Sunstone Hotel Investors : Presentation June 2021

Company Presentation

June 2021

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: the impact the COVID-19 pandemic has on the Company's business and the economy, as well as the response of governments and the Company to the pandemic, and how quickly and successfully effective vaccines and therapies are distributed and administered; increased risks related to employee matters, including increased employment litigation and claims for severance or other benefits tied to termination or furloughs as a result of temporary hotel suspensions or reduced hotel operations due to COVID-19; general economic and business conditions, including a U.S. recession, trade conflicts and tariffs, regional or global economic slowdowns and any type of flu or disease-related pandemic that impacts travel or the ability to travel, including COVID-19; the need for business-related travel, including the increased use of business-related technology; rising hotel operating costs due to labor costs, workers' compensation and health-care related costs, utility costs, property and liability insurance costs, unanticipated costs such as acts of nature and their consequences and other costs that may not be offset by increased room rates; the ground, building or airspace leases for three of the hotels the Company has interests in as of the date of this presentation; the need for renovations, repositionings and other capital expenditures for the Company's hotels; the impact, including any delays, of renovations and repositionings on hotel operations; new hotel supply, or alternative lodging options such as timeshare, vacation rentals or sharing services such as Airbnb, in the Company's markets, which could harm its occupancy levels and revenue at its hotels; competition from hotels not owned by the Company; relationships with, and the requirements, performance and reputation of, the managers of the Company's hotels; relationships with, and the requirements and reputation of, the Company's franchisors and hotel brands; the Company's hotels may become impaired, or its hotels which have previously become impaired may become further impaired in the future, which may adversely affect its financial condition and results of operations; competition for the acquisition of hotels, and the Company's ability to complete acquisitions and dispositions; performance of hotels after they are acquired; changes in the Company's business strategy or acquisition or disposition plans; the Company's level of debt, including secured, unsecured, fixed and variable rate debt; financial and other covenants in the Company's debt and preferred stock; the impact on the Company's business of potential defaults by the Company on its debt agreements or leases; volatility in the capital markets and the effect on lodging demand or the Company's ability to obtain capital on favorable terms or at all; the Company's need to operate as a REIT and comply with other applicable laws and regulations, including new laws, interpretations or court decisions that may change the federal or state tax laws or the federal or state income tax consequences of the Company's qualification as a REIT; potential adverse tax consequences in the event that the Company's operating leases with its taxable REIT subsidiaries are not held to have been made on an arm's-length basis; system security risks, data protection breaches, cyber-attacks, including those impacting the Company's hotel managers or other third parties, and systems integration issues; other events beyond the Company's control, including climate change, natural disasters, terrorist attacks or civil unrest; and other risks and uncertainties associated with the Company's business described in its 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

Sunstone Operations Update

Pace of Recovery is Accelerating

While still well below normalized levels, RevPAR has accelerated meaningfully in recent months. Portfolio occupancy, average daily rate (ADR), and RevPAR all witnessed sequential growth in each month of 2021. May occupancy and ADR were the highest since the start of the pandemic and exceeded our expectations.

Comparable Portfolio RevPAR and Total RevPAR by Month

$140

RevPAR

Total RevPAR

$105

$70

$35

$0

Apr-20

May-20

Jun-20

Jul-20

Aug-20

Sep-20

Oct-20

Nov-20

Dec-20

Jan-21

Feb-21

Mar-21

Apr-21

May-21

Note: Data excludes one hotel with suspended operations as of May 31, 2021 and does not include Montage Healdsburg. Data for May 2021 is preliminary and subject to adjustments	3
during the month-end close process.

Sunstone Operations Update

Average Daily Rates are Moving Towards Pre-Pandemic Levels While Occupancy Rebuilds

Rate integrity has been much stronger than anticipated despite record declines in demand. Average daily rates are recovering despite materially lower, yet improving, occupancy levels.

Comparable Portfolio Occupancy and ADR Change by Month as Compared to 2019

0%

										-14%
-20%											-18%		-16%	-18%	-16%
										-22%
						-35%			-35%
-40%					-37%
						-42%	-44%
															-47%
-56%												-56%
-60%			-58%	-58%									-65%
												-71%
-80%									-76%
					-78%
								-81%		-83%	-81%
						-86%
					-92%						Occupancy Change	ADR Change
-100%			-97%	-96%
	-98%
		Apr-20	May-20	Jun-20	Jul-20	Aug-20	Sep-20	Oct-20	Nov-20	Dec-20	Jan-21	Feb-21	Mar-21	Apr-21	May-21
Note: Data excludes one hotel with suspended operations as of May 31, 2021 and does not include Montage Healdsburg. Data for May 2021 is preliminary and subject to adjustments	4

during the month-end close process.

Sunstone Operations Update

Recent Operating Performance Ahead of Expectations

Recent operating performance has come in stronger than anticipated and Montage Healdsburg is ramping up ahead of expectations. The portfolio has generated positive hotel EBITDA in each month since March.

Recent Operating Performance

		March 2021			April 2021			May 2021
Metric	Occupancy	ADR	RevPAR	Occupancy	ADR	RevPAR	Occupancy	ADR	RevPAR
16-Hotel	30%	$205	$62	39%	$204	$80	46%	$213	$98
Comparable Portfolio

Montage	34%	$893	$303	56%	$917	$511	56%	$1,091	$614
Healdsburg

Total 17-Hotel	30%	$216	$65	40%	$219	$87	46%	$229	$106
Portfolio

Note: The 16-hotel comparable portfolio and total 17-hotel portfolio exclude one hotel with suspended operations as of May 31, 2021. Data for May 2021 is preliminary and subject to	5
adjustments during the month-end close process.