in Newmark Holdings and BGC Holdings ~~and Newmark Holdings~~ are ~~generally~~ held by ~~employees. Generally such units~~Newmark employees and receive quarterly allocations of net income ~~which~~and are ~~cash distributed on a quarterly basis and~~ generally contingent upon services being provided by the unit holders. As discussed above, preferred units in ~~BGC~~Newmark Holdings and ~~Newmark~~BGC Holdings are not entitled to participate in partnership distributions other than with respect to a distribution at a rate of either 0.6875% (which is 2.75% per calendar year) or such other amount as set forth in the award documentation. The quarterly allocations of net income to such limited partnership units are reflected as a component of compensation expense under ~~“Allocations~~“Equity-based compensation and allocations of net income ~~and grants of exchangeability~~ to limited partnership ~~units”~~units and FPUs” in our accompanying unaudited condensed consolidated statements of operations.

Certain of these limited partnership units entitle the holders to receive post-termination payments equal to the notional amount in four equal yearly installments after the holder’s termination. These limited partnership units are accounted for as post-termination liability awards under U.S. GAAP guidance. Accordingly, we recognize a liability for these units on our unaudited condensed consolidated statements of financial condition as part of “Accrued compensation” for the amortized portion of the post-termination payment amount, based on the current fair value of the expected future cash payout. We amortize the post-termination payment amount, less an expected forfeiture rate, over the vesting period, andguidance, which requires that Newmark record an expense for such awards based on the change in value at each reporting period and include the expense in our accompanying unaudited condensed consolidated statements of operations as part of ~~“Compensation~~“Equity-based compensation and ~~employee benefits.~~allocations of net income to limited partnership units and FPUs.”

The liability for limited partnership units with a post-termination payout is included in “Other long-term liabilities” on our accompanying unaudited condensed consolidated balance sheets.

Certain limited partnership units ~~in BGC Holdings and~~held by Newmark ~~Holdings~~employees are granted exchangeability into ~~BGC Partners~~ Class A common stock ~~on a one-for-one basis (subject to adjustments and other requirements as set forth~~or may be redeemed in connection with the ~~BGC Holdings and Newmark Holdings limited partnership agreement).~~grant of shares of Class A common stock. At the time exchangeability is granted, ~~we recognize~~or the shares are issued, Newmark recognizes an expense based on the fair value of the award on that date, which is included in ~~“Allocations~~“Equity-based compensation and allocations of net income ~~and grants of exchangeability~~ to limited partnership ~~units”~~units and FPUs” in our accompanying unaudited condensed consolidated statements of operations.

Employee Loans: We have entered into various agreements with certain of our employees and partners whereby these individuals receive loans that may be either wholly or in part repaid from distributions that the individuals receive on some or all of their limited partnership interests or may be forgiven over a period of time. Cash advance distribution loans are documented in formal agreements and are repayable in timeframes outlined in the underlying agreements. We intend for these advances to be repaid in full from the future distributions on existing and future awards granted. The ~~distributions~~allocations of net income to the awards are treated as compensation expense ~~when made~~ and the proceeds from distributions are used to repay the loan. The forgivable portion of any loans is recognized as compensation expense in our accompanying unaudited

condensed consolidated statements of operations over the life of the loan. We review the loan balances each reporting period for collectability. If we determine that the collectability of a portion of the loan balances is not expected, we recognize a reserve against the loan balances. Actual collectability of loan balances may differ from our estimates. As of March 31, ~~2018~~2023 and December 31, ~~2017,~~2022, the aggregate balance of employee loans, net of reserve, was ~~$226.7~~$605.9 million and ~~$209.6~~$500.8 million, respectively, and is included as “Loans, forgivable loans and other receivables from employees and ~~partners”~~partners, net” in our accompanying unaudited condensed consolidated balance sheets. Compensation expense for the above-mentioned employee loans for the three months ended March 31, ~~2018~~2023 and ~~2017~~2022, was ~~$6.0~~$25.4 million and ~~$2.0~~$18.9 million, respectively. The compensation expense related to these loans was included as part of “Compensation and employee benefits” in our accompanying unaudited condensed consolidated statements of operations.

Goodwill

Goodwill is the excess of the purchase price over the fair value of identifiable net assets acquired in a business combination. As prescribed in U.S. GAAP guidance, Intangibles -– Goodwill and Other Intangible Assets, goodwill is not amortized, but instead is periodically tested for impairment. We review goodwill for impairment on an annual basis during the fourth quarter of each fiscal year or whenever an event occurs, or circumstances change that could reduce the fair value of a reporting unit below its carrying amount.

When reviewing goodwill for impairment, we first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. If the results of the qualitative assessment ~~are~~indicate that it is more likely than not ~~conclusive,~~that the fair value of a reporting unit is less than its carrying amount, or if we choose to bypass the qualitative assessment, we perform a quantitative goodwill impairment analysis ~~using~~as follows.

The quantitative goodwill impairment test, used to identify both the existence of impairment and the amount of impairment loss, compares the fair value of a ~~two-step process. Newmark had~~reporting unit with its carrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss should be recognized in an amount equal to that excess, limited to the total amount of goodwill ~~balances as of March 31, 2018 and December 31, 2017 of $475.0 million and $477.0 million, respectively.~~

~~The first step of~~allocated to that reporting unit. If the ~~process involves comparing each reporting unit’s~~ estimated fair value toof a reporting unit exceeds its carrying value, ~~including goodwill.~~goodwill is deemed not to be impaired. To estimate the fair value of the reporting ~~units,~~unit, we use a discounted cash flow model and data regarding market comparables. The valuation process requires significant judgment and involves the use of significant estimates and assumptions. These assumptions include cash flow projections, estimated cost of capital and the selection of peer companies and relevant multiples. Because significant assumptions and estimates are used in projecting future cash flows, choosing peer companies and selecting relevant multiples, actual results may differ from our estimates under different assumptions or conditions. If

Credit Losses

The CECL methodology, which became effective on January 1, 2020, requires us to estimate lifetime expected credit losses by incorporating historical loss experience, as well as current and future economic conditions over a reasonable and supportable period beyond the ~~estimated fair value~~balance sheet date. The adoption of CECL resulted in the recognition of reserves relating to our loss sharing guarantee provided to Fannie Mae under the Fannie Mae DUS Program which was previously accounted for under the incurred loss model, which generally required that a ~~reporting unit exceeds its carrying value, goodwill~~loss be incurred before it was recognized. Additional reserves were recognized for our receivables from customers including certain employee receivables carried at amortized cost.

The expected credit loss is ~~deemed not~~modeled based on our historical loss experience adjusted to ~~be impaired. If the carrying value exceeds estimated fair value, there is an indication of potential impairment and the second step is performed to measure the~~reflect current conditions. A significant amount of ~~potential impairment.~~

~~The second step~~judgment is required in the determination of the ~~process involves~~appropriate reasonable and supportable period, the ~~calculation~~methodology used to incorporate current and future macroeconomic conditions, determination of ~~an implied fair value~~the probability of ~~goodwill for each reporting unit for~~and exposure at default, all of which ~~step one indicated a potential impairment may exist. The implied fair value of goodwill is determined by~~are ultimately used in measuring the ~~excess~~quantitative components of our reserves. Beyond the ~~estimated fair value~~reasonable and supportable period, we estimate expected credit losses using our historical loss rates. We also consider whether to adjust the quantitative reserves for certain external and internal qualitative factors, which consequentially may increase or decrease the reserves for credit losses and receivables. In order to estimate credit losses, assumptions about current and future economic conditions are incorporated into the model using multiple economic scenarios that are weighted to reflect the conditions at each measurement date.

During the three months ended March 31, 2023, there was an increase of ~~the reporting unit as calculated~~$1.4 million in ~~step one, over the estimated fair values of the individual assets, liabilities~~our reserves. These reserves were based on macroeconomic forecasts are critical inputs into our model and ~~identified intangibles. Events~~material movements in variables such as, ~~economic weakness, significant declines in operating results of reporting units,~~the U.S. unemployment rate and U.S. GDP growth rate could significantly affect our estimated expected credit losses. These macroeconomic forecasts, under different conditions or ~~significant changes to critical inputs of the goodwill impairment test (e.g.,~~using different assumptions or estimates ~~of cash flows or cost of capital) could cause the estimated fair value of our reporting units to decline, which~~ could result in ~~an impairment~~significantly different changes in reserves for credit losses. It is difficult to estimate how potential changes in specific factors might affect the overall reserves for credit losses and current results may not reflect the potential future impact of ~~goodwill in the future.~~

macroeconomic forecast changes.

Income Taxes

Newmark accounts for income taxes using the asset and liability method as prescribed in U.S. GAAP guidance, Income ~~Taxes~~.Taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to basis differences between ~~the~~our accompanying unaudited condensed consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Certain of Newmark’s entities are taxed as U.S. partnerships and are subject to ~~the Unincorporated Business Tax (“UBT”)~~UBT in New York City. Therefore, the tax liability or benefit related to the partnership income or loss except for UBT rests with the partners, rather than the partnership entity. As such, the partners’ tax liability or benefit is not reflected in ~~Newmark’s~~our accompanying unaudited condensed consolidated financial statements. The tax-related assets, liabilities, provisions or benefits included in ~~Newmark’s~~our accompanying unaudited condensed consolidated financial statements also reflect the results of the entities that are taxed as corporations, either in the U.S. or in foreign jurisdictions.

Newmark’s income taxes as presented are calculated on a separate return basis, although Newmark’s operations have historically been included in BGC’s U.S. federal and state tax returns or separate non-U.S. jurisdictions tax returns. As Newmark operations in many jurisdictions are unincorporated commercial units of BGC and its subsidiaries, stand-alone tax returns have not been filed for the operations in these jurisdictions. Accordingly, Newmark’s tax results as presented are not necessarily reflective of the results that Newmark would have generated on a stand-alone basis.

Newmark provides for uncertain tax positions based upon management’s assessment of whether a tax benefit is more likely than not to be sustained upon examination by tax authorities. Management is required to determine whether a tax position is more likely than not to be sustained upon examination by tax authorities, including resolution of any related appeals or litigation processes, based on the technical merits of the position. Because significant assumptions are used in determining whether a tax benefit is more likely

than not to be sustained upon examination by tax authorities, actual results may differ from Newmark’s estimates under different assumptions or conditions. Newmark recognizes interest and penalties related to uncertain tax positions in “Provision for income taxes” in ~~Newmark’s~~our accompanying unaudited condensed consolidated statements of operations.

A valuation allowance is recorded against deferred tax assets if it is deemed more likely than not that those assets will not be realized. In assessing the need for a valuation allowance, Newmark considers all available evidence, including past operating results, the existence of cumulative losses in the most recent fiscal years, estimates of future taxable income and the feasibility of tax planning strategies.

The measurement of current and deferred income tax assets and liabilities is based on provisions of enacted tax laws and involves uncertainties in the application of tax regulations in the U.S. and other tax jurisdictions. Because Newmark’s interpretation of complex tax law may impact the measurement of current and deferred income taxes, actual results may differ from these estimates under different assumptions regarding the application of tax law.

On December 22, 2017, the SEC issued Staff Accounting Bulletin (“SAB 118”), which provides guidance on accounting for tax effects of the 2017 Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the 2017 Tax Act enactment date for companies to complete the accounting under ASC 740. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the 2017 Tax Act for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of the 2017 Tax Act is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate to be included in the financial statements. If a company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply ASC 740 on the basis of the provision of the tax laws that were in effect immediately before the enactment of the 2017 Tax Act. While Newmark is able to make reasonable estimates of the impact of the reduction in corporate rate and the deemed repatriation transition tax, the final impact of the 2017 Tax Act may differ from these estimates, due to, among other things, changes in interpretations, additional guidance that may be issued, unexpected negative changes in business and market conditions that could reduce certain tax benefits, and actions taken by Newmark as a result of the 2017 Tax Act.

Derivative Financial Instruments

We have loan commitments to extend credit to third parties. The commitments to extend credit are for mortgage loans at a specific rate (rate lock commitments). These commitments generally have fixed expiration dates or other termination

clauses and may require a fee. We are committed to extend credit to the counterparty as long as there is no violation of any condition established in the commitment contracts.

We simultaneously enter into a Forward Sales Contract or an agreement to deliver such mortgages to third-party investors at a fixed ~~price (forward sale contracts).~~

price.

Both the commitment to extend credit and the forward sale commitment qualify as derivative financial instruments. We recognize all derivatives on ~~the~~our accompanying unaudited condensed consolidated balance sheets as assets or liabilities measured at fair value. The change in the derivatives fair value is recognized in current period earnings.

~~Recent Accounting Pronouncements~~

Newmark entered into variable postpaid forward contracts as a result of the Nasdaq Forwards. These contracts qualified as derivative financial instruments. The Nasdaq Forwards provided Newmark with the ability to redeem the EPUs for Nasdaq shares, and as these instruments were not legally detachable, they represented single financial instruments. The financial instruments’ EPU redemption feature for Nasdaq shares was not clearly and closely related to the economic characteristics and risks of Newmark’s EPU equity host instruments, and, therefore, it represented an embedded derivative that is required to be bifurcated and recorded at fair value on our accompanying unaudited condensed consolidated balance sheets, with all changes in fair value recorded as a component of “Other income (loss), net” on our accompanying unaudited condensed consolidated statements of operations. See Note ~~1—“Organization and Basis of Presentation,”~~11 — “Derivatives”, to our accompanying unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.

Recent Accounting Pronouncements

See Note 1 — “Organization and Basis of Presentation”, to our accompanying unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q, for information regarding recent accounting pronouncements.

