<PAGE>

                                                                     EXHIBIT 4.6

PREPARED BY AND UPON RECORDATION RETURN TO:

Kilpatrick Stockton LLP
3500 One First Union Center
301 South College Center
Charlotte, North Carolina 28202-6001
Attention:  John Nicholas Suhr, Jr., Esq.

Loan No.:  26-5950580                                          Boulder, Colorado
                                                                 Homewood Suites





                          APPLE SUITES SPE III, INC.,


                                  as Assignor


                                      to


                          FIRST UNION NATIONAL BANK,

                                  as Assignee

                            _______________________


                    ASSIGNMENT OF LEASES, RENTS AND PROFITS

                            _______________________

                              Date:  June 1, 2001
<PAGE>

                    ASSIGNMENT OF LEASES, RENTS AND PROFITS
                    ---------------------------------------


     THIS ASSIGNMENT OF LEASES, RENTS AND PROFITS (this "Assignment") made as of
                                                         ----------
June 1, 2001 by APPLE SUITES SPE III, INC., a Virginia corporation ("Assignor"),
                                                                     --------
whose address is 9 North Third Street, Richmond, Virginia 23219, in favor of
FIRST UNION NATIONAL BANK, a national banking association ("Assignee"), whose
                                                            --------
address is One First Union Center 301 South College Street, Mailcode NC0166,
Charlotte, North Carolina 28288, Attention:  William Cohane Contract Finance.


                              W I T N E S S E T H:
                              - - - - - - - - - -

     THAT, WHEREAS, Assignor has executed that certain Promissory Note (the
"Note") dated of even date herewith, payable to the order of Assignee in the
-----
stated principal amount of Ten Million Seven Hundred Thousand and No/100 Dollars
($10,700,000.00); and

     WHEREAS, the Note is secured by that certain Deed of Trust and Security
Agreement  (the "Deed of Trust") dated of even date herewith, from Assignor for
                 -------------
the benefit of Assignee, encumbering that certain real property situated in the
County of Boulder, State of Colorado, as more particularly described on Exhibit
                                                                        -------
A attached hereto and incorporated herein by this reference, and all buildings
-
and other improvements now or hereafter located thereon (collectively, the
"Improvements") (said real property and the Improvements are hereinafter
-------------
sometimes collectively referred to as the "Property"); and
                                           --------

     WHEREAS, Assignor is desirous of further securing to Assignee the
performance of the terms, covenants and agreements hereof and of the Note, the
Deed of Trust and each other document evidencing, securing, guaranteeing or
otherwise relating to the indebtedness evidenced by the Note, (the Deed of Trust
and the other Loan Documents (as defined in the Deed of Trust).

     NOW, THEREFORE, in consideration of the making of the loan evidenced by the
Note by Assignee to Assignor and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Assignor does hereby
irrevocably, absolutely and unconditionally transfer, sell, assign, pledge and
convey to Assignee, its successors and assigns, all of the right, title and
interest of Assignor in and to (i) all leases, licenses, concessions and
occupancy agreements of all or any part of the Property and any and all
guarantees, extensions, renewals, replacements and modifications thereof
(collectively, the "Leases"), including, without limitation, that certain
                    ------
Amended and Restated Hotel Lease Agreement dated June 1, 2001 between Assignor,
as successor, and Apple Suites Management, Inc., as lessee, with any guaranty of
the performance and payment thereunder (the "Percentage Lease"), (ii) all rents,
                                             ----------------
royalties, issues, profits, revenue, income and credit card receipts collected
from guest rooms, restaurants, bars, meeting rooms, banquet rooms and
recreational facilities, parking charges, and other benefits from the Property,
now or hereafter arising from the use or enjoyment of all or any portion thereof
or rendering of services by Assignor or any operator or manager of the hotel or
the commercial space located in the Improvements (including, without limitation,
from the rental of any office space, retail space, guest rooms or other space,
halls, stores and offices), and (iii) all concession fees and rentals, health
club membership fees, food and beverage wholesale and retail
<PAGE>

sales, service charges, vending machine sale or from any lease, license,
tenancy, concession, occupancy agreement or other agreement pertaining thereto
or arising from any of the Contracts (as defined in the Deed of Trust) or any of
the General Intangibles (as defined in the Deed of Trust) and any other items of
revenue, receipts or other income as identified in the Uniform System of
Accounts for Hotels, 9th Edition as published by the Hotel Association of New
York City, Inc. (1996), as from time to time amended (collectively with the
items listed in clause (ii), the "Rents") and all proceeds from the sale or
                                  -----
other disposition of the Leases and the right to receive and apply the Rents to
the payment of the Debt (as defined in the Deed of Trust), and (iv) all cash or
securities deposited in any security deposit account to secure performance by
the tenants, lessees or licensees, as applicable, of their obligations under any
such leases, licenses, concessions or occupancy agreements, whether said cash or
securities are to be held until the expiration of the terms of said leases,
licenses, concessions or occupancy agreements or applied to one or more of the
installments of rent coming due prior to the expiration of said terms;

