10-Q

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM

10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2021

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from

Commission File Number:

001-36155

MARCUS & MILLICHAP, INC.

(Exact name of registrant as specified in its Charter)


Delaware		35-2478370
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

23975 Park Sorrento, Suite 400 Calabasas, California		91302
(Address of Principal Executive Offices)		(Zip Code)

(818)

212-2250

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.0001 per share	MMI	New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes

☒ No ☐

Indicate by checkmark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter time period that the registrant was required to submit such files).

Yes

☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a

non-accelerated

filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule

12b-2

of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No

☒

Number of shares of common stock, par value $0.0001 per share, of the registrant issued and outstanding as of August 2, 2021 was

39,579,303 shares.

Table of Contents

MARCUS & MILLICHAP, INC.

TABLE OF CONTENTS


	Page
PART I. FINANCIAL INFORMATION

Item 1. Financial Statements		3
Condensed Consolidated Balance Sheets at June 30, 2021 (Unaudited) and December 31, 2020		3
Condensed Consolidated Statements of Net and Comprehensive Income for the Three and Six Months Ended June 30, 2021 and 2020 (Unaudited)		4
Condensed Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended June 30, 2021 and 2020 (Unaudited)		5
Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2021 and 2020 (Unaudited)		7
Notes to Condensed Consolidated Financial Statements (Unaudited)		8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		25
Item 3. Quantitative and Qualitative Disclosures About Market Risk		38
Item 4. Controls and Procedures		39

PART II. OTHER INFORMATION

Item 1. Legal Proceedings		40
Item 1A. Risk Factors		40
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		40
Item 3. Defaults Upon Senior Securities		40
Item 4. Mine Safety Disclosures		40
Item 5. Other Information		40
Item 6. Exhibits		41

SIGNATURES

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

MARCUS & MILLICHAP, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except for shares and par value)


	June 30, 2021 (Unaudited)		December 31, 2020
Assets
Current assets:
Cash and cash equivalents	$	230,414	$	243,152
Commissions receivable, net		14,954		10,391
Prepaid expenses		10,402		10,153
Marketable debt securities, available-for-sale (includes amortized cost of $147,142 and $158,148 at June 30, 2021 and December 31, 2020, respectively, and $0 allowance for credit losses)		147,172		158,258
Advances and loans, net		2,657		2,413
Other assets		5,742		4,711

Total current assets		411,341		429,078
Property and equipment, net		22,746		23,436
Operating lease right-of-use assets, net		86,420		84,024
Marketable debt securities, available-for-sale (includes amortized cost of $95,488 and $45,181 at June 30, 2021 and December 31, 2020, respectively, and $0 allowance for credit losses)		97,514		47,773
Assets held in rabbi trust		11,178		10,295
Deferred tax assets, net		20,706		21,374
Goodwill and other intangible assets, net		49,843		52,053
Advances and loans, net		114,036		106,913
Other assets		3,986		4,176

Total assets	$	817,770	$	779,122


Liabilities and stockholders’ equity
Current liabilities:
Accounts payable and other liabilities	$	20,959	$	18,288
Deferred compensation and commissions		48,169		58,106
Income tax payable		2,380		3,726
Operating lease liabilities		20,157		19,190
Accrued bonuses and other employee related expenses		23,854		21,007

Total current liabilities		115,519		120,317
Deferred compensation and commissions		32,191		38,745
Operating lease liabilities		61,293		59,408
Other liabilities		11,914		13,816

Total liabilities		220,917		232,286


Commitments and contingencies		—		—

Stockholders’ equity:
Preferred stock, $0.0001 par value:
Authorized shares – 25,000,000; issued and outstanding shares – none at June 30, 2021 and December 31, 2020, respectively		—		—
Common stock, $0.0001 par value:
Authorized shares – 150,000,000; issued and outstanding shares – 39,578,360 and 39,401,976 at June 30, 2021 and December 31, 2020, respectively		4		4
Additional paid-in capital		117,457		113,182
Retained earnings		477,620		431,076
Accumulated other comprehensive income		1,772		2,574

Total stockholders’ equity		596,853		546,836

Total liabilities and stockholders’ equity	$	817,770	$	779,122

See accompanying notes to condensed consolidated financial statements.

