Ownership Submission
FORM 3
 UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

INITIAL STATEMENT OF 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 *
  Cruse Kenneth Edward
 2. Date of Event Requiring Statement (Month/Day/Year)
01/02/2007		 3. Issuer Name and Ticker or Trading Symbol
Sunstone Hotel Investors, Inc. [SHO]
(Last)
(First)
(Middle)
903 CALLE AMANECER, SUITE 100		 4. Relationship of Reporting Person(s) to Issuer
(Check all applicable)
_____ Director _____ 10% Owner
__X__ Officer (give title below) _____ Other (specify below)
SVP - Chief Financial Officer
 5. If Amendment, Date Original Filed(Month/Day/Year)
(Street)

SAN CLEMENTE, CA 92673		 6. Individual or Joint/Group Filing(Check Applicable Line)
_X_ Form filed by One Reporting Person
___ Form filed by More than One Reporting Person
(City)
(State)
(Zip)
Table I - Non-Derivative Securities Beneficially Owned
1.Title of Security
(Instr. 4)		 2. Amount of Securities Beneficially Owned
(Instr. 4)		 3. Ownership Form: Direct (D) or Indirect (I)
(Instr. 5)		 4. Nature of Indirect Beneficial Ownership
(Instr. 5)
Common Stock 14,288 (1)
D
 

Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly. SEC 1473 (7-02)
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Table II - Derivative Securities Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security
(Instr. 4)		 2. Date Exercisable and Expiration Date
(Month/Day/Year)		 3. Title and Amount of Securities Underlying Derivative Security
(Instr. 4)		 4. Conversion or Exercise Price of Derivative Security 5. Ownership Form of Derivative Security: Direct (D) or Indirect (I)
(Instr. 5)		 6. Nature of Indirect Beneficial Ownership
(Instr. 5)
Date Exercisable Expiration Date Title Amount or Number of Shares
Restricted Stock Units   (2)   (2) Common Stock 16,061 $ 0 D  

Reporting Owners

Reporting Owner Name / Address Relationships
Director 10% Owner Officer Other
Cruse Kenneth Edward
903 CALLE AMANECER
SUITE 100
SAN CLEMENTE, CA 92673		       SVP - Chief Financial Officer  

Signatures

Kenneth E. Cruse 01/05/2007
**Signature of Reporting Person Date

Explanation of Responses:

* If the form is filed by more than one reporting person, see Instruction 5(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) 8,684 of these shares are subject to the satisfaction of vesting conditions over a three-year period, with the first vesting occuring on February 8, 2007.
(2) Mr. Cruse holds an aggregate of 16,061 restricted stock units, subject to the satisfaction of vesting conditions over a three-year period, with the first vesting occuring on October 26, 2007. Upon vesting, the Issuer will deliver one share of common stock for each vested restricted stock unit. Mr. Cruse has only the rights of an unsecured creditor in the restricted stock units, and no rights as a stockholder of the Issuer, until the restricted stock units vest.

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