Capital Deployment Priorities, Dividend Policy

~~Our board~~ and Repurchase and Redemption Program

Since 2021, we have returned $792.0 million dollars to shareholders through share repurchases and redemptions. In addition, we paid dividends and distributions. We expect to continue returning capital to shareholders, although our near term rate of ~~directors has authorized a~~share repurchases are expected to decline. This is due to the current market dislocation, which is providing us with high quality opportunities to hire the industry’s best talent and acquire companies at attractive valuations.

Traditionally, our dividend policy provided that ~~reflects our intention~~we expect to pay a quarterly cash dividend ~~starting with the first quarter of 2018. Any dividends~~ to our common stockholders ~~will be calculated~~ based on ~~our expected post-tax Adjusted Earnings per fully diluted share, as a measure of net income for the year. See below for a definition of “post-tax Adjusted Earnings” per fully diluted share.~~

~~We currently expect that, in any year, our aggregate quarterly dividends will be equal to or less than our estimate at the end of the first quarter of such year of 25% of~~ our post-tax Adjusted Earnings per fully diluted share to our common stockholders for such year. The declaration, payment, timing and amount of any future dividends payable by us will be at the discretion of our board of directors; provided that any dividend to our common stockholders that would result in the dividendsshare. Please see below for a ~~year exceeding 25%~~detailed definition of ~~our~~ post-tax Adjusted Earnings per fully diluted ~~share for such year shall require the consent of the holder of a majority of the Newmark Holdings exchangeable limited partnership interests, which is currently Cantor.~~

For the first quarter of 2018, our board of directors declared a dividend of 9 cents per share based on management’s current expectation of our post-tax Adjusted Earning per fully diluted share for the year, and has indicated that it expects such dividend to remain consistent for the full year. To the extent that 25% of our post-tax Adjusted Earnings per fully diluted share for the year exceeds this dividend on an annualized basis (i.e. an expected aggregate of $0.36 for four quarters), we do not expect that our board of directors will increase the amount of the quarterly dividend payment during the year, or make downward adjustments in the event of a shortfall, although no assurance can be given that adjustments will not be made during the year. We have indicated that we expect to announce the annual expected dividend rateshare. Beginning in the first quarter of 2020, and for all of the quarterly periods in 2020 and 2021, the Board reduced the quarterly dividend to $0.01 per share, out of an abundance of caution, in order to strengthen the Company’s balance sheet as the real estate markets faced difficult and unprecedented macroeconomic conditions due to the COVID-19 pandemic. Additionally, beginning with the first quarter 2020, Newmark Holdings reduced its distributions to or on behalf of its partners. For all of the quarterly periods in 2022, the Board increased the quarterly dividend to $0.03 per share. In addition, Newmark increased the after-tax distributions to its partners to $0.06 per unit. The Exchange Ratio was adjusted in accordance with the terms of the Separation and Distribution Agreement due to any difference in our dividend policy and the distribution policy of Newmark Holdings.

Any dividends, if and when declared by our Board, will be paid on a quarterly basis. The dividend to our common stockholders is expected to be calculated based on a number of factors, including post-tax Adjusted Earnings allocated to us and generated over the fiscal quarter ending prior to the record date for the dividend. No assurance can be made, however, that a dividend will be paid each ~~year.~~

quarter. The declaration, payment, timing, and amount of any future dividends payable by us will be at the sole discretion of our ~~board~~Board. With respect to any distributions which are declared, amounts paid to or on behalf of ~~directors.~~ partners will at least cover their related tax payments. Whether any given post-tax amount is equivalent to the amount received by a stockholder also on an after-tax basis depends upon stockholders’ and partners’ domiciles and tax status.

We received 6,222,340 Nasdaq shares worth $1,093.9 million as of June 30, 2021. On July 2, 2021, we settled the third and fourth Nasdaq Forwards with 944,329 Nasdaq shares worth $166.0 million and retained 5,278,011 Nasdaq shares. In connection with the 2021 Equity Event, we used $484.4 million, of which $203.5 million was to reduce our fully diluted share count by 16.3 million, and $280.9 million related to amounts paid on behalf of, or to partners for withholding taxes related to unit exchanges and/or redemptions, cash paid for redemption of HDUs, and other items. From July 2021 through March 2022, we sold all of the Nasdaq shares.

We are a holding company, with no direct operations, and therefore we are able to pay dividends only from our available cash on hand and funds received from distributions from Newmark OpCo. Our ability to pay dividends may also be limited by regulatory ~~or other~~ considerations as well as by covenants contained in financing or other agreements. In addition, under

Delaware law, ~~our,~~ dividends may be payable only out of surplus, which is our net assets minus our capital (as defined under Delaware law), or, if we have no surplus, out of our net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year. Accordingly, any unanticipated accounting, tax, regulatory or other charges against net income may adversely affect our ability to declare and pay dividends. While we intend to declare and pay dividends quarterly, there can be no assurance that our ~~board of directors~~Board will declare dividends at all or on a regular basis or that the amount of our dividends will not change.

Non-GAAP Financial Measures

Newmark uses non-GAAP financial measures that differ from the most directly comparable measures calculated and presented in accordance with Generally Accepted Accounting Principles in the United States ("GAAP"). Non-GAAP financial measures used by the Company include "Adjusted Earnings before noncontrolling interests and taxes", which is used interchangeably with "pre-tax Adjusted Earnings"; "Post-tax Adjusted Earnings to fully diluted shareholders", which is used interchangeably with "post-tax Adjusted Earnings"; "Adjusted EBITDA"; and "Liquidity". The definitions of these and other non-GAAP terms are below.

Adjusted Earnings Defined

Newmark uses non-GAAP financial measures, including ~~but not limited~~“Adjusted Earnings before noncontrolling interests and taxes” and “Post-tax Adjusted Earnings to ~~“pre-tax Adjusted Earnings” and “post-tax Adjusted Earnings,”~~fully diluted shareholders” which are supplemental measures of operating results ~~that are~~ used by management to evaluate the financial performance of the Company and its consolidated subsidiaries. Newmark believes that Adjusted Earnings best reflect the operating earnings generated by the Company on a consolidated basis and are the earnings which management considers ~~available for, among other things, dividends and/or distributions to Newmark’s common stockholders and holders of Newmark Holdings partnership units during any period.~~

when managing its business.

As compared with ~~items such as~~ “Income (loss) before income taxes and noncontrolling interests” and “Net income (loss) for fully diluted shares” ~~all~~both prepared in accordance with GAAP, Adjusted Earnings calculations primarily exclude certain non-cash ~~compensation~~items and other expenses that generally do not involve the receipt or outlay of cash by the Company and/or which do not dilute existing ~~stockholders, as described below.~~stockholders. In addition, Adjusted Earnings calculations exclude certain gains and charges that management believes do not best reflect the ordinary ~~operating~~ results of ~~Newmark~~

~~Adjustments Made to Calculate Pre-Tax~~Newmark. Adjusted Earnings

~~Newmark defines pre-tax~~ is calculated by taking the most comparable GAAP measures and making adjustments for certain items with respect to compensation expenses, non-compensation expenses, and other income, as discussed below.

Calculations of Compensation Adjustments for Adjusted Earnings and Adjusted EBITDA

Treatment of Equity-Based Compensation under Adjusted Earnings and Adjusted EBITDA

The Company’s Adjusted Earnings and Adjusted EBITDA measures exclude all GAAP charges included in the line item “Equity-based compensation and allocations of net income to limited partnership units and FPUs” (or “equity-based compensation” for purposes of defining the Company’s non-GAAP results) as recorded on the Company’s GAAP ~~income (loss) from operations before income~~Consolidated Statements of Operations and GAAP Consolidated Statements of Cash Flows. These GAAP equity-based compensation charges reflect the following items:

•Charges with respect to grants of exchangeability, which reflect the right of holders of limited partnership units with no capital accounts, such as LPUs and PSUs, to exchange these units into shares of common stock, or into partnership units with capital accounts, such as HDUs, as well as cash paid with respect to taxes withheld or expected to be owed by the unit holder upon such exchange. The withholding taxes related to the exchange of certain non-exchangeable units without a capital account into either common shares or units with a capital account may be funded by the redemption of preferred units such as PPSUs.

•Charges with respect to preferred units. Any preferred units would not be included in the Company’s fully diluted share count because they cannot be made exchangeable into shares of common stock and ~~noncontrolling interest~~are entitled only to a fixed distribution. Preferred units are granted in ~~subsidiaries, excluding~~connection with the grant of certain ~~items such as:~~

limited partnership units that may be granted exchangeability or redeemed in connection with the grant of shares of common stock at ratios designed to cover any withholding taxes expected to be paid. The Company believes that this is an acceptable alternative to the common practice among public companies of issuing the gross amount of shares to employees, subject to cashless withholding of shares, to pay applicable withholding taxes.

~~Non-cash asset impairment~~•GAAP equity-based compensation charges ~~if any;~~

with respect to the grant of an offsetting amount of common stock or partnership units with capital accounts in connection with the redemption of non-exchangeable units, including PSUs and LPUs.

•Charges related to amortization of RSUs and limited partnership units.

•Charges related to grants of equity awards, including common stock or partnership units with capital accounts.

•Allocations of net income to limited partnership ~~units;~~

units and FPUs. Such allocations represent the pro-rata portion of post-tax GAAP earnings available to such unit holders.

~~Non-cash~~The amount of certain quarterly equity-based compensation charges ~~related to~~is based upon the ~~amortization~~Company’s estimate of ~~intangibles with respect to acquisitions;~~

such expected charges during the annual period, as described further below under “Methodology for Calculating Adjusted Earnings Taxes”.

~~Non-cash charges relating to grants of exchangeability to limited partnership units.~~

Virtually all of ~~the Company’s~~Newmark’s key executives and producers have ~~partnership~~equity or ~~equity~~partnership stakes in the Company and its subsidiaries and generally receive deferred equity or limited partnership units as part of their compensation. A significant percentage of Newmark’s fully diluted shares are owned by ~~the Company’s~~its executives, partners, and employees. The Company issues limited partnership units ~~and~~as well as other forms of equity-based compensation, including grants of exchangeability ~~to unit holders~~into shares of common stock, to provide liquidity to ~~Newmark’s~~its employees, to align the interests of ~~the Company’s~~its employees and management with those of common stockholders, to help motivate and retain key employees, and to encourage a collaborative culture that drives cross-selling and ~~revenue~~ growth.

~~When~~

•The fully diluted share count excludes the shares related to these instruments, but includes the associated ~~interest~~ expense, net of tax.

The share count for Adjusted Earnings excludes certain shares and share equivalents expected to be issued in future periods but not yet eligible to receive dividends and/or distributions. Each quarter, the dividend payable to Newmark’s ~~common~~ stockholders, if any, is expected to be determined by the Company’s ~~board~~Board of ~~directors~~Directors with reference to a number of factors, including post-tax Adjusted Earnings per ~~fully diluted~~ share. Newmark may also pay a ~~pro rata~~pro-rata distribution of net income to limited partnership units, as well as to Cantor for its noncontrolling interest. The amount of this net income, and therefore of these payments per unit, would be determined using the above definition of ~~pre-tax~~ Adjusted Earnings ~~using the fully diluted~~per share ~~count.~~ on a pre-tax basis.

The declaration, payment, timing, and amount of any future dividends payable by the Company will be at the discretion of its ~~board~~Board of ~~directors~~Directors using the fully diluted share count.

~~OUR ORGANIZATIONAL STRUCTURE~~

~~Our Restructuring~~

~~We are Newmark Group, Inc., a Delaware corporation. We were formed as NRE Delaware, Inc.~~ For more information on ~~November 18, 2016 and changed our name to Newmark Group, Inc. on October 18, 2017. We were formed for~~any share count adjustments, see the ~~purpose of becoming a public company conducting the operations of BGC Partners’ Real Estate Services segment, including Newmark and Berkeley Point.~~

~~Through the following series of transactions prior to and following the completion~~section of the ~~Separation~~Company’s most recent financial results press release titled “Fully Diluted Weighted-Average Share Count for GAAP and ~~our IPO, we became~~Adjusted Earnings.”

Management Rationale for Using Adjusted Earnings

Newmark’s calculation of Adjusted Earnings excludes the items discussed above because they are either non-cash in nature, because the anticipated benefits from the expenditures are not expected to be fully realized until future periods, or because the Company views results excluding these items as a separate publicly traded company. A majority of our issued and outstanding shares of common stock are held by BGC Partners. If BGC Partners completes the spin-off, a majority of our issued and outstanding shares of common stock will be held by the stockholders of BGC Partners asbetter reflection of the ~~date~~underlying performance of Newmark’s ongoing operations. Management uses Adjusted Earnings in part to help it evaluate, among other things, the overall performance of the ~~spin-off.~~

~~Prior~~Company’s business, to make decisions with respect to the ~~completion~~Company’s operations, and to determine the amount of ~~our IPO, the separation~~dividends payable to common stockholders and contribution pursuant to which members of the BGC Group transferred to us substantially all of the assets and liabilities of the BGC Partners’ Real Estate Services segment, including Newmark, Berkeley Point and the right to receive the remainder of the Nasdaq payment (the “Contribution”), various types of interests of Newmark Holdings were issueddistributions payable to holders of ~~interests~~limited partnership units. Dividends payable to common stockholders and distributions payable to holders of ~~BGC Holdings in proportion~~limited partnership units are included within “Dividends to ~~such interests of BGC Holdings held by such holders immediately prior thereto.~~

~~Concurrently with the Separation~~stockholders” and ~~Contribution, we entered into the transactions described under “Assumption~~“Earnings and ~~Repayment of Indebtedness” below.~~

~~In March 2018, BGC Partners made an additional investment in us as described under “BGC Partners March 2018 Investment” below.~~

~~BGC Partners may distribute the shares of our common stock held thereby~~tax distributions to ~~its stockholders as described under “The Distribution” below.~~

~~The types of interests in Newmark, Newmark Holdings and Newmark OpCo outstanding following the completion of the these transactions are described under “Current Structure of Newmark” below.~~

~~The Separation and Contribution~~

Prior to the completion of the IPO, pursuant to the Separation and Distribution Agreement, members of the BGC Group transferred to us substantially all of the assets and liabilities of the BGC group relating to BGC Partners’ Real Estate Services segment, including Newmark, Berkeley Point and the right to receive the remainder of the Nasdaq Earn-out. For a description of the Nasdaq Earn-out, see “Nasdaq Transaction.” Prior to the separation, the BGC Group held all of the historical assets and liabilities related to our business.

