Sunstone Hotel Investors

March 2021

Company Presentation

Forward-Looking Statements

This presentation contains forward-looking statements within the meaning of federal securities laws and regulations. These

forward-looking statements are identified by their use of terms and phrases such as “anticipate,” “believe,” “continue,”

“could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “should,” “will” and other similar terms and phrases,

including opinions, references to assumptions and forecasts of future results. Forward-looking statements are not

guarantees of future performance and involve known and unknown risks, uncertainties and other factors that may cause the

actual results to differ materially from those anticipated at the time the forward-looking statements are made. These risks

include, but are not limited to: volatility in the debt or equity markets affecting our ability to acquire or sell hotel assets;

international, national and local economic and business conditions, including the likelihood of a U.S. recession, government

shutdown, changes in the European Union or global economic slowdown, as well as any type of flu, disease-related

pandemic or the adverse effects of climate change, affecting the lodging and travel industry; the ability to maintain sufficient

liquidity and our access to capital markets; terrorist attacks or civil unrest, which would affect occupancy rates at our hotels

and the demand for hotel products and services; operating risks associated with the hotel business; risks associated with

the level of our indebtedness and our ability to meet covenants in our debt and equity agreements; relationships with

property managers and franchisors; our ability to maintain our properties in a first-class manner, including meeting capital

expenditure requirements; our ability to compete effectively in areas such as access, location, quality of accommodations

and room rate structures; changes in travel patterns, taxes and government regulations, which influence or determine

wages, prices, construction procedures and costs; our ability to identify, successfully compete for and complete

acquisitions; the performance of hotels after they are acquired; necessary capital expenditures and our ability to fund them

and complete them with minimum disruption; our ability to continue to satisfy complex rules in order for us to qualify as a

REIT for federal income tax purposes; severe weather events or other natural disasters; risks impacting our ability to pay

anticipated future dividends; and other risks and uncertainties associated with our business described in the Company’s

filings with the Securities and Exchange Commission. Although the Company believes the expectations reflected in such

forward-looking statements are based upon reasonable assumptions, it can give no assurance that the expectations will be

attained or that any deviation will not be material. All forward-looking information provided herein is as of the date of this

presentation, and the Company undertakes no obligation to update any forward-looking statement to conform the statement

to actual results or changes in the Company’s expectations.

This presentation should be read together with the consolidated financial statements and notes thereto included in our most

recent reports on Form 10-K and Form 10-Q. Copies of these reports are available on our website at

www.sunstonehotels.com and through the SEC’s Electronic Data Gathering Analysis and Retrieval System (“EDGAR”) at

www.sec.gov.

2

Why Sunstone. . .

3

High quality portfolio of Long-Term Relevant Real Estate®

Ability to take a long-term and balanced approach to the business

and well positioned to capitalize on the recovery

Sector-leading, low-levered balance sheet and significant liquidity

provide protection and opportunity for growth

Management team with superior track record of accretive and well-

timed capital allocation

Best-in-class corporate governance with executive compensation

structure that creates strong alignment with shareholders

a

a

a

a

a

Investment Highlights

Opportunity to invest at cyclically-low valuation with the security

offered by the lowest levered balance sheet in the sector with the

liquidity to growa

Long-Term Relevant Real Estate® Is . . .

4

JW Marriott New OrleansOceans Edge

Resort & Marina

Marriott

PortlandHilton San Diego Bayfront

Hyatt Regency

San Francisco

Marriott Boston

Long Wharf

Renaissance Washington DC Wailea Beach Resort

Boston Park Plaza

What’s Going On . . .

5

Substantially Entire Portfolio Has Resumed Operations, Cash Burn Improving, Positive Trends Emerging

• After suspending operations across most of the portfolio in early 2020, substantially all hotels –

representing 98% of 2019 hotel EBITDA – have since resumed operations.

• Recent forward bookings are encouraging and have gained momentum as vaccine distribution is

becoming more widespread.

• The reopening of hotels, rising occupancy levels and significant cost reductions have allowed us to

improve our monthly cash burn rate.

• Opportunistically completed several disruptive capital projects in 2020 and are now shifting focus to

several value enhancing projects in 2021.

• Best-in-class balance sheet and significant liquidity position Sunstone to capitalize on investment

opportunities as the industry recovers.

