SecProbe.io

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                                                          April 23, 2026

Aaron Reyes
Chief Financial Officer
Sunstone Hotel Investors, Inc.
15 Enterprise, Suite 200
Aliso Viejo, California 92656

        Re: Sunstone Hotel Investors, Inc.
            Form 10-K for the year ended December 31, 2025
            Filed on February 27, 2026
            Form 8-K filed on February 27, 2026
            File No. 001-32319
Dear Aaron Reyes:

       We have completed our review of your filings. We remind you that the
company and its
management are responsible for the accuracy and adequacy of their disclosures,
notwithstanding
any review, comments, action or absence of action by the staff.

                                                          Sincerely,

                                                          Division of
Corporation Finance
                                                          Office of Real Estate
& Construction
</TEXT>
</DOCUMENT>

CORRESP
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CORRESP

355 South Grand Avenue

Los Angeles, California 90071-1560

Tel: +1.213.485.1234 Fax: +1.213.891.8763

www.lw.com

FIRM / AFFILIATE OFFICES

Abu Dhabi

Moscow

Barcelona

Munich

Beijing

New Jersey

Boston

New York

Brussels

Orange County

April 22, 2026

Chicago

Paris

Doha

Riyadh

Dubai

Rome

Frankfurt

San Diego

Hamburg

San Francisco

Hong Kong

Shanghai

Houston

Silicon Valley

London

Singapore

Los Angeles

Tokyo

Madrid

Washington, D.C.

Milan

 VIA EDGAR

 Ameen
Hamady

 Shannon Menjivar

 Securities and Exchange Commission

 Division of Corporation Finance

 Office of Real
Estate & Construction

 100 F Street, N.E.

Washington, D.C. 20549

Re:
 Sunstone Hotel Investors, Inc.

Form 10-K for the Fiscal Year Ended December 31, 2025

Filed on February 27, 2026

Sunstone Hotel Investors, Inc.

Form 8-K

Filed on February 27, 2026

File No. 001-32319

Dear Ameen Hamady and Shannon Menjivar,

 On
behalf of Sunstone Hotel Investors, Inc. (the “Company”), this letter sets forth the Company’s response to the comments of the Staff of the Division of Corporation Finance (the “Staff”) of
the Securities and Exchange Commission (the “Commission”), dated April 13, 2026, with respect to the Company’s Annual Report on Form 10-K for the year ended
December 31, 2025 and Current Report on Form 8-K filed on February 27, 2026 (the “Form 8-K”). For your convenience, the Staff’s
comments are set forth below in italics, followed by the Company’s responses.

 Comment

Form 8-K: Exhibit 99.1 Unaudited Selected and Financial Data, page 2

1.
 We note your presentation of Adjusted FFO Attributable to Common Stockholders per Diluted share here and
as part of your 2026 Outlook. In future periodic filings, please present with equal or greater prominence the most directly comparable measure calculated in accordance with GAAP for this non-GAAP financial
measure. Refer to Item 10(e)(1)(i)(A) of Regulation S-K and Question 102.10(a) of the Division’s Corporation Finance Interpretations on Non-GAAP Financial
Measures.

 April 22, 2026

 Page
 2

 Response

The Company respectfully informs the Staff that in applicable future filings, it will revise its disclosures to present with equal or greater
prominence Net Income (Loss) Attributable to Common Stockholders per Diluted Share, which is the most directly comparable measure calculated in accordance with GAAP. Set forth in Exhibit A hereto is a copy of the earnings release that was included
as an exhibit to the Form 8-K, which has been marked to show the Company’s proposed revisions in response to the Staff’s comment (additions appear in bold underline and deletions in strikethrough font).

*   *   *   *   *

If you have any questions or comments with regard to these responses or other matters, or would like any additional information, please call
the undersigned at (213) 891-7421.

Sincerely,

/s/ Steven B. Stokdyk

 Steven B. Stokdyk

 of LATHAM & WATKINS
LLP

cc:
 Aaron R. Reyes, Executive Vice President & Chief Financial Officer, Sunstone Hotel Investors, Inc.

 Brent T. Epstein, Latham & Watkins LLP

 April 22, 2026

 Page
 3

 EXHIBIT A

[Redline of earnings release attached]

 Exhibit 99.1

 For Additional Information:

Aaron Reyes

 Sunstone Hotel Investors, Inc.

(949) 382-3018

SUNSTONE HOTEL INVESTORS REPORTS RESULTS FOR FOURTH QUARTER AND FULL YEAR 2025

Returned Over $170 Million to Common Stockholders in 2025 Through Dividends and Share Repurchases

Restores $500 Million Repurchase Authorization

ALISO VIEJO, CA – February 27, 2026 – Sunstone Hotel Investors, Inc. (the “Company” or “Sunstone”) (NYSE: SHO) today
announced results for the fourth quarter and full year ended December 31, 2025.

 Fourth Quarter 2025 Operational Results (as compared to Fourth
Quarter 2024):

•

 Net Income: Net income
attributable to common stockholders was
$3.27.2 million, or $0.02 per
diluted share, as compared to a net loss of $3.10.8 million, or a loss of $0.02 per diluted share.

•

 Total Portfolio RevPAR: Total Portfolio RevPAR increased 9.6% to $220.12. The average daily rate was
$319.01 and occupancy was 69.0%.

•

 Adjusted EBITDAre: Adjusted EBITDAre increased 17.6% to $56.6 million.

•

 Adjusted FFO: Adjusted FFO attributable to common stockholders per diluted share increased 25.0% to $0.20.

 Full Year 2025 Operational Results (as compared to Full Year 2024):

•

 Net Income: Net income
attributable to common stockholders was
$24.68.5 million, or $0.04 per diluted share, as compared to
$43.328.0 million, or $0.14 per
diluted share. Excluding the loss on the sale of the Hilton New Orleans St. Charles in June 2025, net income attributable to common stockholders for
the full year 2025 would have been
$33.317.2 million, or $0.09 per
diluted share.

•

 Total Portfolio RevPAR: Total Portfolio RevPAR increased 3.8% to $225.12. The average daily rate was
$317.07 and occupancy was 71.0%.

•

 Adjusted EBITDAre: Adjusted EBITDAre increased 3.0% to $236.6 million.

•

 Adjusted FFO: Adjusted FFO attributable to common stockholders per diluted share increased 7.5% to $0.86.

 Information regarding the non-GAAP financial measures disclosed in this release is provided
below in “Non-GAAP Financial Measures.” Reconciliations of non-GAAP financial measures to the most comparable GAAP measure for each of the periods presented
are included later in this release.

 Bryan A. Giglia, Chief Executive Officer, stated, “Our portfolio outperformed our expectations in the fourth
quarter delivering impressive Total RevPAR growth of 12.5% as the benefit of our recent investment activity added to generally broad-based strength across our portfolio. We were particularly encouraged by stronger performance at Andaz Miami Beach
and Wailea Beach Resort which saw robust demand over the festive period with the momentum continuing into 2026.”

 Mr. Giglia continued,
“While macroeconomic uncertainty and other factors impeded industry growth in 2025, we nevertheless had a productive year at Sunstone. We recycled out of a lower growth hotel and used the proceeds to accretively repurchase our stock, debuted
Andaz Miami Beach, completed other capital investments intended to drive future growth, and returned over $170 million to our shareholders through share repurchases and dividends. While we see reasons to be optimistic about the year ahead, we
remain cautious and know the operating environment can be impacted, both positively and negatively, by events outside of our control. In 2026, we will continue to execute our strategy of recycling capital, investing in our portfolio, and returning
capital to shareholders while working to address the valuation discount at which we trade. We have an exceptional portfolio with meaningful growth potential, a flexible balance sheet with optionality, a nimble size that allows us to pivot among the
most accretive capital allocation opportunities, and a singular focus to realize the embedded value of our portfolio for our shareholders.”

 1

 Unaudited Selected Statistical and Financial Data ($ in millions, except RevPAR, ADR and per share
amounts).

Quarter Ended December 31,

Year Ended December 31,

2025

2024

Change

2025

2024

Change

 Net Income

$
 7.2

$
 0.8

763.3
%

$
 24.6

$
 43.3

(43.2
)%

 Net Income (Loss)
Attributable to Common Stockholders

$
3.2

$
(3.1
)

204.4
%

$
8.5

$
28.0

(69.8
)%

 Net
Income (Loss) Attributable to Common Stockholders per Diluted Share

$
 0.02

$
(0.02
)

200.0
%

$
 0.04

$
 0.14

(71.4
)%

 Total Portfolio Operating Statistics (1)

 RevPAR

$
 220.12

$
 200.75

9.6
%

$
 225.12

$
 216.86

3.8
%

 Occupancy

69.0
%

65.1
%

390
bps

71.0
%

68.7
%

230
bps

 Average Daily Rate

$
 319.01

$
 308.37

3.5
%

$
 317.07

$
 315.66

0.4
%

 Total Portfolio Operating Statistics, excluding Andaz Miami Beach (2)

 RevPAR

$
 218.07

$
 209.38

4.2
%

$
 229.94

$
 225.31

2.1
%

 Occupancy

69.1
%

67.9
%

120
bps

72.7
%

71.3
%

140
bps

 Average Daily Rate

$
 315.59

$
 308.37

2.3
%

$
 316.28

$
 316.00

0.1
%

 Total Portfolio Hotel Adjusted EBITDAre Margin, excluding Andaz Miami Beach (2)

25.5
%

23.3
%

220
bps

26.7
%

26.3
%

40
bps

 Adjusted EBITDAre

$
 56.6

$
 48.1

17.6
%

$
 236.6

$
 229.7

3.0
%

 Adjusted FFO Attributable to Common Stockholders

$
 38.9

$
 32.0

21.4
%

$
 167.8

$
 163.0

3.0
%

 Adjusted FFO Attributable to Common Stockholders per Diluted Share

$
 0.20

$
 0.16

25.0
%

$
 0.86

$
 0.80

7.5
%

(1)
 Includes the 14 hotels owned by the Company as of December 31, 2025, and includes prior ownership results
for the Hyatt Regency San Antonio Riverwalk, acquired by the Company in April 2024.

(2)
 Includes the 14 hotels owned by the Company as of December 31, 2025, with the exception of Andaz Miami
Beach due to its renovation activity during 2025 and 2024. Includes prior ownership results for the Hyatt Regency San Antonio Riverwalk, acquired by the Company in April 2024.

The Company’s actual results for 2025 compare to its guidance previously provided as follows:

 Metric ($ in millions, except per share data)

Full Year 2025
Guidance (1)

Full Year 2025
Actual Results

Performance
Relative to Prior
Guidance Midpoint

 Net Income

$14 to $28

$25

+ $4

 Total Portfolio RevPAR Growth (2)

3.0% to 5.0%

3.8%

- 20 bps

 Total Portfolio RevPAR Growth, excluding Andaz Miami Beach (2)

1.0% to 3.0%

2.1%

+ 10 bps

 Adjusted EBITDAre

$226 to $240

$237

+ $4

 Adjusted FFO Attributable to Common Stockholders

$156 to $170

$168

+ $5

 Adjusted FFO Attributable to Common Stockholders per Diluted Share

$0.80 to $0.87

$0.86

+ $0.02

 Diluted Weighted Average Shares Outstanding

195,000,000

194,452,000

- 548,000

(1)
 Reflects guidance presented on November 7, 2025.

(2)
 RevPAR Growth reflects comparison to full year 2024.

2025 Highlights

 Andaz Miami Beach. In May 2025,
the Company opened Andaz Miami Beach, following a complete transformation of the property. The fully renovated luxury resort had a strong finish in 2025 and is expected to generate meaningful earnings growth for the Company in 2026 during its first
full year of operations. Later this year, the resort will introduce Olazul, a members only beach club and will also debut Bazaar Meat, a signature dining destination by José Andrés Group. In addition to substantial earnings growth in
2026, the Company expects Andaz Miami Beach will contribute further to earnings in 2027 and 2028 as it ramps up and stabilizes.

 2

 Hilton New Orleans St. Charles Disposition. In June 2025, the Company sold the 252-room Hilton New Orleans St. Charles for a gross sale price of $47.0 million. The sale price represented an 8.7% cap rate on the hotel’s prior year earnings or a 6.6% cap rate inclusive of the
Company’s estimate of near-term capital expenditures. The Company utilized proceeds received from the sale to accretively repurchase shares of its common stock.

Stock Repurchase Program. During 2025, the Company repurchased an aggregate amount of $103.6 million, before expenses, of its common and preferred
stock. In addition, from the start of this year through February 26, 2026, the Company has allocated an additional $7.5 million, before expenses, into repurchases of its common and preferred stock. The Company believes this repurchase
activity has been done on a discounted basis and generated significant value for its shareholders.

•

 Common stock: During 2025, the Company repurchased 11,589,722 shares at an average purchase price per
share of $8.83 for a total repurchase amount before expenses of $102.4 million. From the start of this year through February 26, 2026, the Company has repurchased 639,355 shares at an average purchase price per share of $8.88 for a total
repurchase amount before expenses of $5.7 million. Since the beginning of 2022, the Company has deployed approximately $300 million and repurchased 31.2 million shares of its common stock, representing over 14% of shares outstanding
at the start of the period, at an average purchase price of $9.60 per share. The average purchase price per share represents a substantial discount to consensus estimates of net asset value and implies a highly attractive valuation multiple on the
Company’s stabilized cash flow.

•

 Series H Cumulative Redeemable Preferred Stock: During 2025, the Company repurchased 54,097 shares at an
average purchase price per share of $20.28 for a total repurchase amount before expenses of $1.1 million. From the start of this year through February 26, 2026, the Company has repurchased 90,459 shares at an average purchase price per
share of $20.69 for a total repurchase amount before expenses of $1.9 million. The 2025 and 2026 average repurchase price of $20.54 per share reflects an 18% discount to the preferred stock liquidation value.

•

 Series I Cumulative Redeemable Preferred Stock: During 2025, the Company repurchased 9,027 shares at an
average purchase price per share of $19.25 for a total repurchase amount before expenses of $0.2 million. The average repurchase price per share reflects a 23.0% discount to the preferred stock liquidation value.

Amended and Restated Credit Agreement. In September 2025, the Company completed its Third Amended and Restated Credit Agreement (the “Amended
Credit Agreement”), which provides for an aggregate borrowing capacity of $1.35 billion, and allowed the Company to address all near term maturities, extend the duration of the remaining in-place
loans, and further strengthen the Company’s balance sheet. Inclusive of extension options, loans under the Amended Credit Agreement mature at various points in 2030 and 2031 but are freely prepayable at any time. In connection with the new
facilities, the Company entered into a series of interest rate swaps to lower its borrowing cost and better manage interest rate risk.

 Recent
Developments

 Stock Repurchase Program Reauthorization. In February 2026, Sunstone’s Board of Directors reauthorized the Company’s
stock repurchase program which allows the Company to acquire up to $500.0 million of its common and preferred stock. The authorization has no stated expiration and future repurchases under the program will depend on various factors including
the Company’s capital needs, other capital allocation opportunities available to the Company, and the price of the Company’s common and preferred stock. Including repurchase activity completed subsequent to the reauthorization, the
Company currently has nearly $500.0 million remaining under the new authorization.

 Delayed-Draw and Series A Senior Notes Repayment. In
January 2026, the Company drew the remaining $90.0 million available under its $275.0 million delayed-draw term loan facility and used a majority of the proceeds received to repay the $65.0 million balance of the Series A Senior Notes
at their scheduled maturity. Following this repayment, the Company has no debt maturities until 2028.

 Corporate Responsibility Report. In February
2026, the Company published its 2025 Corporate Responsibility Report. The report includes details on Sunstone’s progress related to its environmental sustainability, social responsibility and corporate governance initiatives during 2024, as
well as details of the Company’s performance towards its 2035 environmental targets. A copy of the report can be found on the Corporate Responsibility page of the Company’s website at www.sunstonehotels.com.

Balance Sheet and Liquidity Update

 As of
December 31, 2025, the Company had $185.7 million of cash and cash equivalents, including restricted cash of $76.5 million, total assets of $3.0 billion, including $2.8 billion of net investments in hotel properties, total
debt of $930.0 million and stockholders’ equity of $1.9 billion.

