Real Estate Central

SAN CLEMENTE, Calif., July 8 /PRNewswire-FirstCall/ — Sunstone Hotel
Investors, Inc. (NYSE: SHO) announced today the final results of its
previously announced modified “Dutch Auction” tender offer (the “Offer”) to
purchase up to 6,200,000 shares of its Common Stock, par value $0.01 per
share (”Common Stock”), which expired at 12:00 midnight, New York City
time, on June 27, 2008. The Company also announced it exercised its right
to purchase up to an additional 2% of its outstanding Common Stock without
amending or extending the Offer.

In accordance with the terms and conditions of the Offer, the Company
has accepted for purchase 7,374,179 shares, representing approximately 13%
of its outstanding Common Stock, at a price of $17.50 per share, for a
total cost of approximately $129 million (excluding fees and costs of the
Offer).

Based on the final tabulation by American Stock Transfer & Trust
Company, the depositary for the Offer (the “Depositary”), a total of
7,707,362 shares were validly tendered and not validly withdrawn at or
below a price of $17.50 per share. Because more than 7,374,179 shares of
Common Stock were validly tendered and not validly withdrawn, the Offer was
oversubscribed. As a result, the Depositary has informed the Company that,
after giving effect to the priority for “odd lots”, the final proration
factor is approximately 95.67% of the shares properly tendered and not
withdrawn at or below $17.50 per share.

The Depository will promptly pay for the shares accepted for purchase
and will promptly return all shares tendered and not accepted for purchase.
After giving effect to the purchase of the shares, the Company will have
outstanding approximately 51.3 million shares of Common Stock.

“We are pleased with the successful completion of the tender offer and
our ability to repurchase the maximum number of shares at a meaningful
discount to our net asset value,” said Robert A. Alter, Chief Executive
Officer and Executive Chairman of the Board.

Questions and requests for information about the Offer should be
directed to the information agent of the Offer, D.F. King & Co., Inc., at
(800) 735-3107 or (212) 269-5550 (for banks and brokers), or the dealer
manager of the Offer, J.P. Morgan Securities Inc., at (877) 371-5947.

About Sunstone Hotel Investors, Inc.

Sunstone Hotel Investors, Inc. is a lodging real estate investment
trust (”REIT”) that, as of the date hereof, has interests in 45 hotels
comprised of 15,354 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.

This press release contains forward-looking statements within the
meaning of federal securities laws and regulations. These forward looking
statements are identified by their use of terms and phrases such as
“anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,”
“intend,” “may,” “plan,” “predict,” “project,” “should,” “will” and other
similar terms and phrases, including references to assumptions and
forecasts of future results. Forward- looking statements are not guarantees
of future performance and involve known and unknown risks, uncertainties
and other factors which may cause the actual results to differ materially
from those anticipated at the time the forward- looking statements are
made. These risks include, but are not limited to: volatility in the debt
or equity markets affecting our ability to acquire or sell hotel assets;
national and local economic and business conditions, including the
possibility of a U.S. recession; potential terrorist attacks, which would
affect occupancy rates at our hotels and the demand for hotel products and
services; operating risks associated with the hotel business; risks
associated with the level of our indebtedness and our ability to meet
covenants in our debt agreements; relationships with property managers and
franchisors; our ability to maintain our properties in a first-class
manner, including meeting capital expenditure requirements; our ability to
compete effectively in areas such as access, location, quality of
accommodations and room rate structures; changes in travel patterns, taxes
and government regulations, which influence or determine wages, prices,
construction procedures and costs; our ability to identify, successfully
compete for and complete acquisitions; the performance of acquired
properties after they are acquired; necessary capital expenditures and our
ability to fund them and complete them with minimum disruption; our ability
to continue to satisfy complex rules in order for us to qualify as a REIT
for federal income tax purposes; and other risks and uncertainties
associated with our business described in the Company’s filings with the
SEC. Although the Company believes the expectations reflected in such
forward-looking statements are based upon reasonable assumptions, it can
give no assurance that the expectations will be attained or that any
deviation will not be material. All forward-looking information in this
release is as of July 8, 2008, and the Company undertakes no obligation to
update any forward-looking statement to conform the statement to actual
results or changes in the Company’s expectations.



For Additional Information:

Bryan Giglia
Vice President - Corporate Finance
Sunstone Hotel Investors, Inc.
(949) 369-4236

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[Via Real Estate Newswire]