In Operations atEnd of Month

April2020

July2020

October2020

December 2020

Number ofHotels

3 9 14 15

% of Total Rooms

20% 43% 86% 92%

% of 2019Hotel EBITDA

17% 37% 82% 98%

Note: Portfolio data in above table based on current 17-hotel portfolio comprised of 9,017 consolidated total rooms and $310 million of consolidated comparable 2019 hotel EBITDA.

0%

15%

30%

45%

60%

75%

0%

15%

30%

45%

60%

75%

Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21

All Hotels Hotels in Operation

What’s Going On . . .

6

Demand Has Troughed and is Steadily Returning

Trailing 7-Day Occupancy

After record setting declines in late March and April, occupancy has been

slowly increasing in recent months. There has been particular strength

around the weekends and holidays from robust leisure demand that should

translate into meaningfully higher occupancies in the coming months as the

weather improves and business travel accelerates.

Note: Reflects data from March 7, 2020 to February 28, 2021.

0

50,000

100,000

150,000

2Q 2021 3Q 2021 4Q 2021

Group Trends are Stabilizing . . .

7

Pace of Cancellations Has Slowed with Increased Likelihood of Groups Attending in Later Quarters

Group Room Nights Canceled by Week 2021 Group Rooms On the Books

44%46%

12%

% Percent of 2019 actual group rooms

Group cancelation volumes have continued to moderate in recent months with the second half of 2021

maintaining encouraging group bookings. We continue to rebook cancelled events and groups are becoming

increasingly intent on conducting their events later in the year.

0

30,000

60,000

90,000

Feb-20 Mar-20 May-20 Jun-20 Aug-20 Sep-20 Nov-20 Dec-20 Feb-21

(10,000)

(5,000)

0

5,000

10,000

15,000

Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21

Transient Bookings Accelerating . . .

8

Forward Bookings Reflect Pent Up Demand for Travel

Weekly Transient Pickup For Next 6 Months Transient Pace vs. Same Time 2019

35%

48%

73%

0%

20%

40%

60%

80%

2Q 2021 3Q 2021 4Q 2021

Transient booking trends have increased sharply and point to higher levels of demand in the latter portion

of 2021. Strong demand over weekends and recent holidays would suggest there is significant desire for

leisure travel. Business transient demand is starting to return.

After falling off late in 2020, the volume of

weekly net transient bookings has again

resumed an upward trajectory.

Cash Balance Provides Significant Runway . . .

9

Monthly Cash Burn Projections ($ millions)

Monthly Recurring

Cash Uses

Prior

Estimate

Current

Estimate

Percent

Change

Hotel Cash

Uses $10 - $13 $8 - $11 -17%

Corporate Cash

Requirements$6 - $7 $6 -8%

Total Before

Capital Expenditures$16 - $20 $14 - $17 -14%

Cash Burn Rate Has Improved. Portfolio Should Resume Profitability by the Latter Half of 2021

• As more hotels have resumed operations and occupancy levels have continued to gradually rise, we

have been able to further reduce our cash burn rate.

• If the pace of recovery continues, we would expect to return to hotel profitability late in the second

quarter or early in the third quarter.

• Our best-in-class balance sheet has allowed us to avoid costly capital raises since the onset of the

pandemic and we expect to retain significant excess cash that we can deploy into value enhancing

internal and external growth opportunities.

Taking a Long-Term and Balanced Approach . . .

10

Opportunistically Using This Time to Complete What Would Otherwise be Highly Disruptive Capital Work

• Installation of four new escalators to serve

subterranean meeting room and ballroom

levels.

• Implemented a new sense of arrival through

a full refreshment of the porte cochere,

including a new ceiling, lighting and

driveway surface.

• Added new extended lanai decks to 32

oceanfront rooms.

• Drained and replastered the serenity pool.

• Completed various other maintenance

projects that would be have been highly

disruptive to guests and hotel operations.

• Demolished existing lobby floor and

replaced with 50,000 square feet of new tile.

• Removed numerous large planters from

lobby to better accommodate traffic flow.

• Repainted lobby and 10-story atrium.

Took advantage of low demand period in 2020 and accelerated several capital projects that would have

otherwise been highly disruptive to hotel operations and guest satisfaction and would have resulted in

significant displacement under normal operations.

