Bank of America has downgraded six players in the Commercial Real Estate (CRE) mortgage REIT sector, citing interest rate headwinds and weakening fundamentals that spell a "rocky road ahead" for the industry.

Eric Dray, CFA, a research analyst at Bank of America, conveyed in a note to clients on Monday that the sector might see a downward trend in book values and sustained tepid investor sentiment over the coming quarters.

"The office sector has faced headwinds from slow return-to-office in the U.S.," according to Bank of America, as evidenced by a minimal effective rent growth of just...