~~In connection with the Separation, Newmark Holdings~~ limited partnership interests and other noncontrolling interests,” respectively, in our unaudited condensed consolidated statements of cash flows.

The term “Adjusted Earnings” should not be considered in isolation or as an alternative to GAAP net income (loss). The Company views Adjusted Earnings as a metric that is not indicative of liquidity, or the cash available to fund its operations, but rather as a performance measure. Pre- and post-tax Adjusted Earnings, as well as related measures, are not intended to replace the Company’s presentation of its GAAP financial results. However, management believes that these measures help provide investors with a clearer understanding of Newmark’s financial performance and offer useful information to both management and investors regarding certain financial and business trends related to the Company’s financial condition and results of operations. Management believes that the GAAP and Adjusted Earnings measures of financial performance should be considered together.

For more information regarding Adjusted Earnings, see the section of the Company’s most recent financial results press release titled “Reconciliation of GAAP Net Income to Common Stockholders to Adjusted Earnings Before Noncontrolling Interests and Taxes and GAAP Fully Diluted EPS to Post-Tax Adjusted EPS”, including the related footnotes, for details about how Newmark’s non-GAAP results are reconciled to those under GAAP.

Adjusted EBITDA Defined

Newmark ~~Holdings founding partner interests, Newmark Holdings working partner interests~~also provides an additional non-GAAP financial performance measure, “Adjusted EBITDA” which it defines as GAAP “Net income (loss) available to common stockholders”, adjusted for the following items:

•Net income (loss) attributable to noncontrolling interest.

•Provision (benefit) for income taxes.

•OMSR revenue.

•MSR amortization.

•Compensation charges related to OMSRs.

•Other depreciation and ~~Newmark Holdings~~amortization.

•Equity-based compensation and allocations of net income to limited partnership units ~~were distributed to holders~~and FPUs.

•Various other GAAP items that management views as not reflective of

BGC Holdings limited partnership interests, BGC Holdings founding partner interests, BGC Holdings working partner interests and BGC Holdings limited partnership units in proportion to such interests of BGC Holdings held by such holders immediately prior to the ~~Separation.~~

~~We also entered into a tax matters agreement with BGC Partners that governs~~Company’s underlying

performance for the ~~parties’ respective rights, responsibilities and obligations after the Separation~~given period. These may include compensation-related items with respect to taxes, tax attributes, the preparation and filing of tax returns, the control of audits and other tax proceedings, tax elections, assistance and cooperation in respect of tax matters, procedures and restrictions relating to the Distribution, if any, and certain other tax matters. We also entered into an administrative services agreement with Cantor, which governs the provision by Cantor of various administrative services to us, and our provision of various administrative services to Cantor, at a cost equal to (1) the direct cost that the providing party incurs in performing those services, including third-partycost-saving

initiatives, such as severance charges incurred in ~~providing services, plus (2)~~connection with headcount reductions as part of broad

restructuring and/or cost savings plans; charges for exiting leases and/or other long-term contracts as part of

cost-saving initiatives; and non-cash impairment charges related to assets, goodwill and/or intangibles created

from acquisitions.

•Other non-cash, non-dilutive, and/or non-economic items, which may, in certain periods, include the impact of any unrealized non-cash mark-to-market gains or losses on “other income (loss)” related to the Nasdaq Forwards, as well as mark-to-market adjustments for non-marketable investments.

•Interest expense.

Beginning with the third quarter of 2021, calculation of Adjusted EBITDA excludes the Impact of Nasdaq and the Impact of the 2021 Equity Event, (together, the "Impact of Nasdaq and the 2021 Equity Event") which are defined above.

Newmark’s calculation of Adjusted EBITDA excludes certain items discussed above because they are either non-cash in nature, because the anticipated benefits from the expenditures are not expected to be fully realized until future periods, or because the Company views excluding these items as a ~~reasonable allocation~~better reflection of the underlying performance Newmark’s ongoing operations. The Company’s management believes that its Adjusted EBITDA measure is useful in evaluating Newmark’s operating performance, because the calculation of this measure generally eliminates the effects of financing and income taxes and the accounting effects of capital spending and acquisitions, which would include impairment charges of goodwill and intangibles created from acquisitions. Such items may vary for different companies for reasons unrelated to overall operating performance. As a result, the Company’s management uses this measure to evaluate operating performance and for other discretionary purposes. Newmark believes that Adjusted EBITDA is useful to investors to assist them in getting a more complete picture of the Company’s financial results and operations.

Since Newmark’s Adjusted EBITDA is not a recognized measurement under GAAP, investors should use this measure in addition to GAAP measures of net income when analyzing Newmark’s operating performance. Because not all companies use identical EBITDA calculations, the Company’s presentation of Adjusted EBITDA may not be comparable to similarly titled measures of other ~~costs determined in~~companies. Furthermore, Adjusted EBITDA is not intended to be a ~~consistent~~measure of free cash flow or GAAP cash flow from operations, because the Company’s Adjusted EBITDA does not consider certain cash requirements, such as tax and ~~fair manner so as~~debt service payments.

For more information regarding Adjusted EBITDA, see the section of the Company’s most recent financial results press release titled “Reconciliation of GAAP Net Income to ~~cover~~Adjusted EBITDA” including the related footnotes, for details about how Newmark’s non-GAAP results are reconciled to those under GAAP EPS.

Timing of Outlook for Certain GAAP and Non-GAAP Items

Newmark anticipates providing ~~party’s appropriate costs~~ forward-looking guidance for GAAP revenues and for certain non-GAAP measures from time to time. However, the Company does not anticipate providing an outlook for other GAAP results. This is because certain GAAP items, which are excluded from Adjusted Earnings and/or ~~in such other manner as~~Adjusted EBITDA, are difficult to forecast with precision before the ~~parties agree. We also entered into a transition services agreement~~end of each period. The Company therefore believes that it is not possible for it to have the required

information necessary to forecast GAAP results or to quantitatively reconcile GAAP forecasts to non-GAAP forecasts with ~~BGC Partners, which governs~~sufficient precision without unreasonable efforts. For the ~~provision by BGC Partners~~same reasons, the Company is unable to address the probable significance of ~~various administrative services~~the unavailable information. The relevant items that are difficult to ~~us, and our provision of various administrative services to BGC Partners,~~predict on a ~~transitional~~quarterly and/or annual basis ~~(with a term of up to two years following~~with precision and may materially impact the Distribution) and at a cost equal to (1) the direct cost that the providing party incurs in performing those services, including third-party charges incurred in providing services, plus (2) a reasonable allocation of other costs determined in a consistent and fair manner so as to cover the providing party’s appropriate costs or in such other manner as the parties agree.

~~Assumption and Repayment of Indebtedness~~

~~In connection with the Separation and prior~~Company’s GAAP results include, but are not limited to the closing of our IPO, we assumed from BGC Partners the Term Loan and the Converted Term Loan. Newmark OpCo also assumed from BGC U.S. OpCo the BGC Notes. We contributed all of the net proceeds of our IPO to Newmark OpCo in exchange for a number of units representing Newmark OpCo limited partnership interests equal to the number of shares issued by us in the IPO. Newmark OpCo used all of such net proceeds to partially repay intercompany indebtedness owed by Newmark OpCo to us in respect of the Term Loan (which intercompany indebtedness was originally issued by BGC U.S. OpCo and was assumed by Newmark OpCo in connection with the separation). We used all of such repayment from Newmark OpCo to partially repay the Term Loan. The Term Loan had a maturity date of September 8, 2019, and was repaid in full on March 9, 2018. Pursuant to the Term Loan, in the eventfollowing:

•Certain equity-based compensation charges that any member of the Newmark Group received net proceeds from the incurrence of indebtedness for borrowed money or an equity issuance (in each case subject to certain exceptions), Newmark OpCo was obligated to use such net proceeds to repay the remaining intercompany indebtedness owed by Newmark OpCo to us in respect of the Term Loan (which in turn we were obligated to the remaining amount outstanding on the Term Loan), and thereafter, to repay the remaining intercompany indebtedness owed by Newmark OpCo to us in respect of the Converted Term Loan (which in turn we will use to repay the remaining amount outstanding on the Converted Term Loan). Following the repayment of the Term Loan and the Converted Term Loan, in the event that any member of the Newmark Group receives net proceeds from the incurrence of indebtedness for borrowed money (subject to certain exceptions), Newmark OpCo will be obligated to use such net proceeds to repay the BGC Notes. In addition, we will be obligated to repay any remaining amounts under the BGC Notes prior to the Distribution.

On March 19, 2018, Newmark and BGC Partners entered into an Amended and Restated Intercompany Credit Agreement and on the same date Newmark borrowed $150.0 million from BGC pursuant to the facilities under the Intercompany Credit Agreement. The interest rate as of March 31, 2018 was LIBOR plus 3.25%, or 4.99%, which may be ~~adjusted~~determined at the discretion of management.

•Unusual, one-time, non-ordinary, or non-recurring items.

•The impact of gains or losses on certain marketable securities, as well as any gains or losses related to associated mark-to- market movements and/or hedging. These items are calculated using period-end closing prices.

•Non-cash asset impairment charges, which are calculated and analyzed based on the ~~higher~~period-end values of ~~BGC’s~~ the underlying assets. These amounts may not be known until after period-end.

•Acquisitions, dispositions, and/or resolutions of litigation, which are fluid and unpredictable in nature.

Liquidity Defined

Newmark may also use a non-GAAP measure called “liquidity.” The Company considers liquidity to be comprised of the sum of cash and cash equivalents, marketable securities, and reverse repurchase agreements (if any), less securities lent out in securities loaned transactions and repurchase agreements. The Company considers liquidity to be an important metric for determining the amount of cash that is available or that could be readily available to the Company on short notice. For more information regarding liquidity, see the section of the Company’s most recent financial results press release titled “Liquidity Analysis,” including any related footnotes, for details about how Newmark’s ~~short-term borrowing rate then in effect at such time plus 100 basis points, or such other interest rate as may be mutually agreed between BGC and Newmark.. Newmark has transferred these proceeds~~non-GAAP results are reconciled to ~~its restricted cash account pledged for the benefit of Fannie Mae.~~ those under GAAP.

OUR ORGANIZATIONAL STRUCTURE

Current Organizational Structure

As of March 31, ~~2018, Newmark’s total net borrowings under the Intercompany Credit Agreement are $202.0 million.~~

~~BGC Partners March 2018 Investment~~

On March 7, 2018, BGC Partners and its operating subsidiaries purchased 16,606,726 newly issued exchangeable limited partnership units of Newmark Holdings for an aggregate investment of approximately $242.0 million. The price per unit was based on the $14.57 closing price of our Class A common stock on March 6, 2018 as reported on the NASDAQ Global Select Market. These units are exchangeable, at BGC Partners’ discretion, into either shares of our Class common stock or our Class B common stock, par value $0.01 per share. Following such issuance, BGC Partners owned 83.4% of our 138.6 million shares of Class A common issued and outstanding on March 7, 2018 and 100% of our 15.8 million issued and outstanding shares of Class B common stock. Including the newly issued exchangeable limited partnership units of Newmark Holdings, BGC Group owned 59.2% of the 253.0 million fully diluted2023, there were 203,948,837 shares of Newmark outstanding on March 7, 2018. The balance of our fully diluted share count was owned by the public, Cantor, partners of Newmark Holdings, and employees. Because Newmark limited partnership units are not entitled to a vote until they are exchanged for Newmark common stock, BGC Group’s voting power with respect to Newmark did not change as a result of the March 2018 investment. If the BGC Group were to exchange such units into shares of our Class B common stock, the BGC Group would have 95.0% of our total voting power as of March 31, 2018 (92.6% if the BGC Group were to exchange such units into shares of our Class A common stock).

Immediately after giving effect to the March 7, 2018 investment, the BGC Group owned an aggregate 19.2% of the economic interest in Newmark Holdings and an aggregate 59.8% indirect economic interest in Newmark OpCo. Immediately after giving effect to the March 7, 2018 investment, Cantor owns 24.8% of the economic interest in Newmark Holdings and a 9.5% indirect economic interest in Newmark OpCo, and the other limited partners of Newmark Holdings (including Newmark employees) owned 56.0% of the economics of Newmark Holdings and an aggregate 21.4% indirect economic interest in Newmark OpCo.

~~The Distribution (Spin-off)~~

BGC Partners has advised us that it currently expects to pursue a Distribution, or spin-off, to its stockholders of all of the shares of our common stock that it then owns in a manner that is intended to qualify as generally tax-free for U.S. federal income tax purposes. As currently contemplated, shares of our Class A common stock held by BGC Partners would be distributed to the holders of shares of Class A common stock of BGC Partners and shares of our Class B common stock held by BGC Partners would be distributed to the holders of shares of Class B common stock of BGC Partners (which are currently Cantor and another entity controlled by Mr. Lutnick). The determination of whether, when and how to proceed with any such spin-off is entirely within the discretion of BGC Partners.