     TO HAVE AND TO HOLD the same unto Assignee, its successors and assigns.

     IT IS AGREED that this Assignment is made upon the following terms,
covenants and conditions:

     1.   Assignor represents, warrants and covenants to and for the benefit of
Assignee:  (a) that Assignor now is the absolute owner of the landlord's
interest in the Percentage Lease, the only Lease by Assignor at the Property as
of the date hereof, with full right and title to assign the same and the Rents
due or to become due thereunder; (b) that, other than this Assignment and those
assignments, if any, specifically permitted in the Deed of Trust, there are no
other outstanding assignments of the Percentage Lease or Assignor's interest in
the Rents; (c) that no Rents have been anticipated, discounted, released,
waived, compromised or otherwise discharged under the Percentage Lease, except
for prepayment of rent of not more than one (1) month prior to the accrual
thereof, unless otherwise permitted in the Percentage Lease; (d) that there are
no material defaults now existing under the Percentage Lease by the landlord or
tenant, and there exists no state of facts which, with the giving of notice or
lapse of time or both, would constitute a default under the Percentage Lease by
the landlord or tenant, except as disclosed in writing to Assignee; (e) that
Assignor has and shall duly and punctually observe and perform all covenants,
conditions and agreements in the Percentage Lease on the part of the landlord to
be observed and performed thereunder, and (f) the Percentage Lease is in full
force and effect and is the valid and binding obligation of Assignor, and, to
the knowledge of Assignor, are the valid and binding obligation of the tenant
thereto.

     2.   Notwithstanding that this instrument is a present, absolute and
executed assignment of the Rents and of the Leases and a present, absolute and
executed grant of the powers herein granted to Assignee, Assignor is hereby
permitted, and is hereby granted a revocable license by Assignee, to retain
possession of the Leases and to collect and retain the Rents unless and until
there shall be an Event of Default under this Assignment, the Deed of Trust or
the other Loan Documents.  In the event of the occurrence and continuance of
such Event of Default, the aforementioned license granted to Assignor shall
automatically terminate without notice to Assignor, and Assignee may thereafter,
without taking possession of the Property, take possession of the Leases and
collect the Rents to the extent of Assignor's interest

                                       2
<PAGE>

therein. Further, from and after such termination, Assignor shall be the agent
of Assignee in collection of the Rents to the extent of Assignor's interest
therein, and any Rents so collected by Assignor shall be held in trust by
Assignor for the sole and exclusive benefit of Assignee, and Assignor shall,
within three (3) business days after receipt of any Rents, pay the same to
Assignee to be applied by Assignee as hereinafter set forth. Furthermore, from
and after the occurrence and continuance of such Event of Default and
termination of the aforementioned license, Assignee shall have the right and
authority, without any notice whatsoever to Assignor and without regard to the
adequacy of the security therefor, to: (a) manage and operate the Property, with
full power to employ agents to manage the same; (b) demand, collect, receive and
sue for the Rents, including those past due and unpaid; and (c) do all acts
relating to such management, operation, rental, leasing, repair improvement and
alteration of the Property as Assignee in its sole subjective judgment and
discretion shall determine, subject to rights of the tenant and operator under
the Percentage Lease or under agreements not terminated pursuant to the Loan
Documents. Assignee may apply the Rents received by Assignee from the Property,
after deducting the costs of collection thereof, including, without limitation,
reasonable attorneys' fees and a reasonable management fee for any management
agent so employed, against amounts expended for repairs, upkeep, maintenance,
service, fuel, utilities, taxes, assessments, insurance premiums and such other
expenses as Assignee incurs in connection with the operation of the Property and
against interest, principal, required escrow deposits and other sums which have
or which may become due, from time to time, under the terms of the Loan
Documents, in such order or priority as to any of the items so mentioned as
Assignee, in its sole subjective discretion, may determine.

