Sunstone Hotel Investors Company Presentation

1 Sunstone Hotel InvestorsMay 2017 Company PresentationForward-Looking anticipate, believe, continue, could, estimate, expect, intend, may, plan, predict, project, should, will andothersimilartermsandphrases,including opinions, , ,butarenotlimitedto:volatilityinthedebto requitymarketsaffectingourabilitytoacqui reorsellhotelassets;international,nation alandlocaleconomicandbusinessconditions, ,aswellasanytypeoffluordisease-relatedpa ndemic,affectingthelodgingandtravelindus try;theabilitytomaintainsufficientliquid ityandouraccesstocapitalmarkets;potentia lterroristattacksorcivilunrest,whichwoul daffectoccupancyratesatourhotelsandthede mandforhotelproductsandservices;operatin grisksassociatedwiththehotelbusiness;ris ksassociatedwiththelevelofourindebtednes sandourabilitytomeetcovenantsinourdebtan dequityagreements;relationshipswithprope rtymanagersandfranchisors;ourabilitytoma intainourpropertiesinafirst-classmanner, includingmeetingcapitalexpenditurerequir ements;ourabilitytocompeteeffectivelyina reassuchasaccess,location,qualityofaccom modationsandroomratestructures;changesin travelpatterns,taxesandgovernmentregulat ions,whichinfluenceordeterminewages,pric es,constructionproceduresandcosts;ourabi litytoidentify,successfullycompeteforand completeacquisitions;theperformanceofhot elsaftertheyareacquired;necessarycapital expendituresandourabilitytofundthemandco mpletethemwithminimumdisruption;ourabili tytocontinuetosatisfycomplexrulesinorder forustoqualifyasaREIT forfederalincometaxpurposes.

2 Andotherrisksanduncertaintiesassociatedw ithourbusinessdescribedintheCompany , ,andtheCompanyundertakesnoobligationtoup dateanyforward-lookingstatementtoconform thestatementtoactualresultsorchangesinth eCompany 16% 13% 9% 8% 7% 6% 5% 4% 6% HeadquartersAliso Viejo, CA Equity market capitalization$ symbolNYSE: SHOT otalpro rata capitalization$ of hotels27 Net debt & pref. / Pro forma TTM of rooms13,226 Debt & pref. / Pro rata capitalization25%Meeting space (sq. ft.)~850,000 Fixed charge coverage Hotel EBITDA$246mmCompany OverviewSunstone is a leading US lodging real estate investment trust ( REIT ) with interests in 27 hotels, primarily in the urban and resort, upper upscale segment, operated under nationally recognized brandsCompany OverviewPortfolio Distribution(by Hotel EBITDA)Hilton New Orleans St. CharlesBoston Park PlazaJW Marriott New OrleansNote: EBITDA represents trailing twelve month performance ending March 31, 2017.

3 Capitalization and market data as of March 31, 2017. Leverage metrics shown on a pro forma and pro rata basis. Dividend yield based on actual dividends distributed over trailing twelve month AreaIllinoisFloridaNorthern CALouisianaHawaiiNew YorkOtherHigh Quality, Diversified Portfolio Keygateway,conventionandresortmarketdist ributionrepresenting95%ofLTMH otelEBITDA Over93%ofportfoliobyHotelEBITDA brandedunderpremierflags,includingMarrio tt,HiltonandHyatt Relationshipswith8differenthotelmanagers tocaptureandensurebestpracticesacrossthe Company PortfolioRevPARindexof105%withapproximat ely45%ofhotels>110%Strong, Consistent Portfolio Operating Performance with Continued Industry Growth Portfoliooperatingatrecordoccupancylevel sexceeding82%in2015and2016 RobustRevPARgrowthfrom2013 LTMH otelEBITDA perkeyofover$27.

4 000isamongthehighestinsectoranddemonstra testhestrengthofSunstoneassetsandoperati onsWell Maintained Portfolio Significantcapitalinvestmentacrossthepor tfolioincludingmajorrenovationsandreposi tioningsatBostonParkPlaza,WaileaBeachRes ortandHyattRegencySanFrancisco Majorityofinvestmentinguestfacingareaswh ichhastranslatedtostrongguestsatisfactio nasmeasuredbybrandsaswellasmultipleTripA dvisorandAAAFourDiamondawards Over85%ofhotelsrankwithinthetophalfofthe irrespectivemarketperTripAdvisorProven Asset Management Capabilities Drive Organic Growth Seasonedandmulti-disciplinaryassetmanage mentteamwithstrongexperienceinoperationa lanalysis,designandconstruction Completedseveralrecentmajorprojectsthata reservingasgrowthcatalysts Roomsrenovationandsubstantialpublicspace reconfigurationoftheHyattRegencySanFranc isco Acquisition&fullrenovationof1,060roomBos tonParkPlazatoredefinetheasset scompetitivepositioning Fullreconceptingofthe546roomWaileaBeachR esortlocatedon22oceanfrontacresinMauiCon servative Balance Sheet and Financial Strategy Strongcreditprofilewithveryconservativec ovenantmetrics Netdebt+ + Wellstaggeredmaturityschedulewithcurrent weighted-averagematurityofnearly6yearsEx perienced and Dedicated Management Team Keyexecutiveteammembershaveextensiveindu stryexperience Diversebackgroundsensurewell-roundedview anddeepexpertiseacrossallkeyCompanyfunct ions Strongtrackrecordandrelationshipswithinv estors.