~~Current Structure of Newmark~~

~~As of March 31, 2018, there were 138,921,532 shares of~~ Class A common stock issued and 153,142,810 outstanding. ~~BGC Partners~~Cantor and CFGM held ~~115,593,786~~no shares of ~~our Class A common stock representing approximately 83.2% of our outstanding~~Newmark Class A common stock. Each share of Newmark Class A common stock is generally entitled to one vote on matters submitted to a vote of our stockholders. ~~In addition, as~~As of March 31, ~~2018, BGC Partners~~2023, Cantor and CFGM held ~~15,840,049~~21,285,533 shares of ~~our~~Newmark Class B common stock representing all of the outstanding shares of ~~our~~Newmark Class B common stock. ~~Together, the~~The shares of ~~Class A common stock and~~Newmark Class B common stock held by ~~BGC Partners~~Cantor and CFGM, as of March 31, ~~2018,~~2023, represented approximately ~~92.2%~~58.2% of our total voting power. Each share of Newmark Class B common stock is generally entitled to the same rights as a share of Newmark Class A common stock, except that, on matters submitted to a vote of our stockholders, each share of Newmark Class B common stock is entitled to 10 votes. The Newmark Class B common stock generally votes together with the Newmark Class A common stock on all matters submitted to a vote of our stockholders. We expect to retain our dual class structure, and there are no circumstances under which the holders of Newmark Class B common stock would be required to convert their shares of Newmark Class B common stock into shares of Newmark Class A common stock. Our ~~amended and restated certificate~~Certificate of ~~incorporation referred to herein as our certificate of incorporation~~Incorporation does not provide for automatic conversion of shares of Newmark Class B common stock into shares of Newmark Class A common stock upon the occurrence of any event.

We hold the Newmark Holdings general partnership interest and the Newmark Holdings special voting limited partnership interest, which entitle us to remove and appoint the general partner of Newmark Holdings and serve as the general partner of Newmark Holdings, which entitles us to control Newmark Holdings. Newmark Holdings, in turn, holds the Newmark OpCo general partnership interest and the Newmark OpCo special voting limited partnership interest, which entitle Newmark Holdings to remove and appoint the general partner of Newmark OpCo, and serve as the general partner of Newmark OpCo, which entitles Newmark Holdings (and thereby us) to control Newmark OpCo. In addition, as of March 31, ~~2018,~~2023, we ~~indirectly, through wholly owned subsidiaries,~~directly held Newmark OpCo limited partnership interests consisting of approximately ~~154,761,581~~62,806,554 units representing approximately ~~61.3%~~26.6% of the outstanding Newmark OpCo limited partnership interests. We are a holding company that ~~will hold~~holds these interests, ~~serve~~serves as the general partner of Newmark Holdings and, through Newmark Holdings, ~~act~~acts as the general partner of Newmark OpCo. As a result of our ownership of the general partnership interest in Newmark Holdings and Newmark Holdings’ general partnership interest in Newmark OpCo, we ~~will~~ consolidate Newmark OpCo’s results for financial reporting purposes.

Cantor, ~~BGC~~Founding Partners, ~~(including through its operating subsidiaries), founding partners, working partners~~Working Partners and ~~limited partnership unit holders~~Limited Partnership Unit Holders directly hold Newmark Holdings limited partnership interests. Newmark Holdings, in turn, holds Newmark OpCo limited partnership interests and, as a result, Cantor, ~~BGC~~Founding Partners, ~~(including through its operating subsidiaries), founding partners, working partners~~Working Partners and ~~limited partnership unit holders~~Limited Partnership Unit Holders indirectly have interests in Newmark OpCo limited partnership interests.

As a result of the Distribution of limited partnership interests of Newmark Holdings to partners of BGC Holdings in connection with the separation, each holder of BGC Holdings limited partnership interests held a BGC Holdings limited partnership interest and a corresponding 0.454545 of a Newmark Holdings limited partnership interest for each BGC Holdings limited partnership interest held thereby immediately prior to the Separation. The BGC Holdings limited partnership interests and Newmark Holdings limited partnership interests are each entitled to receive cash distributions from BGC Holdings and Newmark Holdings, respectively, in accordance with the terms of such partnership’s respective limited partnership agreement.

The Newmark Holdings limited partnership interests held by Cantor and ~~BGC Partners (including through its operating subsidiaries)~~CFGM are designated as Newmark Holdings exchangeable limited partnership interests. The Newmark Holdings limited partnership interests held by the ~~founding partners~~Founding Partners are designated as Newmark Holdings ~~founding partner~~Founding Partner interests. The Newmark

Holdings limited partnership interests held by

the ~~working partners~~Working Partners are designated as Newmark Holdings ~~working partner~~Working Partner interests. The Newmark Holdings limited partnership interests held by the ~~limited partnership unit holders~~Limited Partnership Unit Holders are designated as limited partnership units.

Each unit of Newmark Holdings limited partnership interests held by Cantor and ~~BGC Partners (including through its operating subsidiaries)~~CFGM is generally exchangeable with us for a number of shares of Class B common stock (or, at Cantor’s option or if there are no additional authorized but unissued shares of Class B common stock, a number of shares of Class A common stock) equal to the exchange ratio (which is currently one, but is subject to adjustment as set forth in the Separation and Distribution Agreement). Prior to the spin-off, however, such exchanges are subject to the limitation as described in our 2017 Annual Report on Form 10-K (the “10-K”) under “Item 13—Certain Relationships and Related-Party Transactions—Amended and Restated Newmark Holdings Limited Partnership Agreement—Exchanges.”

Exchange Ratio.

As of March 31, ~~2018, 5,732,543 founding/working partner~~2023, 3,436,766 Founding/Working Partner interests were outstanding. These ~~founding/working partner~~Founding/Working Partners were issued in the Separationto holders of BGC Holdings ~~founding/working partner~~Founding/Working Partner interests, who received such ~~founding/working partner~~Founding/Working Partner interests in connection with BGC Partners’ acquisition of the BGC Partners business from Cantor in 2008. The Newmark Holdings limited partnership interests held by ~~founding/working partners~~Founding/Working Partners are not exchangeable with us unless (1) Cantor acquires ~~such interests~~Cantor Units from Newmark Holdings upon termination or bankruptcy of the ~~founding/working partners~~Founding/Working Partners or redemption of their units by Newmark Holdings (which it has the right to do under certain circumstances), in which case such interests will be exchangeable with us for ~~our~~shares of Newmark Class A common stock or Newmark Class B common stock as described above, or (2) Cantor determines that such interests can be exchanged by such ~~founding/working partners~~Founding/Working Partners with us for ~~our~~Newmark Class A common stock, with each Newmark Holdings unit exchangeable for a number of shares of ~~our~~Newmark Class A common stock equal to the ~~exchange ratio~~Exchange Ratio (which ~~is currently~~was initially one, but is subject to adjustment as set forth in the Separation and Distribution Agreement), on terms and conditions to be determined by Cantor (which exchange of certain interests Cantor expects to permit from time to time). Cantor has provided that certain ~~founding/working partner~~Founding/Working Partner interests are exchangeable with us for Class A common stock, with each Newmark Holdings unit exchangeable for a number of shares of ~~our~~Newmark Class A common stock equal to the ~~exchange ratio~~Exchange Ratio (which ~~is currently~~was initially one, but is subject to adjustment as set forth in the Separation and Distribution Agreement), in accordance with the terms of the Newmark Holdings limited partnership agreement. Once a Newmark Holdings ~~founding/working partner~~Founding/Working Partner interest becomes exchangeable, such ~~founding/working partner~~Founding/Working Partner interest is automatically exchanged upon a termination or bankruptcy ~~(x)~~ with ~~BGC Partners~~us for Newmark Class A common stock of BGC Partners (after also providing the requisite portion of BGC Holdings founding/working partner interests) if the termination or bankruptcy occurs prior to the Distribution and (y) in all other cases, with us for our Class A common stock.

Further, we provide exchangeability for partnership units under other circumstances in connection with (1) our partnership redemption, compensation and restructuring programs, (2) other incentive compensation arrangements and (3) business combination transactions.

As of March 31, ~~2018, 73,863,094~~2023, 64,084,276 limited partnership units were outstanding (including ~~founding/working partner~~Founding/Working Partner interests and ~~Cantor interests)~~Working Partner interests, and units held by Cantor). Limited partnership units will be only exchangeable with us in accordance with the terms and conditions of the grant of such units, which terms and conditions are determined in our sole discretion, as the Newmark Holdings general partner, with the consent of the Newmark Holdings exchangeable limited partnership interest majority in interest, in accordance with the terms of the Newmark Holdings limited partnership agreement.

Notwithstanding the foregoing, prior to the Distribution, without the prior consent of BGC Partners, no Newmark Holdings limited partnership interests shall be exchangeable into shares of our Class A common stock or Class B common stock. Prior to the Distribution, unless otherwise agreed by BGC Partners, in order for a partner to exchange an exchangeable limited partnership interest in BGC Holdings or Newmark Holdings into a share of BGC common stock, such partner must exchange both one BGC Holdings exchange right unit and a certain number of Newmark Holdings exchangeable units as set forth in the BGC Holdings limited partnership agreement, in order to receive one share of BGC Partners common stock. Prior to the Distribution, to the extent that BGC Partners receives any Newmark OpCo units as a result of any exchange of Newmark Holdings exchangeable units as described in the immediately preceding sentence or as a result of any contribution by BGC Partners to Newmark OpCo or purchase by BGC Partners of Newmark OpCo units (see “Item 13—Certain Relationships and Related-Party Transactions—Reinvestments in Newmark OpCo by BGC Partners” in our Annual Report on Form 10-K/A (“10-K/A”), then, in each case, prior to the Distribution BGC Partners will contribute such Newmark OpCo units to Newmark in exchange for a number of shares of Newmark common stock equal to the number of such Newmark OpCo units multiplied by the then current exchange ratio (with the class of shares of our common stock corresponding to the class of shares of common stock that BGC Partners issued upon such exchange).

The ~~current exchange ratio~~Exchange Ratio between Newmark Holdings limited partnership interests and our common stock iswas initially one. However, this ~~exchange ratio~~Exchange Ratio will be adjusted in accordance with the terms of the Separation and Distribution Agreement if our dividend policy and the distribution policy of Newmark Holdings are different. ~~See “Item 5—Market for~~As of March 31, 2023, the ~~Registrant’s Common Equity, Related Stockholder Matters and Purchased of Equity Securities—Dividend Policy” and “Item 13—Certain Relationship and Related-Party Transactions-Adjustments to~~ Exchange ~~Ratio” in our 10-K/A.~~

Ratio was 0.9252.

With each exchange, our direct and indirect ~~(and, prior to the Distribution and as described above, BGC Partners’ indirect)~~ interest in Newmark OpCo will proportionately increase because, immediately following an exchange, Newmark Holdings will redeem the Newmark Holdings unit so acquired for the Newmark OpCo limited partnership interest underlying such Newmark Holdings unit.

The profit and loss of Newmark OpCo and Newmark Holdings, as the case may be, are allocated based on the total number of Newmark OpCo units and Newmark Holdings units, as the case may be, outstanding.

The following diagram illustrates ~~our~~the ownership structure of Newmark as of March 31, ~~2018.~~2023. The diagram does not reflect the various subsidiaries of Newmark, Newmark ~~Holdings, Newmark OpCo, BGC Partners, BGC U.S. OpCo, BGC Global~~ OpCo or Cantor (including certain operating subsidiaries that are organized as corporations whose equity is either wholly-owned by Newmark or whose equity is majority-owned by Newmark with the remainder owned by Newmark OpCo) or the results of any exchange of Newmark Holdings exchangeable limited partnership interests or, to the extent applicable, Newmark Holdings ~~founding partner~~Founding Partner interests, Newmark Holdings ~~working partner~~Working Partner interests or Newmark Holdings limited partnership units.

In addition, the diagram does not reflect the Newmark OpCo exchangeable preferred limited partnership units, since they are not allocated any gains or losses of Newmark OpCo for tax purposes and are not entitled to regular distributions from Newmark OpCo.

~~OUR OWNERSHIP~~

STRUCTURE

OF NEWMARK AS OF MARCH 31, 2023

Shares of ~~our~~Newmark Class B common stock are convertible into shares of ~~our~~Newmark Class A common stock at any time in the discretion of the holder on a one-for-one basis. Accordingly, if ~~BGC Partners~~Cantor and CFGM converted all of ~~its common stock held in our~~their shares of Newmark Class B common stock into ~~our~~shares of Newmark Class A common stock, ~~BGC Partners~~Cantor and CFGM would hold ~~approximately 84.9%~~12.4% of the voting power in Newmark and the ~~public~~ stockholders of Newmark other than Cantor and CFGM would hold ~~approximately 15.1%~~87.6% of the voting power in Newmark (and the indirect economic interests in Newmark OpCo would remain unchanged).

The diagram above does not show certain operating subsidiaries that are organized as corporations whose equity are either wholly owned by us or whose equity are majority-owned by us with the remainder owned by Newmark OpCo.

