##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
  Form 10-K
  (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES
    EXCHANGE ACT OF 1934For the fiscal
    year ended December 31, 2009ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES
    EXCHANGE ACT OF 1934For the transition period
    from          to   Commission file number:
    001-33280
 HFF, INC.
 (Exact name of registrant as
    specified in its charter)
  Delaware

51-0610340(State of
    incorporation)

(I.R.S. Employer
    Identification No.)One Oxford Centre
    301 Grant Street, Suite 600Pittsburgh, Pennsylvania 15219

(412) 281-8714(Address of principal executive
    offices,
    including zip code)

(Registrants telephone
    number,
    including zip code)   Securities
    registered pursuant to Section 12 (b) of the
    Act:
  Title of Each Class

Name of Exchange on Which RegisteredClass A Common Stock, par value $.01 per share


New York Stock Exchange   Securities
    registered pursuant to Section 12 (g) of the Act:
    NONE
  o þ
  o þ
  þ o
  Regulation S-T o o
  Regulation S-K Form 10-K Form 10-K. o
  12b-2
  Large
    accelerated
    filer o
    Accelerated
    filer þ
    Non-accelerated
    filer o
    Smaller
    reporting
    company o (Do not check if a smaller reporting company)
  Rule 12b-2).  Yes o þ
    Rule 12b-2
  DOCUMENTS
    INCORPORATED BY REFERENCE




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##### 





TABLE OF
    CONTENTS
   
 PART IItem 1.


Business


1Item 1A.


Risk Factors


8Item 1B.


Unresolved Staff Comments


21Item 2.


Properties


22Item 3.


Legal Proceedings


22Item 4.


Reserved


22PART IIItem 5.


Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


23Item 6.


Selected Financial Data


25Item 7.


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


26Item 7A.


Quantitative and Qualitative Disclosures About
    Market Risk


43Item 8.


Financial Statements and Supplementary Data


44Item 9.


Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


80Item 9A.


Controls and Procedures


80Item 9B.


Other Information


80PART IIIItem 10.


Directors, Executive Officers and Corporate
    Governance


80Item 11.


Executive Compensation


81Item 12.


Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


81Item 13.


Certain Relationships and Related Transactions,
    and Director Independence


81Item 14.


Principal Accountant Fees and Services


81PART IVItem 15.


Exhibits and Financial Statement Schedules


81SIGNATURES


82EXHIBIT INDEX


83EX-23.1EX-31.1EX-31.2EX-32.1   i




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##### Table of Contents



FORWARD-LOOKING
    STATEMENTS
  Form 10-K Form 10-K. Form 10-K.
  SPECIAL
    NOTE REGARDING THE REGISTRANT
  Form 10-K Form 10-K
  Form 10-K Form 10-K
 ii




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PART I  Item 1.
    Business  Overview
      
    Debt placement;
    Investment sales;
    Structured finance;
    Private equity, investment banking and advisory services;
    Loan sales; and
    Commercial loan servicing.  transaction-by-transaction
      and/or
 1




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Form 10-K.
  (412) 281-8714.
  Reportable
    Segments
    Our
    Competitive Strengths
    People,
    Expertise and Culture
      Integrated
    Capital Markets Services Platform
   2




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Independent
    Objective Advice
    Extensive
    Cross-Selling Opportunities
    Broad
    and Deep Network of Relationships
    Proprietary
    Transaction Database
    Our
    Strategic Growth Plan
    Increase
    Market Share Across Each of our Capital Markets
    Services
   3




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
    Debt Placement.  Our transaction volume in debt
    placements was approximately $5.7 billion and
    $11.8 billion in 2009 and 2008, respectively. According to
    surveys conducted by the Mortgage Bankers Association, debt
    issuances in 2009 and 2008 were approximately $90 billion
    and $181 billion, respectively.
    Investment Sales.  In 2009, we completed
    investment sales of approximately $2.4 billion, a decrease
    of approximately 55.2% from the approximately $5.5 billion
    completed in 2008. According to Real Capital Analytics,
    commercial real estate sales volume for office, industrial,
    multifamily, retail and hotel properties in the U.S. in
    2009 and 2008 were $52 billion and $145 billion,
    respectively.
    Structured Finance and Advisory Services.  In
    2009 and 2008, we completed approximately $168 million and
    $850 million, respectively, of structured finance and
    advisory services transactions (which includes amounts that we
    internally allocate to the structured finance reporting
    category, even though the transaction may have been funded
    through a single mortgage note) for our clients.
    Private Equity and Investment Banking
    Services.  Our broker-dealer subsidiary, HFF
    Securities, undertakes both discretionary and non-discretionary
    private equity raises, select property specific joint ventures,
    and select investment banking activities for our clients. At
    December 31, 2009 and 2008, we had $1.6 billion and
    $1.5 billion of active private equity discretionary fund
    transactions on which HFF Securities was engaged and may
    recognize additional future revenue.
    Loan Sales.  Since formalizing our loan sales
    platform in 2004, we have consummated over $2.6 billion in
    loan sales transactions, with $241.1 million consummated in
    2009. We see growth in this market due to the desire of lenders
    seeking to diversify concentration risk (geographic, borrower or
    product type), manage potential problems in their loan
    portfolios or sell loans rejected from Commercial Mortgage
    Backed Securities (CMBS) securitization pools.
    Loan servicing.  The principal balance of
    HFFs loan servicing portfolio increased approximately 3.0%
    from approximately $24.5 billion at December 31, 2008,
    to approximately $25.3 billion at December 31, 2009.
    We have approximately 50 formal correspondent lender
    relationships with life insurers.  Continue
    to Capitalize on Cross-Selling Opportunities
     4




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Expand
    Our Geographic Footprint
      Our
    Services
  Debt
    Placement Services
      Investment
    Sales Services
    Structured
    Finance Services
  and/or
 5




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and/or and/or
  Private
    Equity, Investment Banking, Initial Public Offerings and
    Advisory Services
    
    Joint Ventures.  Equity capital for our
    commercial real estate clients to establish joint ventures
    relating to either identified properties or properties to be
    acquired by a fund sponsor. These joint ventures typically
    involve the acquisition, development, recapitalization or
    restructuring of multi-asset commercial real estate portfolios,
    and include a variety of property types and geographic areas.
    Private Placements.  Private placements of
    common, perpetual preferred and convertible preferred
    securities. Issuances can involve primary or secondary shares
    that may be publicly registered, listed and traded.
    Advisory Services.  Entity-level advisory
    services for various types of transactions including mergers and
    acquisitions, sales and divestitures, management buyouts, and
    recapitalizations and restructurings.
    Marketing and Fund-Raising.  Institutional
    marketing and fund-raising for public and private commercial
    real estate companies, with a focus on opportunity and
    value-added commercial real estate funds. In this capacity, we
    undertake private equity raises, both discretionary and
    non-discretionary, and offer advisory services.  Loan
    Sales
  and/or
  Commercial
    Loan Servicing
  sub-servicing) and/or
  and/or
 6




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Competition
      Regulation
    Rule 15c3-1,
    Seasonality
   7




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Employees
    History
        Available
    Information
  Form 10-K. Form 10-K, Form 10-Q, Form 8-K,
  
    our Code of Conduct and Ethics;
    the charter of the Nominating and Corporate Governing Committee
    of our Board of Directors;
    the charter of the Compensation Committee of our Board of
    Directors;
    the charter of the Audit Committee of our Board of
    Directors; and
    our Corporate Governance Guidelines.  Item 1A.
    Risk
    Factors  Form 10-K,
 8




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Risks
    Related to Our Business
  General
    economic conditions and commercial real estate market
    conditions, both globally and domestically, have had and may in
    the future have a negative impact on our business.
  and/or and/or
    
    Slowdowns in economic activity could cause tenant demand for
    space to decline, which would adversely affect the operation and
    income of commercial real estate properties and thereby affect
    investor demand and the supply of capital for debt and equity
    investments in commercial real estate.
    Declines in the regional or local demand for commercial real
    estate, or significant disruptions in other segments of the real
    estate market, could adversely affect our results of operations.
    During 2009, approximately 20.4%, 8.1%, 5.6% and 12.7% of our
    capital markets services revenues was derived from transactions
    involving commercial real estate located in Texas, Florida,
    Massachusetts and the region consisting of the District of
    Columbia, Maryland and Virginia, respectively. As a result, a
    significant portion of our business is dependent on the economic
    conditions in general and the markets for commercial real estate
    in these areas, which, like other commercial real estate
    markets, have experienced price volatility or economic downturns
    in the past.
    Global and domestic credit and liquidity issues, significant
    fluctuations in interest rates as well as steady and protracted
    increases or decreases of interest rates could adversely affect
    the operation and income of commercial real estate properties as
    well as the demand from investors for commercial real estate
    investments. Any of these events could adversely affect investor
    demand and the supply of capital for debt and equity investments
    in commercial real estate. In particular, the lack of debt
    and/or
    equity for commercial real estate transactions and the resulting
    global re-pricing of debt and equity risk,
    and/or
    increased interest rates may reduce the number of acquisitions,
    dispositions and loan originations, as well as the respective
    transaction volumes, which could also adversely affect our
    servicing revenue. All of the above could cause prices to
    decrease due to the reduced amount of financing available as
    well as the increased cost of obtaining financing, and could
    lead to a decrease in purchase and sale activity.
    Significant disruptions or changes in capital market flows, as
    well as credit and liquidity issues in the global and domestic
    capital markets, regardless of their duration, could adversely
    affect the supply
    and/or
    demand for capital from investors for commercial real estate
    investments. For example, beginning in the second half of 2007
    and continuing to the present time, the well-publicized
    disruptions and dislocations in the global credit markets have
    created significant restrictions in the availability of credit.
    In turn, the volume and pace of commercial real estate
    transactions have been significantly reduced during this period
    and commercial 9