Table of Contents

MARCUS & MILLICHAP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF NET AND COMPREHENSIVE INCOME

(in thousands, except per share amounts)

(Unaudited)


	Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020
Revenues:
Real estate brokerage commissions	$	252,903		$	103,371		$	415,699		$	275,200
Financing fees		28,214			12,703			46,057			28,054
Other revenues		3,829			1,326			7,167			4,863

Total revenues		284,946			117,400			468,923			308,117

Operating expenses:
Cost of services		178,585			73,743			287,688			187,500
Selling, general and administrative		61,797			43,519			113,474			98,379
Depreciation and amortization		2,959			2,752			5,956			5,216

Total operating expenses		243,341			120,014			407,118			291,095

Operating income (loss)		41,605			(2,614	)		61,805			17,022
Other income (expense), net		1,370			2,975			2,414			2,609
Interest expense		(146	)		(213	)		(292	)		(496	)

Income before provision for income taxes		42,829			148			63,927			19,135
Provision for income taxes		11,297			42			17,383			5,959

Net income		31,532			106			46,544			13,176


Other comprehensive income (loss):
Marketable debt securities, available-for-sale:
Change in net unrealized gains		146			1,214			(475	)		717
Less: reclassification adjustment for net losses included in other income (expense), net		3			13			3			24

Net change, net of tax of $51, $421, $(164) and $253 for the three and six months ended June 30, 2021 and 2020, respectively		149			1,227			(472	)		741
Foreign currency translation (loss) gain, net of tax of $0 for each of the three and six months ended June 30, 2021 and 2020		(217	)		(423	)		(330	)		468

Total other comprehensive (loss) income		(68	)		804			(802	)		1,209

Comprehensive income	$	31,464		$	910		$	45,742		$	14,385


Earnings per share:
Basic	$	0.79		$	—		$	1.17		$	0.33
Diluted	$	0.78		$	—		$	1.16		$	0.33
Weighted average common shares outstanding:
Basic		39,877			39,629			39,817			39,585
Diluted		40,139			39,673			40,112			39,662

See accompanying notes to condensed consolidated financial statements.

Table of Contents

MARCUS & MILLICHAP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands, except for shares)

(Unaudited)


	Three Months Ended June 30, 2021
	Preferred Stock				Common Stock					Additional Paid-In Capital			Stock Notes Receivable From Employees			Retained Earnings		Accumulated Other Comprehensive Income (Loss)			Total
	Shares		Amount		Shares			Amount		Additional Paid-In Capital			Stock Notes Receivable From Employees			Retained Earnings		Accumulated Other Comprehensive Income (Loss)			Total
Balance at March 31, 2021		—	$	—		39,500,966		$	4	$	113,737		$	—		$	446,088	$	1,840		$	561,669
Net and comprehensive income (loss)		—		—		—			—		—			—			31,532		(68	)		31,464
Stock-based award activity
Stock-based compensation		—		—		—			—		2,662			—			—		—			2,662
Shares issued pursuant to employee stock purchase plan		—		—		11,635			—		369			—			—		—			369
Issuance of common stock for vesting of restricted stock units		—		—		34,198			—		—			—			—		—			—
Issuance of common stock for unvested restricted stock awards		—		—		12,492			—		—			—			—		—			—
Issuance of common stock for stock settled deferred consideration		—		—		27,481			—		1,000			—			—		—			1,000
Shares withheld related to net share settlement of stock-based awards		—		—		(8,412	)		—		(311	)		—			—		—			(311	)

Balance as of June 30, 2021		—	$	—		39,578,360		$	4	$	117,457		$	—		$	477,620	$	1,772		$	596,853