     3.   Without limiting the rights granted hereinabove, in the event Assignor
shall fail to make any payment or to perform any act required under the terms
hereof and such failure shall not be cured within any applicable grace or cure
period, or if none, within thirty (30) days after receipt of written notice from
Assignee, then Assignee may, but shall not be obligated to, without prior notice
to or demand on Assignor, and without releasing Assignor from any obligation
hereof, make or perform the same in such manner and to such extent as Assignee
may deem necessary to protect the security hereof, including specifically,
without limitation, appearing in and defending any action or proceeding
purporting to affect the security hereof or the rights or powers of Assignee,
performing or discharging any obligation, covenant or agreement of Assignor
under any of the Leases, and, in exercising any of such powers, paying all
necessary and reasonable costs and expenses, employing counsel and incurring and
paying reasonable attorneys' fees.  Any sum advanced or paid by Assignee for any
such purpose, including, without limitation, reasonable attorneys' fees,
together with interest thereon at the Default Interest Rate (as defined in the
Note) from the date paid or advanced by Assignee until repaid by Assignor, shall
immediately be due and payable to Assignee by Assignor on demand and shall be
secured by the Deed of Trust and by all of the other Loan Documents securing all
or any part of the indebtedness evidenced by the Note.

     4.   This Assignment shall not operate to place responsibility for the
control, care, management or repair of the Property upon Assignee, nor for the
performance of any of the terms and conditions of any of the Leases, nor shall
it operate to make Assignee responsible or liable for any waste committed on the
Property by the tenants, guests or any other party or for any dangerous or
defective condition of the Property or for any negligence in the management,

                                       3
<PAGE>

upkeep, repair or control of the Property.  Assignee shall not be liable for any
loss sustained by Assignor resulting from Assignee's failure to let the Property
or from any other act or omission of Assignee in managing the Property. This
Assignment shall not be construed as making Assignee a mortgagee in possession.
Assignee is obligated to account to Assignor only for such Rents as are actually
collected or received by Assignee.

     5.   Assignor shall and does hereby indemnify and hold Assignee harmless
from and against any and all liability, loss, claim, demand or damage which may
or might be incurred by reason of this Assignment, including, without
limitation, claims or demands for security deposits from tenants or guests of
space in the Improvements deposited with Assignor, and from and against any and
all claims and demands whatsoever which may be asserted against Assignee by
reason of any alleged obligations or undertakings on its part to perform or
discharge any of the terms, covenants or agreements contained in any of the
Leases, excluding Assignee's gross negligence and willful misconduct as finally
determined by a court of competent jurisdiction.  Should Assignee incur any
liability by reason of this Assignment or in defense of any claim or demand for
loss or damage as provided above, the amount thereof, including, without
limitation, costs, expenses and reasonable attorneys' fees, together with
interest thereof at the Default Interest Rate from the date paid or incurred by
Assignee until repaid by Assignor, shall be immediately due and payable to
Assignee by Assignor upon demand and shall be secured by the Deed of Trust and
by all of the other Loan Documents securing all or any part of the indebtedness
evidenced by the Note.

     6.   Assignor hereby irrevocably appoints Assignee as its attorney-in-fact
which power of attorney is coupled with an interest by virtue of this Assignment
and is irrevocable so long as any sums are outstanding under the loan evidenced
by the Note to, from and after the occurrence of an Event of Default by Assignor
hereunder or under any of the other Loan Documents, do, make or perform any act,
right or privilege which Assignee shall have under or by virtue of this
Assignment.

     7.   Assignor covenants and agrees that Assignor shall not, without the
prior written consent of Assignee, further pledge, transfer, mortgage or
otherwise encumber or assign the Leases or future payments of Rents, except as
otherwise expressly permitted by the terms of the Deed of Trust.

     8.   Assignor covenants and agrees that Assignor shall, at its sole cost
and expense, appear in and defend any action or proceeding arising under,
growing out of, or in any manner connected with the Leases or the obligations,
duties or liabilities of the landlord or tenant thereunder to the extent
necessary to preserve Assignee's material rights under the Leases, and if
Assignor shall fail to do so, Assignee, at its option but without obligation,
may do so.  Assignor shall pay on demand all reasonable costs and expenses,
including, without limitation, reasonable attorneys' fees, which Assignee may
incur in connection with Assignee's appearance, voluntary or otherwise, in any
such action or proceeding, together with interest thereon at the Default
Interest Rate from the date incurred by Assignee until repaid by Assignor.

