Sunstone Hotel Investors, Inc. Designates New Shelf Registration Statement to Effect Resales of Shares of Common Stock Issuable Upon Exchange of the Exchangeable Senior Notes Due 2027 of Its Operating Partnership

Sunstone Hotel Investors, Inc. (NYSE: SHO) announced today that it has designated the new shelf registration statement that it filed on November 6, 2008 with the Securities and Exchange Commission (the “Commission”) to replace the existing shelf registration statement that was previously designated on October 12, 2007 pursuant to the terms of the Registration Rights Agreement among it, Sunstone Hotel Partnership, LLC (the “Operating Partnership”), Bear Stearns & Co. Inc., Citigroup Global Markets Inc. and Wachovia Capital Markets, LLC, dated June 18, 2007, and the Registration Rights Agreement among it, the Operating Partnership and Bear Stearns & Co, Inc., dated June 27, 2007, both relating to Sunstone Hotel Partnership, LLC’s 4.60% Exchangeable Senior Notes due 2027. The previously designated shelf was set to expire on December 20, 2008. The new shelf registration statement became effective today and, among other things, allows electing holders of notes who may receive shares of common stock issuable upon exchange of the notes to effect resales of the shares of common stock under a prospectus included in the new shelf registration statement. The exchangeable notes were offered and sold on June 18, 2007 and June 27, 2007 to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended.

This announcement is neither an offer to sell nor the solicitation of an offer to buy the exchangeable notes or the shares of common stock that may be issuable upon exchange of the exchangeable notes and shall not constitute an offer in any jurisdiction in which such offer or solicitation is unlawful.

Sunstone Hotel Investors, Inc. (the “Company”) is a lodging real estate investment trust (“REIT”) that, as of the date hereof, has interests in 45 hotels comprised of 15,349 rooms primarily in the upper-upscale segment operated under nationally recognized brands, such as Marriott, Hilton, Hyatt, Fairmont and Starwood. For further information, please visit the Company’s website at http://www.sunstonehotels.com.