	Three Months Ended June 30, 2020
	Preferred Stock				Common Stock					Additional Paid-In Capital			Stock Notes Receivable From Employees			Retained Earnings		Accumulated Other Comprehensive Income			Total
	Shares		Amount		Shares			Amount		Additional Paid-In Capital			Stock Notes Receivable From Employees			Retained Earnings		Accumulated Other Comprehensive Income			Total
Balance at March 31, 2020		—	$	—		39,272,429		$	4	$	105,601		$	(4	)	$	401,308	$	2,383		$	509,292
Net and comprehensive income		—		—		—			—		—			—			106		804			910
Stock-based award activity
Stock-based compensation		—		—		—			—		2,536			—			—		—			2,536
Shares issued pursuant to employee stock purchase plan		—		—		15,923			—		371			—			—		—			371
Issuance of common stock for vesting of restricted stock units		—		—		27,373			—		—			—			—		—			—
Issuance of common stock for unvested restricted stock awards		—		—		19,516			—		—			—			—		—			—
Shares withheld related to net share settlement of stock-based awards		—		—		(7,224	)		—		(200	)		—			—		—			(200	)
Reduction of stock notes receivable from employees		—		—		—			—		—			4			—		—			4

Balance as of June 30, 2020		—	$	—		39,328,017		$	4	$	108,308		$	—		$	401,414	$	3,187		$	512,913

See accompanying notes to condensed consolidated financial statements.

Table of Contents

MARCUS & MILLICHAP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands, except for shares)

(Unaudited)


	Six Months Ended June 30, 2021
	Preferred Stock				Common Stock					Additional Paid-In Capital			Stock Notes Receivable From Employees		Retained Earnings		Accumulated Other Comprehensive Income (Loss)			Total
	Shares		Amount		Shares			Amount		Additional Paid-In Capital			Stock Notes Receivable From Employees		Retained Earnings		Accumulated Other Comprehensive Income (Loss)			Total
Balance at December 31, 2020		—	$	—		39,401,976		$	4	$	113,182		$	—	$	431,076	$	2,574		$	546,836
Net and comprehensive income (loss)		—		—		—			—		—			—		46,544		(802	)		45,742
Stock-based award activity
Stock-based compensation		—		—		—			—		4,950			—		—		—			4,950
Shares issued pursuant to employee stock purchase plan		—		—		11,635			—		369			—		—		—			369
Issuance of common stock for vesting of restricted stock units		—		—		183,315			—		—			—		—		—			—
Issuance of common stock for unvested restricted stock awards		—		—		12,492			—		—			—		—		—			—
Issuance of common stock for stock settled deferred consideration		—		—		27,481			—		1,000			—		—		—			1,000
Shares withheld related to net share settlement of stock-based awards		—		—		(58,539	)		—		(2,044	)		—		—		—			(2,044	)

Balance as of June 30, 2021		—	$	—		39,578,360		$	4	$	117,457		$	—	$	477,620	$	1,772		$	596,853


	Six Months Ended June 30, 2020
	Preferred Stock				Common Stock					Additional Paid-In Capital			Stock Notes Receivable From Employees			Retained Earnings			Accumulated Other Comprehensive Income		Total
	Shares		Amount		Shares			Amount		Additional Paid-In Capital			Stock Notes Receivable From Employees			Retained Earnings			Accumulated Other Comprehensive Income		Total
Balance at December 31, 2019		—	$	—		39,153,195		$	4	$	104,658		$	(4	)	$	388,271		$	1,978	$	494,907
Cumulative effect of a change in accounting principle, net of tax		—		—		—			—		—			—			(33	)		—		(33	)

