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 *   Wagner William M 2. Date of Event Requiring Statement (Month/Day/Year) 05/30/2006 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 Accounting 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 8,734 (1) D Â

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	7,369	$ (2)	D	Â

Reporting Owners

Reporting Owner Name / Address	Relationships
	Director	10% Owner	Officer	Other
Wagner William M 903 CALLE AMANECER SUITE 100 SAN CLEMENTE, CA 92673	Â	Â	  SVP & Chief Accounting Officer	Â

Signatures

William M. Wagner		06/07/2006
**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. Wagner holds an aggregate of 7,369 restricted stock units, subject to the satisfaction of vesting conditions over a four-year period, with the first vesting occuring on October 26, 2006. Upon vesting, the Issuer will deliver one share of common stock for each vested restricted stock unit. Mr Wagner 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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