May 29 (Reuters) - Regional lender Bank OZK's shares fell to their lowest in over six months on Wednesday after analysts at Citigroup double downgraded the stock, citing "substantial concern" over two individual loans tied to the commercial real estate sector.

The brokerage expressed worries that the bank's loans for a life science construction lending project in San Diego and a multi-use project in Atlanta, together estimated to be worth $1.05 billion, could see some deterioration in the coming quarters.

The commercial real estate (CRE) sector, which has been roiled by higher borrowing costs and lower occupancy, has become a key cause of concern for investors and lenders.

Citi said the San Diego property "has been rejected numerous times by sizable pharmaceutical companies" and has no known leases.

The loan to the Atlanta-based project could also see some deterioration owing to "the lack of interest in office leasing, largely due to lackluster location and very open floor plan forcing large-scale leases," the brokerage added.

The two projects together account for 3.8% of Bank OZK's non-purchased loans and are more than 8.1 times larger than its allowance for credit losses for construction loans, Citi said.

A spokesperson for the bank did not immediately respond to a request for comment.

The bank has sizable exposure to CRE. Real estate loans accounted for nearly 77% of its total loan book, as of March 31.

The company's shares were last down 16% at $38.59 in late morning trading. If the losses hold, the stock will wipe roughly $800 million from its total market cap of $5.22 billion.

Other regional lenders also fell in a broadly weak market. The KBW Regional Banking Index, considered a barometer of investor sentiment towards the industry, was last down 2.7% on Wednesday. The index is down 13.7% so far in 2024. (Reporting by Manya Saini and Niket Nishant in Bengaluru; Editing by Maju Samuel)