 3

 Capital Investments Update

The Company invested $29.4 million and $103.0 million into its portfolio during the fourth quarter and year ended December 31, 2025,
respectively. The majority

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<TEXT>
 April 13, 2026

Aaron Reyes
Chief Financial Officer
Sunstone Hotel Investors, Inc.
15 Enterprise, Suite 200
Aliso Viejo, California 92656

 Re: Sunstone Hotel Investors, Inc.
 Form 10-K for the year ended December 31, 2025
 Filed on February 27, 2026
 Form 8-K filed on February 27, 2026
 File No. 001-32319
Dear Aaron Reyes:

 We have reviewed your filings and have the following comment.

 Please respond to this letter within ten business days by providing the
requested
information or advise us as soon as possible when you will respond. If you do
not believe a
comment applies to your facts and circumstances, please tell us why in your
response.

 After reviewing your response to this letter, we may have additional
comments.

Form 8-K filed on February 27, 2026
Unaudited Selected Statistical and Financial Data, page 2

1. We note your presentation of Adjusted FFO Attributable to Common
Stockholders per
 Diluted share here and as part of your 2026 Outlook. In future periodic
filings, please
 present with equal or greater prominence the most directly comparable
measure
 calculated in accordance with GAAP for this non-GAAP financial measure.
Refer to
 Item 10(e)(1)(i)(A) of Regulation S-K and Question 102.10(a) of the
Division's
 Corporation Finance Interpretations on Non-GAAP Financial Measures.
 We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.

 Please contact Ameen Hamady at 202-551-3891 or Shannon Menjivar at
202-551-3856 if
you have questions regarding comments on the financial statements and related
matters.
 April 13, 2026
Page 2

 Sincerely,

 Division of Corporation Finance
 Office of Real Estate & Construction
</TEXT>
</DOCUMENT>

August 25, 2015

Via E -mail
Mr. Bryan A. Giglia
Chief Financial Officer
Sunstone Hotel Investors, Inc.
120 Vantis, Suite 350
Aliso Viejo, CA 92656

Re: Sunstone Hotel Investors, Inc.
Form 10 -K for the year ended December 31, 2014
Filed February 19, 2015
Form 8 -K filed February 17, 2015
File No. 1 -32319

Dear Mr. Giglia :

We have completed our review of your filings .  We remind you that our comments or
changes to disclosure in response to our comments do not foreclose the Commission from taking
any action with respect to the company or the filing s and the company may not assert staff
comments as a defense in any proceeding initiated by the Commission or any person under the
federal securities laws of the United States.  We urge all persons who are responsible for the
accuracy and adequacy of the disclosure in the filing s to be certain that the filing s include the
information the Securities Exchange Act of 1934 and all applicable rules require.

Sincerely,

 /s/ Jaime G. John

Jaime G. John
Branch Chief

CORRESP
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filename1.htm

355 South Grand   Avenue

Los Angeles,   California  90071-1560

Tel:   +1.213.485.1234  Fax: +1.213.891.8763

www.lw.com

FIRM / AFFILIATE   OFFICES

Abu Dhabi

Moscow

Barcelona

Munich

Beijing

New Jersey

Boston

New York

Brussels

Orange County

July 27, 2015

Chicago

Paris

Doha

Riyadh

Dubai

Rome

Frankfurt

San Diego

VIA EDGAR AND FEDERAL EXPRESS

Hamburg

San Francisco

Hong Kong

Shanghai

Jamie G. John, Branch   Chief

Houston

Silicon Valley

William Demarest,   Accountant

London

Singapore

Securities and Exchange Commission

Los Angeles

Tokyo

Division of Corporation Finance

Madrid

Washington, D.C.

100 F Street, N.E.

Milan

Washington, D.C. 20549-3628

Re:                             Sunstone Hotel Investors, Inc.

Form 10-K for the Fiscal Year Ended December 31, 2014

Filed February 19, 2015

File No. 1-32319

Sunstone Hotel Investors, Inc.

Form 8-K

Filed February 17, 2015

File No. 1-32319

Dear Ms. John and Mr. Demarest,

On behalf of Sunstone Hotel Investors, Inc. (the “Company”), this letter sets forth the Company’s response to the comments of the Staff of the Division of Corporation Finance (the “Staff”) of the Securities and Exchange Commission (the “Commission”), dated July 15, 2015, with respect to the Company’s Annual Report on Form 10-K and Current Report on Form 8-K for the year ended December 31, 2014. For your convenience, the Staff’s comments are set forth below in italics, followed by the Company’s responses.

Comments

Form 8-K: Exhibit 99.1 Comparable Hotel EBITDA and Margins, page 18

1.              We note your response to prior comment 2. Please address the following as it relates to your proposed revised presentation.

·                  Disclose additional details regarding the composition of the $7.4 million Acquisition net income including whether the amount includes depreciation, interest and other corporate overhead costs incurred by the previous owner. Further, confirm whether any adjustments were made to the amounts provided by the previous owner.

·                  Tell us how you determined that each of the amounts presented in the Comparable column are meaningful. Alternatively, tell us the consideration you gave to revising your presentation to include a single column beginning with the Actual Hotel EBITDA reconciliation as presented in your May 20, 2015 response to comment 3; followed by an adjustment for Acquisition Hotel EBITDA and adjustments for pro forma depreciation and other pro forma items as necessary.

·                  To the extent that you include pro forma adjustments for depreciation and other pro forma items, provide additional disclosure regarding the basis for the amounts included.

Provide an example of your proposed disclosure within your response.

Response

The Company informs the Staff that the $7.4 million Acquisition pro forma net operating income is comprised of the Marriott Wailea’s net operating income as reported by the hotel’s previous owner ($11.6 million), reduced by the Company’s pro forma depreciation expense for the hotel ($4.3 million). The hotel’s net operating income generated during the prior ownership period does not include either interest or other corporate overhead costs incurred by the previous owner, and no adjustments were made by the Company to the amounts provided by the previous owner.

The Company informs the Staff that it will revise its presentation of Comparable Hotel Adjusted EBITDA and Margins to include a single column presentation, and that it will provide additional disclosure regarding the basis of all pro forma adjustments, such as depreciation and interest. The Company believes that a single column presentation more concisely informs investors about its property-level operating performance, as well as the impact that acquisitions and other adjustments have on the Company’s margins. The Company’s revised presentation for the years ended December 31, 2014 and 2013 is as follows:

2

Sunstone Hotel Investors, Inc.

Non-GAAP Financial Measures

Comparable Hotel Adjusted EBITDA and Margins

(Unaudited and in thousands)

Year Ended
   December 31, 2014

Year Ended
   December 31, 2013

Comparable   Hotel Adjusted EBITDA Margin (1)

30.5

%

28.6

%

Comparable   Hotel Adjusted EBITDA Margin, excluding non-current year property taxes, net   (2)

30.2

%

28.7

%

Total revenues

$

1,141,998

$

923,824

Non-hotel   revenues (3)

(7,174

)

(6,620

)

Total Actual   Hotel Revenues

1,134,824

917,204

Prior ownership   hotel revenues (4)

33,369

176,530

Total   Comparable Hotel Revenues

$

1,168,193

$

1,093,734

Net income

$

87,939

$

70,001

Non-hotel   revenues (3)

(7,174

)

(6,620

)

Non-hotel   operating expenses and adjustments (5)

10,371

9,830

Corporate   overhead

28,739

26,671

Depreciation and   amortization

155,845

137,476

Interest and   other income

(3,479

)

(2,821

)

Interest expense

72,315

72,239

Loss on   extinguishment of debt

4,638

44

Income tax   provision

179

8,145

Income from   discontinued operations

(4,849

)

(48,410

)

Actual Hotel   Adjusted EBITDA

344,524

266,555

Prior ownership   pro forma net operating income (4)

7,350

21,169

Pro forma   depreciation expense (4)

4,260

22,964

Pro forma   interest expense (4)

—

2,647

Comparable   Hotel Adjusted EBITDA

356,134

313,335

Non-current year   property tax related adjustments, net

(3,301

)

399

Comparable   Hotel Adjusted EBITDA, excluding non-current year property taxes, net

$

352,833

$

313,734

(1)

Comparable Hotel Adjusted EBITDA Margin is   calculated as Comparable Hotel Adjusted EBITDA divided by Total Comparable   Hotel Revenues.

(2)

Comparable Hotel Adjusted EBITDA Margin, excluding   non-current year property taxes, net for the year ended December 31,   2014 excludes the additional net benefit of $3.3 million related to prior   year property tax related adjustments. Comparable Hotel Adjusted EBITDA   Margin, excluding non-current year property taxes, net for the year ended   December 31, 2013 includes the additional net expense of $0.1 million in   prior year property tax related assessments and the additional expense of   $0.3 million related to fees incurred for a successful real estate tax appeal   at the Hilton New Orleans, the benefit of which was not recorded until 2014.

(3)

Non-hotel revenues represent revenue earned by   BuyEfficient, as well as the amortization of favorable and unfavorable tenant   lease contracts recorded in conjunction with the Company’s acquisitions of   the Boston Park Plaza, the Hilton Garden Inn Chicago Downtown/Magnificent   Mile, the Hilton New Orleans St. Charles, the Hyatt Regency San Francisco and   the Marriott Wailea.

(4)

Includes hotel revenues and net operating income   generated during the prior ownership periods for the Hilton New Orleans St.   Charles acquired May 1, 2013, the Boston Park Plaza acquired   July 2, 2013, the Hyatt Regency San Francisco acquired December 2,   2013, and the Marriott Wailea acquired July 17, 2014, along with the   Company’s pro forma adjustments for depreciation and interest expense. The   Company obtained prior ownership information from each of the hotels’   previous owners during the due diligence periods before acquiring the hotels.   The Company performed limited reviews of the information as part of its   analyses of the acquisitions. The Company determined the amount to include as   pro forma depreciation expense by allocating the Company’s purchase price of   each hotel between the various components of each property (i.e. land,   building, furniture, fixtures and equipment) based on the values included in   existing tax records for the years ended December 31, 2013 and 2012, as   applicable. Depreciable assets were then given lives ranging from 7 to 40   years. The Company determined the amount to include as pro forma interest   expense based on the debt assumed upon its acquisition of the Boston Park   Plaza, with a balance of $120.0 million at January 1, 2013 and an   interest rate of 4.4%.

(5)

Non-hotel operating expenses and adjustments   represent expenses generated by BuyEfficient, as well as the following: the   amortization of lease intangibles; the amortization of the favorable   management agreement recorded in conjunction with our acquisition of the   Hilton Garden Inn Chicago Downtown/Magnificent Mile; non-cash straightline   lease expense; capital lease obligation interest - cash ground rent; and $0.7   million of property-level restructuring costs incurred during 2014 at the   Boston Park Plaza.

*                                         *                                         *                                         *                                         *

3

If you have any questions or comments with regard to these responses or other matters, or would like any additional information, please call the undersigned at (213) 891-7421.

Sincerely,

/s/ Steven B. Stokdyk

Steven B. Stokdyk

of LATHAM &   WATKINS LLP

cc:                                Bryan Giglia, Senior Vice President & Chief Financial Officer, Sunstone Hotel Investors, Inc.

David Sloan, Senior Vice President & General Counsel, Sunstone Hotel Investors, Inc.

4

July 15, 2015

Via E -mail
Mr. Bryan A. Giglia
Chief Financial Officer
Sunstone Hotel Investors, Inc.
120 Vantis, Suite 350
Aliso Viejo, CA 92656

Re: Sunstone Hotel Investors, Inc.
Form 10 -K for the year ended December 31, 2014
Filed February 19, 2015
Form 8 -K filed February 17, 2015
File No. 1 -32319

Dear Mr. Giglia :

We have reviewed  your June 15 , 2015  response to our comment  letter  and have the
following comment .  In our comment , we may ask you to provide us with information so we may
better understand your disclosure.

Please respond to this comment  within ten busine ss days by providing the requested
information or advis e us as soon as possible  when you will respond.  If you  do not believe our
comment applies  to your facts and circumstances, please tell us why in your response.

After reviewing your response to this comment , we may have additional comments.
Unless we note otherwise, our refer ences to prior comments are to c omments in our June 5 , 2015
letter .

Form 8 -K filed February 17, 2015

Exhibit 99.1

Comparable Hotel EBITDA and Margins, page 18

1. We note your response to prior comment 2.  Please address the following as it relates to
your proposed revised presentation.
 Disclose additional details regarding the composition of the $7.4 million
Acquisition net income including whether the amount includes depreciation,
interest and other corporate overhead costs incurred by the previou s owner.
Further, confirm whether any adjustments were made to the amounts provided by
the previous owner.

Bryan A. Giglia
Sunstone Hotel Inv estors, Inc.
July 15, 2015
Page 2

  Tell us how you determined that the each of the amounts presented in the
Comparable column are meaningful.  Alternatively, tell us the conside ration you
gave to revising your presentation to include a single column beginning with the
Actual Hotel EBITDA reconciliation as presented in your May 20, 2015 response
to comment 3; followed by an adjustment for Acquisition Hotel EBITDA and
adjustments f or pro forma deprecation and other pro forma items as necessary.
 To the extent that you include pro forma adjustments for depreciation and other
pro forma items, provide additional disclosure regarding the basis for the amounts
included.
Provide an example of your proposed disclosure within your response.

You may contact William Demarest, Accountant at 202 -551-3432 or me at 202 -551-3446
with any questions.

Sincerely,

 /s/ Jaime G. John

Jaime G. John
Branch Chief

CORRESP
1
filename1.htm

355 South Grand Avenue
   Los Angeles, California  90071-1560
   Tel: +1.213.485.1234  Fax:   +1.213.891.8763
   www.lw.com

FIRM / AFFILIATE   OFFICES

Abu Dhabi

Moscow

Barcelona

Munich

Beijing

New Jersey

Boston

New York

Brussels

Orange County

June 15, 2015

Chicago

Paris

Doha

Riyadh

Dubai

Rome

Frankfurt

San Diego

VIA EDGAR AND FEDERAL EXPRESS

Hamburg

San Francisco

Hong Kong

Shanghai

Houston

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Jamie G. John, Branch   Chief

London

Singapore

William Demarest,   Accountant

Los Angeles

Tokyo

Securities and Exchange Commission

Madrid

Washington, D.C.

Division of Corporation Finance

Milan

100 F Street, N.E.

Washington, D.C. 20549-3628

Re:          Sunstone Hotel Investors, Inc.

Form 10-K for the Fiscal Year Ended December 31, 2014

Filed February 19, 2015

File No. 1-32319

Sunstone Hotel Investors, Inc.

Form 8-K

Filed February 17, 2015

File No. 1-32319

Dear Ms. John and Mr. Demarest,

On behalf of Sunstone Hotel Investors, Inc. (the “Company”), this letter sets forth the Company’s response to the comments of the Staff of the Division of Corporation Finance (the “Staff”) of the Securities and Exchange Commission (the “Commission”), dated June 5, 2015, with respect to the Company’s Annual Report on Form 10-K and Current Report on Form 8-K for the year ended December 31, 2014. For your convenience, the Staff’s comments are set forth below in italics, followed by the Company’s responses.

Comments

Form 10-K: Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, Seasonality and Volatility, page 63

1.              We note your prior response to prior comment 2. Please tell us how you determined the amount of prior ownership results. Additionally, to the extent that you retain this disclosure in future filings, provide all of the disclosure requirements in Item 10(e) of Regulation S-K, including identifying comparable portfolio revenues as a non-GAAP measure and describing the usefulness of the measure to the company and to investors.

Response

The Company informs the Staff that it obtains prior ownership information from a hotel’s previous owner(s) during the due diligence period before its acquisition of a hotel. The Company performs a limited review of the information as part of its analysis of a potential acquisition. The prior ownership information it receives may or may not be audited. The Company combines prior ownership results with its ownership results in order to present its hotels’ financial information on a comparable basis.  To the extent that it retains this disclosure in future filings, the Company informs the Staff that it will explain the source for this information.

The Company also informs the Staff that, to the extent it retains this disclosure in future filings, it will provide all of the disclosure requirements of Item 10(e) of Regulation S-K, including identifying comparable portfolio revenues as a non-GAAP measure and describing the usefulness of the measure to the Company and to investors.  In particular, the Company believes Comparable Portfolio Revenues are useful to the Company and investors in evaluating its operating performance because this measure helps investors evaluate and compare the results of its operations from period to period by removing the fluctuations caused by an acquisition.

