Edgar Filing: Sunstone Hotel Investors, Inc.

Ownership Submission

FORM 4

Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP OF SECURITIES

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940

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(Print or Type Responses)

1. Name and Address of Reporting Person ^*

Sunstone Hotel Investors, L.L.C.

2. Issuer Name and Ticker or Trading Symbol
Sunstone Hotel Investors, Inc. [SHO]

5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)

_____ Director	__X__ 10% Owner
_____ Officer (give title below)	_____ Other (specify below)

(Last)

(First)

(Middle)

13155 NOEL ROAD, SUITE 700

3. Date of Earliest Transaction (Month/Day/Year)
10/26/2004

(Street)

DALLAS, TX 75240

4. If Amendment, Date Original Filed(Month/Day/Year)

6. Individual or Joint/Group Filing(Check Applicable Line)
___ Form filed by One Reporting Person
_X_ Form filed by More than One Reporting Person

(City)

(State)

(Zip)

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned

1.Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	3. Transaction Code (Instr. 8)		4. Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5)			5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4)	6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
1.Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	Code	V	Amount	(A) or (D)	Price		6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
Common Stock	10/26/2004		J		9,990,832	A	$ 17 ⁽¹⁾	9,990,932 ⁽²⁾	I	See footnote. ⁽³⁾
Common Stock	10/26/2004		J		103,684	D	$ 17 ⁽⁴⁾	9,887,248	I	See footnote. ⁽³⁾

Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
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Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)

1. Title of Derivative Security
(Instr. 3)

2. Conversion or Exercise Price of Derivative Security

3. Transaction Date (Month/Day/Year)

3A. Deemed Execution Date, if any (Month/Day/Year)

4. Transaction Code
(Instr. 8)

5. Number of Derivative Securities Acquired (A) or Disposed of (D)
(Instr. 3, 4, and 5)

6. Date Exercisable and Expiration Date
(Month/Day/Year)

7. Title and Amount of Underlying Securities
(Instr. 3 and 4)

8. Price of Derivative Security
(Instr. 5)

9. Number of Derivative Securities Beneficially Owned Following Reported Transaction(s)
(Instr. 4)

10. Ownership Form of Derivative Security: Direct (D) or Indirect (I)
(Instr. 4)

11. Nature of Indirect Beneficial Ownership
(Instr. 4)

Code

(A)

(D)

Date Exercisable

Expiration Date

Title

Amount or Number of Shares

Sunstone Hotel Partnership, LLC Units (Right to acquire)

⁽⁵⁾

10/26/2004

19,112,556

⁽⁵⁾

Sunstone Hotel Investors, Inc. Common Stock

19,112,556

$ 17 ⁽⁶⁾

19,112,556 ⁽⁷⁾

See footnote. ⁽³⁾

Sunstone Hotel Partnership, LLC Units (Right to acquire)

⁽⁵⁾

10/26/2004

12,247,984

⁽⁵⁾

Sunstone Hotel Investors, Inc. Common Stock

12,247,984

$ 17

6,864,572 ⁽⁸⁾

See footnote. ⁽³⁾

Reporting Owners

Reporting Owner Name / Address	Relationships
Reporting Owner Name / Address	Director	10% Owner	Officer	Other
Sunstone Hotel Investors, L.L.C. 13155 NOEL ROAD SUITE 700 DALLAS, TX 75240		X
WB Hotel Investors, LLC 13155 NOEL ROAD SUITE 700 DALLAS, TX 75240		X
Westbrook Real Estate Fund III, L.P. 13155 NOEL ROAD SUITE 700 DALLAS, TX 75240		X
Westbrook Real Estate Co-Investment Partnership III, L.P. 13155 NOEL ROAD SUITE 700 DALLAS, TX 75240		X
Westbrook SHP L.L.C. 13155 NOEL ROAD SUITE 700 DALLAS, TX 75240		X
Westbrook Sunstone Investors, L.L.C. 13155 NOEL ROAD SUITE 700 DALLAS, TX 75240		X
Westbrook Real Estate Partners Management III, L.L.C. 13155 NOEL ROAD SUITE 700 DALLAS, TX 75240		X
Westbrook Real Estate Fund IV, L.P. 13155 NOEL ROAD SUITE 700 DALLAS, TX 75240		X
Westbrook Real Estate Co-Investment Partnership IV, L.P. 13155 NOEL ROAD SUITE 700 DALLAS, TX 75240		X
Westbrook Real Estate Partners Management IV, L.L.C. 13155 NOEL ROAD SUITE 700 DALLAS, TX 75240		X

Signatures

See signatures attached as Exhibit 99.1		10/26/2004
^**Signature of Reporting Person		Date

Explanation of Responses:

*	If the form is filed by more than one reporting person, see Instruction 4(b)(v).
**	Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
(1)	The shares of Common Stock were received in exchange for interests in certain property-owning entities as described under the caption "Formation and Structuring Transactions" in Sunstone Hotel Investors, Inc.'s final prospectus dated October 22, 2004.
(2)	Consists of 4,516,702 shares of Common Stock directly owned by Sunstone Hotel Investors, L.L.C., 889,469 shares of Common Stock directly owned by WB Hotel Investors, LLC and 4,584,761 shares of Common Stock directly owned by Sunstone/WB Hotel Investors IV, LLC.
(3)	See Exhibit 99.1.
(4)	The shares of Common Stock were granted to former employees of Sunstone Hotel Investors, Inc. and will vest ratably over five years as described under the caption "Certain Relationships and Related Transactions" in the Prospectus.
(5)	Holders of Units are entitled to present them for redemption for a cash amount equal to the then-fair market value of an equal number of shares of Sunstone Hotel Investors, Inc. or, in Sunstone Hotel Investors, Inc.'s sole discretion, an equal number of shares of Common Stock. Units are immediately eligible to be presented for redemption or become eligible at various times through October 22, 2005.
(6)	The Units were received in exchange for interests in certain property-owning entities as described under the caption "Formation and Structuring Transactions" in Sunstone Hotel Investors, Inc.'s final prospectus dated October 22, 2004.
(7)	Consists of 8,636,329 Units directly owned by Sunstone Hotel Investors, L.L.C., 1,709,764 Units directly owned by WB Hotel Investors, LLC, 7,831,659 Units directly owned by Sunstone/WB Hotel Investors IV, LLC and 934,804 Units directly owned by Sunstone/WB Manhattan Beach.
(8)	Consists of 3,100,975 Units directly owned by Sunstone Hotel Investors, L.L.C., 615,896 Units directly owned by WB Hotel Investors, LLC, 2,606,302 Units directly owned by Sunstone/WB Hotel Investors IV, LLC and 541,399 Units directly owned by Sunstone/WB Manhattan Beach.
Remarks: This Form 4 is being filed by the entities listed on Exhibit 99.1 to this Form 4 (the "Reporting Persons"). The Reporting Persons may be deemed to constitute a "group" for purposes of Section 13(d) of the Exchange Act. Because the SEC's electronic filing system will not allow more than ten joint filers on one Form 4, the holdings of the Reporting Persons are being reported on two identical Form 4s.

Note: File three copies of this Form, one of which must be manually signed. If space is insufficient, see Instruction 6 for procedure.

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