Sunstone Updates Business Report

August total portfolio RevPAR was $105.65, down 20.8% to prior year

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. September 17, 2009

SEPTEMBER 17, 2009 - Sunstone Hotel Investors, Inc. (NYSE:SHO) has provided an update on its recent operating performance and finance transactions.

Preliminary Operations Update Through August 31, 2009 (39 Hotel Portfolio):

o August total portfolio RevPAR was $105.65, down 20.8% to prior year.

o Quarter-to-date total portfolio RevPAR was $104.50, down 19.9% to prior year.

o Year-to-date total portfolio RevPAR was $100.63, down 19.7% to prior year.

Arthur Buser, President and Chief Executive Officer, stated, "We continue to manage our portfolio and balance sheet to best position the Company for future opportunities. Our secured debt management initiatives are beginning to produce positive results, and on the operations front, we are seeing signs of improved group activity. During the past 30 days, our two bellwether group hotels - the Renaissance Washington D.C. and the Renaissance Orlando - booked over 40,000 group rooms combined, which is a marked improvement over recent booking trends."

Secured Debt Portfolio

As previously announced, the Company has initiated a program aimed at proactively addressing value and cash flow deficits among the Company's mortgaged hotels. As of the date hereof, the Company has elected to cease the subsidization of debt service associated with three of its hotels: the W San Diego Hotel, the Marriott Ontario Airport and the Renaissance Westchester. At this time, the Company is working with the lender's representatives to facilitate deed-backs of the W San Diego Hotel and the Marriott Ontario Airport. The Company is currently in negotiations with the special servicer of the Renaissance Westchester loan.

The Company has agreed in principle to terms of an amendment to the $105.4 million CMBS mortgage loan secured by the Renaissance Baltimore Hotel. The amendment will result in the elimination of amortization on the debt for a period of up to 30 months.

Additionally, the Company is in discussions with lender's representatives on several other mortgage loans, none of which are in default as of the date of this release.

Ken Cruse, Chief Financial Officer, stated, "We continue to proactively manage our secured debt portfolio to further enhance our credit profile. We are proceeding with deed-backs of two assets where the loan amounts meaningfully exceed the value of the collateral assets, and through a collaborative effort with the special servicer, we have reached an agreement in principle to eliminate amortization on the Renaissance Baltimore loan for up to 2.5 years."