Fitch Inc. may downgrade $18.1 billion of commercial mortgage-backed bonds sold from 2006 to 2008.

Losses on those transactions are expected to average 4.5% to 5%, Fitch said Wednesday. Some deals underwritten in 2007 with high concentrations of so-called pro forma loans could generate loss rates as high as 7.5%, the rating agency said.

"A sharp decline in economic conditions and the lack of available real estate financing have begun to impact commercial property and CMBS loan performance," Fitch said. The ratings on a "majority of the classes" will likely be cut one to two levels over the next 30 days.

Standard & Poor's Corp. said Tuesday that it may lower its ratings on as much as $96.6 billion of commercial mortgage-backed securities.

The real estate brokerage CB Richard Ellis Group Inc. said Wednesday that the vacancy rate in midtown Manhattan, the most expensive U.S. office market, is the highest since September 2004, and that rents there are the lowest since April 2007.

The area had 10 million square feet of sublease space available at the end of last month, and 70% of it might not be leased, CB Richard Ellis said.

Space being relinquished by financial services firms and other companies is coming up for sublease with short-term expiration dates that make the properties unattractive to new tenants, said John Powers, the brokerage's chairman for the New York area. "There's no question it's an overhang on pricing."

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