How We Approach the Balance Sheet . . .Sector Leading Balance Sheet Going Into the Pandemic with Significant Tangible Liquidity

11

2019 Year-End Net Debt & Preferred to TTM EBITDA

We have long believed that a lowly levered balance sheet is the most appropriate capital

structure for a highly cyclical industry that is subject to operating leverage.

Note: Per company public filings as December 31, 2019. Debt balances calculated on a pro rata basis.

0.0x

1.0x

2.0x

3.0x

4.0x

5.0x

6.0x

SHO HST RLJ DRH XHR RHP PK PEB

0.0x

3.0x

6.0x

9.0x

2019 at 100%No Acquisitions

2019 at 100%With Acquisitions

2019 at 75%No Acquisitions

2019 at 75%With Acquisitions

2019 at 50%No Acquisitions

2019 at 50%With Acquisitions

Substantial Acquisition Capacity . . .

12

Illustrative Net Debt & Preferred / EBITDA at Various Assumed Recovery Levels and Acquisition Volumes

Acquisition Capacity Assuming

EBITDA at 100% of 2019

Comparable Levels

Acquisition Capacity Assuming

EBITDA at 75% of 2019

Comparable Levels

Acquisition Capacity Assuming

EBITDA at 50% of 2019

Comparable Levels

We Retain Significant Capacity Given the Strength of Our Balance Sheet at the Onset of the Pandemic

Note: Based on $292 million of 2019 comparable adjusted corporate EBITDA for the current 17-hotel portfolio. Acquisitions assumed at 16x stabilized EBITDA.

Given the strength of our balance sheet, once we emerge from the waiver period, our debt covenants would still

allow for substantial acquisition capacity even if EBITDA does not immediately return to pre-pandemic levels.

Over $1.5

billion of

acquisitions

$700 million to

$1.0 billion of

acquisitions

$250 million to

$400 million of

acquisitions

90%

100%

110%

120%

130%

140%

150%

160%

170%

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 (F)

13

Superior Capital Allocation Track Record . . . Acquiring and Disposing of Hotels at Right Points in Cycle While Increasing Our Ownership of LTRR®

Acquisition and Disposition Summary

Chicago Downtown / Mag Mile

Minneapolis

Los Angeles

Rochester 4-Hotel

Portfolio

Indexed Top-25 Market RevPAR

We acquired nearly $2.0 billion of

higher quality hotels, in the early

phase of the cycle . . .

Acquisitions

Dispositions . . . and sold 22 lower quality and

generally commodity hotels for $1.7 billion

as the cycle matured.

Note: Excludes Royal Palm which was owned for less than one year. 2020(F) reflects the pre-pandemic 2020 RevPAR growth forecast for urban hotels per CBRE Hotel Horizons.

$6.50

$8.50

$10.50

$12.50

$14.50

$16.50

$18.50

Nov-13 Nov-14 Nov-15 Nov-16 Nov-17 Nov-18 Nov-19 Nov-2014

Superior Capital Allocation Track Record . . . Accretive Capital Allocation

Track record of patient and disciplined accessing of the equity capital markets, and

opportunistically repurchasing shares.

Repurchased $50

million at $13.22

in mid 2019

SHO Price

Issued $79 million at $16.28 in

May & June 2017. Acquired

Oceans Edge Resort & Marina.

Issued $271 million at $13.56 in

November 2013. Acquired Hyatt

Regency Embarcadero.

Issued $55 million

at $15.47 in

December 2016

Issued $45

million at $17.42

in June 2018

Issued $263 million at $14.60

in June 2014. Acquired Wailea

Beach Resort.

Issued $22 million at

$15.96 in November &

December 2014

Repurchased $104

million at $10.61 in

1Q 2020

How We View Corporate Governance . . .

15

Ranked among highest in corporate governance by Green Street Advisors

Culture of transparency with best-in-class disclosure and quarterly supplemental

Opted-out of MUTA, limitations on rights plans, adopted proxy access and

stockholder’s right to amend bylaws, do not allow hedging or pledging of shares held

by executives

Non-classified board with annual election of all directors

Directors have open access to senior management and all employees and regularly

review ESG practices and initiatives

Executive compensation program creates strong shareholder alignment. Adopted

compensation clawback policy and double trigger provision upon change of control.

a

a

a

a

a

Our priority is to maximize shareholder value. Our board structure, corporate charter

and culture of transparency place us at the top of the REIT space in terms of

corporate governance.

Sector Leading Corporate Governance Profile