~~Structure~~ In addition, if Cantor and CFGM continued to hold shares of Newmark ~~Following the Distribution (Spin-off)~~

~~BGC Partners has advised us that it currently expects to pursue a Distribution, or spin-off, to its stockholders of~~Class B common stock and if Cantor exchanged all of the exchangeable limited partnership units held by Cantor for shares of ~~our~~Newmark Class B common stock, ~~that it then owns~~Cantor and CFGM would hold 76.0% of the voting power in ~~a manner that is intended to qualify as generally tax-free for U.S. federal income tax purposes. As currently contemplated, shares~~Newmark, and the stockholders of ~~our~~Newmark other than Cantor and CFGM would hold 24.0% of the voting power in Newmark.

The diagram reflects Newmark Class A common stock ~~held~~and Newmark Holdings partnership unit activity from January 1, 2023 through March 31, 2023 as follows: (a) an aggregate of 1,927,905 limited partnership units granted by ~~BGC Partners would be distributed to the holders~~Newmark Holdings; (b) no shares of Newmark Class A common stock repurchased by us; (c) 155,240 shares of Newmark Class A common stock forfeited; (d) 985,540 shares of Newmark Class A common stock issued for RSUs; (e) 12,319 shares of Class A common stock issued by us under our acquisition shelf Registration Statement on Form S-4 (Registration No. 333-231616), but not the 18,314,935 of ~~BGC Partners~~such shares remaining available for issuance by us under such Registration Statement; and shares of our Class B common stock held by BGC Partners would be distributed to the holders of shares of Class B common stock of BGC Partners (which are currently Cantor and another entity controlled by Mr. Lutnick). The determination of whether, when and how to proceed with any such spin-off is entirely within the discretion of BGC Partners.

To account for potential changes in the number of shares of Class A common stock and Class B common stock of BGC Partners and Newmark between the IPO and the spin-off, and to ensure that the spin-off (if it occurs) is pro rata to the stockholders of BGC Partners, immediately prior to the spin-off, BGC Partners will convert any shares of Class B common stock of Newmark beneficially owned by BGC Partners into shares of Class A common stock of Newmark, or exchange any shares of Class A common stock of Newmark beneficially owned by BGC Partners for shares of Class B common stock of Newmark, so that the ratio of shares of Class B common stock of Newmark held by BGC Partners to the shares of Class A common stock of Newmark held by BGC Partners, in each case as of immediately prior to the spin-off, equals the ratio of shares of outstanding Class B common stock of BGC Partners to the shares of outstanding Class A common stock of BGC Partners, in each case as of the record date of the spin-off.

(h) 306,666 terminated limited partnership units.

ITEM 3. ~~QUALITATIVE~~QUANTITATIVE AND ~~QUANTITATI~~VEQUALITATIVE DISCLOSURES ABOUT MARKET RISK

~~Interest Rate~~

Credit Risk

Our multifamily origination business, under the Fannie Mae DUS program, originates and services multifamily loans for Fannie Mae without having to obtain Fannie Mae’s prior approval for certain loans, as long as the loans meet the underwriting guidelines set forth by Fannie Mae. In ~~connection with~~return for the ~~Separation, we assumed from BGC Partners the Term Loan~~delegated authority to make loans and the ~~Converted Term Loan. Newmark OpCo also assumed from BGC U.S. OpCo~~commitment to purchase loans by Fannie Mae, we must maintain minimum collateral and generally are required to share risk of loss on loans sold through Fannie Mae. With respect to most loans, we are generally required to absorb approximately one-third of any losses on the ~~BGC Notes. We contributed all~~unpaid principal balance of a loan at the time of loss settlement. Some of the ~~net proceeds~~loans that we originate under the Fannie Mae DUS program are subject to reduced levels or no risk-sharing. However, we generally receive lower servicing fees with respect to such loans. Although our Berkeley Point business’s average annual losses from such risk-sharing programs have been a minimal percentage of the IPO to Newmark OpCo in exchange for a number of units representing Newmark OpCo limited partnership interests equal to the number of shares issued by us in the IPO. Newmark OpCo used all of such net proceeds to partially repay intercompany indebtedness owed by Newmark OpCo to us in respect of the Term Loan (which intercompany indebtedness was originally issued by BGC U.S. OpCo and has been assumed by Newmark OpCo in connection with the separation). In addition, on March 7, 2018, BGC, including through its subsidiary invested $242.0 million in Newmark limited partnership interests. Newmark has used the proceeds from this transaction plus all of the repayment from Newmark OpCo, and cash on hand to repay in full the Term Loan during the three months ended March 31, 2018. Following the IPO, in the event that any member of the Newmark Group receives net proceeds from the incurrence of indebtedness for borrowed money or an equity issuance (in each case subject to certain exceptions), Newmark OpCo will be obligated to use such net proceeds to repay the remaining intercompany indebtedness owed by Newmark OpCo to us to repay the remaining intercompany indebtedness owed by Newmark OpCo to us in respect of the Converted Term Loan (which in turn we will use to repay the remaining amount outstanding on the Converted Term Loan). Following the repayment of the Term Loan and the Converted Term Loan, in the event that any member of the Newmark Group receives net proceeds from the incurrence of indebtedness for borrowed money (subject to certain exceptions), Newmark OpCo will be obligated to use such net proceeds to repay the BGC Notes. In addition, we will be obligated to repay any remaining amounts under the BGC Notes prior to the distribution. We intend to replace the financing provided by the BGC Notes that remain outstanding with new senior term loans (which may be secured or unsecured), new senior unsecured notes, other long- or short-term financing or a combination thereof in an aggregate principal amount of ~~approximately $412.5 million. While~~such loans, if loan defaults increase, actual risk-sharing obligation payments under the ~~terms~~Fannie Mae DUS program could increase, and such defaults could have a material adverse effect on our business, financial condition, results of ~~these borrowings, including~~operations and prospects. In addition, a material failure to pay its share of losses under the Fannie Mae DUS program could result in the revocation of Berkeley Point’s license from Fannie Mae and the exercise of various remedies available to Fannie Mae under the Fannie Mae DUS program.

Interest Rate Risk

Newmark had $550.0 million of fixed rate 6.125% Senior Notes outstanding as of March 31, 2023. These debt obligations are not currently subject to fluctuations in interest rates, ~~have not yet been determined, our interest income expense~~although in the event of refinancing or issuance of new debt, such debt could be ~~exposed~~subject to changes in interest rates. ~~In that event, we may enter into~~Newmark had $225.0 million outstanding under its Credit Facility as of March 31, 2023. The interest rate ~~swap agreements to attempt to hedge~~on the ~~variability of future interest payments due to changes in interest rates.~~

Credit Facility is currently based upon SOFR.

Berkeley Point is an intermediary that originates loans which are generally pre-sold prior to loan closing. Therefore, for loans held for sale to the GSEs and HUD, we are not currently exposed to unhedged interest rate risk. Prior to closing on loans with borrowers, we enter into agreements to sell the loans to investors, and originated loans are typically sold within 45 days of funding. The coupon rate for each loan is set concurrently with the establishment of the interest rate with the investor.

Some of our assets and liabilities are subject to changes in interest rates. Earnings from escrows are generally based on ~~LIBOR.~~LIBOR or SOFR. 30-day ~~LIBOR~~SOFR as of March 31, ~~2018 and December 31, 2017~~2023 was ~~188~~463 basis points and ~~157~~30-day LIBOR was 45 basis points ~~respectively.~~at March 31, 2022. A ~~100 basis~~100-basis point increase in the 30-day SOFR would increase our annual earnings by $9.1 million based on our escrow balances as of March 31, 2023. A 100-basis point increase to the 30-day LIBOR would increase our annual earnings by ~~approximately $7.9~~$9.8 million based on our escrow ~~balance~~balances as of March 31, ~~2018 compared to $8.1~~2022. A 100-basis point decrease in the 30-day SOFR would decrease our annual earnings by $9.1 million based on our escrow ~~balance~~balances as of ~~December~~March 31, ~~2017.~~2023. A decrease in 30-day LIBOR to zero would decrease our annual earnings by ~~approximately $7.9~~$4.5 million based on the escrow ~~balance~~balances as of March 31, ~~2018 compared to $8.1 million based on our escrow balance as of December 31, 2017.~~

2022.

We use warehouse facilities ~~borrowings from related parties,~~ and a repurchase agreement to fund loans we originate under our various lending programs. The borrowing costs of our warehouse facilities and the repurchase agreement is based on ~~LIBOR.~~SOFR. A 100-basis point increase in 30-day SOFR would decrease our annual earnings by $4.3 million based on our outstanding balances as of March 31, 2023. A 100-basis point increase in 30-day LIBOR would decrease our annual ~~net interest income~~earnings by ~~approximately $9.5~~$5.7 million based on our outstanding balances as of March 31, ~~2018 compared to $6.7 million based on our outstanding balances as of March 31, 2017.~~2022. A ~~100-basis point~~100 basis-point decrease in 30-day ~~LIBOR~~SOFR would increase our annual earnings by approximately ~~$9.5~~$4.3 million based on our outstanding warehouse balance as of March 31, ~~2018 compared to $6.6 million as of March 31, 2017.~~

~~The borrowing cost of the Converted Term Loan is based on LIBOR.~~2023. A ~~100-basis point increase~~decrease in ~~the~~ 30-day LIBOR to

zero would increase our ~~interest expense~~annual earnings by ~~$4.0 million on our outstanding balances as of March 31, 2018. A 100-basis point decrease in the 30-day LIBOR would decrease our annual interest expense by $4.0~~approximately $2.6 million based on our outstanding warehouse balance as of March 31, ~~2018.~~

The borrowing cost of the Intercompany Credit Agreement is based on LIBOR. A 100-basis point increase in the 30-day LIBOR would increase our interest expense by $2.1 million on our outstanding balances as of March 31, 2018. A 100-basis point decrease in the 30-day LIBOR would decrease our annual interest expense by $2.1 million based on our outstanding balance as of March 31, 2018.

2022.

Foreign Currency Risk

We are exposed to risks associated with changes in foreign exchange rates. Changes in foreign exchange rates create volatility in the U.S. Dollar equivalent of our revenues and expenses. While our international results of operations, as measured in U.S. Dollars, are subject to foreign exchange fluctuations, we do not consider the related risk to be material to our results of operations. While our exposure to foreign exchange risk is not currently material to us, we expect to grow our international revenues in the future, and any future potential exposure to foreign exchange fluctuations may present a material risk to our business.

Disaster Recovery

Our processes address disaster recovery concerns. We operate most of our technology from dual-primary data centers at our two different London locations. Either site alone is capable of running all of our essential systems. In addition, we maintain technology operations from data centers in New Jersey and Connecticut. Replicated instances of this technology are maintained in our London data centers. All data centers are built and equipped to best-practice standards of physical security with appropriate environmental monitoring and safeguards. Failover for the majority of our systems is automated.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Newmark Group, Inc. maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed by Newmark Group, Inc. is recorded, processed, accumulated, summarized and communicated to its management, including its Chairman and its Chief Financial Officer, to allow timely decisions regarding required disclosures, and reported within the time periods specified in the SEC’s rules and forms. The Chairman and the Chief Financial Officer have performed an evaluation of the effectiveness of the design and operation of Newmark Group, Inc.’s disclosure controls and procedures as of March 31, ~~2018.~~2023. Based on that evaluation, the Chairman and the Chief Financial Officer concluded that ~~Newmark’s~~Newmark Group, Inc.’s disclosure controls and procedures were effective as of March 31, ~~2018.~~

2023.

Changes in Internal Control over Financial Reporting

During the ~~three months ending~~quarter ended March 31, ~~2018,~~2023, there were no changes in our internal control over financial reporting that materially ~~affect,~~affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II

ITEM 1. LEGAL PROCEEDINGS

See Note ~~29—“Commitments, Contingencies~~29 — “Commitments and ~~Guarantees”~~Contingencies” to the Company’s unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q and under the heading "Legal Proceedings" included in Part I, Item 2 of this Quarterly on Form 10-Q, Management's Discussion and Analysis of Financial Condition and Results of Operations, for a description of our legal proceedings which is incorporated by reference herein.

ITEM 1A. RISK FACTORS

~~Investors should consider~~

There have been no material changes to the ~~following additional~~ risk ~~factors:~~

~~We may not be able to protect our intellectual property rights or may be prevented from using intellectual property used~~factors previously disclosed under Part I, Item 1A, "Risk Factors" in our ~~business.~~

~~Our success is dependent, in part, upon our intellectual property. We rely primarily~~Annual Report on trade secret, contract, patent, copyright and trademark law in the United States and other jurisdictions as well as confidentiality procedures and contractual provisions to establish and protect our intellectual property rights to proprietary technologies, products, services or methods, and our brand.

Unauthorized use of our intellectual property could make it more expensive to do business and harm our operating results. We cannot ensure that our intellectual property rights are sufficient to protect our competitive advantages or that any particular patent, copyright or trademark is valid and enforceable, and all patents ultimately expire. In addition, the laws of some foreign countries may not protect our intellectual property rights to the same extent as the laws in the United States, or at all. Any significant impairment of our intellectual property rights could harm our business or our ability to compete.

Protecting our intellectual property rights is costly and time consuming. Although we have taken steps to protect ourselves, there can be no assurance that we will be aware of all patents, copyrights or trademarks that may pose a risk of infringement by our products and services. Generally, it is not economically practicable to determine in advance whether our products or services may infringe the present or future rights of others.

Accordingly, we may face claims of infringement or other violations of intellectual property rights that could interfere with our ability to use intellectual property or technology that is material to our business. The number of such third-party claims may grow. Our technologies may not be able to withstand such third-party claims or rights against their use.