Balance at January 1, 2020, as adjusted		—		—		39,153,195			4		104,658			(4	)		388,238			1,978		494,874
Net and comprehensive income		—		—		—			—		—			—			13,176			1,209		14,385
Stock-based award activity
Stock-based compensation		—		—		—			—		5,168			—			—			—		5,168
Shares issued pursuant to employee stock purchase plan		—		—		15,923			—		371			—			—			—		371
Issuance of common stock for vesting of restricted stock units		—		—		197,479			—		—			—			—			—		—
Issuance of common stock for unvested restricted stock awards		—		—		19,516			—		—			—			—			—		—
Shares withheld related to net share settlement of stock-based awards		—		—		(58,096	)		—		(1,889	)		—			—			—		(1,889	)
Reduction of stock notes receivable from employees		—		—		—			—		—			4			—			—		4

Balance as of June 30, 2020		—	$	—		39,328,017		$	4	$	108,308		$	—		$	401,414		$	3,187	$	512,913

See accompanying notes to condensed consolidated financial statements.

Table of Contents

MARCUS & MILLICHAP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)


	Six Months Ended June 30,
	2021			2020
Cash flows from operating activities
Net income	$	46,544		$	13,176
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization		5,956			5,216
Amortization of right-of-use assets		11,850			11,151
Credit loss recovery		(137	)		(78	)
Stock-based compensation		4,950			5,168
Deferred taxes, net		780			4,172
Unrealized foreign exchange (gains) losses		(560	)		557
Net realized gains on marketable debt securities, available-for-sale		(10	)		(117	)
Other non-cash items		196			567
Changes in operating assets and liabilities:
Commissions receivable		(4,781	)		(5	)
Prepaid expenses		(239	)		2,259
Advances and loans		(7,086	)		(34,149	)
Other assets		(2,138	)		(1,059	)
Accounts payable and other liabilities		4,988			(1,204	)
Income tax receivable/payable		(1,345	)		775
Accrued bonuses and other employee related expenses		3,005			(18,168	)
Deferred compensation and commissions		(15,968	)		(31,425	)
Operating lease liabilities		(10,557	)		(9,016	)
Other liabilities		(1,982	)		331

Net cash provided by (used in) operating activities		33,466			(51,849	)

Cash flows from investing activities
Acquisition of businesses, net of cash received		229			(11,821	)
Purchases of marketable debt securities, available-for-sale		(199,513	)		(95,266	)
Proceeds from sales and maturities of marketable debt securities, available-for-sale		159,968			95,028
Issuances of employee notes receivable		(40	)		(211	)
Payments received on employee notes receivable		276			1
Purchase of property and equipment		(2,770	)		(4,190	)

Net cash used in investing activities		(41,850	)		(16,459	)

Cash flows from financing activities
Taxes paid related to net share settlement of stock-based awards		(2,044	)		(1,889	)
Proceeds from issuance of shares pursuant to employee stock purchase plan		369			371
Principal payments on notes payable to former stockholders		—			(6,563	)
Principal payments on stock appreciation rights liability		(1,481	)		(1,251	)
Principal payments on deferred consideration		(1,302	)		—

Net cash used in financing activities		(4,458	)		(9,332	)

Effect of currency exchange rate changes on cash and cash equivalents		104			(150	)

Net decrease in cash and cash equivalents		(12,738	)		(77,790	)
Cash and cash equivalents at beginning of period		243,152			232,670

Cash and cash equivalents at end of period	$	230,414		$	154,880


Supplemental disclosures of cash flow information
Interest paid during the period	$	714		$	1,193

Income taxes paid, net	$	17,897		$	1,013

See accompanying notes to condensed consolidated financial statements.

Table of Contents

MARCUS & MILLICHAP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.	Description of Business, Basis of Presentation and Recent Accounting Pronouncements

Description of Business

Marcus & Millichap, Inc. (the “Company”,

“Marcus & Millichap”, or “MMI”), a Delaware corporation, is a brokerage firm specializing in commercial real estate investment sales, financing, research and advisory services. As of June 30, 2021, MMI operates 84 offices in the United States and Canada through its wholly-owned subsidiaries, including the operations of Marcus & Millichap Capital Corporation.