Form 8-K: Exhibit 99.1 Comparable Hotel EBITDA and Margins, page 18

1.              We note your response to prior comment 3. Please address the following as it relates to your proposed revised presentation.

·                  Tell us how you determined the amounts to include in the “Acquisition” column.

·                  Explain to us your basis for including an adjustment for pro forma depreciation in the “Acquisition” column and how you determined the amount of the adjustment as described in footnote (2).

·                  To the extent that you retain this disclosure in future filings, provide all of the disclosures required by Regulation G and Item 10(e)(1)(i) of Regulation S-K, including labeling this presentation as non-GAAP. Additionally, provide disclosure regarding the information included within and excluded from the “Acquisition” column.

Response

The Company informs the Staff that amounts included in the “Acquisition” column were obtained from the Marriott Wailea’s previous owner during the Company’s due diligence period before the Company acquired the hotel in July 2014, with the exception of the pro forma adjustment for depreciation. The Company’s pro forma presentation of depreciation is included in this disclosure in order to give investors a clear understanding of how the acquisition of the hotel will affect the Company’s consolidated depreciation expense and net income in the future. The Company determined the amount to include as pro forma depreciation expense by allocating the Company’s purchase price of the hotel between the various components of the property (i.e. land, building, furniture, fixtures and equipment) based on the values included in existing tax records for the year ended December 31, 2013. Depreciable assets were then given lives ranging from 7 to 40 years. To the extent that it retains this disclosure in future filings, the Company informs the Staff that it will explain the source for this information, as well as information included within and excluded from the “Acquisition” column.

The Company also informs the Staff that, to the extent it retains this disclosure in future filings, it will provide all of the disclosure requirements of Item 10(e) of Regulation S-K, including labeling this presentation as  non-GAAP.

*             *             *             *             *

2

If you have any questions or comments with regard to these responses or other matters, or would like any additional information, please call the undersigned at (213) 891-7421.

Sincerely,

/s/ Steven B. Stokdyk

Steven B. Stokdyk

of LATHAM &   WATKINS LLP

cc:

Bryan Giglia, Senior   Vice President & Chief Financial Officer, Sunstone Hotel Investors, Inc.

David Sloan, Senior   Vice President & General Counsel, Sunstone Hotel Investors, Inc.

3

June 5, 2015

Via E -mail
Mr. Bryan A. Giglia
Chief Financial Officer
Sunstone Hotel Investors, Inc.
120 Vantis, Suite 350
Aliso Viejo, CA 92656

Re: Sunstone Hotel Investors, Inc.
Form 10 -K for the Fiscal Y ear Ended December 31, 2014
Filed February 19, 2015
Form 8 -K filed February 17, 2015
File No. 1 -32319

Dear Mr. Giglia :

We have reviewed  your May 20, 2015  response to our comment  letter  and have the
following comment s.  In some of our comments , we may ask you to provide us with information
so we may better understand your disclosure.

Please respond to these comments  within ten busine ss days by providing the requested
information or advis e us as soon as possible when you will respond.  If you  do not believe our
comments apply to your facts and circumstances, please tell us why in your response.

After reviewing your response to these  comments, we may have additional comments.
Unless we note otherwis e, our references to prior comments are to c omments in our May 12,
2015  letter .

Form 10 -K for the Fiscal Year Ended December 31, 2014

Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of
Operations

Seasonality and V olatility, page 63

1. We note your response to prior comment 2.  Please tell us how you determined the
amount of prior ownership results. Additionally, to the extent that you retain this
disclosure in future filings, provide all of the disclosure requirement s in Item 10(e) of
Regulation S -K, including identifying comparable portfolio revenues as a non -GAAP
measure and describing the usefulness of the measure to the company and to investors.

Bryan A. Giglia
Sunstone Hotel Investors, Inc.
June 5, 2015
Page 2

 Form 8 -K filed February 17, 2015

Exhibit 99.1

Comparable Hotel EBITDA and Margins, page 18

1. We note your response to prior comment 3.  Please address the following as it relates to
your proposed revised presentation.
 Tell us how you determined the amounts to include in the “Acquisition” column.
 Explain to us your basis for including an adjustment for pro forma depreciation in
the “Acquisition” column and how you determined the amount of the adjustment
as described in footnote (2).
 To the extent that you retain this disclosure in future filings, provide all of the
disclosures required by Regulation G and Item 10(e)(1)(i) of Regulation S -K,
including labeling this presentation as non -GAA P.    Additionally, provide
disclosure  regarding the information included within and excluded from the
“Acquisition ” column.

You may contact William Demarest, Accountant at 202 -551-3432 or me at 202 -551-3446
with any questions.

Sincerely,

 /s/ Jaime G. John

Jaime G. John
Branch Chief

CORRESP
1
filename1.htm

355 South Grand Avenue

Los Angeles, California 90071-1560

Tel: +1.213.485.1234  Fax: +1.213.891.8763

www.lw.com

FIRM / AFFILIATE OFFICES

Abu Dhabi

Moscow

Barcelona

Munich

Beijing

New Jersey

Boston

New York

Brussels

Orange County

May 20, 2015

Chicago

Paris

Doha

Riyadh

Dubai

Rome

Frankfurt

San Diego

Hamburg

San Francisco

Hong Kong

Shanghai

Houston

Silicon Valley

London

Singapore

Los Angeles

Tokyo

Madrid

Washington, D.C.

Milan

VIA EDGAR AND FEDERAL EXPRESS

Jamie G. John, Branch Chief

William Demarest, Accountant

Securities and Exchange Commission

Division of Corporation Finance

100 F Street, N.E.

Washington, D.C. 20549-3628

Re:                             Sunstone Hotel Investors, Inc.

Form 10-K

Filed February 19, 2015

File No. 1-32319

Sunstone Hotel Investors, Inc.

Form 8-K

Filed February 17, 2015

File No. 1-32319

Dear Ms. John and Mr. Demarest,

On behalf of Sunstone Hotel Investors, Inc. (the “Company”), this letter sets forth the Company’s response to the comments of the Staff of the Division of Corporation Finance (the “Staff”) of the Securities and Exchange Commission (the “Commission”), dated May 12, 2015, with respect to the Company’s Annual Report on Form 10-K and Current Report on Form 8-K for the year ended December 31, 2014. For your convenience, the Staff’s comments are set forth below in italics, followed by the Company’s responses.

Comments

Form 10-K: Non-GAAP Financial Measures, page 43

1.              We note that your presentation of FFO on page 47 appears to represent FFO attributable to common and preferred shareholders. Please advise and to the extent that you continue to present this measure in future filings revise your label accordingly.

Response

The Company’s current presentation of FFO represents FFO attributable to common and preferred stockholders. In order to be more consistent with its peers and with its own presentation of Adjusted FFO attributable to common stockholders, the Company intends to change its presentation of FFO to FFO attributable to common stockholders, and will reconcile that metric to net income. The revised presentation for the year ended December 31, 2014 is as follows (in thousands):

Net income

$

87,939

Preferred stock   dividends

(9,200

)

Operations held   for investment:

Real estate   depreciation and amortization

154,253

Amortization of   lease intangibles

4,113

Gain on sale of   assets, net

(93

)

Non-controlling   interests:

Income from   consolidated joint venture attributable to non-controlling interest

(6,676

)

Real estate   depreciation and amortization

(3,335

)

Discontinued   operations:

Gain on sale of   assets

(5,199

)

FFO attributable   to common stockholders

$

221,802

Form 10-K: Seasonality and Volatility, page 63

2.              We note your presentation of Comparable Portfolio Revenues. As this appears to be a non-GAAP measure, please tell us how your presentation complies with Item 10(e) of Regulation S-K or advise.

Response

The Company will include reconciliations between Comparable Portfolio Revenues and Total Revenues, which is the most directly comparable GAAP financial measure, in accordance with Item 10(e) of Regulation S-K. The revised presentation for the year ended December 31, 2014 is as follows (in thousands):

Revenues

First
   Quarter

Second
   Quarter

Third
   Quarter

Fourth
   Quarter

Total

Total revenues

$

243,483

$

300,852

$

307,783

$

289,880

$

1,141,998

Prior ownership   results (1)

17,415

13,469

2,485

—

33,369

Non-hotel revenues   (2)

(1,621

)

(1,852

)

(1,904

)

(1,797

)

(7,174

)

Total Comparable   Portfolio revenues (3)

$

259,277

$

312,469

$

308,364

$

288,083

$

1,168,193

Quarterly   Comparable Portfolio revenues as a percentage of total

22.2

%

26.7

%

26.4

%

24.7

%

100.0

%

(1)         Represents prior ownership results for the Marriott Wailea before our acquisition of the hotel.

(2)         Includes revenue earned by BuyEfficient, as well as the amortization of favorable and unfavorable tenant lease contracts recorded in conjunction with our acquisitions of the Boston Park Plaza, the Hilton Garden Inn Chicago Downtown/Magnificent Mile, the Hilton New Orleans St. Charles, the Hyatt Regency San Francisco and the Marriott Wailea.

(3)         Represents revenues generated during our ownership and prior ownership, as applicable, for all 30 hotels in which we have interests as of December 31, 2014.

2

Form 8-K: Exhibit 99.1 Comparable Hotel EBITDA and Margins, page 18

3.              Please provide the following information with respect to your reconciliation of Hotel EBITDA, Hotel EBITDA Margins and the related Comparable Hotel Measures.

·                  Tell us the consideration you gave to Regulation G and Item 10(e)(1)(i) of Regulation S-K. Specifically we note that Hotel Revenue and Hotel Expenses used to derive your non-GAAP measures are not consistent with the amounts presented on your Statement of Operations.

·                  Tell us the consideration you gave to Question 102.10 of the Compliance and Disclosure Interpretations on Non-GAAP Financial Measures.

·                  It appears that Hotel EBITDA includes adjustments other than those specified in the definition of EBITDA. Please advise and revise your labels accordingly in future filings.

Response

The Company’s current presentation of Hotel EBITDA and Hotel EBITDA Margins reconciles Hotel EBITDA to Net Income. The Company will revise its presentation to reconcile both Total Hotel Revenues and Hotel EBITDA to their most directly comparable GAAP financial measures, in accordance with Regulation G and Item 10(e)(1)(i) of Regulation S-K, as well as Question 102.10 of the Compliance and Disclosure Interpretations on Non-GAAP Financial Measures. In addition, the Company will revise its Hotel EBITDA label to more clearly identify the related amounts as Hotel Adjusted EBITDA. The revised presentation for the year ended December 31, 2014 is as follows:

Year Ended December 31, 2014

Actual (1)

Acquisition (2)

Comparable (3)

Number of hotels

30

30

Number of rooms

14,303

14,303

Hotel   Adjusted EBITDA margin (4)

30.4

%

34.8

%

30.5

%

Hotel   Adjusted EBITDA margin, less non-current year property tax related   adjustments, net (5)

30.1

%

30.2

%

Total revenues

$

1,141,998

$

33,369

$

1,175,367

Non-hotel revenues   (6)

(7,174

)

—

(7,174

)

Total   Hotel Revenues

$

1,134,824

$

33,369

$

1,168,193

Net income

$

87,939

$

7,350

$

95,289

Non-hotel revenues   (6)

(7,174

)

—

(7,174

)

Non-hotel   operating expenses (7)

9,696

—

9,696

Property-level   restructuring costs

675

—

675

Corporate overhead

28,739

—

28,739

Depreciation and   amortization

155,845

4,260

160,105

Interest and other   income

(3,479

)

—

(3,479

)

Interest expense

72,315

—

72,315

Loss on   extinguishment of debt

4,638

—

4,638

Income tax   provision

179

—

179

Income from   discontinued operations

(4,849

)

—

(4,849

)

Hotel   Adjusted EBITDA

344,524

11,610

356,134

Non-current year   property tax related adjustments, net

(3,301

)

—

(3,301

)

Hotel   Adjusted EBITDA, less non-current year property tax related adjustments, net   (5)

$

341,223

$

11,610

$

352,833

3

(1)         Actual represents the Company’s ownership results for the 30 Hotels held for investment as of December 31, 2014.

(2)         Acquisition for the year ended December 31, 2014 represents prior ownership results for the Marriott Wailea acquired July 17, 2014, along with the Company’s pro forma adjustment for depreciation expense.

(3)         Comparable represents the Company’s ownership results and prior ownership results as applicable for the 30 Comparable Hotels.

(4)         Hotel Adjusted EBITDA margin is calculated as Hotel Adjusted EBITDA divided by Total Hotel Revenues.

(5)         Hotel Adjusted EBITDA margin, less non-current year property tax related adjustments, net for the year ended December 31, 2014 excludes the additional net benefit of $3.3 million related to prior year property tax related adjustments.

(6)         Non-hotel revenues represent revenue earned by BuyEfficient, as well as the amortization of favorable and unfavorable tenant lease contracts recorded in conjunction with our acquisitions of the Boston Park Plaza, the Hilton Garden Inn Chicago Downtown/Magnificent Mile, the Hilton New Orleans St. Charles, the Hyatt Regency San Francisco and the Marriott Wailea.

(7)         Non-hotel operating expenses represent expenses generated by BuyEfficient, as well as the following: the amortization of lease intangibles; the amortization of the favorable management agreement recorded in conjunction with our acquisition of the Hilton Garden Inn Chicago Downtown/Magnificent Mile; non-cash straightline lease expense; and capital lease obligation interest - cash ground rent.

*                                         *                                         *                                         *                                         *

In connection with this response, the Company has authorized us to acknowledge on its behalf that (i) the Company is responsible for the adequacy and accuracy of the disclosure in the above-referenced filing, (ii) Staff comments or changes to disclosure in response to staff’s comments do not foreclose the Commission from taking any action with respect to the above-referenced filing; and (iii) the Company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

If you have any questions or comments with regard to these responses or other matters, or would like any additional information, please call the undersigned at (213) 891-7421.

Sincerely,

/s/ Steven B. Stokdyk

Steven B. Stokdyk

of LATHAM & WATKINS LLP

cc:                                Bryan Giglia, Senior Vice President & Chief Financial Officer, Sunstone Hotel Investors, Inc.

David Sloan, Senior Vice President & General Counsel, Sunstone Hotel Investors, Inc.

4

May 12, 2015

Via E -mail
Mr. Bryan A. Giglia
Chief Financial Officer
Sunstone Hotel Investors, Inc.
120 Vantis, Suite 350
Aliso Viejo, CA 92656

Re: Sunstone Hotel Investors, Inc.
Form 10 -K for the year ended December 31, 2014
Filed February 19, 2015
Form 8 -K filed February 17, 2015
File No. 1 -32319

Dear Mr. Giglia :

We have limited our review  of your filing s to the financial statements and related
disclosures and have the following comments.  In some of our comments, we may ask you to
provide us with information so we may better understand your disclosure.

Please respond to these comments  within ten busine ss days by providing the requested
information or advis e us as soon as possible when you will respond.  If you do not believe our
comments apply to your facts and circumstances, please tell us why in your response.

After reviewing your response to these  comments, we may have  additional comments.

Form 10 -K for the year ended December 31, 2014

Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of
Operations

Non-GAAP Financial Measures, page 43

1. We note that your pres entation of FFO on page 47 appears to represent FFO attributable
to common and preferred shareholders.   Please advise and to the extent that you continue
to present this measure in future filings revise your label accordingly.

Mr. Bryan A. Giglia
Sunstone Hotel Investors, Inc.
May 12, 2015
Page 2

 Seasonality and Volatil ity, page 63

2. We note your presentation of Comparable Portfolio Revenues.  As this appears to be a
non-GAAP measure, please tell us how your presentation complies with Item 10(e) of
Regulation S -K or advise.

Form 8 -K filed February 17, 2015

Exhibit 99.1

Comparable Hotel EBITDA and Margins, page 18

3. Please provide the following information with respect to your reconciliation of Hotel
EBITDA, Hotel EBITDA Margins and the related Comparable Hotel measures.
 Tell us the consideration you gave  to Regulation G and Item 10(e)(1)(i) of
Regulation S -K.  Specifically we note that Hotel Revenue and Hotel Expenses
used to derive your non -GAAP measures are not consistent with the amounts
presented on your GAAP Statement s of Operations.
 Tell us the co nsideration you gave to  Question 102.10 of the Compliance and
Disclosure Interpretations on Non -GAAP Financial Measures.
 It appears that Hotel EBITDA includes adjustments other than those specified  in
the definition of EBITDA.  Please advise and revise yo ur labels accordingly in
future filings.
If after further consideration you conclude that a revision to your reconciliation of the
non-GAAP measures is appropriate, provide us with your revised presentation to be
included in future filings.

