<PAGE> 1
RULE 424(b)(3)
SEC FILE NO.: 333-41683
SUNSTONE HOTEL INVESTORS, INC.
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SUPPLEMENT NO. 2 DATED MARCH 1, 1999
TO PROSPECTUS DATED DECEMBER 17, 1997
This Supplement No. 2 is a part of and should be read in connection with
the prospectus of Sunstone Hotel Investors, Inc., a Maryland corporation, dated
December 17, 1997 (the "Prospectus") and Supplement No. 1 to the Prospectus,
dated January 23, 1998 ("Supplement No. 1"). Capitalized terms used but not
defined in this Supplement No. 2 have the meanings given to them in the
Prospectus. This Supplement No. 2 adds Selling Stockholders who were not named
in the Prospectus or Supplement No. 1.
Of the 1,000,000 shares of Common Stock registered for sale under the
Prospectus, Selling Stockholders who beneficially own or owned 768,793 shares
were named in the Prospectus or in Supplement No. 1, leaving 231,207 shares for
which Selling Stockholders were not named. This Supplement No. 2 names
additional Selling Stockholders for 59,919 of the 231,207 shares. The following
table names the additional Selling Stockholders, the number of shares each
stockholder has represented to the Company such stockholder beneficially owns,
and the number of shares registered for resale under the Prospectus. To the
Company's knowledge all of the shares registered hereunder are being offered for
sale by the Selling Stockholders for their own account. None of the figures
below for either stockholder individually represents 1% or more of the
outstanding Common Stock of the Company.
<TABLE>
<CAPTION>
Number of Shares
Number of Shares Registered for
Name of Selling Stockholder Beneficially Owned Resale Hereby
- --------------------------- ------------------ ----------------
<S> <C> <C>
Inns Properties 50,359 50,359
OT Hill LLC 339,109 9,560
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TOTAL 389,468 59,919
</TABLE>
The Selling Stockholders named above have acquired, or will acquire, the
shares of Common Stock listed above pursuant to the redemption of Units of the
Partnership. None of the Selling Stockholders named above has had a material
relationship with the Company within the past three years other than as a result
of the ownership of the Common Shares or other securities of the Company or
Units of the Partnership.