Reorganization and Initial Public Offering

MMI was formed in June 2013 in preparation for Marcus & Millichap Company (“MMC”) to

spin-off

its majority-owned subsidiary, Marcus & Millichap Real Estate Investment Services, Inc. (“MMREIS”). Prior to the initial public offering (“IPO”) of MMI, all of the preferred and common stockholders of MMREIS (including MMC and employees of MMREIS) contributed all of their outstanding shares to MMI, in exchange for new MMI common stock. As a result, MMREIS became a wholly-owned subsidiary of MMI. Thereafter, MMC distributed 80.0% of the shares of MMI common stock to MMC’s shareholders and exchanged the remaining portion of its shares of MMI common stock for cancellation of indebtedness of MMC. MMI completed its IPO in November 2013.

Basis of Presentation

The financial information presented in the accompanying unaudited condensed consolidated financial statements, has been prepared in accordance with rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for quarterly reports on

Form 10-Q

and

Article 10-01

Regulation S-X.

Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles (“U.S. GAAP”) for complete financial statements. In the opinion of management, the accompanying unaudited condensed consolidated financial statements and notes include all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the condensed consolidated financial position, results of operations and cash flows for the periods presented. These unaudited condensed consolidated financial statements should be read in conjunction with the annual audited consolidated financial statements and notes thereto, including the Company’s accounting policies for the year ended December 31, 2020 included in the Company’s Annual Report on Form

10-K

filed on March 1, 2021 with the SEC. The results of the six months ended June 30, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021, for other interim periods or for future years.

Considerations Related to the

COVID-19

Pandemic

The Company may continue to experience operational and financial impacts due to the ongoing

COVID-19

pandemic. Actual results may differ from the Company’s current estimates due to the uncertainty around the economic impact and spread of new

COVID-19

variants and vaccination rates.

See Note 5 – “Acquisitions, Goodwill and Other Intangible Assets” and Note 8 – “Fair Value Measurements” for further discussions on the potential impacts of

COVID-19.

Consolidation

The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the related disclosures at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to a concentration of credit risk principally consist of cash and cash equivalents, investments in marketable debt securities,

available-for-sale,

security deposits (included under other assets,

non-current)

and commissions receivable, net. Cash and cash equivalents are placed with high-credit quality financial institutions and invested in high-credit quality money market funds and commercial paper. Concentrations and ratings of marketable debt securities,

available-for-sale

are limited by the approved investment policy.

Table of Contents

MARCUS & MILLICHAP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

To reduce its credit risk, the Company monitors the credit standing of the financial institutions money market funds that represent amounts recorded as cash and cash equivalents. The Company historically has not experienced any significant losses related to cash and cash equivalents.

The Company derives its revenues from a broad range of real estate investors, owners, and users in the United States and Canada, none of which individually represents a significant concentration of credit risk. The Company maintains allowances, as needed, for estimated credit losses based on management’s assessment of the likelihood of collection. For the three and six months ended June 30, 2021 and 2020, no transaction represented 10% or more of total revenues. Further, while one or more transactions may represent 10% or more of commissions receivable at any reporting date, amounts due are typically collected within 10 days of settlement and, therefore, do not expose the Company to significant credit risk.

During the three and six months ended June 30, 2021 and 2020, the Company’s Canadian operations represented approximately 2% of total revenues.

During each of the three and

six months ended June 30, 2021 and 2020, no office represented 10% or more of total revenues.

Recent Accounting Pronouncements

Pending Adoption

In March 2020, the FASB issued Accounting Standards Update (“ASU”)

No. 2020-04,

Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting

(“ASU

2020-04”).