We urge all persons who are responsible for the accuracy and adequacy of the disclosure
in the filing to be certain that the filing s include  the information the Securities Exchange Act of
1934 and all applicable Exchange Act rules require.   Since the company and i ts management are
in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy
and adequacy of the disclosures they have made.

 In responding to our comments, please provide  a written statement from the company
acknowledging that:

 the company is responsible for the adequacy and accuracy of the disclosure in the filing s;

 staff comments or changes to disclosure in response to staff comments do not foreclose
the Commission from taking any action with respect to the filing s; and

 the company may not assert staff comments as a defense in any proceeding initiated by
the Commission or any person under the federal securities laws of the United States.

Mr. Bryan A. Giglia
Sunstone Hotel Investors, Inc.
May 12, 2015
Page 3

 You may contact William Demarest, Accountant at 202 -551-3432 or me at 2 02-551-3446
with any questions.

Sincerely,

 /s/ Jaime G. John

Jaime G. John
Branch Chief

August 14, 2014

Via E -mail
Mr. Bryan A. Giglia
Chief Financial Officer
Sunstone Hotel Investors, Inc.
120 Vantis, Suite 350
Aliso Viejo, CA 92656

Re: Sunstone Hotel Investors, Inc.
 Form 10-K
Filed February 25, 2014
File No. 1 -32319

Sunstone Hotel Investors, Inc.
 Schedule 14A
Filed March 25, 2014
File No. 1 -32319

Dear Mr. Giglia :

We have completed our review of your filing s.  We remind you that our comments or
changes to disclosure in response to our comments do not foreclose the Commission from taking
any action with respect to the company or the filing s and the company may not assert staff
comments as a defense in any proceeding initiated by the Commission or any person under the
federal securities laws of the United States.  We urge all persons who are responsible for the
accuracy and adequacy of the disclosure in the filing s to be certain that the filing s include  the
information the Securities Excha nge Act of 1934 and all applicable rules require.

You may contact Isaac Esquivel, Staff Accountant,  at (202) 551 -3395  or me at (202) 551 -
3429  if you have questions regarding comment s on the financial statements and re lated matters.
Please contact Folake Ayoola, Staff Attorney,  at (202) 551 -3673 or Jennifer Gowetski, Staff
Attorney,  at (202) 551 -3401  with any other questions.

Sincerely,

 /s/ Kristi Marrone

Kristi Marrone
Staff Accountant

CORRESP
1
filename1.htm

355 South Grand   Avenue

Los Angeles,   California 90071-1560

Tel: +1.213.485.1234   Fax: +1.213.891.8763

www.lw.com

FIRM / AFFILIATE   OFFICES

Abu Dhabi

Moscow

Barcelona

Munich

Beijing

New Jersey

Boston

New York

Brussels

Orange County

July 11, 2014

Chicago

Paris

Doha

Riyadh

VIA EDGAR AND FEDERAL EXPRESS

Dubai

Rome

Frankfurt

San Diego

Kristi Marrone

Hamburg

San Francisco

Staff Accountant

Hong Kong

Shanghai

Securities and Exchange Commission

Houston

Silicon Valley

Division of Corporation Finance

London

Singapore

100 F Street, N.E.

Los Angeles

Tokyo

Washington, D.C. 20549-3628

Madrid

Washington, D.C.

Milan

Re:                             Sunstone Hotel Investors, Inc.

Form 10-K

Filed February 25, 2014

File No. 1-32319

Sunstone Hotel Investors, Inc.

Schedule 14A

Filed March 25, 2014

File No. 1-32319

Dear Ms. Marrone,

On behalf of Sunstone Hotel Investors, Inc. (the “Company”), this letter sets forth the Company’s response to the comments of the Staff of the Division of Corporation Finance (the “Staff”) of the Securities and Exchange Commission (the “Commission”), dated June 23, 2014, with respect to the Company’s Annual Report on Form 10-K and Proxy Statement on Schedule 14A for the year ended December 31, 2013.  For your convenience, the Staff’s comments are set forth below in italics, followed by the Company’s responses.

Comments

Operating Activities, page 37

1.              We refer to your table on page 44 where you reconcile FFO to net income. We note that your reconciliation adjusts for preferred stock dividends and redemption charges, which is inconsistent with the measure as defined by NAREIT. In future Exchange Act reports, please revise to remove this adjustment and confirm that your FFO measure is as defined by NAREIT. Alternatively, please rename the performance indicator.

Response

The Company intends to rename its presentation of FFO to be “FFO available to common stockholders” and will reconcile that metric to net income.  The Company will also disclose that the metric is not the same as FFO as defined by NAREIT.  The revised presentation for the year ended December 31, 2013 is as follows (in thousands):

Net income

$

70,001

Preferred stock   dividends and redemption charges

(19,013

)

Operations held   for investment:

Real estate   depreciation and amortization

136,047

Amortization of   lease intangibles

4,112

Gain on sale of   assets, net

(12

)

Non-controlling   interests:

Income from   consolidated joint venture attributable to non-controlling interest

(4,013

)

Real estate   depreciation and amortization

(3,956

)

Discontinued   operations:

Gain on sale of   assets

(51,620

)

FFO available to   common stockholders

$

131,546

If the Company determines to present FFO as defined by NAREIT in the future, it will provide a similar reconciliation to net income.

4. Discontinued Operations, page F-22

2.              We note that a gain of $51.6 million was recognized for the sale of the Rochester Portfolio. Please provide us with your analysis of how you calculated and determined the accounting for the gains in the transaction, including the gains that were deferred. Please cite the applicable guidance in your response. In addition, please expand upon the redemption terms of the Preferred Equity Investment.

Response

The Rochester Portfolio (or the “Portfolio”) is comprised of four hotels (the “Rochester Hotels”) and one commercial laundry facility located in close proximity to the Mayo Clinic in Rochester, Minnesota. Three of the hotels and the commercial laundry facility were purchased by the Company’s Predecessor in 1999. The remaining hotel was developed by the Company in 2004. Due to the Company’s long-term holding period for the Rochester Portfolio, the net book value of these assets on the disposition date was $130.0 million, net of accumulated depreciation of $86.4 million.

The Company obtained a gross selling price of $230.0 million for the Rochester Portfolio due in part to the Portfolio’s close proximity to the Mayo Clinic as well as to the Buyer’s personal involvement in the region. The Buyer plans to capitalize on his hospital/health system background to increase profitability by better integrating the hotel guest/hospital patient experience.

2

The Company used the guidance presented in ASC 360-20-40-3 to determine whether profit should be recognized in full when the Rochester Portfolio was sold. As profit from the sale was determinable, collectability was reasonably assured and the earnings process was virtually complete since the Company was not obliged to perform significant activities after the sale to earn the profit, the sale met the criteria to be recognized using the full accrual method outlined as follows (in millions):

Gross selling   price

$

230.0

Less: Net book   value of Rochester Portfolio

(130.0

)

Less: Transaction   costs

(5.7

)

Less deferred   gain: Preferred Equity Investment

(25.0

)

Less deferred   gain: Working capital advance

(3.7

)

Less deferred   gain: Pension liability

(14.0

)

Net gain on sale

$

51.6

Upon sale of the Rochester Portfolio, the Company retained a $25.0 million preferred equity investment (the “Preferred Equity Investment”) in the Rochester Hotels that yields an 11% dividend. The Preferred Equity Investment is perpetual in nature and has no participating or voting rights related to the entity that purchased the Rochester Hotels. It receives no allocation of income or losses and only receives the 11% preferred dividend. In addition, the Preferred Equity Investment and related dividend are subordinate to the first mortgage on the Portfolio. The Preferred Equity Investment may be redeemed upon certain defaults such as defaults upon the terms of the first mortgage on the Portfolio, the Portfolio’s third-party management agreement and the Portfolio’s franchise agreement. In the event of an uncured default, the Company may force the Buyer to sell the Portfolio for at least its appraised value to the highest bidder, in which case a portion of the sale proceeds would be used to redeem the Preferred Equity Investment. The Buyer may, but is not obligated to, redeem the Preferred Equity Investment at any time. In addition, the Preferred Equity Investment may be redeemed upon the Buyer’s sale of the Portfolio. Under no circumstances will the Portfolio revert back to the Company, nor does the Company have any option to repurchase the Portfolio under any contractual agreement.

Based on the above, the Company has determined that the Preferred Equity Investment is in substance an earn-out provision. The Company used the guidance presented in ASC 360-20-40-64 for circumstances whereby the seller participates in future profits from the property without risk of loss to determine that any redemption payments received from the Preferred Equity Investment represent contingent future profits that shall be recognized when they are realized. As such, the Company deferred $25.0 million in gain, which will be recognized if and when the Preferred Equity Investment is redeemed. The Preferred Equity Investment is recorded at face value on the Company’s consolidated balance sheet net of the deferred gain, resulting in a net book value of zero on the Company’s consolidated balance sheet as of December 31, 2013.

The Company provided the Buyer of the Rochester Portfolio a $3.7 million working capital advance upon sale of the Portfolio. The Company used the guidance presented in ASC 360-20-40-13(c) to determine that the $3.7 million loan to the Buyer shall not be included as part of the Buyer’s initial investment. The working capital advance is accounted for similarly to the Preferred Equity Investment as the working capital advance is subordinate to even the Preferred Equity Investment. Therefore, the Company recorded the $3.7 million receivable from the Buyer net of the deferred gain, resulting in a net book value of zero on the Company’s consolidated balance sheet as of December 31, 2013. The gain will be deferred until the working capital advance is repaid.

Upon sale of the Rochester Portfolio, the Company also retained a liability not to exceed $14.0 million related to the Rochester Portfolio’s pension plan, which could be triggered in certain circumstances, including termination of the pension plan. The Company used the guidance presented in ASC 360-20-40-37 to determine that gain should be deferred based on the Company’s maximum exposure to loss. The $14.0 million gain will be deferred until the Company is released from its contractual guarantee to the third-party management company. The Company’s liability is included in other liabilities on the Company’s consolidated balance sheet as of December 31, 2013.

3

The Company used the guidance presented in ASC 360-20-40-15 and 40-16 to determine that if all cash was received for the full sales price of the property and the Company is not at risk to financing, the Buyer’s commitment to pay for the property is not a factor in the Company’s profit recognition, and the initial and continuing investment tests are not applicable. Therefore, the Company recognized net proceeds from the Rochester Portfolio sale based on the actual net cash received from the transaction. The net proceeds received and net gain recorded from the sale of the Rochester Portfolio are as follows (in millions):

Gross selling   price

$

230.0

Less deferred   gain: Preferred Equity Investment

(25.0

)

Less deferred   gain: Working capital advance

(3.7

)

Less: Transaction   costs

(5.7

)

Net proceeds   received

195.6

Less: Net book   value of Rochester Portfolio

(130.0

)

Less deferred gain:   Pension liability

(14.0

)

Net gain on sale

$

51.6

Schedule 14A

General

3.              In future Exchange Act reports, please revise the “say on pay” proposal to comply with Compliance and Disclosure Interpretations Exchange Act Rules 169.07.

Response

With respect to any future “say on pay” proposal contained in Exchange Act reports, the Company will comply with Compliance and Disclosure Interpretations Exchange Act Rules 169.07.

*                                         *                                         *                                         *                                         *

In connection with this response, the Company has authorized us to acknowledge on its behalf that (i) the Company is responsible for the adequacy and accuracy of the disclosure in the above-referenced filing, (ii) Staff comments or changes to disclosure in response to staff’s comments do not foreclose the Commission from taking any action with respect to the above-referenced filing; and (iii) the Company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

If you have any questions or comments with regard to these responses or other matters, or would like any additional information, please call the undersigned at (213) 891-7421.

Sincerely,

/s/ Steven B. Stokdyk

Steven B. Stokdyk

of LATHAM & WATKINS LLP

cc:                                Bryan Giglia, Senior Vice President & Chief Financial Officer, Sunstone Hotel Investors, Inc.

David Sloan, Senior Vice President & General Counsel, Sunstone Hotel Investors, Inc.

4

June 23 , 2014

Via E -mail
Mr. Bryan A. Giglia
Chief Financial Officer
Sunstone Hotel Investors, Inc.
120 Vantis, Suite 350
Aliso Viejo, CA 92656

Re: Sunstone Hotel Investors, Inc.
 Form 10-K
Filed February 25, 2014
File No. 1 -32319

Sunstone Hotel Investors, Inc.
 Schedule 14A
Filed March 25, 2014
File No. 1 -32319

Dear Mr. Giglia :

We have reviewed your filing s and have the following comments.  In some of our
comments, we may ask you to provide us with information so we may better understand your
disclosure.

Please respond to this letter within ten business days by amending your filing, by
providing the requested information, or by advising us when you will provide the request ed
response.   If you do not believe our comments apply to your facts and circumstances or do not
believe an amendment is appropriate, please tell us why in your response.

After reviewing any amendment to your filing and the information you provide in
response to these  comments, we may have  additional comments.

Form 10 -K for the Fiscal Year Ended December 31, 2013

Operating Activities, page 34

1. We refer to your table on page 44 where you reconcile FFO to net income.  We note that
your recon ciliation adjusts for preferred stock dividends and redemption charges, which
is inconsistent with the FFO measure as defined by NAREIT.  In future Exchange Act
reports, please revise to remove this adjustment and confirm that your FFO measure is as
define d by NAREIT.  Alternatively, please rename the performance indicator.

Mr. Bryan A. Giglia
Sunstone Hotel Investors, Inc.
June 23, 2014
Page 2

 4. Discontinued Operations, page F -22

2. We note that a gain of $51.6 million was recognized for the sale of the Rochester
Portfolio.  Please provide us with your analysis of how you calculated and determined the
accounting for the gains in the transaction, including the gains that were deferred.  Please
cite the applicable guidance in your response.  In addition, please expand upon the
redemption terms of the Preferred Equity Investme nt.

Schedule 14A

General

3. In future Exchange Act reports, please revise the “say on pay” proposal to comply with
Compliance and Disclosure Interpretations Exchange Act Rules 169.07.

We urge all persons who are responsible for the accuracy and adequacy o f the disclosure
in the filing to be certain that the filing includes the information the Securities Exchange Act of
1934 and all applicable Exchange Act rules require.   Since the company and its management are
in possession of all facts relating to a comp any’s disclosure, they are responsible for the accuracy
and adequacy of the disclosures they have made.

 In responding to our comments, please provide  a written statement from the company
acknowledging that:

 the company is responsible for the adequacy and accuracy of the disclosure in the filing;

 staff comments or changes to disclosure in response to staff comments do not foreclose
the Commission from taking any action with respect to the filing; and

 the company may not assert staff comments as a defense in any proceeding initiated by
the Commission or any person under the federal securities laws of the United States.

You may contact Isaac Esquivel, Staff Accountant,  at (202) 551 -3395  or me at (202) 551 -
3429  if you have questions regarding comment s on the financial statements and re lated matters.
Please contact Folake Ayoola, Staff Attorney,  at (202) 551 -3673 or Jennifer Gowetski, Staff
Attorney,  at (202) 551 -3401  with any other questions.

Sincerely,

 /s/ Kristi Marrone

Kristi Marrone
Staff Accountant

May 16 , 2013

Via E -mail
Mr. Bryan A. Giglia
Chief Financial Officer
Sunstone Hotel Investors, Inc.
120 Vantis, Suite 350
Aliso Viejo, CA  92656

Re: Sunstone Hotel Investors, Inc.
 Form 10-K
Filed February  25, 2013
File No. 001 -32319

Dear Mr. Giglia :

We have completed our review of your filing.  We remind you that our comments or
changes to disclosure in response to our comments do not foreclose the Commission from taking
any action with respect to the company or the filing and the company may not assert staff
comments as a defense in any proceeding initiated by the Commission or any person under the
federal securities laws of the United States.  We urge all persons who are res ponsible for the
accuracy and adequacy of the disclosure in the filing to be certain that the filing includes the
information the Securities Exchange Act of 1934 and all applicable rules require.

