<PAGE>

                                                                     EXHIBIT 4.7

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


            PERCENTAGE LEASE SUBORDINATION AND ATTORNMENT AGREEMENT
            -------------------------------------------------------


          This Percentage Lease Subordination and Attornment Agreement (this
"Agreement") is dated as of the 1st day of June, 2001, between First Union
National Bank, a national banking association ("Lender"), and Apple Suites
Management, Inc., a Virginia corporation ("Lessee").

                                    RECITALS
                                    --------

          TT.  Lessee is the percentage lessee under a certain percentage lease
(the "Percentage Lease") dated June 1, 2001, with Apple Suites SPE III, Inc., a
Virginia corporation ("Lessor") of premises described in the Percentage Lease
being a certain hotel known as Homewood Suites located in 4950 Baseline Road,
Boulder, Colorado 80303 and more particularly described in Exhibit A attached
hereto and made a part hereof (the "Property").

          UU.  This Agreement is being entered into in connection with a
mortgage loan (the "Loan") being made by Lender to Lessor, to be secured by,
among other things:  (a) a first deed of trust on and of the Property (the
"Mortgage"); and (b) a first assignment of leases and rents on the Property (the
"Assignment of Leases and Rents") to be recorded.  The Mortgage and the
Assignment of Leases and Rents are hereinafter collectively referred to as the
"Security Documents".

          VV.  Lessee acknowledges that Lender will rely on this Agreement in
making the Loan to Lessor.

                                   AGREEMENT
                                   ---------

     For mutual consideration, including the mutual covenants and agreements set
forth below, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:

          1.   Lessee agrees that the Percentage Lease is and shall be subject
and subordinate to the Security Documents and to all present or future advances
under the obligations secured thereby and all renewals, amendments,
modifications, consolidations, replacements and extensions of the secured
obligations and the Security Documents, to the full extent of all amounts
secured by the Security Documents from time to time.  Said subordination is to
have the same force and effect as if the Security Documents and such renewals,
modifications, consolidations, replacements and extensions thereof had been
executed, acknowledged, delivered and recorded prior to the Percentage Lease,
any amendments or modifications thereof and any notice thereof.
<PAGE>

          2.   Lessee agrees that, in the event of the occurrence and
continuance of an Event of Default under the Mortgage by the Lessor or a
foreclosure of the Mortgage by Lender or the acceptance of a deed in lieu of
foreclosure by Lender or any other succession of Lender to fee ownership, either
Lender or Lessee may elect to terminate the Percentage Lease by written notice
to the other in accordance with Section 8 hereof.  In the event neither Lender
nor Lessee elect to terminate the Percentage Lease, Lessee will attorn to and
recognize Lender as its Lessor under the Percentage Lease for the remainder of
the term of the Percentage Lease (including all extension periods which have
been or are hereafter exercised) upon the same terms and conditions as are set
forth in the Percentage Lease, and Lessee hereby agrees to pay and perform all
of the obligations of Lessee pursuant to the Percentage Lease.

          3.   Lessee agrees that, in the event Lender succeeds to the interest
of Lessor under the Percentage Lease, Lender shall not be:

          (a) liable for any act or omission of any prior Lessor (including,
without limitation, the then defaulting Lessor), or

          (b) subject to any defense or offsets which Lessee may have against
any prior Lessor (including, without limitation, the then defaulting Lessor), or

          (c) bound by any payment of rent or additional rent which Lessee might
have paid for more than one month in advance of the due date under the
Percentage Lease to any prior Lessor (including, without limitation, the then
defaulting Lessor) (unless otherwise expressly permitted therein and such
advance rent shall have been applied to ordinary and necessary expenses or
capital expenditures in connection with owning and operating the Property or
paid to Lender or otherwise as contemplated by the Loan Documents), or

          (d) bound by any obligation to make any payment to Lessee which was
required to be made prior to the time Lender succeeded to any prior Lessor's
interest, or

          (e) accountable for any monies deposited with any prior Lessor
(including security deposits), except to the extent such monies are actually
received by Lender, or

          (f) bound by any surrender, termination, amendment or modification of
the Percentage Lease made without the consent of Lender, unless such consent is
not required by Section 1.12 of the Mortgage.

          4.   Lessee agrees that, notwithstanding any provision hereof to the
contrary, the terms of the Mortgage shall continue to govern with respect to the
disposition of any insurance proceeds or eminent domain awards, and any
obligations of Lessor to restore the real estate of which the Premises are a
part shall, insofar as they apply to Lender, be limited to insurance proceeds or
eminent domain awards received by Lender after the deduction of all costs and
expenses incurred in obtaining such proceeds or awards.

          5.   Lessee hereby agrees to give to Lender copies of all notices of
Lessor

                                       2
<PAGE>

default(s) under the Percentage Lease in the same manner as, and whenever,
Lessee shall give any such notice of default to Lessor, and no such notice of
default shall be deemed given to Lessor unless and until a copy of such notice
shall have been so delivered to Lender. Lender shall have the right to remedy
any Lessor default under the Percentage Lease, or to cause any default of Lessor
under the Percentage Lease to be remedied, and for such purpose Lessee hereby
grants Lender such additional period of time as may be reasonable to enable
Lender to remedy, or cause to be remedied, any such default in addition to the
period given to Lessor for remedying, or causing to be remedied, any such
default. Lessee shall accept performance by Lender of any term, covenant,
condition or agreement to be performed by Lessor under the Percentage Lease with
the same force and effect as though performed by Lessor. Lender shall have the
right, without Lessee's consent, to foreclose the Mortgage or to accept a deed
in lieu of foreclosure of the Mortgage or to exercise any other remedies under
the Security Documents.