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real estate prices have declined in many countries, including
    the U.S. Changes in the perception that commercial real
    estate is an accepted asset class for portfolio diversification
    could also result in a significant reduction in the amount of
    debt and equity capital available in the commercial real estate
    sector.      Our
    business has been and may continue to be adversely affected by
    recent restrictions in the availability of debt and/or equity
    capital as well as the lack of adequate credit and the risk of
    continued deterioration of the debt and/or credit markets and
    commercial real estate markets.
  and/or and/or
  and/or and/or
  If we
    are unable to retain and attract qualified and experienced
    transaction professionals and associates, our growth may be
    limited and our business and operating results could
    suffer.
   10




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expense-to-operating
      The
    deteriorating business of certain of our clients could adversely
    affect our results of operation and financial
    condition.
   11




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Additional
    indebtedness or an inability to obtain indebtedness may make us
    more vulnerable to economic downturns and limit our ability to
    withstand competitive pressures.
      
    a substantial portion of our cash flow from operations may be
    dedicated to debt service and may not be available for other
    purposes;
    our cash flow from operations may be insufficient to fund our
    business operations and our inability to obtain financing will
    make it more difficult to fund our operations;
    making it more difficult for us to satisfy our obligations;
    limiting our flexibility in planning for, or reacting to,
    changes in our business and the industry in which we operate;
    obtaining financing in the future for our warehouse lending
    activities related to our Freddie Mac Program Plus Seller
    Servicer business, working capital, capital expenditures and
    general corporate purposes, including acquisitions, and may
    impede our ability to process our capital markets platform
    services as well as to secure favorable lease terms;
    making it more difficult to continue to fund our strategic
    growth initiatives and retain and attract key
    individuals; and
    placing us at a competitive disadvantage compared to our
    competitors with less debt and greater financial resources.  and/or
  The
    current global credit and financial crisis could affect the
    ability or willingness of the financial institutions with whom
    we currently do business to provide funding under our current
    financing arrangements.
   12




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transaction-by-transaction
    Our
    business could be hurt if we are unable to retain our business
    philosophy and partnership culture and efforts to retain our
    philosophy and culture could adversely affect our ability to
    maintain and grow our business.
      We
    have numerous significant competitors and potential future
    competitors, some of which may have greater resources than we
    do, and we may not be able to continue to compete
    effectively.
   13




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compensation-to-operating
  In the
    event that we experience significant growth in the future, such
    growth may be difficult to sustain and may place significant
    demands on our administrative, operational and financial
    resources.
        If we
    acquire companies or significant groups of personnel in the
    future, we may experience high transaction and integration
    costs, the integration process may be disruptive to our business
    and the acquired businesses and/or personnel may not perform as
    we expect.
  and/or
 14




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A
    failure to appropriately deal with actual or perceived conflicts
    of interest could adversely affect our businesses.
    A
    majority of our revenue is derived from capital markets services
    transaction fees, which are not
    long-term
    contracted sources of revenue, are subject to external economic
    conditions and intense competition, and declines in those
    engagements could have a material adverse effect on our
    financial condition and results of operations.
  transaction-by-transaction
  Significant
    fluctuations in our revenues and net income may make it
    difficult for us to achieve steady earnings growth on a
    quarterly or an annual basis, which may make the comparison
    between periods difficult and may cause the price of our
    Class A common stock to decline.
     15




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Our
    results of operation vary significantly among quarters during
    each calendar year, which makes comparisons of our quarterly
    results difficult.
    Our
    existing goodwill and other intangible assets could become
    impaired, which may require us to take significant non-cash
    charges.
    Form 10-K.
  Our
    existing deferred tax assets may not be realizable, which may
    require us to take significant non-cash charges.
    and/or
  step-up
 16




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step-up
  Employee
    misconduct, which is difficult to detect and deter, could harm
    us by impairing our ability to attract and retain clients and
    subjecting us to significant legal liability and reputational
    harm.
    Compliance
    failures and changes in regulation could result in an increase
    in our compliance costs or subject us to sanctions or
    litigation.
      We
    could be adversely affected if the Terrorism Risk Insurance Act
    of 2002 is not renewed beyond 2014, or is adversely amended, or
    if insurance for other natural or manmade disasters is
    interrupted or constrained.
   17




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Risks
    Related to Our Organizational Structure
  Our
    only material asset is our units in the Operating Partnerships,
    and we are accordingly dependent upon distributions from the
    Operating Partnerships to pay our expenses, taxes and dividends
    (if and when declared by our board of directors).
    We
    will be required to pay HFF Holdings for most of the benefits
    relating to any additional tax depreciation or amortization
    deductions we may claim as a result of the tax basis
    step-up we
    receive, subsequent sales of our common stock and related
    transactions with HFF Holdings.
     18




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If
    HFF, Inc. was deemed an investment company under the
    Investment Company Act of 1940 as a result of its ownership of
    the Operating Partnerships, applicable restrictions could make
    it impractical for us to continue our business as contemplated
    and could have a material adverse effect on our
    business.
     19




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Risks
    Related to Our Class A Common Stock
  Ownership
    by HFF Holdings of substantial voting power in HFF, Inc. may
    give rise to conflicts of interests and may prevent new
    investors from influencing significant corporate
    decisions.
          If we
    fail to maintain an effective system of internal controls, we
    may not be able to accurately report financial results or
    prevent fraud.
      If
    securities analysts do not publish research or reports about our
    business or if they downgrade our company or our sector, the
    price of our Class A common stock could
    decline.
   20




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Our
    share price may decline due to the large number of shares
    eligible for future sale and for exchange.
      The
    market price of our Class A common stock may continue to be
    volatile, which could cause the value of your investment to
    decline or subject us to litigation.
      Anti-takeover
    provisions in our charter documents and Delaware law could delay
    or prevent a change in control.
    Item 1B.
    Unresolved
    Staff Comments   21




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Item 2.
    Properties    Item 3.
    Legal
    Proceedings    Item 4.
    Reserved. 22




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##### Table of Contents



PART II  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities.  Market
    Information
      2009High

Low1st Quarter

$
2.80


$
1.052nd Quarter


4.56



1.923rd Quarter


6.99



3.494th Quarter


6.80



5.44   2008High

Low1st Quarter

$
7.93


$
4.632nd Quarter


7.56



4.913rd Quarter


6.40



3.964th Quarter


4.00



1.68   Form 10-K.
  Holders
    Dividends
     23




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Performance
    Graph
      COMPARISON
    OF 35-MONTH
    CUMULATIVE TOTAL RETURN
    Among HFF, Inc., The S&P 500 Index, and a Peer
    Group
  
  1/31/07

3/31/07

6/30/07

9/30/07

12/31/07

3/31/08

6/30/08

9/30/08

12/31/08

3/31/09

6/30/09

9/30/09

12/31/09l
    HFF, Inc.


100.00



80.21



82.94



63.48



41.39



26.79



30.43



21.44



13.10



10.70



20.86



36.42



33.42n
    S&P 500 Index


100.00



98.79



104.53



106.15



102.09



91.97



89.00



80.98



62.80



55.48



63.92



73.50



77.535 Peer
    Group


100.00



95.33



103.00



86.33



63.04



66.15



54.86



38.96



19.36



16.80



28.59



38.97



47.88   Recent
    Sales of Unregistered Securities
   24




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Item 6.
    Selected
    Financial Data  Form 10-K. Form 10-K. Form 10-K Form 10-K.
  For The Year Ended December 31,2009


2008


2007


2006


2005Statement of Income Data:Total revenue

$
77,476


$
131,687


$
255,666


$
229,697


$
205,848Operating expenses


81,390



130,401



207,686



175,410



157,759Operating (loss) income


(3,914
)


1,286



47,980



54,287



48,089Interest and other income, net


6,431



4,928



6,469



1,139



414Interest expense


(419
)


(20
)


(407
)


(3,541
)


(80
)Decrease in payable under the tax receivable agreement


1,889



3,862











Income before income taxes


3,987



10,056



54,042



51,885



48,423Income taxes(a)


2,208



5,043



9,874



332



288Net income


1,779



5,013



44,168



51,553



48,135Net income attributable to noncontrolling interest


2,531



4,784



29,748







Net (loss) income attributable to controlling interest

$
(752
)

$
229


$
14,420


$
51,553


$
48,135Less net income earned prior to IPO and reorganization










(1,893
)


(51,553
)


(48,135
)(Loss) income available to common stockholders

$
(752
)

$
229


$
12,527


$



$
Diluted earnings per common share

$
(0.05
)

$
0.01


$
0.84







Balance Sheet Data:Total assets

$
223,644


$
202,498


$
240,476


$
154,302


$
38,630Long term debt, excluding current portion

$
123


$
60


$
111


$
91


$
150Total liabilities

$
156,639


$
136,872


$
180,648


$
198,620


$
29,521     (a)
    
    Prior to the Reorganization Transactions in January 2007, we
    operated as two limited liability companies (HFF Holdings and
    Holdings Sub), a corporation (Holliday GP) and two limited
    partnerships (HFF LP and HFF Securities), which two partnerships
    we refer to as the Operating Partnerships. As a result, our
    income was subject to limited U.S. federal income taxes and our
    income and expenses were passed through and reported on the
    individual tax returns of the members of HFF Holdings. Income
    taxes shown on the Companys consolidated statements of
    income reflect federal income taxes of the corporation and
    business and corporate income taxes in various jurisdictions.
    Following the initial public offering, the Company became
    subject to additional entity-level taxes that are reflected in
    our consolidated financial statements. See
    Managements Discussion 25




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and Analysis of Financial Condition and Results of
    Operation  Key Financial Measures and
    Indicators  Costs and Expenses  Income Tax
    Expense.  Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Form 10-K.
  Overview
  Our
    Business
    transaction-by-transaction
    