Sincerely,

 /s/ Jonathan Wiggins

Jonathan Wiggins
Staff Accountant

CORRESP
1
filename1.htm

355 South Grand Avenue

Los Angeles, California   90071-1560

Tel: +1.213.485.1234 Fax:   +1.213.891.8763

www.lw.com

FIRM / AFFILIATE   OFFICES

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Re:                             Sunstone Hotel Investors, Inc.

Form 10-K

Filed March 25, 2013

File No. 001-32319

Dear Mr. Wiggins,

On behalf of Sunstone Hotel Investors, Inc. (the “Company”), this letter sets forth the Company’s response to the comments of the Staff of the Division of Corporation Finance (the “Staff”) of the Securities and Exchange Commission (the “Commission”), dated April 17, 2013, with respect to the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.  For your convenience, the Staff’s comment is set forth below in italics, followed by the Company’s response.

Comment

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, page 30

Non-GAAP Financial Measures, page 37

1.              Please include a statement as to why management believes the presentation of Adjusted EBITDA provides useful information to investors regarding your financial position or results of operations in accordance with Item 10(e)(1)(i)(C). In that regard, we note your disclosure on pages 37 — 38 regarding the usefulness of EBITDA and Adjusted EBITDA, but you [sic] disclosure appears to address only EBITDA. Please revise to describe specifically why the further adjustments made to EBITDA result in a measure that is also useful to investors. This comment is applicable to Adjusted FFO as well. Please provide us with your proposed revisions.

Response

We will include the following statements which specifically describe why the further adjustments made to EBITDA and FFO result in measures that are useful to investors in our future filings commencing with the Form 10-Q for the quarter ended March 31, 2013 in accordance with Item 10(e)(1)(i)(C) of Regulation S-K:

“Non-GAAP Financial Measures. We use the following “non-GAAP financial measures” that we believe are useful to investors as key supplemental measures of our operating performance: EBITDA, Adjusted EBITDA, FFO and Adjusted FFO. These measures should not be considered in isolation or as a substitute for measures of performance in accordance with GAAP. EBITDA, Adjusted EBITDA, FFO and Adjusted FFO, as calculated by us, may not be comparable to other companies that do not define such terms exactly as the Company. These non-GAAP measures are used in addition to and in conjunction with results presented in accordance with GAAP. They should not be considered as alternatives to operating profit, cash flow from operations, or any other operating performance measure prescribed by GAAP. These non-GAAP financial measures reflect additional ways of viewing our operations that we believe, when viewed with our GAAP results and the reconciliations to the corresponding GAAP financial measures, provide a more complete understanding of factors and trends affecting our business than could be obtained absent this disclosure. We strongly encourage investors to review our financial information in its entirety and not to rely on a single financial measure.

EBITDA is a commonly used measure of performance in many industries. We believe EBITDA is useful to investors in evaluating our operating performance because this measure helps investors evaluate and compare the results of our operations from period to period by removing the impact of our capital structure (primarily interest expense) and our asset base (primarily depreciation and amortization) from our operating results. We also believe the use of EBITDA facilitates comparisons between us and other lodging REITs, hotel owners who are not REITs and other capital-intensive companies. In addition, certain covenants included in our indebtedness use EBITDA as a measure of financial compliance. We also use EBITDA as a measure in determining the value of hotel acquisitions and dispositions.

Historically, we have adjusted EBITDA when evaluating our performance because we believe that the exclusion of certain additional items described below provides useful information to investors regarding our operating performance and that the presentation of Adjusted EBITDA, when combined with the primary GAAP presentation of net income, is beneficial to an investor’s complete understanding of our operating performance. We adjust EBITDA for the following items, which may occur in any period, and refer to this measure as Adjusted EBITDA:

·                  Amortization of deferred stock compensation: we exclude the non-cash expense incurred with the amortization of deferred stock compensation as this expense does not reflect the underlying performance of our hotels.

·                  Amortization of favorable and unfavorable contracts: we exclude the non-cash amortization of the favorable management contract asset and the unfavorable tenant lease liability recorded in conjunction with our acquisition of the Hilton Garden Inn Downtown/Magnificent Mile. The amortization of favorable and unfavorable contracts does not reflect the underlying performance of our hotels.

2

·                  Ground rent adjustments: we exclude the non-cash expense incurred from straightlining our ground lease obligations as this expense does not reflect the underlying performance of our hotels. We do however, include an adjustment for the cash ground lease expense recorded on the Hyatt Chicago Magnificent Mile’s building lease. Upon acquisition of this hotel, we determined that the building lease was a capital lease, and, therefore, we include a portion of the capital lease payment each month in interest expense. We include an adjustment for ground lease expense on capital leases in order to more accurately reflect the operating performance of the Hyatt Chicago Magnificent Mile.

·                  Real estate transactions: we exclude the effect of gains and losses on the disposition of depreciable assets because we believe that including them in Adjusted EBITDA is not consistent with reflecting the ongoing performance of our assets. In addition, material gains or losses from the depreciated value of the disposed assets could be less important to investors given that the depreciated asset value often does not reflect its market value.

·                  Gains or losses from extinguishment of debt: we exclude the effect of finance charges and premiums associated with the extinguishment of debt, including the acceleration of deferred financing costs from the original issuance of the debt being redeemed or retired because, like interest expense, their removal helps investors evaluate and compare the results of our operations from period to period by removing the impact of our capital structure.

·                  Acquisition costs: under GAAP, costs associated with completed acquisitions are expensed in the year incurred. We exclude the effect of these costs because we believe they are not reflective of the ongoing performance of the Company.

·                  Consolidated partnership adjustments: we deduct the non-controlling partner’s pro rata share of any EBITDA adjustments related to our consolidated Hilton San Diego Bayfront partnership.

·                  Cumulative effect of a change in accounting principal: infrequently, the FASB promulgates new accounting standards that require the consolidated statement of operations to reflect the cumulative effect of a change in accounting principal. We exclude these one-time adjustments because they do not reflect our actual performance for that period.

·                  Impairment losses: we exclude the effect of impairment losses because we believe that including them in Adjusted EBITDA is not consistent with reflecting the ongoing performance of our remaining assets. In addition, we believe that impairment charges, which are based off of historical cost account values, are similar to gains (losses) on dispositions and depreciation expense, both of which are also excluded from EBITDA.

·                  Other adjustments: we exclude other adjustments such as lawsuit settlement costs, prior year property tax assessments, management company transition costs, and departmental closing costs, including severance, because we do not believe these costs reflect the ongoing operations of our hotels.

We believe that the presentation of FFO provides useful information to investors regarding our operating performance because it is a measure of our operations without regard to specified non-cash items such as real estate depreciation and amortization, amortization of lease intangibles, any real estate impairment loss and any gain or loss on sale of real estate assets, all of which are based on historical cost accounting and may be of lesser significance in evaluating our current performance. We believe the use of FFO facilitates comparisons between us and other lodging REITs.

3

We also present Adjusted FFO when evaluating our operating performance because we believe that the exclusion of certain additional items described below provides useful supplemental information to investors regarding our ongoing operating performance, and may facilitate comparisons of operating performance between periods and our peer companies. We adjust FFO for the following items, which may occur in any period, and refer to this measure as Adjusted FFO:

·                  Amortization of favorable and unfavorable contracts: we exclude the non-cash amortization of the favorable management contract asset and the unfavorable tenant lease liability recorded in conjunction with our acquisition of the Hilton Garden Inn Downtown/Magnificent Mile. The amortization of favorable and unfavorable contracts does not reflect the underlying performance of our hotels.

·                  Non-cash ground rent adjustments: we exclude the non-cash expense incurred from straightlining our ground lease obligations as this expense does not reflect the underlying performance of our hotels.

·                  Gains or losses from extinguishment of debt: we exclude the effect of finance charges and premiums associated with the extinguishment of debt, including the acceleration of deferred financing costs from the original issuance of the debt being redeemed or retired. We also exclude the non-cash gains or losses on our derivatives, as well as the original issuance costs associated with the redemption of preferred stock. We believe that these items are not reflective of our ongoing finance costs.

·                  Acquisition costs: under GAAP, costs associated with completed acquisitions are expensed in the year incurred. We exclude the effect of these costs because we believe they are not reflective of the ongoing performance of the Company.

·                  Impairment losses: we exclude the effect of non-real estate impairment losses because we believe that including them in Adjusted FFO is not consistent with reflecting the ongoing performance of our remaining assets.

·                  Consolidated partnership adjustments: we deduct the non-controlling partner’s pro rata share of any FFO adjustments related to our consolidated Hilton San Diego Bayfront partnership.

·                  Other adjustments: we exclude other adjustments such as lawsuit settlement costs, prior year property tax assessments, management company transition costs, departmental closing costs, including severance, and income tax provisions because we do not believe these costs reflect the ongoing operations of our hotels.”

*                                         *                                         *                                         *                                         *

In connection with this response, the Company has authorized us to acknowledge on its behalf that (i) the Company is responsible for the adequacy and accuracy of the disclosure in the above-referenced filing, (ii) Staff comments or changes to disclosure in response to staff’s comments do not foreclose the Commission from taking any action with respect to the above-referenced filing; and (iii) the Company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

4

If you have any questions or comments with regard to these responses or other matters, or would like any additional information, please call the undersigned at (213) 891-7421.

Sincerely,

/s/ Steven B. Stokdyk

Steven B. Stokdyk

of LATHAM & WATKINS LLP

cc:                                Bryan Giglia, Senior Vice President & Chief Financial Officer, Sunstone Hotel Investors, Inc.

David Sloan, Senior Vice President & General Counsel, Sunstone Hotel Investors, Inc.

5

April 17, 2013

Via Email
Mr. Bryan A. Giglia
Chief Financial Officer
Sunstone Hotel Investors, Inc.
120 Vantis, Suite 350
Aliso Viejo, CA  92656

Re: Sunstone Hotel Investors, Inc.
 Form 10-K
Filed February  25, 2013
File No. 001 -32319

Dear Mr. Giglia :

We have reviewed your filing an d have the following comment.  In our comments, we
may ask you to provide us with information so we may better understand your disclosure.

Please respond to this letter within ten business days by amending your filing, by
providing the requested information, or by advising us when you will provide the requested
response.   If you do not believe our comment applies  to your facts and circumstanc es or do not
believe an amendment is appropriate, please tell us why in your response.

After reviewing any amendment to your filing and the information you provide in
response to this comment , we may have  additional comments.

Item 7. Manag ement’s Discussion and Analysis of Financial Condition and Results of
Operations, page 30

Non-GAAP Financial Measures, page 37

1. Please include a statement as to why management believes the presentation of Adjusted
EBITDA provides useful information to inv estors regarding your financial position or
results of operations in accordance with Item 10(e)(1)(i)(C).  In that regard, we note your
disclosure on pages 37 – 38 regarding the usefulness of EBITDA and Adjusted EBITDA,
but you disclosure appears to addres s only EBITDA.  Please revise to describe
specifically why the further adjustments made to EBITDA result in a measure that is also
useful to investors.  This comment is applicable to Adjusted FFO as well.  Please provide
us with your proposed revisions.

We urge all persons who are responsible for the accuracy and adequacy of the disclosure
in the filing to be certain that the filing includes the information the Securities Exchange Act of

Bryan A. Giglia
Sunstone Hotel Investors, Inc.
April 17, 2013
Page 2

 1934 and all applicable Exchange Act rules require.   Since the compan y and its management are
in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy
and adequacy of the disclosures they have made.

 In responding to our comments, please provide  a written statement from the com pany
acknowledging that:

 the company is responsible for the adequacy and accuracy of the disclosure in the filing;

 staff comments or changes to disclosure in response to staff comments do not foreclose
the Commission from taking any action with respect t o the filing; and

 the company may not assert staff comments as a defense in any proceeding initiated by
the Commission or any person under the federal securities laws of the United States.

You may contact Kristi Marrone at (202) 551 -3429 me  at (202) 551-3694  if you have
questions regarding comments on the financial statements and r elated matters.

Sincerely,

 /s/ Jonathan Wiggins

Jonathan Wiggins
Staff Accountant

January 6, 2011

  Mr. Kenneth E. Cruse Chief Financial Officer Sunstone Hotel Investors, Inc. 120 Vantis, Suite 350 Aliso Viejo, California 92656
Re: Sunstone Hotel Investors, Inc.
  Form 10-K for the year ended December 31, 2009
Filed on February 23, 2010
File No. 001-32319

Dear Mr. Kenneth E. Cruse:
We have completed our review of your Form 10-K and related filings and do not, at this
time, have any further comments.

         S i n c e r e l y ,

Yolanda Crittendon Staff Accountant

CORRESP
1
filename1.htm

Correspondence Letter

 December 20, 2010

 VIA EDGAR AND OVERNIGHT DELIVERY

 Securities and Exchange Commission

Division of Corporation Finance

 100 F Street,
N.E.

 Washington, D.C. 20549

Attention:

Wilson K. Lee, Staff Accountant

Yolanda Crittendon, Staff Accountant

Re:

Sunstone Hotel Investors, Inc.

Form 10-K for the Year Ended December 31, 2009

 Filed on February 23, 2010

 File No. 001-32319

 Ladies and Gentleman:

We are in receipt of your letter dated December 13, 2010 requesting additional information regarding the Company’s Annual
Report on Form 10-K for the year ended December 31, 2009. For your convenience, we have repeated your numbered comments in italics followed by our responses. References throughout this letter to “we,” “us,” “our”
and “the Company” are to Sunstone Hotel Investors, Inc.

 FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2009

Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations, page 28

Non-GAAP Financial Measures, page 35

1.
We have considered your response to comment one. Please clarify how adjusting for loan penalties and fees to arrive at EBITDA meets the criteria outlined within
the Exchange Act Release No. 47226.

 Response: We note the Staff’s comment and have
reviewed the Exchange Act Release No. 47226. We refer the Staff to our Statement of Operations for the year ended December 31, 2009 and related disclosure at footnote 9 on page F-27 of the notes to the financial statements that provides a
detail of our accounting policy as it relates to interest expense. We respectfully submit that such penalties and fees represent additional default interest and other charges by financial institutions as a result of our default on certain loans
which had penalty interest clauses in the loan agreements. We believe such amounts represent yield adjustments required by the loan documents and represent interest under our accounting policy. Accordingly, such penalties and fees represent
additional interest expense on the loans and, in accordance with Exchange Act Release No. 47226, we add such interest back to net income (loss) to arrive at EBITDA.

 *  *  *  *  *

 Questions or comments regarding any matters with respect to this letter may be directed to
the undersigned at (949) 382-3012. Comments can also be sent via facsimile at (949) 330-4051.

Very truly yours,

 /s/ Kenneth E. Cruse

Kenneth E. Cruse

 President and Chief Financial
Officer

cc.

 Steven B. Stokdyk

 (Latham
& Watkins LLP)

 Chris Johnston

 (Ernst &
Young LLP)

December 13, 2010

 Mr. Kenneth E. Cruse Chief Financial Officer Sunstone Hotel Investors, Inc. 120 Vantis, Suite 350 Aliso Viejo, California 92656
Re: Sunstone Hotel Investors, Inc.
  Form 10-K for the year ended December 31, 2009
Filed on February 23, 2010
File No. 001-32319

Dear Mr. Kenneth E. Cruse:
We have reviewed your response letter dated December 10, 2010 and have the following
comment.  In our comment, we may ask you to provide us with information so we may better understand your disclosure.
 Please respond to this letter within ten business days by providing the requested
information or by advising us when you will provide the requested response. If you do not believe our comment applies to your facts and circumstances, please tell us why in your response.
 After reviewing the information you provide in response to this comment, we may have
additional comments.  FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2009

Item 7 – Management’s Discussion and Analys is of Financial Condition and Results of
Operations, page 28
 Non-GAAP Financial Measures, page 35

1. We have considered your response to comment one.   Please clarify how adjusting for loan penalties and fees to arrive at EBITDA meets the criteria outlined within the Exchange Act Release No. 47226.

Kenneth E. Cruse
Sunstone Hotel Investors, Inc. December 13, 2010 Page 2

You may contact Wilson K. Lee, at (202) 551-3468 or me, at (202) 551-3472 if you have
any questions.
Sincerely,

Yolanda Crittendon Staff Accountant

CORRESP
1
filename1.htm

Correspondence Letter

 December 9, 2010

 VIA EDGAR AND OVERNIGHT DELIVERY

 Securities and Exchange Commission

Division of Corporation Finance

 100 F Street,
N.E.

 Washington, D.C. 20549

Attention:

Wilson K. Lee, Staff Accountant

Yolanda Crittendon, Staff Accountant

Re:

Sunstone Hotel Investors, Inc.