          6.   Lessee hereby consents to the Assignment of Leases and Rents from
Lessor to Lender in connection with the Loan.  Lessee acknowledges that the
interest of the Lessor under the Percentage Lease is to be assigned to Lender
solely as security for the purposes specified in said assignments, and Lender
shall have no duty, liability or obligation whatsoever under the Percentage
Lease or any extension or renewal thereof, either by virtue of said assignments
or by any subsequent receipt or collection of rents thereunder, unless Lender
shall specifically undertake such liability in writing or unless Lender or its
designee or nominee becomes, and then only with respect to periods in which
Lender or its designee or nominee becomes, the fee owner of the Premises.
Lessee agrees that upon receipt of a written notice from Lender of a default by
Lessor under the Loan, Lessee will thereafter, if requested by Lender, pay rent
to Lender in accordance with the terms of the Percentage Lease unless and until
the Percentage Lease is terminated.

          7.   The Percentage Lease shall not be assigned by Lessee, modified,
amended or terminated without Lender's prior written consent in each instance,
except as otherwise provided in the Mortgage.

          8.   If Lender succeeds to the interest of Lessor under the Percentage
Lease or if an Event of Default occurs under the Loan Documents which is not
cured within any applicable cure period, if any, Lender or Lessee shall have the
right to terminate the Percentage Lease at any time with or without cause upon
provision of three (3) days written notice to Lessee or Lender, as the case may
be.

          9.   Any notice, election, communication, request or other document or
demand required or permitted under this Agreement shall be in writing and shall
be deemed delivered on the earlier to occur of (a) receipt or (b) the date of
delivery, refusal or nondelivery indicated on the return receipt, if deposited
in a United States Postal Service Depository, postage prepaid, sent certified or
registered mail, return receipt requested, or if sent via a recognized
commercial courier service providing for a receipt, addressed to Lessee or
Lender, as the case may be, at the following addresses:


     If to Lessee:  Apple Suites Management, Inc.

                                       3
<PAGE>

                      306 East Main Street
                      Richmond, Virginia 23219
                      Attention:  Glade M. Knight

     If to Lender:    First Union National Bank
                      One First Union Center DC6
                      Charlotte, North Carolina 28288-0166
                      Attention:  William J. Cohane

     with a copy to:  Kilpatrick Stockton LLP
                      301 South College Street, Suite 3500
                      Charlotte, NC 28202
                      Attention:  John Nicholas Suhr, Jr., Esq.

     10.  The term "Lender" as used herein includes any successor or assign of
the named Lender herein, including without limitation, any co-lender at the time
of making the Loan, any purchaser at a foreclosure sale and any transferee
pursuant to a deed in lieu of foreclosure, and their successors and assigns, and
the terms "Lessee" and "Lessor" as used herein include any successor and assign
of the named Lessee and Lessor herein, respectively; provided, however, that
such reference to Lessee's or Lessor's successors and assigns shall not be
construed as Lender's consent to any assignment or other transfer by Lessee or
Lessor.

     11.  If any provision of this Agreement is held to be invalid or
unenforceable by a court of competent jurisdiction, such provision shall be
deemed modified to the extent necessary to be enforceable, or if such
modification is not practicable, such provision shall be deemed deleted from
this Agreement, and the other provisions of this Agreement shall remain in full
force and effect.

     12.  Neither this Agreement nor any of the terms hereof may be terminated,
amended, supplemented, waived or modified orally, but only by an instrument in
writing executed by the party against which enforcement of the termination,
amendment, supplement, waiver or modification is sought.

     This Agreement shall be construed in accordance with the laws of the state
of in which the Property is located.

     The person executing this Agreement on behalf of Lessee is authorized by
Lessee to do so and execution hereof is the binding act of Lessee enforceable
against Lessee.


            [THE BALANCE OF THIS PAGE WAS LEFT BLANK INTENTIONALLY]

                                       4
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     Witness the execution hereof [under seal] as of the date first above
written.

                              LENDER:

                              FIRST UNION NATIONAL BANK


                              By: /s/ Alan Kronovet
                                 ----------------------------------
                                 Name:  Alan Kronovet
                                 Title: Vice President


                              APPLE SUITES MANAGEMENT, INC.,
                              a Virginia corporation


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

     The undersigned Lessor hereby consents to the foregoing Agreement.


                              APPLE SUITES SPE III, INC.,
                              a Virginia limited partnership


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

STATE OF NORTH CAROLINA
         --------------

COUNTY OF MECKLENBURG
          -----------

This instrument was acknowledged before me on June 25, 2001, by Alan Kronovet, a
Vice President  of First Union National Bank, a national banking association on
behalf of said national banking association.

/s/  Renee D. Sides
------------------------------
Notary Public


My commission expires:  10/19/2003


COMMONWEALTH OF VIRGINIA

CITY OF RICHMOND

This instrument was acknowledged before me on May 30, 2001, by Glade M. Knight,
the President of Apple Suites Management, Inc. on behalf of said corporation.


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


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


COMMONWEALTH OF VIRGINIA

CITY OF RICHMOND

This instrument was acknowledged before me on May 30, 2001, by Glade M. Knight,
the President of Apple Suites SPE III, Inc., on behalf of said corporation.


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


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