ASU

2020-04

provides temporary optional exceptions to the guidance in U.S. GAAP on contract modifications to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate (“SOFR”). ASU

2020-04

is effective for all entities upon issuance and may be applied prospectively to contract modifications through December 31, 2022. The guidance applies to the Company’s Credit Agreement (see Note 13 – “Commitments and Contingencies”), which references LIBOR, and will generally allow it to account for and present a modification as an event that does not require contract remeasurement at the modification date or reassessment of a previous accounting determination. As of June 30, 2021, the Company has not drawn funds from the credit facility. The Company continues to evaluate the impact of this new standard but does not expect ASU

2020-04

to have a material effect on its condensed consolidated financial statements.

2.	Property and Equipment, Net

Property and equipment, net consisted of the following (in thousands):


	June 30, 2021			December 31, 2020
Computer software and hardware equipment	$	31,007		$	30,955
Furniture, fixtures and equipment		23,809			23,418
Less: accumulated depreciation and amortization		(32,070	)		(30,937	)

	$	22,746		$	23,436

During the six months ended June 30, 2021 and 2020, the Company

wrote-off

approximately $2.4 million and $966,000, respectively, of fully depreciated computer software and hardware equipment and furniture, fixtures and equipment.

As of June 30, 2021 and 2020, property and equipment additions incurred but not yet paid included in accounts payable and other liabilities were $250,000 and $197,000, respectively.

3.	Operating Leases

The Company has operating leases for all of its facilities and autos. As of June 30, 2021 and December 31, 2020, operating lease

right-of-use

(“ROU”) assets were $138.8 million and $126.9 million, respectively, and the related accumulated amortization was $52.4 million and $42.9 million, respectively.

Table of Contents

MARCUS & MILLICHAP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The operating lease cost, included in selling, general and administrative expense in the condensed consolidated statement of net and comprehensive income, consisted of the following (in thousands):


	Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020
Operating lease cost:
Lease cost (1)	$	6,512		$	6,341		$	13,101		$	12,604
Variable lease cost (2)		1,241			1,215			2,641			2,611
Sublease income		(19	)		(89	)		(52	)		(166	)

	$	7,734		$	7,467		$	15,690		$	15,049

(1)	Includes short-term lease cost and ROU asset amortization.

(2)	Primarily relates to common area maintenance, property taxes, insurance, utilities and parking.

Maturities of lease liabilities by year consisted of the following (in thousands):


	June 30, 2021
Remainder of 2021	$	11,862
2022		19,536
2023		16,039
2024		13,913
2025		11,730
Thereafter		14,575

Total future minimum lease payments		87,655
Less imputed interest		(6,205	)

Present value of operating lease liabilities	$	81,450

Supplemental cash flow information and noncash activity related to the operating leases consisted of the following (in thousands):


	Six Months Ended June 30,
	2021		2020
Operating cash flow information:
Cash paid for amounts included in the measurement of operating lease liabilities	$	11,764	$	10,456
Noncash activity:
ROU assets obtained in exchange for operating lease liabilities	$	13,373	$	6,334
Tenant improvements owned by lessor related to ROU assets (1)	$	881	$	317

(1)	Reclassification from other assets current.

Other information related to the operating leases consisted of the following:


	June 30, 2021			December 31, 2020
Weighted average remaining operating lease term		4.84 years			4.70 years
Weighted average discount rate		3.0	%		3.1	%

Table of Contents

MARCUS & MILLICHAP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

4.	Investments in Marketable Debt Securities

Amortized cost, allowance for credit losses, gross unrealized gains/losses in accumulated other comprehensive income/loss and fair value of marketable debt securities,

available-for-sale,

by type of security consisted of the following (in thousands):


	June 30, 2021
	Amortized Cost		Allowance for Credit Losses		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Short-term investments:
U.S. treasuries	$	74,424	$	—	$	12	$	—		$	74,436
Corporate debt		72,718		—		19		(1	)		72,736

	$	147,142	$	—	$	31	$	(1	)	$	147,172

Long-term investments:
U.S. treasuries	$	52,033	$	—	$	185	$	(22	)	$	52,196
U.S. government sponsored entities		888		—		27		(