Washington, D.C. 20549

SUNSTONE HOTEL INVESTORS, INC.

(Name of Issuer)

Common Stock

(Title of Class of Securities)

867892101

(CUSIP Number)

December 31, 2009

(Date of Event Which Requires Filing of this Statement)

Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications:

Janice V. Sharry, Esq.
Haynes and Boone, LLP
2323 Victory Avenue, Suite 700
Dallas, Texas 75219-7673
(214) 651-5562

 

 

CUSIP No.		867892101

CUSIP No.		867892101

CUSIP No.		867892101

CUSIP No.		867892101

Item 1.

(a)

Name of Issuer

SUNSTONE HOTEL INVESTORS, INC.

(b)

Address of Issuer’s Principal Executive Offices

903 Calle Amanecer, Suite 100, San Clemente, California 92673.

Item 2.

(a)

Name of Person Filing

This statement is jointly filed by and on behalf of each of MSD Capital, L.P., MSD SBI, L.P., and MSD RE Investments, L.P. — Public. MSD SBI and MSD RE Investments are the record and direct beneficial owners of the securities covered by this statement. MSD Capital is the general partner of each of MSD SBI and MSD RE Investments, and may be deemed to indirectly beneficially own securities owned by MSD SBI and MSD RE Investments. MSD Capital Management, LLC is the general partner of MSD Capital. Michael S. Dell is the controlling member of MSD Capital Management, and may be deemed to beneficially own securities owned by MSD Capital Management. Each reporting person declares that neither the filing of this statement nor anything herein shall be construed as an admission that such person is, for the purposes of Section 13(d) or 13(g) of the Act or any other purpose, the beneficial owner of any securities covered by this statement.

(b)

Address of Principal Business Office or, if none, Residence

The address of the principal business office of each reporting person is 645 Fifth Avenue, 21st Floor, New York, New York 10022.

(c)

Citizenship

See Item 4 on the cover page(s) hereto.

(d)

Title of Class of Securities

Common Stock

(e)

CUSIP Number

867892101

CUSIP No.		867892101

Item 3.		If this statement is filed pursuant to §§240.13d-1(b) or 240.13d-2(b) or (c), check whether the person filing is:

	(a)	o	A Broker or dealer registered under Section 15 of the Act (15 U.S.C. 78o);
	(b)	o	A Bank as defined in Section 3(a)(6) of the Act (15 U.S.C. 78c);
	(c)	o	An insurance company as defined in Section 3(a)(19) of the Act (15 U.S.C. 78c);
	(d)	o	An investment company registered under Section 8 of the Investment Company Act of 1940 (15 U.S.C. 80a-8);
	(e)	o	An investment adviser in accordance with §240.13d-1(b)(1)(ii)(E);
	(f)	o	An employee benefit plan or endowment fund in accordance with §240.13d- 1(b)(1)(ii)(F);
	(g)	o	A parent holding company or control person in accordance with §240.13d- 1(b)(1)(ii)(G);
	(h)	o	A savings associations as defined in Section 3(b) of the Federal Deposit Insurance Act (12 U.S.C. 1813);
	(i)	o	A church plan that is excluded from the definition of an investment company under Section 3(c)(14) of the Investment Company Act of 1940 (15 U.S.C. 80a-3);
	(j)	o	A group, in accordance with §240.13d-1(b)(1)(ii)(J).

Item 4.		Ownership.

	(a)		Amount beneficially owned: See Item 9 on the cover page(s) hereto.
	(b)		Percent of class: See Item 11 on the cover page(s) hereto.
	(c)		Number of shares as to which such person has:

	(i)		Sole power to vote or to direct the vote: See Item 5 on the cover page(s) hereto.
	(ii)		Shared power to vote or to direct the vote: See Item 6 on the cover page(s) hereto.
	(iii)		Sole power to dispose or to direct the disposition of: See Item 7 on the cover page(s) hereto.
	(iv)		Shared power to dispose or to direct the disposition of: See Item 8 on the cover page(s) hereto.

Item 5.		Ownership of 5% or Less of a Class.

If this statement is being filed to report the fact that as of the date hereof the reporting person has ceased to be the beneficial owner of more than five percent of the class of securities, check the following þ.

CUSIP No.		867892101

Item 6.		Ownership of More than 5 Percent on Behalf of Another Person

Not Applicable

Item 7.		Identification and Classification of the Subsidiary Which Acquired the Security Being Reported on by the Parent Holding Company or Control Person.

Not Applicable

Item 8.		Identification and Classification of Members of the Group

Not Applicable

Item 9.		Notice of Dissolution of Group

Not Applicable

Item 10.		Certifications

(a) Not Applicable

(b) By signing below I certify that, to the best of my knowledge and belief, the securities referred to above were not acquired and are not held for the purpose of or with the effect of changing or influencing the control of the issuer of the securities and were not acquired and are not held in connection with or as a participant in any transaction having that purpose or effect.

CUSIP No.		867892101

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

CUSIP No.		867892101

EXHIBIT INDEX

Exhibit		Description of Exhibit
99.2		Joint Filing Agreement (incorporated herein by reference from Exhibit 99.1 to the Schedule 13G relating to the common stock of the issuer filed January 27, 2009, by the reporting person(s) with the Commission).