     9.   At any time, Assignee may, at its option, notify any tenants or other
parties of the existence of this Assignment.  Assignor does hereby specifically
authorize, instruct and direct

                                       4
<PAGE>

each and every present and future tenant, lessee and licensee of the whole or
any part of the Property to pay all unpaid and future Rents owed to Assignor to
Assignee upon receipt of demand from Assignee to so pay the same, and Assignor
hereby agrees that each such present and future tenant, lessee and licensee may
rely upon such written demand from Assignee to so pay said Rents without any
inquiry into whether there exists an Event of Default hereunder or under the
other Loan Documents or whether Assignee is otherwise entitled to said Rents.
Assignor hereby waives any right, claim or demand which Assignor may now or
hereafter have against any present or future tenant, lessee or licensee by
reason of such payment of Rents to Assignee, and any such payment shall
discharge such tenant's, lessee's or licensee's obligation to make such payment
to Assignor.

     10.  Assignee may take or release any security for the indebtedness
evidenced by the Note, may release any party primarily or secondarily liable for
the indebtedness evidenced by the Note, may grant extensions, renewals or
indulgences with respect to the indebtedness evidenced by the Note and may apply
any other security therefor held by it to the satisfaction of any indebtedness
evidenced by the Note without prejudice to any of its rights hereunder or under
any of the Loan Documents.

     11.  The acceptance of this Assignment and the collection of the Rents as
herein provided shall be without prejudice to Assignee.  The exercise or failure
to exercise by Assignee of the rights granted Assignee in this Assignment, and
the collection of the Rents and the application thereof as herein provided,
shall not be considered a waiver by Assignee of any Event of Default under the
Loan Documents or prevent foreclosure of any liens on the Property as a result
of the occurrence and continuance of an Event of Default, nor shall such
exercise make Assignee liable under any of the Leases, Assignee hereby expressly
reserving all of its rights and privileges under the Deed of Trust and the other
Loan Documents as fully as though this Assignment had not been entered into.
The rights of Assignee hereunder are cumulative and concurrent, may be pursued
separately, successively or together and may be exercised as often as occasion
therefor shall arise, it being agreed by Assignor that the exercise of any one
or more of the rights provided for herein shall not be construed as a waiver of
any of the other rights or remedies of Assignee, at law or in equity or
otherwise, so long as any obligation under the Loan Documents remains
unsatisfied.

     12.  All rights of Assignee hereunder shall inure to the benefit of its
successors and assigns; and shall pass to and may be exercised by any assignee
of Assignee.  All obligations of Assignor shall bind its successors and assigns
and any subsequent owner of the Property.  Assignor hereby agrees that if
Assignee gives notice to Assignor of an assignment of said rights, upon such
notice the liability of Assignor to the assignee of the Assignee shall be
immediate and absolute.  Assignor will not set up any claim against Assignee or
any intervening assignee as a defense, counterclaim or set-off to any action
brought by Assignee or any intervening assignee for any amounts due hereunder or
for possession of or the exercise of rights with respect to the Leases or the
Rents.

     13.  If any provision under this Assignment or the application thereof to
any entity, person or circumstance shall be invalid, illegal or unenforceable to
any extent, the remainder of this Assignment and the application of the
provisions hereof to other entities, persons or

                                       5
<PAGE>

circumstances shall not be affected thereby and shall be enforced to the fullest
extent permitted by law.

     14.  This Assignment may not be amended, modified or otherwise changed
except by a written instrument duly executed by Assignor and Assignee.

     15.  This Assignment shall be in full force and effect continuously from
the date hereof to and until the Deed of Trust shall be released of record, and
the release of the Deed of Trust shall, for all purposes, automatically
terminate this Assignment and render this Assignment null and void and of no
effect whatsoever. This Assignment shall continue and remain in full force and
effect during any period of foreclosure with respect to the Property.

     16.  In case of a conflict between any provision of this Assignment and any
provision of the other Loan Documents, the provisions of the Note or the Deed of
Trust, if they shall be the conflicting other Loan Document, shall prevail and
be controlling.

     17.  All notices, demands, requests or other communications to be sent by
one party to the other hereunder or required by law shall be given and become
effective as provided in the Deed of Trust.