    Economic and commercial real estate market
    downturns.  Our business is dependent on
    international and domestic economic conditions and the demand
    for commercial real estate and related services in the markets
    in which we operate. A slow down, a significant downturn
    and/or a
    recession in either the global economy
    and/or the
    domestic economy, including, but not limited to, even a regional
    economic downturn, could adversely affect our business. A
    general decline in acquisition and disposition activity can lead
    to a reduction in fees and commissions for arranging such
    transactions, as well as in fees and commissions for arranging
    financing for acquirers and property owners that are seeking to
    recapitalize their existing properties. Likewise, a general
    decline in commercial real estate investment activity can lead
    to a reduction in fees and commissions for arranging
    acquisitions, dispositions and financings for acquisitions as
    well as for recapitalizations for existing property owners. Such
    a general decline can also lead to a significant reduction in
    our loan servicing activities, due to increased delinquencies
    and defaults and lack of additional loans that we would have
    otherwise added to our loan servicing portfolio.
    Global and domestic credit and liquidity
    issues.  Global and domestic credit and liquidity
    issues have recently led to an economic downturn, including, but
    not limited to, a commercial real estate market downturn. This
    downturn has in turn led to a decrease in transaction activity
    and lower values, which is expected to continue for the
    foreseeable future. The recent situation in the global credit
    markets whereby many world governments (including, but not
    limited to, the U.S., where the Company transacts virtually all
    of its business) have had to take unprecedented and uncharted
    steps to either support the financial institutions in their
    respective countries from collapse or taken direct ownership of
    same is unprecedented in the Companys history.
    Restrictions on the availability of capital, both debt
    and/or
    equity, have created significant reductions and could further
    reduce the liquidity in and flow of capital to the commercial
    real 26




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estate markets. These restrictions could also cause commercial
    real estate prices to decrease due to the reduced amount of
    equity capital and debt financing available. In particular,
    global and domestic credit and liquidity issues may reduce the
    number of acquisitions, dispositions and loan originations, as
    well as the respective number of transactions and transaction
    volumes, which could also adversely affect our capital markets
    services revenues (including our servicing revenue).  
    Decreased investment allocation to commercial real estate
    class.Allocations to commercial real estate as
    an asset class for investment portfolio diversification may
    decrease for a number of reasons beyond our control, including,
    but not limited to, poor performance of the asset class relative
    to other asset classes or the superior performance of other
    asset classes when compared with continued good performance of
    the commercial real estate asset class or the poor performance
    of all asset classes. In addition, while commercial real estate
    is now viewed as an accepted and valid class for portfolio
    diversification, if this perception changes, there could be a
    significant reduction in the amount of debt and equity capital
    available in the commercial real estate sector. In particular,
    reductions in debt
    and/or
    equity allocations to commercial real estate may reduce the
    number of acquisitions, dispositions and loan originations, as
    well as the respective number of transactions and transaction
    volumes, which could also adversely affect our capital markets
    services revenues including our servicing revenue.
    Fluctuations in interest rates.  Significant
    fluctuations in interest rates as well as steady and protracted
    movements of interest rates in one direction (increases or
    decreases) could adversely affect the operation and income of
    commercial real estate properties, as well as the demand from
    investors for commercial real estate investments. Both of these
    events could adversely affect investor demand and the supply of
    capital for debt and equity investments in commercial real
    estate. In particular, increased interest rates may cause prices
    to decrease due to the increased costs of obtaining financing
    and could lead to decreases in purchase and sale activities,
    thereby reducing the amounts of investment sales and loan
    originations and related servicing fees. If our investment sales
    origination and servicing businesses are negatively impacted, it
    is likely that our other lines of business would also suffer due
    to the relationship among our various capital markets services.      Form 10-K.
  Key
    Financial Measures and Indicators
  Revenues
  transaction-by-transaction
 27




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Total
    Revenues:
  Capital markets services revenues.
  
    Origination fees.  Our origination fees are
    earned through the placement of debt, equity and structured
    financing. Debt placements represent the majority of our
    business, with approximately $5.7 billion and
    $11.8 billion of debt transaction volume in 2009 and 2008,
    respectively. Fees earned by HFF Securities for discretionary
    and non-discretionary equity capital raises and other investment
    banking services are also included with capital markets services
    revenue in our consolidated statements of income. We recognize
    origination revenues at the closing of the applicable financing
    and funding of capital, when such fees are generally collected.
    We recognize fees earned by HFF Securities at the time the
    capital is funded or committed, based on the underlying fee
    agreement, unless collectibility of our fee is not reasonably
    assured, in which case we recognize fees as they are collected.
    Investment sales fees.  We earn investment
    sales fees by acting as a broker for commercial real estate
    owners seeking to sell a property(ies) or an interest in a
    property(ies). We recognize investment sales revenues at the
    close and funding of the sale, when such fees are generally
    collected.
    Loan servicing fees.  We generate loan
    servicing fees through the provision of collection, remittance,
    recordkeeping, reporting and other related loan servicing
    functions, activities and services. We also earn fees through
    escrow balances maintained as a result of required reserve
    accounts and tax and insurance escrows for the loans we service.
    We recognize loan servicing revenues at the time services are
    rendered, provided the loans are current and the debt service
    payments are actually made by the borrowers. We recognize the
    other fees related to escrows and other activities at the time
    the fees are paid.
    Loan sales and other production fees.  We
    generate loan sales and other production fees through assisting
    our clients in their efforts to sell all or portions of
    commercial real estate debt notes. We recognize loan sales and
    other production revenues at the close and funding of the
    capital to consummate sale, when such fees are generally
    collected.  Interest on mortgage notes receivable.
  Other. out-of-pocket
  and/or transaction-by-transaction
  Costs
    and Expenses
   28




---



##### Table of Contents



Operating
    Expenses:
  Cost of Services.
  Personnel.
  Stock Based Compensation. Compensation  Stock Compensation
  Occupancy.
  Travel and entertainment.
  Supplies, research and printing.
  Other.
  Interest
    and Other Income, net:
   29




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##### Table of Contents



Interest
    Expense:
    Decrease
    in Payable Under the Tax Receivable Agreement:
    Income
    Tax Expense:
        and/or
  Noncontrolling
    Interest:
   30




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##### Table of Contents



Results
    of Operations
  period-to-period
  Year
    Ended December 31, 2009 Compared to Year Ended
    December 31, 2008
  For The Year Ended December 31,2009


2008


Total


Total% of





% of


Dollar


PercentageDollars


Revenue


Dollars


Revenue


Change


Change(Dollars in thousands, unless percentages)RevenuesCapital markets services revenue

$
72,234



93.2
%

$
126,076



95.7
%

$
(53,842
)


(42.7
)%Interest on mortgage notes receivable


3,458



4.5
%


1,819



1.4
%


1,639



90.1
%Other


1,784



2.3
%


3,792



2.9
%


(2,008
)


(53.0
)%Total revenues


77,476



100.0
%


131,687



100.0
%


(54,211
)


(41.2
)%Operating expensesCost of services


47,923



61.9
%


85,335



64.8
%


(37,412
)


(43.8
)%Personnel


7,144



9.2
%


8,803



6.7
%


(1,659
)


(18.8
)%Occupancy


7,573



9.8
%


7,527



5.7
%


46



0.6
%Travel and entertainment


2,841



3.7
%


5,971



4.5
%


(3,130
)


(52.4
)%Supplies, research and printing


2,162



2.8
%


6,792



5.2
%


(4,630
)


(68.2
)%Other


13,747



17.7
%


15,973



12.1
%


(2,226
)


(13.9
)%Total operating expenses


81,390



105.1
%


130,401



99.0
%


(49,011
)


(37.6
)%Operating (loss) income


(3,914
)


(5.1
)%


1,286



1.0
%


(5,200
)


(404.4
)%Interest and other income, net


6,431



8.3
%


4,928



3.7
%


1,503



30.5
%Interest expense


(419
)


(0.5
)%


(20
)


(0.0
)%


(399
)


NMDecrease in payable under the tax receivable agreement


1,889



2.4
%


3,862



2.9
%


(1,973
)


(51.1
)%Income before taxes


3,987



5.1
%


10,056



7.6
%


(6,069
)


(60.4
)%Income tax expense


2,208



2.8
%


5,043



3.8
%


(2,835
)


(56.2
)%Net income


1,779



2.3
%


5,013



3.8
%


(3,234
)


(64.5
)%Net income attributable to noncontrolling interest


2,531



3.3
%


4,784



3.6
%


(2,253
)


(47.1
)%Net (loss) income attributable to controlling interest

$
(752
)


(1.0
)%

$
229



0.2
%

$
(981
)


(428.4
)%       Revenues.
  
    The revenues we generated from capital markets services for the
    year ended December 31, 2009 decreased $53.8 million,
    or 42.7%, to $72.2 million from $126.1 million for the
    same period in 2008. The decrease is primarily attributable to
    decreased production. 31




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##### Table of Contents




    The revenues derived from interest on mortgage notes was
    $3.5 million for the year ended December 31, 2009
    compared to $1.8 million for the same period in 2008, an
    increase of $1.6 million. The increase is due to an
    increase in the number of loans originated and increased average
    loan values in our participation in Freddie Macs Program
    Plus Seller
    Servicer®

    Program during the year ended December 31, 2009 as compared
    to 2008.
    The other revenues we earned, which include expense
    reimbursements from clients related to
    out-of-pocket
    costs incurred, were $1.8 million for the year ended
    December 31, 2009 compared to $3.8 million for the
    same period in 2008, a decrease of $2.0 million, or 53.0%.
    Other revenues decreased primarily as a result of the decrease
    in production volumes.  Total Operating Expenses. ®
  
    The costs of services for the year ended December 31, 2009
    decreased $37.4 million, or 43.8%, to $47.9 million
    from $85.3 million for the same period in 2008. The
    decrease is primarily the result of the decrease in commissions
    and other incentive compensation directly related to the
    decrease in capital markets services revenues. Cost of services
    as a percentage of capital markets services revenues were
    approximately 66.3% and 67.7% for the years ended
    December 31, 2009 and December 31, 2008, respectively.
    This percentage decrease in 2009 is primarily attributable to
    the fixed portion of cost of services, such as salaries for our
    analysts and fringe benefit costs, which decreased greater than
    the decrease in revenue. This is primarily due to the cost
    savings initiatives that were implemented during the fourth
    quarter 2008 and second quarter 2009.
    Personnel expenses that are not directly attributable to
    providing services to our clients for the year ended
    December 31, 2009 decreased $1.7 million, or 18.8%, to
    $7.2 million from $8.8 million for the same period in
    2008. The decrease is primarily related to a decrease in
    salaries due to a lower headcount.    
    Occupancy, travel and entertainment, and supplies, research and
    printing expenses for the year ended December 31, 2009
    decreased $7.7 million, or 38.0%, to $12.6 million
    compared to the same period in 2008. This decrease is primarily
    due to decreased supplies, research and printing and travel and
    entertainment costs stemming from the decrease in capital
    markets services revenues and the impact of our cost saving
    initiatives.
    Other expenses, including costs for insurance, professional
    fees, depreciation and amortization, interest on our warehouse
    line of credit and other operating expenses, were
    $13.7 million in the year ended December 31, 2009, a
    decrease of $2.2 million, or 13.9%, versus
    $16.0 million in the year ended December 31, 2008.
    This decrease is primarily related to decreases in a number of
    cost categories such as marketing and advertising, outsourcing
    and licensing, postage and delivery charges, professional fees
    and other general and administrative costs. These decreases were
    partially offset by increased interest expense on our warehouse
    lines of credit supporting our Freddie Mac loan business and
    increased amortization on our mortgage servicing rights
    intangible assets. 32




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##### Table of Contents



Operating (loss) income.
  Interest and other income, net.
  Interest expense.
  Net Income.
  