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6 Nationally Diversified PortfolioStrong US Gateway, Convention and Resort Market ExposureSunstone has strong coastal distribution representing approximately 80% of LTM Hotel EBITDAA pproximately 95% of LTM Hotel EBITDA generated by properties in major US gateway, convention and resort marketsNote: Hotel EBITDA represents trailing twelve month performance ending March 31, 2017 for the total 27 property portfolioMajor US gateway, convention and resort markets include Boston, New York, Washington DC, Baltimore, Chicago, Orlando, New Orleans, San Francisco, Los Angeles, Orange County, CA, Hawaii, Park City and San DiegoMassachusetts3 Hotels | 1,936 Rooms | Hotel EBITDAM arriott Boston Long WharfBoston Park PlazaMarriott QuincyNew York2 Hotels | 826 Rooms | Hotel EBITDAH ilton Times SquareRenaissance WestchesterPennsylvania1 Hotel | 289 Rooms | Hotel EBITDAM arriott PhiladelphiaDC / MD / VA3 Hotels | 1,825 Rooms | Hotel EBITDAR enaissance Washington.

7 DCRenaissance HarborplaceMarriott Tysons CornerFlorida1 Hotel | 781 Rooms | Hotel EBITDAR enaissance Orlando at Sea World Louisiana2 Hotels | 753 Rooms | Hotel EBITDAJW Marriott New OrleansHilton New Orleans St. CharlesTexas2 Hotels | 870 Rooms | Hotel EBITDAH ilton North HoustonMarriott HoustonHawaii1 Hotel | 546 Rooms | Hotel EBITDAMaui: Wailea Beach ResortIllinois3 Hotels | 1,148 Rooms | Hotel EBITDAE mbassy Suites Chicago DowntownHilton Garden Inn Magnificent MileHyatt Centric Chicago Magnificent MileOregon1 Hotel | 249 Rooms | Hotel EBITDAM arriott PortlandUtah1 Hotel | 199 Rooms | Hotel EBITDAM arriott Park CitySouthern California6 Hotels | 2,999 Rooms | Hotel EBITDAH ilton San Diego BayfrontRenaissance Long BeachRenaissance Los Angeles AirportHyatt Regency Newport BeachEmbassy Suites Hotel La JollaCourtyard by Marriott Los AngelesNorthern California1 Hotel | 804 Rooms | Hotel EBITDAH yatt Regency San FranciscoBranded by.

8 HiltonHyattIndependentMarriott5 High Quality Assets6 Marriott Boston Long WharfHilton San Diego BayfrontHyatt Chicago Magnificent MileRenaissance Orlando at SeaWorld Renaissance Washington DC7 Opportunity to acquire a high quality property situated in a prime, fee simple location in San Francisco's financial district Hotel located next to numerous corporate and leisure demand generators with additional uplift expected from the construction of 3 million square feet of new office space in immediate vicinity Substantial upside opportunities available through renovation, streamlining of F&B offerings and more intensive asset managementPropertyOverviewLocationSan Francisco,CANumber of Rooms804 Square Feetof Meeting Space72,000 Ownership TypeFeeSimpleAcquisition OverviewTransaction ClosedDecember 2013 Purchase Price$263 millionPurchase Price per Key$327,300 Multiple on 2014E EBITDA at on 2014E NOI at Regency San FranciscoAcquisition SummaryAcquisition Rationale8 GuestroomMeeting SpaceThe MarketActual and Forecast RevPAR and EBITDAC onstructive Market Fundamentals Hotel has captured outsized market share growth since acquisition benefitting from recent capital investment and healthy market fundamentals Given the Hotel s prime location and abundant meeting space, the asset is well positioned to benefit from additional commercial development in the immediate vicinity and a lack of competitive new Hotel supplyHyatt Regency San FranciscoSustained EBITDA Growth and Outperformance($000s)

9 $200$225$250$27515,00018,00021,00024,000 27,00030,00033,0002013A2014A2015A2016 AEBITDA - Actual (L)RevPAR (R)EBITDA - Underwritten (L)9 Hyatt Regency San FranciscoIrreplaceable Asset in Prime LocationBoston Park Plaza10 Acquisition Rationale Opportunity to acquire a desirable independent Hotel on fee simple basis in the high barrier-to-entry Boston lodging market Attractive valuation at substantial discount to replacement cost with significant in-place cash flow generation Meaningful value creation opportunities possible through renovation and repositioning Situated in highly desirable Back Bay submarket and proximate to multiple demand generators including key business, convention, tourism and retail destinations Significant strategic optionality resulting from lack of brand or management encumbrances Further increases portfolio quality and enhances brand and geographic distributionPropertyOverviewLocationBack Bay Boston.

10 MABrandIndependentChain ScaleUpper UpscaleService LevelFull ServiceNumber of Rooms11,060 Square Feetof Meeting Space50,000 Square Feetof Retail Space50,000 OwnershipFeeSimpleAcquisition OverviewTransaction ClosedJuly 2013 Purchase Price$250 millionPurchase Price per Key$237,400 Multiple on 2013E EBITDA at on 2013E NOI at Summary(1)At the time of acquisition, the Hotel comprised 1,053 rooms. Seven additional rooms were subsequently added during renovation11 GRAND DAME IS BACK The historic Boston Park Plaza is reborn with a $100 million top-to-bottom makeover Front Desk BeforeFront Desk AfterMain Lobby BeforeMain Lobby AfterRenovation and Reposition Overview Comprehensive renovation designed to reposition the Hotel and redefine its long-term earnings potential Full guestroom renovation and conversion of select room size formats to garner more premium rates and enhance position of asset among competitive set Full revitalization of lobby, meeting spaces and common areas Retail tenant mix upgraded and service offerings enhanced to better align with repositioned asset profile Numerous asset management initiatives implemented to drive operational efficiencies.