     18.  THIS ASSIGNMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE IN WHICH THE PROPERTY IS SITUATED, EXCEPT TO THE EXTENT
THAT ANY OF SUCH LAWS MAY NOW OR HEREAFTER BE PREEMPTED BY FEDERAL LAW, IN WHICH
CASE SUCH FEDERAL LAW SHALL SO GOVERN AND BE CONTROLLING.

     19.  Assignor, to the full extent permitted by law, hereby knowingly,
intentionally and voluntarily, with and upon the advice of competent counsel,
waives, relinquishes and forever foregoes the right to a trial by jury in any
action or proceeding based upon, arising out of, or in any way relating to the
debt or any conduct, act or omission of Assignee or Assignor, or any of their
directors, officers, partners, members, employees, agents or attorneys, or any
other persons affiliated with Assignee or Assignor in each of the foregoing
cases, whether sounding in contract, tort or otherwise.

     20.  This Assignment may be executed in any number of counterparts, each of
which shall be effective only upon delivery and thereafter shall be deemed an
original, and all of which shall be taken to be one and the same instrument, for
the same effect as if all parties hereto had signed the same signature page.
Any signature page of this Assignment may be detached from any counterpart of
this Assignment without impairing the legal effect of any signatures thereon and
may be attached to another counterpart of this Assignment identical in form
hereto but having attached to it one or more additional signature pages.

     21.  In addition to, but not in lieu of, any other rights hereunder,
Assignee shall have the right to institute suit and obtain a protective or
mandatory injunction against Assignor to enforce the observance, of the
agreements, covenants, terms and conditions contained herein following the
occurrence and continuance of an Event of Default.

                                       6
<PAGE>

     22.  Assignee shall, as a matter of absolute right, be entitled, upon
application to a court of applicable jurisdiction, and without notice to
Assignor,  to the appointment of a receiver to obtain and secure the rights of
Assignee hereunder and the benefits intended to be provided to Assignee
hereunder.

     23.  Assignee may sell, transfer and deliver the Note and the Loan
Documents to one or more investors in the secondary mortgage market.  In
connection with such sale, Assignee may retain or assign responsibility for
servicing the loan evidenced by the Note or may delegate some or all of such
responsibility and/or obligations to a servicer, including, but not limited to,
any subservicer or master servicer, on behalf of the investors.

     24.  If Assignee determines at any time to sell, transfer or assign this
Assignment, the Note, the Deed of Trust and the other Loan Documents, and any or
all servicing rights with respect thereto, or to grant participations therein
(the "Participations") or issue mortgage pass-through certificates or other
      --------------
securities evidencing a beneficial interest in a rated or unrated public
offering or private placement (the "Securities"), Assignee may forward to each
                                    ----------
purchaser, transferee, assignee, servicer, participant, investor, or their
respective successors in such Participations and/or Securities (collectively,
the "Investor") or any Rating Agency rating such Securities, each prospective
     --------
Investor and each of the foregoing's respective counsel, all documents and
information which Assignee now has or may hereafter acquire relating to the debt
evidenced by the Note and to Assignor, any guarantor, any indemnitor and the
Property, which shall have been furnished by Assignor, any guarantor or any
indemnitor as Assignee determines necessary or desirable.

     25.  Notwithstanding anything to the contrary contained in this Assignment,
the liability of Assignor and its officers, directors, general partners,
managers, members and principals for the indebtedness secured hereby and for the
performance of the other agreements, covenants and obligations contained herein
and in the Loan Documents shall be limited as set forth in Section 2.6 of the
Note.

            [THE BALANCE OF THIS PAGE WAS LEFT BLANK INTENTIONALLY]

                                       7
<PAGE>

     IN WITNESS WHEREOF, Assignor has executed this Assignment as of the day and
year first written above.


                              ASSIGNOR:

                              APPLE SUITES SPE III, INC.,
                              a Virginia corporation


                              By:/s/ Glade M. Knight
                                 -------------------------------
                                 Name:  Glade M. Knight
                                 Title:  President

<PAGE>

COMMONWEALTH OF VIRGINIA
CITY OF RICHMOND


The foregoing instrument was acknowledged before me this 30/th/ Day of May, 2001
by Glade M. Knight, the President of APPLE SUITES SPE III, INC., a Virginia
corporation, on behalf of said corporation.


[SEAL]


 /s/ Kay T. Eaves
--------------------------
Notary Public


My Commission expires:  2/29/2004
                      --------------

<PAGE>

                                   EXHIBIT A
                                   ---------

                               Legal Description

                                   [OMITTED]