    The decrease in the payable under the tax receivable agreement
    of $1.9 million and $3.9 million for the years ended
    December 31, 2009 and 2008, respectively, primarily
    reflects the decrease in the estimated tax benefits owed to HFF
    Holdings under the tax receivable agreement. This decrease in
    tax benefits owed to HFF Holdings represents 85% of the decrease
    in the related deferred tax asset of $2.2 million and
    $4.6 million for 2009 and 2008, respectively.
    Income tax expense was approximately $2.2 million for the
    year ended December 31, 2009, a decrease of
    $2.8 million from $5.0 million in the year ended
    December 31, 2008. This decrease is primarily due to the
    decrease in net operating income experienced during the year
    ended December 31, 2009 compared to the same period in the
    prior year. During the year ended December 31, 2009, the
    Company recorded income tax expense of $2.2 million
    primarily relating to the change in the rates used to measure
    the Companys deferred tax assets and the establishment of
    a valuation allowance on certain state net operating loss
    carryforwards. For further detail relating to the Operating
    Partnerships Section 754 election, refer to
    Note 13 to our consolidated financial statements. During
    the year ended December 31, 2008, the Company recorded
    current income tax benefit of $2.5 million which was offset
    by deferred income tax expense of $7.6 million.   33




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##### Table of Contents



Year
    Ended December 31, 2008 Compared to Year Ended
    December 31, 2007
  For The Year Ended December 31,2008


2007


Total


Total% of





% of


Dollar


PercentageDollars


Revenue


Dollars


Revenue


Change


Change(Dollars in thousands, unless percentages)RevenuesCapital markets services revenue

$
126,076



95.7
%

$
250,576



98.0
%

$
(124,500
)


(49.7
)%Interest on mortgage notes receivable


1,819



1.4
%


1,585



0.6
%


234



14.8
%Other


3,792



2.9
%


3,505



1.4
%


287



8.2
%Total revenues


131,687



100.0
%


255,666



100.0
%


(123,979
)


(48.5
)%Operating expensesCost of services


85,335



64.8
%


148,026



57.9
%


(62,691
)


(42.4
)%Personnel


8,803



6.7
%


17,224



6.7
%


(8,421
)


(48.9
)%Occupancy


7,527



5.7
%


8,009



3.1
%


(482
)


(6.0
)%Travel and entertainment


5,971



4.5
%


6,810



2.7
%


(839
)


(12.3
)%Supplies, research and printing


6,792



5.2
%


8,776



3.4
%


(1,984
)


(22.6
)%Other


15,973



12.1
%


18,841



7.4
%


(2,868
)


(15.2
)%Total operating expenses


130,401



99.0
%


207,686



81.2
%


(77,285
)


(37.2
)%Operating income


1,286



1.0
%


47,980



18.8
%


(46,694
)


(97.3
)%Interest and other income, net


4,928



3.7
%


6,469



2.5
%


(1,541
)


(23.8
)%Interest expense


(20
)


(0.0
)%


(407
)


(0.2
)%


387



(95.1
)%Decrease in payable under the tax receivable agreement


3,862



2.9
%






0.0
%


3,862



NMIncome before taxes


10,056



7.6
%


54,042



21.1
%


(43,986
)


(81.4
)%Income tax expense


5,043



3.8
%


9,874



3.9
%


(4,831
)


(48.9
)%Net income


5,013



3.8
%


44,168



17.3
%


(39,155
)


(88.7
)%Net income attributable to noncontrolling interest


4,784



3.6
%


29,748



11.6
%


(24,964
)


(83.9
)%Net income attributable to controlling interest

$
229



0.2
%

$
14,420



5.6
%

$
(14,191
)


(98.4
)%       Revenues.
  
    The revenues we generated from capital markets services for the
    year ended December 31, 2008 decreased $124.5 million,
    or 49.7%, to $126.1 million from $250.6 million for
    the same period in 2007. The decrease is primarily attributable
    to decreased production.
    The revenues derived from interest on mortgage notes was
    $1.8 million for the year ended December 31, 2008
    compared to $1.6 million for the same period in 2007, an
    increase of $0.2 million. The increase is due to an
    increase in the number of loans originated and increased average
    loan values in our participation in Freddie Macs Program
    Plus Seller
    Servicer®

    Program during the year ended December 31, 2008, compared
    to the same period in 2007. 34




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##### Table of Contents




    The other revenues we earned, which include expense
    reimbursements from clients related to
    out-of-pocket
    costs incurred, were $3.8 million for the year ended
    December 31, 2008 compared to $3.5 million for the
    same period in 2007, an increase of $0.3 million, or 8.2%.
    Other revenues increased primarily as a result of an increased
    effort to recoup out of pocket costs especially during the
    slowdown in the economy.  Total Operating Expenses.
  
    The costs of services for the year ended December 31, 2008
    decreased $62.7 million, or 42.4%, to $85.3 million
    from $148.0 million for the same period in 2007. The
    decrease is primarily the result of the decrease in commissions
    and other incentive compensation directly related to the
    decrease in capital markets services revenues. Cost of services
    as a percentage of capital markets services revenues were
    approximately 67.7% and 59.1% for the years ended
    December 31, 2008 and December 31, 2007, respectively.
    This percentage increase in 2008 is primarily attributable to
    the fixed portion of cost of services, such as salaries for our
    analysts and fringe benefit costs being spread over a lower
    revenue base.
    Personnel expenses that are not directly attributable to
    providing services to our clients for the year ended
    December 31, 2008 decreased $8.4 million, or 48.9%, to
    $8.8 million from $17.2 million for the same period in
    2007. The decrease is primarily related to a decrease in profit
    participation expense resulting from the lower operating income
    during the year ended December 31, 2008. This decrease was
    slightly offset by increased salaries of $0.6 million
    during the year ended December 31, 2008 as compared to the
    same period in the prior year.
    The stock compensation cost, included in personnel expenses,
    that has been charged against income for the year ended
    December 31, 2008, was $0.9 million as compared to
    $0.8 million for the same period in 2007. At
    December 31, 2008, there was approximately
    $1.4 million of unrecognized compensation cost related to
    share based awards. The weighted average remaining contractual
    term of the nonvested restricted stock units is two years as of
    December 31, 2008. The weighted average remaining
    contractual term of the nonvested options is 11 years as of
    December 31, 2008.
    Occupancy, travel and entertainment, and supplies, research and
    printing expenses for the year ended December 31, 2008
    decreased $3.3 million, or 14.0%, to $20.3 million
    compared to the same period in 2007. This decrease is primarily
    due to decreased supplies, research and printing expenses as
    well as lower travel and entertainment costs stemming from the
    decrease in capital markets services revenues.
    Other expenses, including costs for insurance, professional
    fees, depreciation and amortization, interest on our warehouse
    line of credit and other operating expenses, were
    $16.0 million in the year ended December 31, 2008, a
    decrease of $2.9 million, or 15.2%, versus
    $18.8 million in the year ended December 31, 2007.
    This decrease is primarily related to decreases in professional
    fees and marketing expenses. The Company experienced higher
    professional fees of approximately $1.2 million during the
    year ended December 31, 2007 primarily as a consequence of
    fees related to the Companys initial public offering and
    initial compliance with the requirements of Section 404 of
    the Sarbanes-Oxley Act, that were incurred during this period.
    Marketing expenses decreased $1.0 million in 2008 due to a
    decrease in corporate and local advertising and
    corporate-sponsored events.  Operating income.
  Interest and other income, net.
 35




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##### Table of Contents



Net Income.
  