We may have to rely on litigation to enforce our intellectual property rights, protect our trade secrets, determine the validity and scope of the rights of others or defend against claims of infringement or invalidity. For example, we recently responded to a claim by Newmark Realty Capital, Inc. (which we refer to as “Realty Capital”) against us alleging, among other things, trademark infringement under Section 32 of the Lanham Act. In connection with our answer, we filed counterclaims alleging that Realty Capital has infringed our trademarks and seeking an order cancelling Realty Capital’s registered trademarks. We also separately initiated an action before the U.S. Patent and Trademark Office seeking invalidation of Realty Capital’s registration of a design mark that includes the stand-alone name “Newmark.” On November 16, 2017, a federal court in the Northern District of California issued an order denying Realty Capital’s motion to enjoin us from using the name “Newmark” generally as a trademark, which supported Newmark’s rights and longstanding goodwill in relation to the use of the “Newmark” name. The same order temporarily enjoined Newmark from using the name “Newmark” for “mortgage banking, mortgage brokerage, loan servicing, investment brokerage, and investment consulting services in the field of commercial real estate.” This order is in effect until a decision at trial, which is currently scheduled for January 2019. We have moved the court for an order reconsidering the injunction and lifting it in its entirety, and may eventually file an appeal if necessary. In response to our request that the court stay the injunction pending reconsideration, the court ruled in our favor and has suspended the injunction as to the categories of “investment consulting” and “investment brokerage.” In advance of the motion for reconsideration hearing, Realty Capital filed a motion for a new injunction prohibiting the use of “Newmark” for “any commercial real estate services” and demanding relief more expansive than the request the Court previously denied on November 16, 2017. On March 30, 2018, the court granted the reconsideration motion in part and denied it in part, reversing that part of the injunction that prohibited the us from using the “Newmark Knight Frank” name. We have initiated an appeal of the remaining portion of the injunction. On April 17, 2018, the court denied Realty Capital’s motion to modify the injunction in its entirety. No assurance can be given as to whether these cases will ultimately be determined in our favor or that our ability to use the “Newmark” name will be impacted by the proceedings. Any such claims or litigation, whether successful or unsuccessful, could result in substantial costs, the diversion of resources and the attention of management, any of which could materially negatively affect our business. Responding to these claims could also require us to enter into royalty or licensing agreements with the third parties claiming infringement, stop selling or redesign affected products or services or pay damages on our own behalf or to satisfy indemnification commitments with our clients. Such royalty or licensing agreements, if available, may not be available on terms acceptable to us, and may negatively affect our business, financial condition, results of operations or prospects. Despite these potential risks, even if we are permanently

enjoined from using the “Newmark” name in the sectors described in the preliminary injunction order or in connection with commercial real estate services generally, we do not believe such an order would significantly affect our long-term prospects.

We have debt, which could adversely affect our ability to raise additional capital to fund our operations and activities, limit our ability to react to changes in the economy or the commercial real estate services industry, expose us to interest rate risk, impact our ability to obtain a favorable credit rating and prevent us from meeting or refinancing our obligations under our indebtedness.

As of March 31, 2018, we had approximately $1,014.5 million in aggregate principal amount of indebtedness outstanding. The amount of debt we incur may have important, adverse consequences to us and our investors, including that:

it may limit our ability to borrow money, dispose of assets or sell equity to fund our working capital, capital expenditures, dividend payments, debt service, strategic initiatives or other obligations or purposes;

~~it may limit our flexibility in planning for, or reacting to, changes in the economy, the markets, regulatory requirements, our operations or our business;~~

~~we may be more highly leveraged than some of our competitors, which may place us at a competitive disadvantage;~~

~~it may impact the time frame~~Form 10-K for the ~~completion of the Distribution;~~

year ended December 31, 2022.

~~it may make us more vulnerable to downturns in the economy or our business;~~

~~it may require a substantial portion of our cash flow from operations to make interest payments;~~

~~it may make it more difficult for us to satisfy other obligations;~~

it may increase the risk of a future credit ratings downgrade of us or otherwise impact our ability to obtain favorable credit ratings, which could increase future debt costs and limit the future availability of debt financing;

~~we may not be able to borrow additional funds or refinance existing debt as needed or take advantage of business opportunities as they arise, pay cash dividends or repurchase common stock; and~~

there would be a material adverse effect on our businesses, financial condition, results of operations and prospects if we were unable to service our indebtedness or obtain additional financing or refinance our existing debt on terms acceptable to us.

In December 2017, following the announcement of the Berkeley Point Acquisition and our IPO, the credit rating outlooks of BGC were amended to “negative watch,” which is subject to the successful completion of various capital raising and other activities to strengthen its balance sheet. We are also planning to begin the process of pursuing our own credit rating, which is likely to be impacted by BGC’s rating. Although BGC has taken steps in recent months to strengthen its balance sheet and improve its credit ratios, no assurance can be given that we will obtain a credit rating in a timely fashion or that the credit rating we do ultimately receive will enable us to borrow on favorable terms. Such credit ratings may further impact the timing of our proposed tax-free spin-off, which is contingent upon us repaying or refinancing our $812.5 million of long-term debt owed to or guaranteed by BGC in order to be tax-free. On May 8, 2018, Fitch ratings affirmed Cantor’s and BGC’s Long-term Issuer Default Ratings (“IDRs”) at ‘BBB-‘ and Short-term IDRs at ‘F3’. Fitch has also removed the ratings from Rating Watch Negative and assigned Stable Rating Outlooks to both Cantor and BGC. Additionally, on May 14, 2018, Standard and Poor’s (“S&P”) also affirmed Cantor’s and BGC’s issuer credit and senior unsecured debt ratings at ‘BBB-‘ and removed the ratings from CreditWatch with negative implications, assigning stable rating outlooks.

To the extent that we incur additional indebtedness or seek to refinance our existing debt, the risks described above could increase. In addition, our actual cash requirements in the future may be greater than expected. Our cash flow from operations may not be sufficient to service our outstanding debt or to repay the outstanding debt as it becomes due, and we may not be able to borrow money, sell assets or otherwise raise funds on acceptable terms, or at all, to service or refinance our debt.

ITEM 2.UNREGISTERED SALES OF E~~QUITY~~EQUITY SECURITIES AND USE OF PROCEEDS

The information required by this Item is set forth in Note ~~28-“Compensation”~~6 — “Stock Transactions and Unit Redemptions” and Note 28 — “Compensation” to ~~the~~our accompanying unaudited condensed consolidated financial statements included in Item 1 of Part I of this Quarterly Report on Form 10-Q and in Part I, Item 2, of this Quarterly Report on Form 10-Q, Management’s Discussion and Analysis of Financial Condition and Results of Operations, ~~(Item 2 of Part I)~~ and is incorporated by reference herein.

ITEM 3.DEFAULTS UPON SENIOR SECURITIES

~~None.~~

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

~~None.~~

Not Applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6.E~~XHIBITS~~

EXHIBITS

The Exhibit Index set forth below is incorporated by reference in response to this Item 6.

~~EXHIBIT INDEX~~

~~Exhibit~~ ~~Number~~	~~Exhibit Title~~
Exhibit Number		Exhibit Title
~~10.26~~
10.1		~~Investment~~Employment Agreement, dated ~~as of March 6, 2018,~~February 10, 2023, by and among ~~BGC Partners, Inc., BGC Holdings, L.P., BGC Partners, L.P., BGC Global Holdings, L.P., Newmark Group, Inc.,~~Barry Gosin, Newmark Holdings, L.P., and Newmark Partners, L.P. (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on ~~March 7, 2018)~~February 14, 2023).

~~10.27~~ 10.2		Amendment, ~~No. 1~~dated as of March 10, 2023, to the Amended and Restated Agreement of Limited Partnership of Newmark ~~Partners,~~Holdings, L.P., dated as of ~~March 14, 2018~~December 13, 2017 (incorporated by reference to Exhibit ~~10.27~~10.1 to the ~~Registrant’s~~Registrant's Current Report on Form ~~10-K~~8-K filed with the SEC on March 20, 2018)*14, 2023).

~~10.28~~ 31.1		Amended and Restated Credit Agreement, dated as of March 19, 2018, by and between BGC Partners, Inc. and Newmark Group, Inc. (incorporated by reference to Exhibit 10.28 to the Registrant’s Current Report on Form 10-K filed with the SEC on March 20, 2018)

~~31.1~~	Certification by the Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 .

31.2		Certification by the Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 .

32.1		Certification by the Principal Executive Officer and Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of ~~2002~~2002.

101		The following materials from Newmark Group, Inc.’s Quarterly Report on Form 10-Q for the period ended March 31, ~~2018~~2023 are formatted in inline eXtensible Business Reporting Language ~~(XBRL)~~(iXBRL): (i) the ~~Unaudited~~ Condensed Consolidated Balance Sheets, (ii) the ~~Unaudited~~ Condensed Consolidated Statements of Operations, (iii) the ~~Unaudited~~ Condensed Consolidated Statements of Comprehensive Income, ~~(Loss),~~ (iv) the ~~Unaudited Condensed Consolidated Statements of Cash Flows, (v) the Unaudited~~ Condensed Consolidated Statements of Changes in Equity, (v) the Condensed Consolidated Statements of Cash Flows and (vi) Notes to the ~~Unaudited Condensed~~ Consolidated Financial ~~Statements.~~ Statement. The XBRL Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

104		The cover page from this Quarterly Report on Form 10-Q, formatted in InlineXBRL (included in Exhibit 101).

~~SIGNATURES~~

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Quarterly Report on Form 10-Q for the ~~three months~~quarter ended March 31, ~~2018~~2023 to be signed on its behalf by the undersigned, thereunto duly ~~authorized, on the 15th day of May, 2018.~~

authorized.


Newmark Group, Inc.

		/s/ Howard W. Lutnick
Name:		Howard W. Lutnick
Title:		Chairman

~~Newmark Group, Inc.~~

~~By:~~	~~/s/ Howard W. Lutnick~~
~~Name:~~	~~Howard W. Lutnick~~
~~Title:~~	~~Chairman~~

Pursuant to the requirements of the Securities Exchange Act of 1934, this Quarterly Report on Form 10-Q has been signed below by the following persons on behalf of the registrant, Newmark Group, Inc., in the capacities and on the date indicated.

~~Signature~~	~~Capacity in Which Signed~~		~~Date~~

~~/s/ Howard W. Lutnick~~ ~~Howard W. Lutnick~~	~~Chairman (Principal Executive Officer)~~		~~May 15, 2018~~

/s/ Michael J. Rispoli
Name:		Michael J. Rispoli
Title:				Chief Financial Officer ~~(Principal Financial and Accounting Officer)~~	~~May 15, 2018~~

Date: May 9, 2023


Class		Outstanding at May ~~11, 2018~~ 8, 2023
Class A Common Stock, par value $0.01 per share	~~138,921,532~~	153,218,006 shares
Class B Common Stock, par value $0.01 per share	~~15,840,049~~	21,285,533 shares


~~SIGNATURES~~ TERM						82 DEFINITION
2021 Equity Event						In connection with the acceleration of the Nasdaq Earn-out, on June 28, 2021, the Compensation Committee approved a plan to expedite the tax deductible exchange and redemption of a substantial number of limited partnership units held by partners of the Company

6.125% Senior Notes						The Company’s 6.125% Senior Notes due on November 15, 2023, issued on November 6, 2018 in an original principal amount of $550.0 million

Berkeley Point						Berkeley Point Financial LLC, a wholly owned subsidiary of the Company acquired on September 8, 2017, which does business as part of Newmark Multifamily Capital Markets

BGC or BGC Partners						BGC Partners, Inc. (Nasdaq: BGCP), which acquired us on October 14, 2011, facilitated the Newmark IPO on December 14, 2017, and completed the Spin-Off that led to us becoming a separate publicly traded company on November 30, 2018, and, where applicable, its subsidiaries.

BGC Entity Group						BGC, BGC Holdings, and BGC U.S. OpCo, and their respective subsidiaries (other than, prior to the Spin-off, the Newmark Entity Group), collectively

BGC Holdings						BGC Holdings, L.P., an entity owned by Cantor, Founding Partners, BGC employee partners and, after the Separation, Newmark employee partners

BGC U.S. Opco						BGC Partners, L.P., an operating partnership, which is owned jointly by BGC and BGC Holdings and holds the U.S. business of BGC

Board or Board of Directors						Board of Directors of the Company



CAGR						Compound annual growth rate

Cantor						Cantor Fitzgerald, L.P. and, where applicable, its subsidiaries

Cantor Credit Agreement						Unsecured credit agreement with Cantor

Cantor Entity Group						Cantor and its subsidiaries (other than any member of the BGC Entity Group or the Newmark Entity Group), Howard W. Lutnick and/or any of his immediate family members as so designated by Howard W. Lutnick and any trusts or other entities controlled by Howard W. Lutnick

Cantor Units						Limited partnership interests of BGC Holdings or Newmark Holdings held by the Cantor Entity Group, which units are exchangeable into shares of BGC Class A common stock or BGC Class B common stock, or Newmark Class A common stock or Newmark Class B common stock, as applicable

CCRE						Cantor Commercial Real Estate Company, L.P.

CCRE Lending						Cantor Commercial Real Estate Lending, L.P., a wholly owned subsidiary of Real Estate LP

CECL						Current Expected Credit Losses

Certificate of Incorporation						Amended and Restated Certificate of Incorporation of Newmark Group, Inc.

CF Secured						CF Secured, LLC

CF&Co						Cantor Fitzgerald & Co., a wholly owned broker-dealer subsidiary of Cantor

CFGM						CF Group Management, Inc., the managing general partner of Cantor Fitzgerald, L.P.