Form 10-K for the Year Ended December 31, 2009

Filed on February 23, 2010

File No. 001-32319

 Ladies and Gentleman:

 We are in receipt of your letter dated December 2, 2010 requesting additional information regarding the Company’s
Annual Report on Form 10-K for the year ended December 31, 2009. For your convenience, we have repeated your numbered comments in italics followed by our responses. References throughout this letter to “we,” “us,”
“our” and “the Company” are to Sunstone Hotel Investors, Inc.

 FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2009

 Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations, page 28

 Non-GAAP Financial Measures, page 35

1.
Refer to the table on page 36. We note that your non-GAAP measure, EBITDA, is calculated differently than EBITDA within the Exchange Act Release No. 47226.
Specifically, we note your measure excludes charges other than interest, tax, depreciation, and amortization. Please advise.

 Response: We acknowledge the Staff’s comment and advise the Staff that we have calculated EBITDA in accordance with the Exchange Act Release No. 47226 except for $47,000 of amortization
of deferred stock compensation for unconsolidated joint ventures in our Form 10-K for the year ended December 31, 2009. This was corrected in our Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, June 30
and September 30, 2010 and we will continue to include all charges other than interest, tax, depreciation, and real estate related amortization going forward.

 Financial Statements and Notes

 Consolidated Statements of Operations, page F-4

2.
We note that you have included dividends declared per common share on the face of your Consolidated Statements of Operations versus in the notes to your financial
statements. Tell us how your disclosure complies with the guidance in paragraph 260-10-45-5 of the FASB Accounting Standards Codification.

 Response: We acknowledge the Staff’s comment and advise the Staff that we disclosed dividends declared per common share on the face of our Consolidated Statements of Operations per the
guidance in Regulation S-X Rule 10-01 (b)(2) of the Securities Exchange Act of 1934. We will prospectively include dividends declared per common share in the notes to our financial statements in our future filings per the guidance in paragraph
260-10-45-5 of the FASB Accounting Standards Codification.

 Closing

We urge all persons who are responsible for the accuracy and adequacy of the disclosure in the filing to be certain that the filing
includes the information the Securities Exchange Act of 1934 and all applicable Exchange Act rules require. Since the company and its management are in possession of all facts relating to a company’s disclosure, they are responsible for the
accuracy and adequacy of the disclosures they have made.

 In responding to our comment, please provide a written
statement from the company acknowledging that:

•

 the company is responsible for the adequacy and accuracy of the disclosure in the filings;

•

 staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the
filings; and

•

 the company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities
laws of the United States.

 Response: We acknowledge that:

•

 we are responsible for the adequacy and accuracy of the disclosure in our filings;

•

 staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the
filing; and

•

 we may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the
United States.

*    *    *    *    *

 Questions or comments regarding any matters with respect to this letter may be directed to
the undersigned at (949) 382-3012. Comments can also be sent via facsimile at (949) 330-4051.

Very truly yours,

 /s/ Kenneth E. Cruse

Kenneth E. Cruse

Executive Vice President and Chief Financial Officer

cc.

Steven B. Stokdyk

(Latham & Watkins LLP)

Chris Johnston

(Ernst & Young LLP)

December 2, 2010

  Mr. Kenneth E. Cruse Chief Financial Officer Sunstone Hotel Investors, Inc. 120 Vantis, Suite 350 Aliso Viejo, California 92656
Re: Sunstone Hotel Investors, Inc.
  Form 10-K for the year ended December 31, 2009
Filed on February 23, 2010 File No. 001-32319
 Dear Mr. Kenneth E. Cruse:
We have reviewed your filing and have the following comments.   In our
comments, we may ask you to provide us w ith information so we may better understand
your disclosure.
 Please respond to this letter within te n business days by providing the requested
information or by advising us when you will provide the requested response. If you do not believe our comments apply to your facts and circumstan ces, please tell us why in
your response.

 After reviewing the information you provi de in response to these comments, we
may have additional comments.
FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2009

Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of
Operations, page 28

Non-GAAP Financial Measures, page 35
 1. Refer to the table on page 36.  We not e that your non-GAAP measure, EBITDA,
is calculated differently than EBITDA  within the Exchange Act Release No.
47226.  Specifically, we note your measure ex cludes charges other than interest,
tax, depreciation, and amor tization.  Please advise.

Kenneth E. Cruse
Sunstone Hotel Investors, Inc. December 2, 2010 Page 2   Financial Statements and Notes

Consolidated Statements of Operations, page F-4

2. We note that you have included dividends declared per common share on the face
of your Consolidated Statements of Oper ations versus in the notes to your
financial statements. Tell us how your di sclosure complies with the guidance in
paragraph 260-10-45-5 of the FASB Accounting Standards Codification.

We urge all persons who are responsible for the accuracy and adequacy of the
disclosure in the filing to be certain that the filing includes the information the Securities
Exchange Act of 1934 and all applicable Exch ange Act rules require. Since the company
and its management are in possession of all f acts relating to a company’s disclosure, they
are responsible for the accuracy and adequacy of the disclosures they have made.
In responding to our comment, please provide a written statement from the
company acknowledging that:
• the company is responsible for the adequacy  and accuracy of the disclosure in the
filings;

• staff comments or changes to disclosure  in response to staff comments do not
foreclose the Commission from taking any action with respect to the filings; and

• the company may not assert staff comme nts as a defense in any proceeding
initiated by the Commission or any person under the federal secu rities laws of the
United States.
   You may contact Wilson K. Lee at (2 02) 551 – 3468 or me at (202) 551 – 3472 if
you have any questions.
Sincerely,

         Yolanda Crittendon          S t a f f  A c c o u n t a n t

January 17, 2008  Mail Stop 4561
By U.S. Mail and facsimile to (949) 369-3151

Mr. Kenneth E. Cruse, Chief Financial Officer Sunstone Hotel Investors, Inc. 903 Calle Amanecer, Suite 100 San Clemente, CA    92673
RE: Sunstone Hotel Investors, Inc.
            File No.  001-32319
 Form 10-K for the year ended December 31, 2006
Forms 10-Q for the quarters ended March 31, 2007, June 30, 2007 and September 30, 2007

Dear Mr. Cruse:
We have completed our review of your Fo rm 10-K and related filings and have no
further comments at this time.

                                                                                  Sincerely,
                                                                                                                                                                                                                                                                        Linda van Doorn                                                                                   Senior Assistant Chief Accountant

CORRESP
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Correspondence Letter

 December 20, 2007

 VIA EDGAR AND OVERNIGHT COURIER

 Linda van Doorn

 Senior Assistant Chief Accountant

 U.S. Securities and Exchange Commission

 Mail Stop 4561

 450 Fifth Street, N.W.

 Washington, D.C. 20549

Re:
Sunstone Hotel Investors, Inc.

 Commission File
No. 001-32319

 Form 10-K for Fiscal Year Ended December 31, 2006

 Forms 10-Q for Fiscal Quarters Ended March 31, 2007 and June 30, 2007 and September 30, 2007

 Dear Ms. van Doorn:

 This letter constitutes the
response of Sunstone Hotel Investors, Inc., a Maryland corporation (the “Company”), to the comment letter of the Securities and Exchange Commission (the “Commission”) dated December 13, 2007. In our letter, we refer to the
Staff of the Commission as the “Staff”. For ease of reference, we have included below the Staff’s comment verbatim and our response.

 Form 10-K

 Certifications, Exhibit 31.1 and 31.2

 Comment 1: We noted that the identification of the certifying individual at the beginning of the certifications required by Exchange Act Rule
13a-14(a) also includes the title of the certifying individual. Considering that the certifications must be signed in a personal capacity, please confirm to us that your officers signed such certifications in a personal capacity and that you will
revise your certifications in future filings to exclude the title of the certifying individual from the opening sentence.

 Response:
The Company confirms that (i) the officers who signed such certifications did so in a personal capacity and (ii) the Company will revise the certifications in future filings to exclude the title of the certifying individual from the
opening sentence (and has so revised the certifications in all Forms 10-Q since the filing of the Annual Report on Form 10-K for the year ended December 31, 2006).

 Pursuant to the Staff’s request, the Company acknowledges that:

•

 The Company is responsible for the adequacy and accuracy of the disclosure in its filings;

•

 Staff comments or changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the Company’s
filings; and

•

 The Company may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United
States.

 If you have any questions concerning the foregoing, please contact the undersigned at (949) 369-4221.

Very truly yours,

/s/ Christopher M. Lal

Christopher M. Lal

Vice President and General Counsel

cc:
Kenneth E. Cruse

Mail Stop 4561
February 22, 2007

Jon D. Kline
903 Calle Amanecer, Suite 100
San Clemente, CA 92673

Re: Sunstone Hotel Investors, Inc.
  Form 10-K for Fiscal Ye ar Ended December 31, 2005
Forms 10-Q for Fiscal Quarters E nded March 31, 200 6, June 30, 2006,
and September 30, 2006
  File No. 001-32319

Dear Mr. Kline:

We have completed our review of your Form 10-K and related filings and do not,
at this time, have any further comments.

You may contact Yolanda Crittendon, Sta ff Accountant, at (202) 551-3472 or the
undersigned at (202) 551-3498 if you have questions.

Sincerely,

Linda VanDoorn
Senior Assistant Chief Accountant

CORRESP
1
filename1.htm

Correspondence Letter

 February 12, 2007

 VIA EDGAR

 Linda VanDoorn

 Senior
Assistant Chief Accountant

 U.S. Securities and Exchange Commission

 Mail Stop 4561

 450 Fifth Street, N.W.

 Washington,
D.C. 20549

Re:
Sunstone Hotel Investors, Inc.

 Form 10-K for Fiscal Year
Ended December 31, 2005

 Forms 10-Q for Fiscal Quarters Ended March 31, 2006 and June 30, 2006

 Commission File No. 001-32319

 Dear
Ms. VanDoorn:

 This letter constitutes the response of Sunstone Hotel Investors, Inc., a Maryland corporation (the
“Company”), to the comment letter of the Securities and Exchange Commission (the “Commission”) dated January 16, 2007. In our letter, we refer to the Staff of the Commission as the “Staff” and to the Form 10-Q for
the fiscal quarter ended June 30, 2006 as the “Second Quarter 2006 Form 10-Q”. Comment numbering used for the response set forth below corresponds to the comment numbering used in the Staff’s letter.

 Second Quarter 2006 Form 10-Q

 Note 13—Subsequent Events, page 12

 Comment 1: Please tell us how you concluded the forward sale agreement you
entered into with Citigroup Global Markets in July 2006 was not required to be accounted for as a derivative under SFAS 133. Specifically, tell us how you concluded that the paragraph 11(a) scope exception in SFAS 133 is available given that the
forward sale agreement does not appear to be solely indexed to your own common stock, as defined in EITF 01-6, given that:

•

 the forward price is also based on the Federal Funds Rate; and

•

 the forward price is subject to decrease if the cost to the forward counterparty of borrowing your common stock exceeds a specified amount.

 903 Calle Amanecer, Suite 100 San Clemente, CA 92673

 Response: We have concluded that we qualify for the paragraph 11(a) scope exception in SFAS 133
because these types of instruments are set at contracted prices that include a cost to carry that is consistent with industry practice in establishing a forward price. Essentially this is a pricing mechanism, not a derivative that can be used to
hedge market conditions. By including changes to the forward sale price based on the Federal Funds Rate, the forward sale contract is more closely aligned with changes in value to the Company’s common stock as opposed to fluctuating due solely
to the passage of time or changes in interest rates. Accordingly, by including an interest rate factor, changes to the forward sale price are more directly indexed to the Company’s own equity because the forward counterparty’s cost to
borrow is based solely on the Company’s common stock price.

 We have concluded that this forward sale agreement is indexed to our own
common stock by following the rules of EITF 01-6. As a result of the fact that the forward sale contract is indexed to the Company’s stock, we followed the provisions of EITF 00-19. Accordingly this instrument is properly accounted for as an
equity instrument and not a derivative liability.

 If you have any questions concerning the foregoing, please contact the undersigned at
(949) 369-4212. We would appreciate it if you could direct your response, if any, to this submission to Ken Cruse at the Company as you did with the comment letter responded to in this letter. Mr. Cruse’s fax number is
(949) 369-3151.

Very truly yours,

 /s/ Ken Cruse

Ken Cruse

cc:
Jon Kline

 Bill Wagner

 903 Calle Amanecer, Suite 100 San Clemente, CA 92673

Mail Stop 4561
January 16, 2007

Jon D. Kline
903 Calle Amanecer, Suite 100
San Clemente, CA 92673

Re: Sunstone Hotel Investors, Inc.
  Form 10-K for Fiscal Ye ar Ended December 31, 2005
Forms 10-Q for Fiscal Quarters E nded March 31, 200 6 and June 30,
2006
  File No. 001-32319

Dear Mr. Kline:

We have reviewed your response letter  dated November 15, 2006, and have the
following additional comment.

Form 10-Q for the Quarter Period June 30, 2006

Note 13 – Subsequent Events, page 12
1. Please tell us how you concluded the fo rward sale agreement you entered into
with Citigroup Global Markets in July 2006 was not required to be accounted for
as a derivative under SFAS 133.   Specificall y, tell us how you c oncluded that the
paragraph 11(a) scope exception in SFAS 133 is available given that the forward
sale agreement does not app ear to be solely indexed to your own common stock,
as defined in EITF 01-6, given that:

ƒ the forward price is also base d on the Federal Funds Rate; and
ƒ the forward price is subject to d ecrease if the cost to the forward
counterparty of borrowing your common stock exceeds a specified amount.

*    *    *    *

As appropriate, please respond to these co mments within 10 business days or tell
us when you will provide us with a response. Detailed cover letters gr eatly facilitate our
review.  Please file your cover letter on E DGAR.  Please understa nd that we may have
additional comments after reviewin g your responses to our comments.

Jon D. Kline
Sunstone Hotel Investors, Inc.
January 16, 2007 Page 2
You may contact Yolanda Crittendon, Sta ff Accountant, at (202) 551-3472 or the
undersigned at (202) 551-3498 if you have questions.

Sincerely,

Linda VanDoorn
Senior Assistant Chief Accountant

CORRESP
1
filename1.htm

Correspondence Letter

 November 15, 2006

 VIA EDGAR

 Linda VanDoorn

 Senior
Assistant Chief Accountant

 U.S. Securities and Exchange Commission

 Mail Stop 4561

 450 Fifth Street, N.W.

 Washington,
D.C. 20549

Re:
Sunstone Hotel Investors, Inc.

 Form 10-K for Fiscal Year
Ended December 31, 2005

 Forms 10-Q for Fiscal Quarters Ended March 31, 2006 and June 30, 2006

 Commission File No. 001-32319

 Dear Ms. VanDoorn:

 This letter constitutes the response of Sunstone Hotel Investors, Inc., a Maryland corporation (the “Company”), to the comment
letter of the Securities and Exchange Commission (the “Commission”) dated October 24, 2006. In our letter, we refer to the Staff of the Commission as the “Staff,” to the Form 10-K for the fiscal year ended December 31,
2005 as the “2005 Form 10-K” and to the Form 10-Q for the fiscal quarter ended June 30, 3006 as the “Second Quarter 2006 Form 10-Q”. Comment numbering used for each response set forth below corresponds to the comment
numbering used in the Staff’s letter.

 2005 Form 10-K

 Note 12—Shareholders’ Equity, page F-25

 Common Stock, page F-26

 Comment 1: We have read and considered your response to comment two.
Since the registrant elected to recognize the related compensation cost on a straight-line basis over the requisite period for the entire award, it still remains unclear how vesting is being accounted for in the company’s financial statements.
Please clarify to us the amount of compensation expense that was recognized and the amount of shares that were issued, if any, as of December 31, 2005 and how they were recognized in the financial statements.

 Response: Under Statement of Financial Accounting Standards No. 123R, Share-Based Payment (“FAS 123R”), the Company has
chosen to recognize compensation cost

 903 Calle Amanecer, Suite 100 San Clemente, CA 92673

 for an award on a straight-line basis over the requisite service period for the entire award, with the requisite service
period being the vesting period.