    The interest expense we incurred during the year ended
    December 31, 2008 totaled $20,000, compared to $407,000 of
    similar expenses incurred in the year ended December 31,
    2007. This decrease resulted from interest expense in the amount
    of $0.4 million on a Credit Agreement with Bank of America
    in January 2007. The outstanding balance of $56.3 million
    under this Credit Agreement was paid off with the proceeds from
    the initial public offering and we contemporaneously entered
    into an Amended Credit Agreement with Bank of America providing
    for our current $40.0 million line of credit. We have not
    drawn on our current line of credit since entering into the
    Amended Credit Agreement in February 2007.
    The decrease in the payable under the tax receivable agreement
    of $3.9 million reflects the decrease in the estimated tax
    benefits owed to HFF Holdings under the tax receivable
    agreement. This decrease in tax benefits owed to HFF Holdings
    represents 85% of the decrease in the related deferred tax asset
    of $4.6 million.  
    Income tax expense was approximately $5.0 million for the
    year ended December 31, 2008, a decrease of
    $4.8 million from $9.9 million in the year ended
    December 31, 2007. This decrease is primarily due to the
    decrease in net operating income experienced during the year
    ended December 31, 2008 compared to the same period in the
    prior year. During the year ended December 31, 2008, the
    Company recorded a current income tax benefit of
    $2.5 million which was offset by deferred income tax
    expense of $7.6 million, primarily relating to the
    amortization of the
    step-up in
    basis from the Operating Partnerships election under
    section 754 of the Internal Revenue Code of 1986, as amended,
    and a change in the rates used to measure the Companys
    deferred tax assets. For further detail relating to the
    Operating Partnerships Section 754 election, refer to
    Note 13 to our consolidated financial statements. During
    the year ended December 31, 2007, the Company recorded
    current income tax expense of $3.7 million and deferred
    income tax expense of $6.2 million.    Financial
    Condition
    
    An increase in cash and cash equivalents to $40.9 million
    at December 31, 2009 compared to $37.0 million at
    December 31, 2008.
    An increase in mortgage notes receivable to $38.8 million
    at December 31, 2009 from $16.3 million at
    December 31, 2008 due to the timing of sales of loans to
    Freddie Mac.
    An increase in intangible assets, net of $1.7 million to
    $9.3 million at December 31, 2009. This increase is
    primarily due to the recognition of acquired mortgage servicing
    rights in 2009, net of amortization for the year.    
    An increase in the warehouse line of credit of
    $22.5 million due to the timing of the sale of loans to
    Freddie Mac and the corresponding draws on the line of credit.  step-up
 36




---



##### Table of Contents



Cash
    Flows
    2009
    2008
    Liquidity
    and Capital Resources
     37




---



##### Table of Contents



transaction-by-transaction transaction-by-transaction
 38




---



##### Table of Contents



Critical
    Accounting Policies; Use of Estimates
  and/or and/or and/or
  Goodwill.
  Intangible Assets.
 39




---



##### Table of Contents



Income
    Taxes.
    and/or
   40




---



##### Table of Contents



Leases. Leases
  Stock
    Based Compensation
    Certain
    Information Concerning Off-Balance Sheet Arrangements
    Contractual
    and Other Cash Obligations
    Payments Due by PeriodLess Than


1-3


3-5


More ThanTotal


1 Year


Years


Years


5 YearsWarehouse line of credit

$
38,800


$
38,800


$



$



$
Capital lease obligations


275



152



119



4



Operating lease obligations


20,415



4,846



8,531



4,649



2,389Purchase obligations


















Other long-term liabilities reflected on the balance sheet(1)


















Total contractual obligations

$
59,490


$
43,798


$
8,650


$
4,653


$
2,389     (1)
    
    From time to time we enter into employment agreements with our
    transaction professionals. Some of these agreements may include
    payments to be made to the individual at a specific time, if
    certain conditions have been met. The Company accrues for these
    payments over the life of the agreement.   41




---



##### Table of Contents



Seasonality
  quarter-by-quarter
  Effect of
    Inflation and/or Deflation
  and/or and/or
  Recent
    Accounting Pronouncements
  Amendments to FASB
    Interpretation No. 46(R)
  Accounting for Transfers of Financial Assets  an
    amendment of FASB Statement No. 140 Transfers and Servicing
  The
    FASB Accounting Standards Codification and the Hierarchy of
    Generally Accepted Accounting Principles
  Subsequent Events,
 42




---



##### Table of Contents



Fair Value Measurements and Disclosures
  Financial Instruments
  Intangibles  Goodwill and Othe
  Consolidation
  Item 7A.
    Quantitative
    and Qualitative Disclosures about Market Risk   43




---



##### Table of Contents



Item 8.
    Financial
    Statements and Supplementary Data  PageHFF, Inc.Managements Report on Effectiveness of
    Internal Control Over Financial Reporting


45Report of Independent Registered Public
    Accounting Firm on Consolidated Financial Statements


46Report of Independent Registered Public
    Accounting Firm on Effectiveness of Internal Control over
    Financial Reporting


47Consolidated Balance Sheets as of
    December 31, 2009 and 2008


48Consolidated Statements of Income for the years
    ended December 31, 2009, 2008 and 2007


49Consolidated Statements of Stockholders
    Equity/Partners Capital (Deficiency) for the years ended
    December 31, 2009, 2008 and 2007


50Consolidated Statements of Cash Flows for the
    years ended December 31, 2009, 2008 and 2007


51Notes to Consolidated Financial Statements


52  44




---



##### Table of Contents



Managements
    Report on Effectiveness of Internal Control Over Financial
    Reporting  Rule 13a-15(f)
       Dated: March 12, 2010

/s/  John
    H. Pelusi, Jr.John
    H. Pelusi, Jr.
    Chief Executive OfficerDated: March 12, 2010

/s/  Gregory
    R. ConleyGregory
    R. Conley
    Chief Financial Officer  45




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm on Consolidated
    Financial Statements           Accounting and Reporting
    Noncontrolling Interest in Consolidated Financial Statements, an
    amendment of ARB No. 51
    
    46




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm on Effectiveness
    of Internal Control Over
    Financial Reporting                 
    47




---



##### Table of Contents



HFF,
    Inc.



Consolidated
    Balance Sheets  December 312009


2008(Dollars in thousands)ASSETSCurrent assets:Cash and cash equivalents

$
40,931


$
37,028Restricted cash (Note 7)


143



190Accounts receivable


569



985Mortgage notes receivable (Note 8)


38,800



16,300Prepaid taxes


250



4,675Prepaid expenses and other current assets


1,250



2,038Deferred tax asset, net


515



320Total current assets


82,458



61,536Property and equipment, net (Note 4)


4,171



5,294Deferred tax asset


123,564



123,848Goodwill


3,712



3,712Intangible assets, net (Note 5)


9,327



7,649Other noncurrent assets


412



459Total assets

$
223,644


$
202,498LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Current portion of long-term debt (Note 7)

$
152


$
91Warehouse line of credit (Note 8)


38,800



16,300Accrued compensation and related taxes


5,112



5,321Accounts payable


866



495Payable to affiliate (Note 19)


54



92Other current liabilities


2,719



2,313Total current liabilities


47,703



24,612Deferred rent credit


3,238



3,793Payable under the tax receivable agreement (Note 13)


105,521



108,287Other long-term liabilities


54



120Long-term debt, less current portion (Note 7)


123



60Total liabilities


156,639



136,872Stockholders equity:Class A common stock, par value $0.01 per share,
    175,000,000 shares authorized; 17,263,281 and
    16,446,480 shares issued, respectively; and 17,183,232 and
    16,446,480 outstanding, respectively


172



164Class B common stock, par value $0.01 per share,
    1 share authorized, issued and outstanding






Treasury stock, 80,049 and 0 shares at cost, respectively


(173
)


Additional
    paid-in-capital


28,498



26,206Retained earnings


12,004



12,756Total parent stockholders equity


40,501



39,126Noncontrolling interest (Note 15)


26,504



26,500Total equity


67,005



65,626Total liabilities and stockholders equity

$
223,644


$
202,498    48




---



##### Table of Contents



HFF,
    Inc.



Consolidated
    Statements of Income  Years Ending December 31,2009


2008


2007(Dollars in thousands)RevenuesCapital markets services revenue

$
72,234


$
126,076


$
250,576Interest on mortgage notes receivable


3,458



1,819



1,585Other


1,784



3,792



3,50577,476



131,687



255,666ExpensesCost of services


47,923



85,335



148,026Personnel


7,144



8,803



17,224Occupancy


7,573



7,527



8,009Travel and entertainment


2,841



5,971



6,810Supplies, research, and printing


2,162



6,792



8,776Insurance


1,850



2,049



1,900Professional fees


3,662



4,359



5,576Depreciation and amortization


3,523



3,475



3,861Interest on warehouse line of credit


1,979



1,547



1,680Other operating


2,733



4,543



5,82481,390



130,401



207,686Operating (loss) income


(3,914
)


1,286



47,980Interest and other income, net


6,431



4,928



6,469Interest expense


(419
)


(20
)


(407
)Decrease in payable under the tax receivable agreement


1,889



3,862



Income before taxes


3,987



10,056



54,042Income tax expense


2,208



5,043



9,874Net income


1,779



5,013



44,168Net income attributable to noncontrolling interest


2,531



4,784



29,748Net (loss) income attributable to controlling interest

$
(752
)

$
229


$
14,420Less net income earned prior to IPO and Reorganization
    Transactions










(1,893
)(Loss) income available to HFF, Inc. common stockholders

$
(752
)

$
229


$
12,527Earnings per share  Basic and Diluted(Loss) income available to HFF, Inc. common
    stockholders  Basic

$
(0.05
)

$
0.01


$
0.84Weighted average shares outstanding  Basic


16,637,216



16,472,141



14,968,389(Loss) income available to HFF, Inc. common
    stockholders  Diluted

$
(0.05
)

$
0.01


$
0.84Weighted average shares outstanding  Diluted


16,637,967



16,472,141



14,968,389    49




---



##### Table of Contents



HFF,
    Inc.



