IPO Profile

Sunstone Hotel Investors
903 Calle Amanecer, Suite 100, San Clemente, California 92673
Tel: 949-369-4000
Web: www.sunstonehotels.com
Ticker: SHO
Amount Raised: $360,400,000.00

Description:
Our predecessors were formed in 1984 and completed an initial public offering in 1995. In November 1999, one of the Contributing Entities purchased our predecessor public company, taking it private. Since that time through June 30, 2004, we have acquired $744.0 million of hotels and sold $362.7 million of hotels, which increased the percentage of our upper upscale and upscale hotel revenue from 56.4% in 1999 to 87.7% in 2003 on a pro forma basis. Additionally, since that time, we increased our room count by 31.1% to 13,794 rooms and our average rooms per hotel by 35.7% to 242 on a pro forma basis. Although we have historically self-managed most of our hotels, we will engage an independent hotel manager, which we refer to as the Management Company, to manage 52 of our 57 hotels. We believe operational efficiencies will be realized through the relationship with the Management Company, in addition to allowing us to comply with the restrictions imposed on us by the applicable rules governing lodging REITs. Our remaining five hotels will continue to be managed by Marriott or Hyatt under existing management agreements. To optimize the cash flow from, and the profitability of, our hotels, we intend to structure our management agreements with the Management Company to align its incentives with ours and to maintain, to the greatest extent practicable, the hotel management practices we employed prior to electing REIT status. Most of our current hotel management employees will become employees of the Management Company, and will generally continue in their current roles. The Management Company will maintain offices in the same building as our headquarters for many of the employees responsible for operations, sales and marketing of our hotels.