CFS11						CFS11 Holdings, LLC, a subsidiary of Cantor

Company						Newmark Group, Inc. and, where applicable, its consolidated subsidiaries


Company Debt Securities						The 6.125% Senior Notes and any future debt securities issued by the Company

Compensation Committee						Compensation Committee of the Board

Contribution Ratio						Ratio of shares of Newmark Common Stock that were outstanding compared to the shares of BGC common stock outstanding as of immediately prior to the Newmark IPO (not including any shares of our common stock sold in the Newmark IPO); this ratio was set initially at a fraction equal to one divided by 2.2

COVID-19						Coronavirus Disease 2019

CRCA						Cantor Realty Capital Advisors, L.P.

Credit Agreement						The Company’s unsecured senior revolving credit agreement with Bank of America, N.A., as administrative agent, and a syndicate of lenders, most recently amended and restated on March 10, 2022

Credit Facility						The credit facility pursuant to the Credit Agreement, with a current maximum revolving loan balance of $600.0 million and maturity date of March 10, 2025, bearing interest at either SOFR or a defined base rate plus additional margin

Deskeo						Space Management (DBA “Deskeo”)

Employees						Includes both employees and those real estate brokers who qualify as statutory non-employees under Internal Revenue Code Section 3508

EPS						Earnings Per Share

EPUs						Exchangeable preferred partnership units, which relate to the Nasdaq Forwards

Equity Plan						Newmark Group, Inc. Long Term Incentive Plan

ESG						Environmental, social and governance, including sustainability or similar items

eSpeed						eSpeed, Inc.

EU						European Union

Exchange Act						Securities Exchange Act of 1934, as amended



Exchange Ratio						The ratio by which a Newmark Holdings limited partnership interest can be exchanged for a number of shares of Newmark Class A common stock

FASB						Financial Accounting Standards Board

Fannie Mae						The Federal National Mortgage Association

Fannie Mae DUS						The Fannie Mae Delegated Underwriting and Servicing Program

FHA						The Federal Housing Administration

FHFA						The Federal Housing Finance Agency

FOMC						Federal Open Market Committee

Forward Sales Contract						An agreement to deliver mortgages to third-party investors at a fixed price

Founding Partners						Individuals who became limited partners of Newmark Holdings in connection with the Separation who held BGC Holdings founding partner interests immediately prior to the Separation (provided that members of the Cantor Entity Group, the BGC Entity Group and Howard W. Lutnick (including any entity directly or indirectly controlled by Mr. Lutnick or any trust of which he is a guarantor, trustee or beneficiary) are not Founding Partners); the holders of BGC Holdings founding partner interests received such founding partner interests in connection with the separation of BGC Partners from Cantor in 2008

FPUs						Founding/Working Partners units in BGC Holdings or Newmark Holdings that are generally redeemed upon termination of employment


Freddie Mac						The Federal Home Loan Mortgage Corporation

Freddie Mac Strip						A 3-basis point servicing fee and/or up to a 1-basis point surveillance fee on certain Freddie Mac loans after the loan is securitized in a Freddie Mac pool

Freddie TAH						The Freddie Mac Targeted Affordable Housing Program





GCS						Global corporate services

Gerald Eve						Gerald Eve LLP, a London-based real estate advisory firm acquired on March 10, 2023

Ginnie Mae						The Government National Mortgage Association

GSE or GSEs						Fannie Mae and Freddie Mac

H-Rights						Rights to exchange PSUs into HDUs

HDUs						LPUs with capital accounts, which are liability awards recorded in “Accrued compensation” in the Company’s consolidated statements of financial condition

HUD						The U.S. Department of Housing and Urban Development

HUD LEAN						HUD’s mortgage insurance program for senior housing

HUD MAP						HUD’s Multifamily Accelerated Processing

Knotel						Knotel, Inc.

LIBOR						London Inter-Bank Offered Rate

Limited Partnership Unit Holders						The individuals who became limited partners of Newmark Holdings in connection with the Separation and who held BGC Holdings limited partnership units immediately prior to the Separation and certain individuals who became or become limited partners of Newmark Holdings from time to time after the Separation and who provide services to the Newmark Entity Group

LPA Amendment						An amendment, dated as of March 10, 2023, to the Newmark Holdings limited partnership agreement

LPUs or limited partnership units						Certain limited partnership units in BGC Holdings or Newmark Holdings held by certain employees of BGC Partners or Newmark and other persons who have provided services to BGC Partners or Newmark, which units may include APSIs, APSUs, AREUs, ARPSUs, HDUs, U.K. LPUs, N Units, PLPUs, PPSIs, PPSUs, PSEs, PSIs, PSUs, REUs, and RPUs, along with future types of limited partnership units in BGC Holdings or Newmark Holdings

Master Repurchase Agreement						Master Repurchase Agreement, dated August 2, 2021, by and between Newmark OpCo. and CF Secured

MBA						Mortgage Bankers’ Association

MSRs						Mortgage servicing rights

Nasdaq						Nasdaq, Inc., formerly known as NASDAQ OMX Group, Inc.

Nasdaq Earn-Out						Total consideration received from the sale of eSpeed by BGC Partners to Nasdaq, including $750.0 million in cash paid upon closing and an earn-out of up to 14,883,705 shares of Nasdaq shares which was paid ratably over 15 years, provided that Nasdaq, as a whole, produced at least $25.0 million in consolidated gross revenues each year

Nasdaq Forwards						Variable postpaid forward contracts with RBC entered into using an SPV that is a consolidated subsidiary of Newmark
Nasdaq shares or Nasdaq payment						The shares of common stock of Nasdaq which remained payable by Nasdaq in connection with the Nasdaq Monetization Transactions, the right to which BGC Partners transferred to Newmark in connection with the Separation

Nasdaq Monetization Transactions						The sale on June 28, 2013 of eSpeed by BGC Partners to Nasdaq, in which the total consideration paid or payable by Nasdaq included the Nasdaq Earn-Out

Newmark						Newmark Group, Inc., and where applicable, its consolidated subsidiaries


Separation and Distribution Agreement						The Separation and Distribution Agreement entered into prior to the completion of the Newmark IPO by Cantor, Newmark, Newmark Holdings, Newmark OpCo, BGC Partners, BGC Holdings, BGC U.S. Opco and, for certain limited purposes described therein, BGC Global Holdings, L.P., as amended from time to time, on December 13, 2017, as amended on November 8, 2018 and amended and restated on November 23, 2018

SOFR						Secured Overnight Financing Rate

SPAC						Special purpose acquisition company named Newmark Acquisition Corp.

Spin-Off						The pro rata distribution, pursuant to the Separation and Distribution Agreement, by BGC to its stockholders of all of the shares of the shares of Newmark Common Stock owned by BGC immediately prior to the effective time of the Spin-Off, completed on November 30, 2018

Sponsor						Newmark Acquisition Holdings, LLC, the sponsor of the SPAC

Spring11						Spring11 Holdings, LP

SPVs						Special purpose vehicles

TDRs						Troubled debt restructurings

Total Debt						Newmark’s quarterly volumes from mortgage brokerage and GSE/FHA originations together

Tradeweb						Tradeweb Markets, Inc

U.K.						United Kingdom

U.S. GAAP or GAAP						Generally Accepted Accounting Principles in the United States of America

UBT						Unincorporated Business Tax

V&A						Valuation and Advisory

View						View, Inc.

Working Partners or Newmark Holdings Working Partners						The individuals who became limited partners of Newmark Holdings in connection with the Separation and who held BGC Holdings working partner interests immediately prior to the Separation and certain individuals who became or become limited partners of Newmark Holdings from time to time from and after the Separation and who provide services to the Newmark Entity Group

☒
☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

☐
☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	~~Page~~
		Page
~~PART I~~
	Glossary of Terms, Abbreviations, and Acronyms	3

PART I - FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS (unaudited)	5	5
	Condensed ~~consolidated~~Consolidated Balance Sheets	5	5
	Condensed ~~consolidated~~Consolidated Statements of Operations	6	6
	Condensed ~~consolidated~~Consolidated Statements of Comprehensive Income ~~(Loss)~~	7	7
	Condensed ~~consolidated~~Consolidated Statements of Changes in Equity	8	8
	Condensed ~~consolidated~~Consolidated Statements of Cash Flows	9	9
	Notes to Condensed ~~consolidated~~Consolidated Financial Statements	11	11
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	50	44
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	88	76
ITEM 4.	CONTROLS AND PROCEDURES	89	77

PART II - OTHER INFORMATION

ITEM 1.	LEGAL PROCEEDINGS	90	78
ITEM 1A.	RISK FACTORS	90	78
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	90	80
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	90	80
ITEM 4.	MINE SAFETY DISCLOSURES	90	80
ITEM 5.	OTHER INFORMATION	90	80
ITEM 6.	EXHIBITS	90	81


Newmark & Co.						Newmark & Company Real Estate, Inc., which for the purposes of this document, is defined as all of the companies acquired by BGC Partners, Inc. on October 14, 2011. Comparisons in this document to our 2011 revenues are based on unaudited full year 2011 revenues for Newmark & Co.

Newmark Common Stock						Collectively Newmark’s Class A common stock and Class B common stock

Newmark Class A common stock						Newmark Class A common stock, par value $0.01 per share

Newmark Class B common stock						Newmark Class B common stock, par value $0.01 per share

Newmark Entity Group						Newmark, Newmark Holdings, Newmark OpCo and their respective subsidiaries, collectively

Newmark Holdings						Newmark Holdings, L.P.

Newmark Holdings limited partnership agreement						Amended and Restated Agreement of Limited Partnership of Newmark Holdings, L.P., dated as of December 13, 2017

Newmark IPO						The initial public offering of 23 million shares of Newmark Class A common stock at a price of $14.00 per share in December 2017

Newmark OpCo						Newmark Partners, L.P., an operating partnership, which is owned jointly by Newmark and Newmark Holdings and holds the businesses of Newmark

Newmark OpCo Preferred Investment						On June 18, 2018 and September 26, 2018, Newmark OpCo issued approximately $175.0 million and $150.0 million of EPUs, respectively, in private transactions to RBC

Newmark S11						Newmark S11 Holdings, LLC

Non-GAAP						A financial measure that differs from the most directly comparable measure calculated and presented in accordance with U.S. GAAP, such as Adjusted Earnings and Adjusted EBITDA

N Units						Non-distributing partnership units of BGC Holdings or Newmark Holdings that may not be allocated any item of profit or loss, and may not be made exchangeable into shares of Class A common stock, including NREUs and NPSUs



Preferred Distribution						Allocation of net profits of BGC Holdings or Newmark Holdings to holders of Preferred Units, at a rate of either 0.6875% (i.e., 2.75% per calendar year) or such other amount as set forth in the award documentation

Preferred Units						Preferred partnership units in BGC Holdings or Newmark Holdings, such as PPSUs, which are settled for cash, rather than made exchangeable into shares of Class A common stock, are only entitled to a Preferred Distribution, and are not included in BGC’s or Newmark’s fully diluted share count

RBC						Royal Bank of Canada

RCA						MSCI Real Capital Analytics

Real Estate LP						CF Real Estate Finance Holdings, L.P., a joint venture with Cantor

RSUs						BGC or Newmark unvested restricted stock units, payable in shares of BGC Class A common stock or Newmark Class A common stock, respectively, held by certain employees of BGC Partners or Newmark and other persons who have provided services to BGC Partners or Newmark, or issued in connection with certain acquisitions

SEC						U.S. Securities and Exchange Commission

Securities Act						Securities Act of 1933, as amended

Separation						Principal corporate transactions pursuant to the Separation and Distribution Agreement, by which BGC, BGC Holdings and BGC U.S. OpCo and their respective subsidiaries (other than the Newmark Entity Group) transferred to Newmark, Newmark Holdings and Newmark OpCo and their respective subsidiaries the assets and liabilities of the BGC Entity Group relating to BGC’s real estate services business, and related transactions, including the distribution of Newmark Holdings units to holders of units in BGC Holdings and the assumption and repayment of certain BGC indebtedness by Newmark

	March 31, 2018		December 31, 2017
Assets:
Current assets:
Cash and cash equivalents	$	48,069	$	121,027
Restricted cash		243,944		52,347
Marketable securities		8,622		57,623
Loans held for sale, at fair value		965,639		362,635
Receivables, net		293,148		210,471
Other current assets (see note 17)		36,499		20,994
Total current assets		1,595,921		825,097
Goodwill		474,990		477,532
Mortgage servicing rights, net		381,526		392,626
Loans, forgivable loans and other receivables from employees and partners, net		226,744		209,549
Fixed assets, net		64,565		64,822
Other intangible assets, net		25,896		24,921
Other assets (see note 17)		287,508		278,460
Total assets	$	3,057,150	$	2,273,007
Liabilities, Redeemable Partnership Interest, and Equity:
Current liabilities:
Warehouse notes payable	$	950,479	$	360,440
Accrued compensation		205,732		205,395
Current portion of accounts payable, accrued expenses and other liabilities (see note 27)		165,746		124,961
Securities loaned		8,622		57,623
Current portion of payables to related parties		197,199		34,169
Total current liabilities		1,527,778		782,588
Long-term debt		400,000		670,710
Long-term debt payable to related parties		412,500		412,500
Other-long term liabilities (see note 27)		163,190		163,795
Total liabilities		2,503,468		2,029,593
Commitments and contingencies
Redeemable partnership interests		22,105		21,096
Equity:
Class A common stock, par value of $0.01 per share: 1,000,000 shares authorized; 138,922 and 138,594 shares issued and outstanding as of March 31, 2018 and December 31, 2017, respectively		1,389		1,386
Class B common stock, par value of $0.01 per share: 500,000 shares authorized; 15,840 shares issued and outstanding at March 31, 2018 and December 31, 2017		158		158
Additional paid-in capital		54,474		59,374
Retained earnings		238,096		199,492
Total stockholders’ equity		294,117		260,410
Noncontrolling interests		237,460		(38,092	)
Total equity		531,577		222,318
Total liabilities, redeemable partnership interest, and equity	$	3,057,150	$	2,273,007