Consolidated
    Statements of Stockholders Equity/Partners Capital
    (Deficiency)  Controlling InterestAdditionalCommon Stock


Treasury Stock


Partners


Paid in


Retained


NoncontrollingShares


Amount


Shares


Amount


Capital


Capital


Earnings


Interest


TotalStockholders equity/partners capital (deficiency),
    December 31, 2006


1


$







$



$
(44,318
)

$



$



$



$
(44,318
)Net income for the period January 1 to January 30, 2007


















1,893















1,893Distributions


















(5,299
)










(14,333
)


(19,632
)Repurchase of Class A common stock


(1
)






























Net proceeds received from the issuance of 16,445,000
    Class A common stock in the initial public offering (IPO),
    less the utilization of net IPO proceeds for the repayment of
    the bank term debt and the purchase of HFF Holdings interest in
    Holliday GP and 45% of HFF Holdings interest in the
    Operating Partnerships resulting in the elimination of
    partners capital and the recording of minority interest to
    effectuate the reorganization, as more fully described in
    Note 1


16,445,000



164











47,724



3,997







6.369



58,254Record the adjustment to give effect to the tax receivable
    agreement with HFF Holding as more fully discussed in
    Note 13






















20,716











20,716Stock compensation and other, net






















640











640Net income for the period January 31 to December 31, 2007


























12,527



29,748



42,275Stockholders equity, December 31, 2007


16,445,000


$
164






$



$



$
25,353


$
12,527


$
21,784


$
59,828Issuance of Class A common stock


1,480































Stock compensation and other, net






















853











853Distributions






























(68
)


(68
)Net income


























229



4,784



5,013Stockholders equity, December 31, 2008


16,446,480


$
164






$



$



$
26,206


$
12,756


$
26,500


$
65,626Issuance of Class A common stock


816,801



9















956







(963
)


2Repurchase of Class A common stock


(80,049
)


(1
)


80,049



(173
)


















(174
)Record the adjustment to give effect of the tax receivable
    agreement with HFF Holdings






















200











200Stock compensation and other, net






















1,136











1,136Distributions






























(1,564
)


(1,564
)Net (loss) income


























(752
)


2,531



1,779Stockholders equity, December 31, 2009


17,183,232


$
172



80,049


$
(173
)

$



$
28,498


$
12,004


$
26,504


$
67,005    50




---



##### Table of Contents



HFF,
    Inc.



Consolidated
    Statements of Cash Flows  Year Ended December 312009


2008


2007(Dollars in thousands)Operating activitiesNet income

$
1,779


$
5,013


$
44,168Adjustments to reconcile net income to net cash provided by
    operating activities:Stock based compensation


1,137



876



813Amortization of investment security discounts






(93
)


Deferred income taxes


1,670



7,567



6,189Payable under the tax receivable agreement


(1,888
)


(3,862
)


Depreciation and amortization:Property and equipment


1,444



1,602



2,304Intangibles


2,079



1,873



1,557Gain on sale or disposition or impairment of assets


(4,966
)


(1,870
)


(343
)Mortgage service rights assumed


(762
)


(1,774
)


(3,637
)Proceeds from sale of mortgage servicing rights


2,030







Increase (decrease) in cash from changes in:Restricted cash


47



180



2,070Accounts receivable


416



511



1,012Payable to/(receivable from) affiliate


(38
)


1,302



2,381Payable under the tax receivable agreement


(2,258
)


(5,257
)


Deferred taxes, net


(1
)


(6
)


182Mortgage notes receivable


(22,500
)


24,700



84,700Net borrowings on warehouse line of credit


22,500



(24,700
)


(84,700
)Prepaid taxes, prepaid expenses and other current assets


5,213



(2,677
)


497Other noncurrent assets


47



144



125Accrued compensation and related taxes


(209
)


(7,631
)


2,116Accounts payable


371



(1,451
)


1,090Other accrued liabilities


406



(168
)


319Other long-term liabilities


(657
)


(642
)


2,092Net cash provided by (used in) operating activities


5,860



(6,363
)


62,935Investing activitiesPurchases of property and equipment


(47
)


(183
)


(4,315
)Non-compete agreement






(100
)


Purchases of investments






(9,907
)


Proceeds from maturities of investments






10,000



Net cash used in investing activities


(47
)


(190
)


(4,315
)Financing activitiesPayments on long-term debt


(173
)


(90
)


(56,398
)Issuance of common stock










272,118Treasury stock


(173
)






Purchase of ownership interests in operating partnerships










(215,931
)Deferred financing costs










(276
)Distributions to members and noncontrolling interest holder


(1,564
)


(68
)


(17,739
)Net cash used in financing activities


(1,910
)


(158
)


(18,226
)Net increase (decrease) in cash


3,903



(6,711
)


40,394Cash and cash equivalents, beginning of period


37,028



43,739



3,345Cash and cash equivalents, end of period

$
40,931


$
37,028


$
43,739Supplemental disclosure of cash flow informationCash paid for income taxes

$
104


$
1,452


$
4,090Cash paid for interest

$
2,413


$
1,624


$
2,528Supplemental disclosure of non-cash financing activitiesProperty acquired under capital leases

$
292


$
52


$
103    51




---



##### Table of Contents



HFF,
    Inc.



Notes to
    Consolidated Financial Statements  1.
    Organization
    and Basis of Presentation  Organization
  and/or and/or
  Initial
    Public Offering and Reorganization
  Form S-1 Form S-1
         52




---



##### Table of Contents



HFF,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    see Notes 14 and 15 see Note 17
  Basis
    of Presentation
          Reclassifications
   53




---



##### Table of Contents



HFF,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
   2.
    Summary
    of Significant Accounting Policies  Consolidation
  Consolidation
    Concentrations
    of Credit Risk
  and/or
  Cash
    and Cash Equivalents
    Revenue
    Recognition
  and/or case-by-case
  out-of-pocket
 54




---



##### Table of Contents



HFF,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  out-of-pocket
  Mortgage
    Notes Receivable
  ®
  Financial
    Services-Mortgage Banking,
  see
    Note 8
  Advertising
    Property
    and Equipment
  Accounting
    Changes and Error Corrections, year-to-date
        Leases
   55




---



##### Table of Contents



HFF,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Leases
  Computer
    Software Costs
    Goodwill
    Prepaid
    Compensation Under Employment Agreements
  sign-up sign-up
  Producer
    Draws
    Intangible
    Assets
   56




---



##### Table of Contents



HFF,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Transfers and Servicing
    35-month
   57




---



##### Table of Contents



HFF,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Earnings
    Per Share
  Earnings Per Share see Note 17
  Stock
    Based Compensation
  Compensation  Stock Compensation
  Income
    Taxes
  Income Taxes
     58




---



##### Table of Contents



HFF,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
      Cost
    of Services
    Segment
    Reporting
    Use of
    Estimates
    Treasury
    Stock
  first-in,
  Recent
    Accounting Pronouncements
  Amendments to FASB
    Interpretation No. 46(R)
  Accounting for Transfers of Financial Assets  an
    amendment of FASB Statement No. 140 Transfers and Servicing
 59




---



##### Table of Contents



HFF,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    The
    FASB Accounting Standards Codification and the Hierarchy of
    Generally Accepted Accounting Principles
  Subsequent Events,
  Fair Value Measurements and Disclosures
  Financial Instruments
  Intangibles  Goodwill and Other,
  Consolidation
  3.
    Stock
    Compensation   60




---



##### Table of Contents



HFF,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Omnibus
    Incentive Compensation Plan
  Form S-1
      Dividend yield


0.0
%Expected volatility


62.0
%Risk-free interest rate


3.5
%Expected life (in years)


6.3   WeightedWeighted


AverageAverage


Remaining


AggregateExercise


Contractual


IntrinsicOptions


Price


Term


ValueBalance at January 1, 2007





$







$
Granted


23,177



17.73



13.0 years



228Exercised














Forfeited or expired














Balance at December 31, 2007


23,177


$
17.73



12.1 years


$
228Granted


4,867



6.93



13.0 years



20Exercised














Forfeited or expired














Balance at December 31, 2008


28,044


$
15.85



11.3 years


$
248Granted


20,728



4.35



13.0 years



60Exercised














Forfeited or expired


(4,167
)


18.00







(42
)Balance at December 31, 2009


44,605


$
10.31



11.4 years


$
266  61




---



##### Table of Contents



HFF,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    WeightedAverageExerciseOptions


PriceNonvested at January 1, 2007





$
Granted


23,177



17.73Vested






Forfeited or expired






Nonvested at December 31, 2007


23,177


$
17.73Granted


4,867



6.93Vested


(7,725
)


17.73Forfeited or expired






Nonvested at December 31, 2008


20,319


$
15.14Granted


20,728



4.35Vested


(9,347
)


15.85Forfeited or expired


(1,389
)


18.00Nonvested at December 31, 2009


30,311


$
7.41       RSUs withRSUs with no


gradedvesting period


vesting period


TotalBalance at January 1, 2007










Granted


11,110



137,502



148,612Converted to common stock










Forfeited or expired










Balance at December 31, 2007


11,110



137,502



148,612Granted


38,100







38,100Converted to common stock


(1,480
)






(1,480
)Forfeited or expired










Balance at December 31, 2008


47,730



137,502



185,232Granted


161,282







161,282Converted to common stock


(127,604
)


(44,793
)


(172,397
)Forfeited or expired






(2,083
)


(2,083
)Balance at December 31, 2009


81,408



90,626



172,034    62




---



##### Table of Contents



HFF,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    4.
    Property
    and Equipment    December 312009


2008Furniture and equipment

$
3,618


$
3,419Computer equipment


1,031



1,022Capitalized software costs


504



516Leasehold improvements


5,953



6,030Subtotal


11,106



10,987Less accumulated depreciation and amortization


(6,935
)


(5,693
)$
4,171


$
5,294     5.
    Intangible
    Assets    December 31, 2009


December 31, 2008Gross








GrossCarrying


Accumulated


Net Book


Carrying


Accumulated


Net BookAmount


Amortization


Value


Amount


Amortization


ValueAmortizable intangible assets:Mortgage servicing rights

$
13,476


$
(4,296
)

$
9,180


$
9,716


$
(2,405
)

$
7,311Deferred financing costs


523



(510
)


13



523



(353
)


170Non-compete agreement


100



(66
)


34



100



(32
)


68Unamortizable intangible assets:FINRA license


100







100



100







100Total intangible assets

$
14,199


$
(4,872
)

$
9,327


$
10,439


$
(2,790
)

$
7,649      63




---



##### Table of Contents



HFF,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
      As of December 31,2009

2008Expected life of cash flows

3 years to 10 years

3 years to 10 yearsDiscount rate(1)

15% to 20%

15% to 20%Prepayment rate

0% to 8%

0% to 7%Inflation rate

2%

2%Cost of service per loan

$1,600 to $4,188

$1,600 to $4,220     (1)
    