 On October 26, 2004, the Company granted 105,263 restricted stock units to the Company’s
executive officers that vested immediately. The immediate vesting of these restricted stock units resulted in the issuance by the Company of 67,947 shares of common stock, net of shares of common stock which were canceled for tax withholding.
The Company recognized approximately $1.8 million in corporate overhead expense on the Company’s statement of operations related to this issuance in the period October 26, 2004 through December 31, 2004.

 Additionally, on October 26, 2004, the Company granted 434,211 restricted stock units to the Company’s executive officers and certain
employees. Of this amount, 315,789 restricted stock units were granted to the executive officers and 118,422 restricted stock units were granted to certain employees. The grants to the Company’s executive officers vest 0% on the first
anniversary of the date of grant, 20% on the second anniversary and 26.67% on each of the third, fourth and fifth anniversary. The grants to the Company’s employees vest in equal 20% installments over five years.

 During the period October 26, 2004 through December 31, 2004, none of the 434,211 restricted stock units vested and thus no shares of common
stock were issued, and approximately $304,000 of compensation expense was recognized in corporate overhead expense on the Company’s statement of operations.

 For the year ended December 31, 2005, 20,847 shares of common stock were issued upon the vesting of 32,078 restricted stock units, net of shares of common stock which were cancelled for tax withholding.
Additionally, 14,705 shares of common stock were issued upon the vesting of 14,705 restricted stock units issued to members of the Company’s Board of Directors. For the year ended December 31, 2005, approximately $2.0 million was
recognized in corporate overhead expense on the Company’s statement of operations related to restricted stock unit grants to the executive officers, certain employees and directors.

 Second Quarter 2006 Form 10-Q

 Note 13—Subsequent Events, page 12

 Comment 2: We note that you entered into a forward sale agreement on
July 18, 2006 relating to 4,000,000 shares of common stock. We note that the initial forward price is reduced by certain specified amounts on the 15th day of January, April, July and October for expected quarterly dividends. Please tell us how you plan to account for the earnings per share impact of the forward sale agreement, specifically
addressing the guidance in paragraph 11 of EITF 03-6.

 Response: The Company plans to account for earnings per share in accordance
with FAS 128. Basic earnings per share will not be affected by the forward sale agreement. Diluted earnings per share will be calculated in accordance with the treasury stock method whereby, if the market price of the Company’s common stock is
greater

 903 Calle Amanecer, Suite 100 San Clemente, CA 92673

 than the price per share in the forward sale agreement, the diluted weighted average shares outstanding will be increased
by a number of shares calculated by multiplying (i) a fraction, the numerator of which is the excess of the market price of the Company’s common stock over the price per share under the forward sale agreement and the denominator of which
is the price per share under the forward sale agreement by (ii) the number of shares of common stock subject to the forward sale agreement.

 Additionally, the Company considered the guidance in EITF 03-6, specifically paragraph 11. The forward sale agreement does not reset when dividends are declared. The adjustments to the forward sales price are stated amounts within the
forward sale agreement and will occur whether dividends are declared or not declared and regardless of the amount of any such dividend. As such, the forward equities are not participating securities and therefore, the two-class method for computing
earnings per share is not required.

 If you have any questions concerning the foregoing, please contact the undersigned at
(949) 369-4350. We would appreciate it if you could direct your response to this submission to Jon Kline at the Company as you did with the comment letter responded to in this letter. Mr. Kline’s fax number is (949) 369-3179.

Very truly yours,

 /s/ William M. Wagner

William M. Wagner

Senior Vice President and

Chief Accounting Officer

 WMW:pc

cc:
Jon Kline

 903 Calle Amanecer, Suite 100 San Clemente, CA
92673

Mail Stop 4561
October 24, 2006

Jon D. Kline
903 Calle Amanecer, Suite 100
San Clemente, CA 92673

Re: Sunstone Hotel Investors, Inc.
  Form 10-K for Fiscal Ye ar Ended December 31, 2005
Forms 10-Q for Fiscal Quarters E nded March 31, 200 6 and June 30,
2006
  File No. 001-32319

Dear Mr. Kline:

We have reviewed your response letter  dated October 10, 2006, and have the
following additional comments.

Form 10-K

Note 12 -  Shareholders’ Equity, page F-25

Common Stock, page F-26
1. We have read and considered your respons e to comment two.  Since the registrant
elected to recognize the rela ted compensation cost on a st raight-line basis over the
requisite period for the entire award, it st ill remains unclear how the vesting is
being accounted for in the company’s financial statements.  Please clarify to us
the amount of compensation expense that was recognized and the amount of shares that were issued, if any, as of December 31, 2005 and how they were
recognized in the financial statements.

Form 10-Q for the Quarter Period June 30, 2006

Note 13 – Subsequent Events, page 12
2. We note that you entered into a forwar d sale agreement on July 18, 2006 relating
to 4,000,000 shares of common stock. We note that the initial forward price is
reduced by certain specified amounts on the 15th day of January, April, July and
October for expected quarterly dividends.  Please tell us how you plan to account

Jon D. Kline
Sunstone Hotel Investors, Inc.
October 24, 2006 Page 2
for the earnings per share impact of this  forward sale agreem ent, specifically
addressing the guidance in paragraph 11 of EITF 03-6.

*    *    *    *

As appropriate, please respond to these co mments within 10 business days or tell
us when you will provide us with a response. Detailed cover letters gr eatly facilitate our
review.  Please file your cover letter on E DGAR.  Please understa nd that we may have
additional comments after reviewin g your responses to our comments.

You may contact Yolanda Crittendon, Sta ff Accountant, at (202) 551-3472 or the
undersigned at (202) 551-3498 if you have questions.

Sincerely,

Linda VanDoorn
Senior Assistant Chief Accountant

CORRESP
1
filename1.htm

Correspondence Letter

 October 10, 2006

 VIA EDGAR

 Linda VanDoorn

 Senior
Assistant Chief Accountant

 U.S. Securities and Exchange Commission

 Mail Stop 4561

 450 Fifth Street, N.W.

 Washington,
D.C. 20549

Re:
Sunstone Hotel Investors, Inc.

Form 10-K for Fiscal Year Ended December 31, 2005

Forms 10-Q for Fiscal Quarters Ended March 31, 2006 and June 30,

2006

Commission File No. 001-32319

 Dear
Ms. VanDoorn:

 This letter constitutes the response of Sunstone Hotel Investors, Inc., a Maryland corporation (the
“Company”), to the comment letter of the Securities and Exchange Commission (the “Commission”) dated September 26, 2006. In our letter, we refer to the Staff of the Commission as the “Staff,” and to the Form 10-K
for the fiscal year ended December 31, 2005 as the “2005 Form 10-K”. Comment numbering used for each response set forth below corresponds to the comment numbering used in the Staff’s letter.

 2005 Form 10-K

 Financial
Statements and Notes

 Note 11 – Series C Cumulative Convertible Redeemable Preferred Stock, page

 F-24

 Comment 1. Please tell
us and disclose in future filings the conversion terms for this series of preferred stock. Explain to us how you considered the guidance in SFAS 133 including paragraph 61(1) and EITF 00-19 in determining the accounting for the conversion features
in your Series C Cumulative Convertible Redeemable Preferred Stock.

 Response: The Company’s Series C Cumulative Convertible
Preferred Stock (the “Series C preferred stock”) is convertible into shares of the Company’s common stock on a one-for-one basis, subject to customary antidilution provisions, including for stock splits, stock dividends, non-cash
distributions and above-market issuer self-tender or

 903 Calle Amanecer, Suite 100 San Clemente, CA 92673

 exchange offers. The 2005 Form 10-K currently has disclosure regarding the convertibility of the Series C preferred
stock on a one-for-one basis. The Company will include in future filings the expanded description of the conversion terms of the Series C preferred stock set forth above.

 Paragraph 11(a) of SFAS 133 allows for a scope exception for contracts issued by the Company that are both (1) indexed to its own stock and
(2) classified in stockholders’ equity. As the Series C preferred stock is convertible into shares of the Company’s common stock, the criteria for (1) is met. In determining whether the Company meets the criteria of
(2), the Company considered the guidance in EITF 00-19, specifically paragraphs 12 through 32, and paragraph 61(l) of SFAS 133. The Company determined that all eight of the conditions within paragraphs 12 through 32 of EITF 00-19 necessary for
the Series C preferred stock to be classified as equity were met. Also, the governing document for the Series C preferred stock contains a provision that allows the holder to require the Company to redeem the Series C preferred stock in the
event any of the following occurs: (1) a change of control (as defined) of the Company, (2) a REIT termination event (as defined), or (3) the Company ceases to be listed for trading on the New York Stock Exchange or the Nasdaq
National Market. Because the occurrence of each of these three items can be considered to be outside of the Company’s control without regard to probability, accounting literature requires the Company to classify the preferred stock outside
of permanent equity. As such, the Series C preferred stock is presented on the Company’s balance sheet in temporary equity, which is outside of stockholders’ equity and total liabilities. Additionally, the Company considered ASR 268
in determining balance sheet classification for the Series C preferred stock. DIG Issue C2 states that for purposes of evaluating the scope exception of paragraph 11(a) of SFAS 133, items classified in temporary equity are considered to be
stockholders’ equity. Therefore, the Company qualifies for the scope exception of Paragraph 11(a) of SFAS 133. Accordingly, the conversion feature of the Series C preferred stock is not considered an embedded derivative that must
be bifurcated from the instrument and separately valued and recorded.

 Note 12—Shareholders’ Equity, page F-25

Common Stock, page F-26

 Comment
2: Refer to the third paragraph We noted that the company granted 434,211 shares of restricted stock to the company’s executive officers on October 26, 2004, which will vest over a five year period beginning on the grant date. Please
clarify if the shares vest ratably over the five year period and how the vesting is being accounted in the company’s financial statements and provide us your GAAP basis in supporting your accounting treatment.

 Response: The Company granted 434,211 restricted stock units to the Company’s executive officers and certain employees. Of this amount,
315,789 restricted stock units were granted to the executive officers and 118,422 restricted stock units were granted to certain employees. The grants to the Company’s executive officers vest 0% on the first anniversary of the date of grant,
20% on the second anniversary and 26.67% on each of the third, fourth and fifth anniversary. The grants to the Company’s employees vest in

equal 20% installments over five years. Under Statement of Financial Accounting Standards No. 123R, Share-Based Payment (“FAS 123R”),
the Company has the option to recognize compensation cost for an award with only service conditions that has a graded vesting schedule (a) on a straight-line basis over the requisite service period for each separately vesting portion of the
award as if the award was, in-substance, multiple awards or (b) on a straight-line basis over the requisite service period for the entire award (that is, over the requisite service period of the last separately vesting portion of the award).
However, the amount of compensation cost recognized at any date must at least equal the portion of the grant date value of the award that is vested at that date. The Company has chosen to recognize compensation cost for an award on a straight-line
basis over the requisite service period for the entire award, with the requisite service period being the vesting period.

 In addition, the
Company granted 105,263 restricted stock units to the Company’s executive officers on October 26, 2004 that vested immediately. The vesting of these restricted stock units resulted in the issuance by the Company of 67,947 shares of
common stock, net of shares of common stock which were canceled for tax withholding. The Company recognized the entire expense related to this issuance in the period in which it occurred.

 The Company will include a disclosure in future filings that it is the Company’s policy to recognize compensation expense for its stock grants on a
straight-line basis over the vesting period for the entire award.

 Exhibits 31.1 and 31.2

 Comment 3: Reference is being made to your Form 10-K for the period ended December 31, 2005 and Form 10-Q for the periods ended March 31,
2006 and June 30, 2006. We note that your certifications include the title of the certifying individual in the “I, [identify the certifying individual], certify that” line. Considering that the certifications must be signed in a
personal capacity, please confirm to us that your officers signed such certifications in a personal capacity and that you will revise your certifications in future filings to exclude the title of the certifying individual from the opening sentence.

 Response: The Company confirms that (i) the officers who signed such certifications did so in a personal capacity and
(ii) the Company will revise the certifications in future filings to exclude the title of the certifying individual from the opening sentence.

 Pursuant to the Staff’s request, the Company acknowledges that:

•

The Company is responsible for the adequacy and accuracy of the disclosure in its filings;

•

Staff comments or changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the Company’s filings; and

•

The Company may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

 If you have any questions concerning the foregoing, please contact the undersigned at (949) 369-4221. We would
appreciate it if you could direct your response to this submission to Jon Kline at the Company as you did with the comment letter responded to in this letter. Mr. Kline’s fax number is (949) 369-3179.

 Very truly yours,

 /s/ Andrew W. Gross

 Andrew W. Gross

 Senior Vice President and

 General Counsel

 AWG:pc

cc:
Jon Kline

Bill Wagner

Mail Stop 4561
September 26, 2006

Jon D. Kline
903 Calle Amanecer, Suite 100
San Clemente, CA 92673

Re: Sunstone Hotel Investors, Inc.
  Form 10-K for Fiscal Ye ar Ended December 31, 2005
Forms 10-Q for Fiscal Quarters E nded March 31, 200 6 and June 30,
2006
  File No. 001-32319

Dear Mr. Kline:

We have reviewed your filings and have the following comments.  We have
limited our review to only your financial stat ements and related disclosures and do not
intend to expand our review to  other portions of your documents.  In some of our
comments, we may ask you to provide us in formation so we may better understand your
disclosure.  After reviewing this inform ation, we may or may not raise additional
comments.

 Please understand that the purpose of our re view process is to assist you in your
compliance with the applicable disclosure  requirements and to  enhance the overall
disclosure in your filing.  We look forward to  working with you in these respects.  We
welcome any questions you may have about our comments or on any other aspect of our
review.  Feel free to call us at the telephone numbers listed at the end of this letter.

Form 10-K

Financial Statements and Notes

Note 11 - Series C Cumulative Convertible  Redeemable Preferred Stock, page F-24
1. Please tell us and disclose in future fili ngs the conversion terms for this series of
preferred stock.  Explain to us how you considered the guidance in SFAS 133 including paragraph 61(l) and EITF 00- 19 in determining the accounting for the
conversion features in your Series C Cumulative Convertible Redeemable
Preferred Stock.

Jon D. Kline
Sunstone Hotel Investors, Inc.
September 26, 2006 Page 2

Note 12 – Shareholders’ Equity, page F-25

Common Stock, page F-26
2. Refer to the third paragraph.  We noted  that the company granted 434,211 shares
of restricted stock to the company’ s executive officers on October 26, 2004,
which will vest over a five year period beginning on the grant date.  Please clarify if the shares vest ratably over the five year period and how the vesting is being
accounted in the company’s financial stat ements and provide us your GAAP basis
in supporting your accounting treatment.

Exhibits 31.1 and 31.2
3. Reference is being made to your Form 10-K for the period ended December 31, 2005 and Form 10-Q for the periods ended March 31, 2006 and June 30, 2006.  We note that your certifications include the title of the certifying individual in the
“I, [identify the certifying individual], certify that:” line.  Considering that the
certifications must be signed in a personal capacity, please confirm to us that your
officers signed such certifi cations in a personal capacity  and that you will revise
your certifications in future filings to exclude the title of the certifying individual
from the opening sentence.

*    *    *    *

As appropriate, please respond to these co mments within 10 business days or tell
us when you will provide us with a response. Detailed cover letters gr eatly facilitate our
review.  Please file your corever letter on EDGAR.  Please understand that we may have
additional comments after reviewin g your responses to our comments.

 We urge all persons who are responsible for the accuracy and adequacy of the disclosure in the filings reviewed by the staff to be certain that they have provided all information investors require for an info rmed decision.  Since the company and its
management are in possession of all facts re lating to a company’s disclosure, they are
responsible for the accuracy and adequacy of the disclosures they have made.

 In connection with responding to our comments, please provide, in writing, a statement from the company acknowledging that:

ƒ the company is responsible for the adequacy  and accuracy of the disclosure in the
filings;

ƒ staff comments or changes to disclosure  in response to staff comments do not
foreclose the Commission from taking any action with respect to the filings; and

Jon D. Kline
Sunstone Hotel Investors, Inc.
September 26, 2006 Page 3

ƒ the company may not assert staff comments as a defense in any proceeding initiated
by the Commission or any person under the federal securities laws of the United States.