	Class A Common Stock		Class B Common Stock		Additional Paid-in Capital			Retained Earnings			BGC’s Net Investment in Newmark			Noncontrolling Interests in Subsidiaries			Total
Balance, January 1, 2017	$	—	$	—	$	—		$	245,877		$	735,899		$	2,007		$	983,783
Consolidated net income (loss)		—		—		—			144,492			—			604			145,096
Distributions		—		—		—			(190,877	)		—			(71	)		(190,948	)
Purchase of noncontrolling interests		—		—		—			—			1,092			(1,092	)		—
Noncontrolling interests in an entity acquired		—		—		—			—			—			19,146			19,146
Debt assumed from BGC		—		—		—			—			(1,387,500	)		—			(1,387,500	)
Contributions		—		—		—			—			368,418			—			368,418
Transfer of pre initial public offering (“IPO”) capital to redeemable partnership interests		—		—		—			—			(21,096	)		—			(21,096	)
Issuance of shares in the Separation (Class A common stock, 115,593,787 shares); (Class B common stock, 15,840,049 shares)		1,156		158		(245,815	)		—			303,187			(58,686	)		—
Proceeds from IPO, net of underwriting discounts and other expenses (Class A common stock, 23,000,000 shares)		230		—		295,189			—			—			—			295,419
Equity-based compensation (Class A common stock, 600,000 shares)		—		—		10,000			—			—			—			10,000
Balance, December 31, 2017	$	1,386	$	158	$	59,374		$	199,492		$	—		$	(38,092	)	$	222,318
Consolidated net income		—		—		—			19,997			—			12,490			32,487
Cumulative effect of revenue standard adoption		—		—		—			16,463			—			2,342			18,805
Reduction of earnings distributions									2,144			—			—			2,144
Distributions		—		—		—			—			—			(100	)		(100	)
Equity-based compensation and related issuance of (Class A common stock, 327,746 shares)		3		—		(4,900	)		—			—			—			(4,897	)
BGC's purchase of 16,600,000 exchangeable limited partnership units in Newmark Holdings		—		—		—			—			—			241,960			241,960
Grant of exchangeability and redemption of limited partnership interests		—		—		—			—			—			19,869			19,869
Allocation of net income to redeemable partnership interests		—		—		—			—			—			(1,009	)		(1,009	)
Balance, March 31, 2018	$	1,389	$	158	$	54,474		$	238,096		$	—		$	237,460		$	531,577

	Three Months Ended March 31, 2017
	As Previously Reported		Retrospective Adjustments		As Retrospectively Adjusted
Income before income taxes and noncontrolling interests	$	7,946		29,046	$	36,992
Net income		7,980		29,027		37,007
Net income attributable to noncontrolling interests		296		—		296
Net income available to common stockholders	$	7,684	$	29,027	$	36,711

	March 31, 2018						December 31, 2017
					Notional						Notional
Derivative contract	Assets		Liabilities		Amounts (1)		Assets		Liabilities		Amounts⁽¹⁾
Forwards	$	9,687	$	2,421	$	1,324,711	$	3,753	$	657	$	541,359
Rate lock commitments		8,750		8,980		374,197		2,923		2,390		180,918
Total	$	18,437	$	11,401			$	6,676	$	3,047

	Location of gain (loss) recognized	Three Months Ended March 31,
	in income for derivatives	2018			2017
Derivatives not designed as hedging instruments:
Rate lock commitments	Gains from mortgage banking activities/originations, net	$	2,269		$	132
Rate lock commitments	Compensation and employee benefits		(2,500	)		(807	)
Forward sale contracts	Gains from mortgage banking activities/originations, net		7,266			3,317
		$	7,035		$	2,642

	Three Months Ended March 31,
	2018
Revenues from contracts with customers:
Leasing and other commissions	$	159,371
Capital markets		101,364
Management services		96,933
Revenues		357,668
Other sources of revenue:
Gains from mortgage banking activities/originations, net⁽¹⁾		38,914
Servicing fees and other⁽¹⁾		33,878
Revenues	$	430,460


~~Delaware~~

	For the Three Months Ended March 31, 2018
	As Reported		Under Previous U.S. GAAP		Effect of Change Higher/(Lower) (1)
Income Statement
Revenues
Leasing and other commissions	$	159,371		148,754	$	10,617
Capital Markets		101,364		101,364		—
Gains from mortgage banking activities/originations, net		38,914		38,914		—
Management services, servicing fees and other		130,811		112,424		18,387

Expenses
Compensation and employee benefits		252,695		247,053		5,642
Operating, administrative and other	$	75,427		57,040	$	18,387

Balance at December 31, 2016	$	412,846
Acquisitions		64,291
Measurement period adjustments		395
Balance at December 31, 2017		477,532
Acquisitions		—
Measurement period adjustments		(2,542	)
Balance at March 31, 2018	$	474,990


Balance, January 1, 2022	$	657,131
Acquisitions	50,756
Measurement period and currency translation adjustments	(1,993)
Balance, December 31, 2022	705,894
Acquisitions	77,089
Divestiture	(9,222)
Measurement period and currency translation adjustments	(63)
Balance, March 31, 2023	$	773,698


	March 31, 2018										March 31, 2023
	Gross Amount		Accumulated Amortization			Net Carrying Amount		Weighted- Average Remaining Life (Years)			Gross Amount		Accumulated Amortization		Net Carrying Amount		Weighted- Average Remaining Life (Years)
Indefinite life:										Indefinite life:
Trademark and trade names	$	4,400	$	—		$	4,400	N/A		Trademark and trade names	$	11,350	$	—	$	11,350	N/A
License agreements (GSE)		5,390		—			5,390	N/A		License agreements (GSE)	5,390		—		5,390		N/A
Definite life:										Definite life:
Trademark and trade names		7,061		(6,183	)		878		0.1	Trademark and trade names	16,277		(8,567)		7,710		2.6
Non-contractual customers		10,447		(2,407	)		8,040		2.5	Non-contractual customers	30,131		(15,531)		14,600		8.4
License agreements		4,981		(1,548	)		3,433		0.7

Non-compete agreements		3,608		(642	)		2,966		1.1	Non-compete agreements	12,565		(5,440)		7,125		4.7
Contractual customers		1,452		(664	)		788		0.2	Contractual customers	59,850		(11,721)		48,129		8.5
Below market leases		15		(14	)		1		—
	$	37,354	$	(11,458	)	$	25,896		4.6
Other										Other	4,551		(2,392)		2,159		11.9
Total										Total	$	140,114	$	(43,651)	$	96,463	7.4

2018	$	3,047
2019		3,934
2020		3,691
2021		2,709
2022 and thereafter		2,725
Total	$	16,106


2023	$	13,620
2024	17,643
2025	16,211
2026	12,720
2027	8,733
Thereafter	10,796
Total	$	79,723

	March 31, 2018			December 31, 2017
Leasehold improvements and other fixed assets	$	79,121		$	77,313

								March 31, 2023		December 31, 2022
Leasehold improvements, furniture and fixtures, and other fixed assets							Leasehold improvements, furniture and fixtures, and other fixed assets	$	225,162	$	207,020
Software, including software development costs		17,827			17,395		Software, including software development costs	50,707		48,112
Computer and communications equipment		16,450			15,878		Computer and communications equipment	32,750		31,586
		113,398			110,586
Total, cost							Total, cost	308,619		286,718
Accumulated depreciation and amortization		(48,833	)		(45,764	)	Accumulated depreciation and amortization	(137,705)		(131,079)
	$	64,565		$	64,822
Total, net							Total, net	$	170,914	$	155,639



	March 31, 2023		December 31, 2022
Deferred tax assets	$	94,687	$	94,689
Equity method investment	94,863		91,280
Non-marketable investments	8,688		8,688

Other tax receivables	7,603		6,683
Other	20,828		12,926
Total	$	226,669	$	214,266

	Committed Lines		Uncommitted Lines		Balance at March 31, 2018		Stated Spread to One Month LIBOR	Rate Type
Warehouse line due June 20, 2018	$	450,000	$	—	$	390,295	130 bps	Variable
Warehouse line due September 25, 2018		200,000		—		166,480	130 bps	Variable
Warehouse line due October 11, 2018⁽¹⁾		400,000		—		361,739	130 bps	Variable
Fannie Mae repurchase agreement, open maturity		—		325,000		31,965	120 bps	Variable
	$	1,050,000	$	325,000	$	950,479


	Committed Lines		Uncommitted Lines		Balance at March 31, 2023		Balance at December 31, 2022		Stated Spread to One-Month SOFR	Rate Type
Warehouse facility due June 14, 2023 (1)	$	450,000	$	—	$	28,563	$	—	130 bps	Variable
Warehouse facility due June 14, 2023 (1)	—		300,000		—		—		130 bps	Variable
Warehouse facility due September 25, 2023	300,000		—		227,046		35,292		130 bps	Variable
Warehouse facility due September 25, 2023	—		100,000		—		—		130 bps	Variable
Warehouse facility due October 6, 2023	800,000		—		172,092		102,114		130 bps	Variable
Fannie Mae repurchase agreement, open maturity	—		400,000		—		—		115 bps	Variable
Total	$	1,550,000	$	800,000	$	427,701	$	137,406

	Committed Lines		Uncommitted Lines		Balance at December 31, 2017		Stated Spread to One Month LIBOR	Rate Type
Warehouse line due June 20, 2018	$	450,000	$	—	$	60,715	130 bps	Variable
Warehouse line due September 25, 2018		200,000		—		107,383	130 bps	Variable
Warehouse line due October 11, 2018		300,000		—		174,102	130 bps	Variable
Fannie Mae repurchase agreement, open maturity		—		325,000		18,240	120 bps	Variable
	$	950,000	$	325,000	$	360,440

	March 31, 2018		December 31, 2017
Converted Term Loan	$	400,000	$	400,000
Term Loan		—		270,710
Long-term debt		400,000		670,710
2019 Promissory Notes		300,000		300,000
2042 Promissory Notes		112,500		112,500
Total long-term debt	$	812,500	$	1,083,210



	March 31, 2023		December 31, 2022
Principal balance	$	550,000	$	550,000
Less: debt issue cost	799		1,120
Less: debt discount	767		1,096
Total	$	548,434	$	547,784

	March 31, 2018				December 31, 2017
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
2019 Promissory Notes	$	300,000	$	309,750	$	300,000	$	313,125
2042 Promissory Notes		112,500		115,650		112,500		116,550
	$	412,500	$	425,400	$	412,500	$	429,675

Financial guarantee liability (in thousands)
Balance at December 31, 2016	$	(413	)
Reversal of provision		359
Balance at December 31, 2017	$	(54	)
Increase to provision		(7	)
Balance at March 31, 2018	$	(61	)

	As of March 31, 2018
	Level 1		Level 2		Level 3			Total
Assets:
Marketable securities	$	8,622	$	—	$	—		$	8,622
Loans held for sale		—		965,639		—			965,639
Rate lock commitments		—		—		8,750			8,750
Forwards		—		—		9,687			9,687
Total assets	$	8,622	$	965,639	$	18,437	#	$	992,698
Liabilities:
Accounts payable, accrued expenses and other liabilities—contingent consideration	$	—	$	—	$	23,087		$	23,087
Rate lock commitments		—		—		8,980			8,980
Forwards		—		—		2,421			2,421
Total Liabilities	$	—	$	—	$	34,488		$	34,488

	As of December 31, 2017
	Level 1		Level 2		Level 3		Total
Assets:
Marketable securities	$	57,623	$	—	$	—	$	57,623
Loans held for sale		—		362,635		—		362,635
Rate lock commitments		—		—		2,923		2,923
Forwards		—		—		3,753		3,753
Total assets	$	57,623	$	362,635	$	6,676	$	426,934
Liabilities:
Accounts payable, accrued expenses and other liabilities—contingent consideration	$	—	$	—	$	23,711	$	23,711
Rate lock commitments		—		—		2,390		2,390
Forwards		—		—		657		657
Total Liabilities	$	—	$	—	$	26,758	$	26,758

	As of March 31, 2018
	Opening Balance		Total realized and unrealized (gains) losses included in Net income⁽¹⁾		Issuances		Settlements			Closing Balance		Unrealized (gains) losses outstanding as of March 31, 2018
Accounts payable, accrued expenses and other liabilities—contingent consideration	$	23,711	$	134	$	—	$	(758	)	$	23,087	$	134
Rate lock commitments and forwards, net		3,629		7,036		—		(3,629	)		7,036		7,036
	$	27,340	$	7,170	$	—	$	(4,387	)	$	30,123	$	7,170

	As of March 31, 2017
	Opening Balance		Total realized and unrealized (gains) losses included in Net income⁽¹⁾		Issuances		Settlements			Closing Balance		Unrealized (gains) losses outstanding as of March 31, 2017
Accounts payable, accrued expenses and other liabilities—contingent consideration	$	38,713	$	438	$	—	$	(10,153	)	$	28,998	$	438
Rate lock commitments and forwards, net		10,254		2,462		—		(10,254	)		2,462		2,462
	$	48,967	$	2,900	$	—	$	(20,407	)	$	31,460	$	2,900

Balance at December 31, 2017	346,538		$	9.56	1.85
Delivered units	(95,773	)		9.17
Forfeited units	(9,470	)		9.95
Balance at March 31, 2018	241,295		$	9.67	1.69