    Reflects the time value of money and the risk of future cash
    flows related to the possible cancellation of servicing
    contracts, transferability restrictions on certain servicing
    contracts, concentration in the life company portfolio and large
    loan risk.      FV atCategory

12/31/08


Capitalized


Amortized


Sold


12/31/09


12/31/09Freddie Mac

$
3,266


$
3,395


$
(828
)

$



$
5,833


$
6,519CMBS


2,861



450



(440
)


(442
)


2,429



2,834Life company


991



328



(540
)






779



938Life company  limited


193



53



(107
)






139



166Total

$
7,311


$
4,226


$
(1,915
)

$
(442
)

$
9,180


$
10,457   FV atCategory

12/31/07


Capitalized


Amortized


Sold


12/31/08


12/31/08Freddie Mac

$
2,183


$
1,879


$
(796
)

$



$
3,266


$
3,805CMBS


2,414



846



(399
)






2,861



3,175Life company


634



776



(419
)






991



1,218Life company  limited


112



152



(71
)






193



247Total

$
5,343


$
3,653


$
(1,685
)

$



$
7,311


$
8,445    64




---



##### Table of Contents



HFF,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
          2010

$
2,0762011


1,6082012


1,3292013


1,1802014


1,067     6.
    Fair
    Value Measurement     65




---



##### Table of Contents



HFF,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    7.
    Long-Term
    Debt and Capital Lease Obligations    December 312009


2008Bank term note payable

$



$
Capital lease obligations


275



151Total long-term debt and capital leases


275



151Less current maturities


152



91Long-term debt and capital leases

$
123


$
60   (a)
    The
    Credit Agreement   66




---



##### Table of Contents



HFF,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    (b)
    Letters
    of Credit and Capital Lease Obligation      2010

$
1522011


922012


272013


4$
275   8.
    Warehouse
    Line of Credit    ®
  transaction-by-transaction 30-day
  9.
    Lease
    Commitments   67




---



##### Table of Contents



HFF,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
      2010

$
4,8462011


4,3062012


4,2252013


3,1342014


1,515Thereafter


2,389$
20,415         10.
    Retirement
    Plan    11.
    Servicing     68




---



##### Table of Contents



HFF,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
   12.
    Legal
    Proceedings  Contingencies
  13.
    Income
    Taxes    Current


Deferred


TotalYear Ended December 31, 2009:Federal

$
123


$
(47
)

$
76State


415



1,717



2,132$
538


$
1,670


$
2,208   Current


Deferred


TotalYear Ended December 31, 2008:Federal

$
(2,086
)

$
6,696


$
4,610State


(438
)


871



433$
(2,524
)

$
7,567


$
5,043     Dec. 31, 2009


Dec. 31, 2008Pre-tax book income

$
3,987


$
10,056Less: pre-tax income allocated to noncontrolling interest holder


(2,559
)


(4,729
)Pre-tax book income after noncontrolling interest

$
1,428


$
5,327   December 31,2009


2008Income Tax expense




Rate





RateTaxes computed at federal rate

$
500



35.0
%

$
1,811



34.0
%State and local taxes, net of federal tax benefit


124



8.7
%


223



4.2
%Effect of deferred tax rate change


1,625



113.8
%


4,879



91.6
%Effect of change in valuation allowance


(50
)


(3.5
)%


(678
)


(12.7
)%Change in income tax benefit payable to stockholder


(307
)


(21.5
)%


(1,492
)


(28.0
)%Restricted stock units shortfall


139



9.7
%






0.0
%Meals and entertainment


77



5.4
%


201



3.8
%Other


77



5.4
%


53



1.0
%Adjustment to prior years taxes


23



1.6
%


46



0.8
%$
2,208



154.6
%

$
5,043



94.7
%  69




---



##### Table of Contents



HFF,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
      December 31,2009


2008Deferred income tax assets:Section 754 election tax basis
    step-up

$
128,726


$
136,478Tenant improvements


668



557Net operating loss carryforward


11,133



3,897Restricted stock units


445



408Compensation


380



267Tax credits


123



Other


139



7141,614



141,614Less: valuation allowance


(15,165
)


(15,730
)Deferred income tax asset


126,449



125,884Deferred income tax liabilities:Goodwill


(316
)


(126
)Servicing rights


(1,577
)


(1,220
)Deferred rent


(477
)


(370
)Deferred income tax liability


(2,370
)


(1,716
)Net deferred income tax asset

$
124,079


$
124,168   step-up step-up step-up
 70




---



##### Table of Contents



HFF,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
      Tax
    Receivable Agreement
     71




---



##### Table of Contents



HFF,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    step-up step-up
  14.
    Supplemental
    Statements of Income   72




---



##### Table of Contents



HFF,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  HFF,
    Inc.
  Consolidated
    Operating Results
  Period


Period


Period


Three


Three


Three


Three1/1/07


1/31/07


2/22/07


Months


Months


Months


Months


Yearthrough


through


through


Ended


Ended


Ended


Ended


Ended1/30/07


2/21/07


3/31/07


3/31/07


6/30/07


9/30/07


12/31/07


12/31/07(Dollars in thousands, except per share data)Revenue

$
17,467


$
12,308


$
25,770


$
55,545


$
79,786


$
68,029


$
52,306


$
255,666Operating expenses:Cost of services


10,817



8,160



14,560



33,537



44,151



39,166



31,172



148,026Operating, administrative and other


4,427



2,663



6,184



13,274



15,378



14,270



12,877



55,799Depreciation and amortization


358



273



389



1,020



878



993



970



3,861Total Expenses


15,602



11,096



21,133



47,831



60,407



54,429



45,019



207,686Operating income


1,865



1,212



4,637



7,714



19,379



13,600



7,287



47,980Interest and other income, net


401



169



352



922



994



2,170



2,383



6,469Interest expense


(373
)


(14
)


(7
)


(394
)


(6
)


(4
)


(3
)


(407
)Income before income taxes and minority interest


1,893



1,367



4,982



8,242



20,367



15,766



9,667



54,042Provision for income taxes






151



945



1,096



3,796



2,947



2,035



9,874Net income


1,893



1,216



4,037



7,146



16,571



12,819



7,632



44,168Net income attributable to noncontrolling interest






1,029



2,879



3,908



11,513



8,808



5,519



29,748Less net income earned prior to IPO and reorganization


(1,893
)










(1,893
)














(1,893
)Net income attributable to controlling interest

$



$
187


$
1,158


$
1,345


$
5,058


$
4,011


$
2,113


$
12,527Net income per share  basic













$
0.13


$
0.31


$
0.24


$
0.13


$
0.84Net income per share  diluted













$
0.13


$
0.31


$
0.24


$
0.13


$
0.84   15.
    Noncontrolling
    Interest     73




---



##### Table of Contents



HFF,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
      Three


Three


Three


ThreeMonths


Months


Months


Months


YearEnded


Ended


Ended


Ended


Ended3/31/09


6/30/09


9/30/09


12/31/09


12/31/09Net (loss) income from operating partnerships

$
(5,176
)

$
526


$
2,402


$
6,931


$
4,683Noncontrolling interest ownership percentage


55.31
%


55.31
%


55.31
%


(A
)Noncontrolling interest

$
(2,863
)

$
291


$
1,328


$
3,775


$
2,531   Three


Three


Three


ThreeMonths


Months


Months


Months


YearEnded


Ended


Ended


Ended


Ended3/31/08


6/30/08


9/30/08


12/31/08


12/31/08Net (loss) income from operating partnerships

$
(177
)

$
5,265


$
2,413


$
1,148


$
8,649Noncontrolling interest ownership percentage


55.31
%


55.31
%


55.31
%


55.31
%Noncontrolling interest

$
(98
)

$
2,912


$
1,335


$
635


$
4,784     (A)
    
    During the three months ending December 31, 2009, the
    ownership of the Operating Partnerships changed due to the
    exercise of the exchange rights of HFF Holdings. HFF
    Holdings ownership percentage in the Operating
    Partnerships was 55.31% during October and November 2009 and
    53.93% during December 2009.   74




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##### Table of Contents



HFF,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Number of


Percentage of





Number ofHFF Holdings


HFF





AdditionalPartnership Units


Holdings





Sharesin the Operating


Partnership


Number of


of Class APartnerships


Units in the


Shares of


CommonAvailable for


Operating


Class A Common


Stock ExpectedExchange as a


Partnerships


Stock Exchanged


toresult of the


Becoming


During the Year


BecomeReorganization


Eligible


Ending


AvailableExchangeability Date:

Transactions


for Exchange


December 31, 2009


for ExchangeJanuary 31, 2009


5,088,750



25
%


644,402



4,444,348January 31, 2010


5,088,750



25
%






5,088,750January 31, 2011


5,088,750



25
%






5,088,750January 31, 2012


5,088,750



25
%






5,088,750Total


20,355,000



100
%


644,402



19,710,598       Form S-3
    16.
    Stockholders
    Equity   75




---



##### Table of Contents



HFF,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
   17.
    Earnings
    Per Share  (dollars in thousands)
  Year

YearEnded

EndedDecember 31,

December 31,2009

2008Net income

$
1,779


$
5,013Net (loss) income attributable to controlling interest

$
(752
)

$
229Weighted Average Shares Outstanding:Basic


16,637,216



16,472,141Diluted


16,637,967



16,472,141     Basic
    Net Income per Share
  Numerator
  Denominator
  Diluted
    Net Income per Share
  Numerator
  Denominator
  76




---



##### Table of Contents



HFF,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Three Months

Year

Three Months

YearEnded

Ended

Ended

EndedDecember 31,

December 31,

December 31,

December 31,2009

2009

2008

2008Basic Earnings Per Share of Class A Common StockNumerator:Net income (loss) attributable to Class A common
    stockholders

$
1,530


$
(752
)

$
(201
)

$
229Denominator:Weighted average number of shares of Class A common stock
    outstanding


16,783,133



16,637,216



16,494,210



16,472,141Basic net income per share of Class A common stock

$
0.09


$
(0.05
)