In addition, please be advise d that the Division of Enfo rcement has access to all
information you provide to the staff of the Divi sion of Corporation Fi nance in our review
of your filings or in response to our comments on your filings.

You may contact Yolanda Crittendon, Sta ff Accountant, at (202) 551-3472 or the
undersigned at (202) 551-3498 if you have questions.

Sincerely,

Linda VanDoorn
Senior Assistant Chief Accountant

CORRESP
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Correspondence to the SEC

 November 17, 2005

 Geoffrey Ossias

 Division of Corporation Finance

 Securities and Exchange Commission

 450 Fifth Street, N.W.

 Washington, D.C. 20549

 Re: Sunstone Hotel Investors, Inc.

 Form S-3 Filed on
October 27, 2005

 File No. 333-129258

 Dear Mr. Ossias:

 On behalf of our client, Sunstone Hotel Investors, Inc. (the “Company”), we hereby respond to the oral comment of the staff (the
“Staff”) of the Securities and Exchange Commission to the Company’s Registration Statement on Form S-3 (the “Form S-3”) referred to above. With respect to footnote 3 on page 31 of the Form S-3, the Staff orally inquired as
to why it was appropriate to register 599,355 shares of common stock of the Company that had not yet been purchased by Security Capital Preferred Growth Incorporated (“Security Capital”). In response to the Staff’s comment, the
disclosure in Amendment No. 2 to the Form S-3, which was filed on November 16, 2005, has been revised to remove the 599,355 shares of common stock to be acquired on December 29, 2005 by Security Capital from the securities to be registered
for sale under the Form S-3.

 If you have any questions
regarding this response or need any additional information, please call me at (310) 712-6630.

Very truly yours,

/s/ ALISON S. RESSLER

Alison S. Ressler

cc:
Elaine Wolff

(Securities and Exchange Commission)

Jon D. Kline

(Sunstone Hotel Investors, Inc.)

CORRESP
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Acceleration Request

 November 17, 2005

 Via Facsimile

 Geoffrey Ossias

 Division of Corporation Finance

 Securities and Exchange Commission

 450 Fifth Street, N.W.

 Washington, D.C. 20549

Re:
Sunstone Hotel Investors, Inc.

 (Form
S-3, File No. 333-129258)

 Dear
Mr. Ossias:

 Pursuant to Rule 461 of Regulation C of the
General Rules and Regulations under the Securities Act of 1933, as amended, the undersigned, on behalf of Sunstone Hotel Investors, Inc. (the “Company”), respectfully requests that the effective date of the Registration Statement on Form
S-3 (“Form S-3”) referred to above be accelerated so that it will become effective on November 17, 2005, 12:00 p.m. (Eastern Standard Time) or as soon as practicable thereafter.

 In accordance with your request, the Company hereby acknowledges the
following:

•

should the Commission or the staff, acting pursuant to delegated authority, declare the filing effective, it does not foreclose the Commission from taking any action with respect to
the filing;

•

the action of the Commission or the staff, acting pursuant to delegated authority, in declaring the filing effective, does not relieve the Company from its full responsibility for
the adequacy and accuracy of the disclosure in the filing; and

•

the Company may not assert this action as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

 Thank you for your assistance and cooperation in
this matter.

 Mr. Geoffrey Ossias

 Page 2

 Sincerely yours,

 Sunstone Hotel Investors, Inc.

By:

/s/ Jon Kline

Name:

Jon Kline

Title:

Chief Financial Officer

cc:
Alison S. Ressler

Patrick S. Brown

(Sullivan & Cromwell LLP)

<DOCUMENT>
<TYPE>LETTER
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<FILENAME>filename1.txt
<TEXT>

      November 9, 2005

Mail Stop 4561

Jon D. Kline
Chief Financial Officer
Sunstone Hotel Investors, Inc.
903 Calle Amanceer, Suite 100
San Clemente, CA 92673

      Re:	Sunstone Hotel Investors, Inc.
		Form S-3 filed on October 27,2005
		File No.  333-129258

Dear Mr. Kline:

      We have limited our review of your filing to those issues we
have addressed in our comments. Where indicated, we think you
should
make changes in response to these comments.  If you disagree, we
will
consider your explanation as to why our comment is inapplicable.
Please be as detailed as necessary in your explanation.  Please be
as
detailed as necessary in your explanation.  In some of our
comments,
we may ask you to provide us with information so we may better
understand your disclosure.  After reviewing this information, we
may
raise additional comments.
      Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comments or on any other
aspect
of our review.  Feel free to call us at the telephone numbers
listed
at the end of this letter.
Selling Stockholders, page 30

1. For each of your selling stockholders that is a private entity,
please:

* identify the natural person who controls the investment
decision,
to the extent you have not already done so; and

* please identity any of the selling shareholders who are broker-
dealers or who are affiliated with broker-dealers.

Please note, a registration statement registering the resale of
shares being offered by broker-dealers must identify the broker-
dealers as underwriters if the shares were not issued as
underwriting
compensation.

2. For selling shareholders that are affiliates of broker-dealers,
please provide an analysis showing that the resale of these
securities is not an indirect primary offering.  Your analysis
should
address the following points:

* how long the selling shareholders have held the securities,

* the circumstances under which the selling shareholders received
the
securities,

* the selling shareholders` relationship to the issuer,

* the amount of securities involved,

* whether the sellers are in the business of underwriting
securities,
and

* whether under all the circumstances it appears that the seller
is
acting as a conduit for the issuer.

Assuming the resale of securities by affiliates of broker-dealers
is
not an indirect primary offering, you must clearly state in your
prospectus that:

* the seller purchased in the ordinary course of business; and

* at the time of the purchase of the securities to be resold the
seller had not agreements or understandings, directly or
indirectly,
with any person to distribute the securities.

      As appropriate, please amend your filing in response to
these
comments.  You may wish to provide us with marked copies of the
amendment to expedite our review.  Please furnish a cover letter
with
your amendment that keys your responses to our comments and
provides
any requested supplemental information.  Detailed cover letters
greatly facilitate our review.  Please understand that we may have
additional comments after reviewing your amendment and responses
to
our comments.

      We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision.  Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.

      In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that:
* the company is responsible for the adequacy and accuracy of the
disclosure in the filing;
* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and
* the company may not assert staff comments and the declaration of
effectiveness as defense in any proceeding initiated by the
Commission or any person under the federal securities laws of the
United States.
      In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in connection with our review of
your
filing or in response to our comments on your filing.

      You may contact Geoffrey Ossias at 202-551-3404 or me at
202-
551-3780 with any other questions.

Sincerely,

Elaine Wolff
Branch Chief

cc: 	Alison Ressler (via fax, 310-712-8800)

??

??

??

??

Jon D. Kline
Sunstone Hotel Investors, Inc.
November 9, 2005
Page 1

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CORRESP
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SEC Correspondence

 November 15, 2005

Via Facsimile

 Geoffrey Ossias

 Division of Corporation Finance

 Securities and Exchange Commission

 450 Fifth Street, N.W.

 Washington, D.C. 20549

 Re: Sunstone Hotel
Investors, Inc.

 (Form S-3, File No. 333-129258)

 Dear Mr. Ossias:

 On behalf of Sunstone Hotel Investors, Inc., we have enclosed herein our request for acceleration relating to the Registration Statement on Form S-3
(“Form S-3”) referred to above. We note that effectiveness of the Form S-3 is subject to your determination of whether the 599,355 shares of common stock to be acquired by Security Capital Preferred Growth Incorporated on December 29, 2005
may be registered for sale under the Form S-3. If your determination is that the 599,355 shares may be registered for sale under the Form S-3, we request that the Form S-3 be declared effective tomorrow as soon as possible after such determination.
If your determination is that the 599,355 shares are not to be registered for sale under the Form S-3, we will file tomorrow an amendment to the S-3 to reflect that the 599,355 shares will not be sold pursuant to the Form S-3 and request that the
Form S-3 be declared effective as soon as possible after the filing of such amendment.

 Please do not hesitate to contact us with any questions.

 Best regards,

 /s/ ALISON S. RESSLER

 Alison S. Ressler

cc:
Patrick S. Brown

(Sullivan & Cromwell LLP)

 November 15, 2005

Via Facsimile

 Geoffrey Ossias

 Division of Corporation Finance

 Securities and Exchange Commission

 450 Fifth Street, N.W.

 Washington, D.C. 20549

 Re: Sunstone Hotel
Investors, Inc.

 (Form S-3, File No. 333-129258)

 Dear Mr. Ossias:

 Pursuant to Rule 461 of Regulation C of the General Rules and Regulations under the Securities Act of 1933, as amended, the undersigned, on behalf of
Sunstone Hotel Investors, Inc. (the “Company”), respectfully requests that the effective date of the Registration Statement on Form S-3 (“Form S-3”) referred to above be accelerated so that it will become effective on November
16, 2005, or as soon as practicable thereafter.

 In accordance
with your request, the Company hereby acknowledges the following:

•

should the Commission or the staff, acting pursuant to delegated authority, declare the filing effective, it does not foreclose the Commission from taking any action with respect to
the filing;

•

the action of the Commission or the staff, acting pursuant to delegated authority, in declaring the filing effective, does not relieve the Company from its full responsibility for
the adequacy and accuracy of the disclosure in the filing; and

•

the Company may not assert this action as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

 Thank you for your assistance and cooperation in
this matter.

 Mr. Geoffrey Ossias

 Page 2

 Sincerely yours,

 Sunstone Hotel
Investors, Inc.

By:

/S/    JON KLINE

 Name: Jon Kline

 Title: Chief Financial
Officer

cc:
Alison S. Ressler

Patrick S. Brown

(Sullivan & Cromwell LLP)

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<TEXT>

      June 1, 2005

Mail Stop 4561

Jon D. Kline
Executive Vice President and Chief Financial Officer
Sunstone Hotel Investors, Inc.
903 Calle Amanecer, Suite 100
San Clemente, CA  92673

Re:	Sunstone Hotel Investors, Inc.
      Form S-11 filed May 20, 2005
      File No. 333-125123

Dear Mr. Kline:

	This is to advise you that we have conducted only a limited
review of your registration statement.  Based on that limited
review,
we have the following comment.

1. Please note that it is not appropriate to specify the joint
book-
running managers on the cover of the prospectus.  Please revise
accordingly.

      As appropriate, please amend your registration statement in
response to these comments.  You may wish to provide us with
marked
copies of the amendment to expedite our review.  Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested information.  Detailed cover
letters greatly facilitate our review.  Please understand that we
may
have additional comments after reviewing your amendment and
responses
to our comments.

      We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing to be certain that the
filing includes all information required under the Securities Act
of
1933 and that they have provided all information investors require
for an informed investment decision.  Since the company and its
management are in possession of all facts relating to a company`s
disclosure, they are responsible for the accuracy and adequacy of
the
disclosures they have made.

      Notwithstanding our comments, in the event the company
requests
acceleration of the effective date of the pending registration
statement, it should furnish a letter, at the time of such
request,
acknowledging that:

?	should the Commission or the staff, acting pursuant to
delegated
authority, declare the filing effective, it does not foreclose the
Commission from taking any action with respect to the filing;

?	the action of the Commission or the staff, acting pursuant to
delegated authority, in declaring the filing effective, does not
relieve the company from its full responsibility for the adequacy
and
accuracy of the disclosure in the filing; and

?	the company may not assert staff comments and the declaration
of
effectiveness as a defense in any proceeding initiated by the
Commission or any person under the federal securities laws of the
United States.

	In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in connection with our review of
your
filing or in response to our comments on your filing.

      We will consider a written request for acceleration of the
effective date of the registration statement as confirmation of
the
fact that those requesting acceleration are aware of their
respective
responsibilities under the Securities Act of 1933 and the
Securities
Exchange Act of 1934 as they relate to the proposed public
offering
of the securities specified in the above registration statement.
We
will act on the request and, pursuant to delegated authority,
grant
acceleration of the effective date.

      We direct your attention to Rules 460 and 461 regarding
requesting acceleration of a registration statement.  Please allow
adequate time after the filing of any amendment for further review
before submitting a request for acceleration.  Please provide this
request at least two business days in advance of the requested
effective date.

      Please contact Jennifer Gowetski, at (202) 551-3401, or me
at
(202) 551-3780 with any questions.

Sincerely,

Elaine Wolff
Branch Chief

cc:	Patrick S. Brown, Esq. (via facsimile)
	Sullivan & Cromwell LLP
??

??

??

??

Sunstone Hotel Investors, Inc.
June 1, 2005
Page 1

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CORRESP
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Sunstone Hotel Investors, Inc Acceleration request for FORM S-11

 [LOGO OF SUNSTONE HOTEL INVESTORS, INC.]

 June 2, 2005

 Via Facsimile

 Jennifer Gowetski,

 Securities and Exchange Commission,

 450 Fifth Street, N.W.,

 Washington D.C. 20549-0408.

Re:
Sunstone Hotel Investors, Inc.

(Form S-11, File No. 333-125123)

 Dear Ms. Gowetski:

 Pursuant to Rule 461 of Regulation C of the General Rules and Regulations under the Securities Act of 1933, as amended, the undersigned, on behalf of
Sunstone Hotel Investors, Inc. (the “Company”), respectfully requests that the effective date of the Registration Statement on Form S-11 referred to above be accelerated so that it will become effective at 3:00 p.m. Eastern time, on
Monday, June 6, 2005, or as soon as practicable thereafter.

 This request for acceleration is subject, however, to your receiving a telephone call prior to such time from our legal counsel, Sullivan & Cromwell LLP, confirming this request.

 In accordance with your request, the Company hereby acknowledges the
following:

•

should the Commission or the staff, acting pursuant to delegated authority, declare the filing effective, it does not foreclose the Commission from taking any action with respect to
the filing;

•

the action of the Commission or the staff, acting pursuant to delegated authority, in declaring the filing effective, does not relieve the Company from its full responsibility for
the adequacy and accuracy of the disclosure in the filing; and

•

the Company may not assert staff comments and the declaration of effectiveness as defense in any proceeding initiated by the Commission or any person under the federal securities
laws of the United States.

 Thank you for your
assistance and cooperation in this matter.

 Sincerely yours,

 Sunstone Hotel Investors, Inc.

By:

/S/    ROBERT
ALTER

 Name:

 Title:

 Robert Alter

 Chief Executive
Officer

cc:
Patrick S. Brown

(Sullivan & Cromwell LLP)

Peter T. Healy

(O’Melveny & Myers LLP)

CORRESP
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Merrill Lynch Acceleration Request for Sunstone Hotel Investors FORM S-11

[LOGO OF MERRILL LYNCH]

 Global Markets & Investment Banking

 World Financial Center

 North Tower

 New York, New York 10281-1305

 212-449-6500

June 2, 2005

 Securities and Exchange Commission

 450 Fifth Street, NW

 Washington, D.C. 20549

Re:
Sunstone Hotel Investors, Inc.

Registration Statement No. 333-125123

 Gentlemen:

 We hereby join the Company in requesting that the effective date for the Registration Statement referred to above be accelerated so that it will be declared effective at 3:00 p.m. e.d.t. on June 6, 2005, or as soon
thereafter as possible, pursuant to Rule 430A.

 In connection with the
foregoing, please be advised that the undersigned have effected approximately the following distribution of copies of the Preliminary Prospectus dated June 1, 2005.

 N.Y.S.E./A.S.E.

1

 Financial Services and Publications

15

 N.A.S.D.

5

 Underwriters

34,407

 Dealers

2

 Individuals & Corporations

1,908

 MLPF&S Inc. Branch Offices

3,382

 TOTAL

39,720
 Copies

 Very truly yours,

 MERRILL LYNCH & CO.

 MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED

 CITIGROUP GLOBAL MARKETS INC.

 DEUTSCHE BANK
SECURITIES INC.

 BEAR, STEARNS & CO. INC.

 A.G. EDWARDS &
SONS, INC.

 BANC OF AMERICA SECURITIES LLC

 UBS SECURITIES
LLC

 WACHOVIA SECURITIES LLC

 CALYON SECURITIES (USA)
INC.

 STIFEL, NICOLAUS & COMPANY, INCORPORATED

 As
Underwriters

BY: MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

By:

/s/    HUGH H. HAYNES

 Hugh H. Haynes

 Authorized Signatory