$
(0.01
)

$
0.01Diluted Earnings Per Share of Class A Common StockNumerator:Net income (loss) attributable to Class A common
    stockholders

$
1,530


$
(752
)

$
(201
)

$
229Add  dilutive effect of:Income allocated to noncontrolling interest holder upon assumed
    exercise of exchange right














Denominator:Basic weighted average number of shares of Class A common
    stock


16,783,133



16,637,216



16,494,210



16,472,141Add  dilutive effect of:Unvested restricted stock units


12,460











Stock options


2,665



751







Noncontrolling interest holder exchange right














Weighted average common shares outstanding  diluted


16,798,258



16,637,967



16,494,210



16,472,141Diluted earnings per share of Class A common stock

$
0.09


$
(0.05
)

$
(0.01
)

$
0.01   18.
    Concentrations   77




---



##### Table of Contents



HFF,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
   19.
    Related
    Party Transactions      20.
    Commitments
    and Contingencies    21.
    Selected
    Quarterly Financial Data (unaudited)  Quarter Ended2009

March 31

June 30

September 30

December 31Net revenue

$
13,228


$
16,433


$
20,612


$
27,203Operating (loss) income


(6,123
)


(1,813
)


840



3,182Interest and other income, net


413



1,989



920



3,109Decrease in payable under the tax receivable agreement










1,694



195Net (loss) income


(4,906
)


91



1,289



5,305Net (loss) income attributable to controlling interest


(2,043
)


(200
)


(39
)


1,530Per share data(1)Basic earnings per share

$
(0.12
)

$
(0.01
)

$
(0.00
)

$
0.09Diluted earnings per share

$
(0.12
)

$
(0.01
)

$
(0.00
)

$
0.09   78




---



##### Table of Contents



HFF,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Quarter Ended2008

March 31

June 30

September 30

December 31Net revenue

$
32,180


$
43,589


$
31,034


$
24,884Operating (loss) income


(1,538
)


3,426



(98
)


(504
)Interest and other income, net


1,006



920



1,849



1,153Decrease in payable under the tax receivable agreement(2)


3,580







282



Net (loss) income


(1,061
)


3,980



1,660



434Net (loss) income attributable to controlling interest


(963
)


1,068



325



(201
)Per share data(1)Basic earnings per share

$
(0.06
)

$
0.06


$
0.02


$
(0.01
)Diluted earnings per share

$
(0.06
)

$
0.06


$
0.02


$
(0.01
)     (1)
    
    Earnings per share were computed independently for each of the
    periods presented; therefore, the sum of the earnings per share
    amounts for the quarters may not equal the total for the year.(2)
    
    During the three months ending March 31, 2008,
    $3.6 million was classified with Income tax expense. This
    amount was reclassed in the third quarter 2008
    Form 10-Q
    for the nine months ending September 30, 2008 to the
    Decrease in payable under the tax receivable agreement line.
    There was no impact to net income or earnings per share in
    either period.  22.
    Subsequent
    Events       79




---



##### Table of Contents



Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure    Item 9A.
    Controls
    and Procedures  Evaluation of Disclosure Controls and Procedures.
    Rule 13a-15(e) Form 10-K.
    Limitations on the Effectiveness of Controls.
    Changes in Internal Control Over Financial Reporting.
    Form 10-K.
  Item 9B.
    Other
    Information   PART III  Item 10.
    Directors,
    Executive Officers and Corporate Governance     80




---



##### Table of Contents



Form 8-K
  Item 11.
    Executive
    Compensation    Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters      Equity Compensation Plan InformationNumber of SecuritiesNumber of





Remaining AvailableSecurities to be





for Future IssuanceIssued Upon


Weighted average


Under EquityExercise of


Exercise Price of


Compensation PlansOutstanding


Outstanding


(excluding SecuritiesOptions, Warrants


Options, Warrants


Reflected in Columnand Rights


and Rights


(a))Plan category

(a)


(b)


(c)Equity compensation plans approved by security holders


218,724


$
11.12



3,107,401Equity compensation plans not approved by security holders


N/A



N/A



N/ATotal


218,724


$
11.12



3,107,401   Item 13.
    Certain
    Relationships, Related Transactions, and Director
    Independence    Item 14.
    Principal
    Accountant Fees and Services    PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules    Exhibits
   81




---



##### Table of Contents



SIGNATURES             Signature

Capacity

Date/s/  John
    H. Pelusi, Jr.John
    H. Pelusi, Jr.

Chief Executive Officer, Director and Executive Managing
    Director 
    (Principal Executive Officer)

March 12, 2010/s/  Gregory
    R. ConleyGregory
    R. Conley

Chief Financial Officer 
    (Principal Financial and
    Accounting Officer)

March 12, 2010/s/  John
    P. FowlerJohn
    P. Fowler

Director

March 12, 2010/s/  Mark
    D. GibsonMark
    D. Gibson

Director

March 12, 2010/s/  John
    Z. KukralJohn
    Z. Kukral

Director

March 12, 2010/s/  Deborah
    H. McAnenyDeborah
    H. McAneny

Director

March 12, 2010/s/  Susan
    P. McGallaSusan
    P. McGalla

Director

March 12, 2010/s/  George
    L. Miles, Jr.George
    L. Miles, Jr.

Director

March 12, 2010/s/  Lenore
    M. SullivanLenore
    M. Sullivan

Director

March 12, 2010/s/  Joe
    B. Thornton, Jr.Joe
    B. Thornton, Jr.

Director

March 12, 2010/s/  Steven
    E. WheelerSteven
    E. Wheeler

Director

March 12, 2010  82




---



##### Table of Contents



Exhibit Index  2
.1

Sale and Merger Agreement, dated January 30, 2007
    (incorporated by reference to Exhibit 10.5 to the
    Registrants Registration Statement on
    Form S-l
    (File
    No. 333-138579)
    (Form S-l)
    filed with the SEC on December 22, 2006)3
.1

Amended and Restated Certificate of Incorporation of the
    Registrant (incorporated by reference to Exhibit 3.1 to the
    Form S-l
    filed with the SEC on December 22, 2006)3
.2

Amended and Restated Bylaws of the Registrant (incorporated by
    reference to Exhibit 3.2 to the
    Form S-1
    filed with the SEC on December 22, 2006)10
.1

Holliday Fenoglio Fowler, L.P. Partnership Agreement, dated
    February 5, 2007 (incorporated by reference to
    Exhibit 10.1 to the Registrants Annual Report on
    Form 10-K
    for the year ended December 31, 2006
    (File No. 001-33280)
    filed with the SEC on March 16, 2007)10
.2

HFF Securities L.P. Partnership Agreement, dated
    February 5, 2007 (incorporated by reference to
    Exhibit 10.2 to the Registrants Annual Report on
    Form 10-K
    for the year ended December 31, 2006 (File
    No. 001-33280)
    filed with the SEC on March 16, 2007)10
.3

Tax Receivable Agreement, dated February 5, 2007
    (incorporated by reference to Exhibit 10.3 to the
    Form S-1
    filed with the SEC on December 22, 2006)10
.4

Registration Rights Agreement, dated February 5, 2007
    (incorporated by reference to Exhibit 10.4 to the
    Form S-1
    filed with the SEC on December 22, 2006)10
.5

HFF, Inc. 2006 Omnibus Incentive Compensation Plan, dated
    January 30, 2007 (incorporated by reference to
    Exhibit 10.9 to the
    Form S-l
    filed with the SEC on January 8, 2007)10
.6

Holliday Fenoglio Fowler, L.P. Profit Participation Bonus Plan
    (incorporated by reference to Exhibit 10.10 to the
    Form S-1
    filed with the SEC on January 8, 2007)10
.7

HFF Securities, L.P. Profit Participation Bonus Plan
    (incorporated by reference to Exhibit 10.11 to the
    Form S-l
    filed with the SEC on January 8, 2007)10
.8

Employment Agreement between the Registrant and John H. Pelusi,
    Jr., dated January 30, 2007 (incorporated by reference to
    Exhibit 10.8 to the Registrants Annual Report on
    Form 10-K
    for the year ended December 31, 2006 (File
    No. 001-33280)
    filed with the SEC on March 16, 2007)10
.9

Employment Agreement between the Registrant and Gregory R.
    Conley, dated January 30, 2007 (incorporated by reference
    to Exhibit 10.9 to the Registrants Annual Report on
    Form 10-K
    for the year ended December 31, 2006 (File
    No. 001-33280)
    filed with the SEC on March 16, 2007)10
.10

Employment Agreement between the Registrant and Nancy Goodson,
    dated January 30, 2007 (incorporated by reference to
    Exhibit 10.10 to the Registrants Annual Report on
    Form 10-K
    for the year ended December 31, 2006 (File
    No. 001-33280)
    filed with the SEC on March 16, 2007)10
.11

Form of Contribution Agreement with John H. Pelusi, Jr., John P.
    Fowler, Mark D. Gibson, John Z. Kukral, Deborah H. McAneny,
    Susan P. McGalla, George L. Miles, Jr., Lenore M. Sullivan, Joe
    B. Thornton, Jr. and Steven E. Wheeler (incorporated by
    reference to Exhibit 10.13 to the Registrants Annual
    Report on
    Form 10-K
    for the year ended December 31, 2007 (File
    No. 001-33280)
    filed with the SEC on March 17, 2008)21
.1

Subsidiaries of the Registrant (incorporated by reference to
    Exhibit 21.1 to the Registrants Annual Report on
    Form 10-K
    for the year ended December 31, 2006 (File
    No. 001-33280)
    filed with the SEC on March 16, 2007)23
.1

Consent of Ernst & Young LLP, Independent Registered
    Public Accounting Firm31
.1

Certificate Pursuant to Section 302 of the Sarbanes-Oxley
    Act of 200231
.2

Certificate Pursuant to Section 302 of the Sarbanes-Oxley
    Act of 200232
.1

Certifications of Chief Executive Officer and Chief Financial
    Officer Pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002  83