EXHIBIT 99.1

                                 RISK FACTORS

     An  investment  in  our  common  shares  involves various risks. You should
carefully  consider  the  following  information  before  making  a  decision to
purchase our common shares.

THERE  IS  NO PUBLIC MARKET FOR OUR COMMON SHARES, SO INVESTORS MAY BE UNABLE TO
DISPOSE OF THEIR INVESTMENT.

     Prospective  shareholders  should  view  the  common shares as illiquid and
must  be  prepared to hold their shares for an indefinite length of time. Before
this  offering,  there  has  been  no  public  market for our common shares, and
initially  we  do  not  expect  a market to develop. We do not plan to cause our
common  shares  to  be listed on any securities exchange or quoted on any system
or  in  any established market either immediately or at any definite time in the
future.  While  we,  acting through our board of directors, may cause the common
shares  to  be listed or quoted if the board of directors determines this action
to  be  prudent,  there  can  be  no  assurance that this event will ever occur.
Shareholders  may be unable to resell their common shares at all, or may be able
to  resell  them  only  later at a substantial discount from the purchase price.
Thus, the common shares should be considered a long-term investment.

THE  BOARD  OF  DIRECTORS  MAY  DECIDE IN ITS SOLE DISCRETION TO LIST OUR COMMON
SHARES OR DISSOLVE US.

     Currently,  we  expect  that  within  approximately  three  years  from the
initial  closing of the minimum offering of 1,666,666.67 common shares we intend
either:

       (1)  to  cause  our  common  shares to be listed on a national securities
   exchange or quoted on the NASDAQ National Market System or

       (2)  with  shareholder approval, to dispose of all of our properties in a
   manner which will permit distributions to our shareholders of cash.

Either  type of action will be conditioned on the board of directors determining
the  action  to  be  prudent  and  in  the  best  interests of our shareholders.
However,  we  are  under  no  obligation  to  take any of these actions, and any
action, if taken, might be taken after the three-year period mentioned above.

THE  COMPENSATION  TO  APPLE  SUITES ADVISORS AND APPLE SUITES REALTY IS PAYABLE
BEFORE DISTRIBUTIONS AND WILL REDUCE INVESTORS' RETURN.

     The  payment  of  compensation  to  Apple  Suites Advisors and Apple Suites
Realty  from  proceeds  of  the  offering  and property revenues will reduce the
amount  of  proceeds  available  for  investment  in  properties,  or  the  cash
available  for distribution, and will therefore tend to reduce the return on our
shareholders'  investments. In addition, this compensation is payable regardless
of  our profitability, and is payable prior to, and without regard to whether we
have sufficient cash for distributions.

THERE  WERE  NO  ARMS-LENGTH  NEGOTIATIONS  FOR OUR AGREEMENTS WITH APPLE SUITES
ADVISORS, APPLE SUITES REALTY AND APPLE SUITES MANAGEMENT.

     Apple  Suites  Advisors  and  Apple  Suites Realty will receive substantial
compensation  from  us  in  exchange  for  various  services they have agreed to
render  to  us.  This  compensation has been established without the benefits of
arms-length


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negotiation.  Apple  Suites Management will enter into leases for our properties
and  has  agreed  to  pay  us  rent.  This  rent WILL BE established without the
benefit of arms-length negotiation.


COMMISSIONS,  ACQUISITION,  ADVISORY  AND OTHER FEES AND EXPENSES WILL LIMIT OUR
ABILITY TO MAKE DISTRIBUTIONS TO INVESTORS.

     The  investment  return  to our shareholders likely will be less than could
be  obtained  by  a  shareholder's  direct acquisition and ownership of the same
properties.  We  will  pay  to David Lerner Associates, Inc. substantial fees to
sell  our  common  shares  which  will  reduce  the  net  proceeds available for
investment  in  properties.  We  will  pay  to  Apple  Suites Realty substantial
acquisition  fees  to  acquire  properties  which  will  reduce the net proceeds
available  for  investment  in properties. In addition, we will pay, principally
to  Apple  Suites Advisors, substantial advisory and related compensation, which
will  reduce cash available for distribution to shareholders. Thus, for example,
if  only  87% of the gross proceeds of the offering are available for investment
in  properties,  revenues  may  be  reduced  by  13% compared to revenues in the
absence of these fees.


THE   COMPENSATION   TO  APPLE  SUITES  REALTY  AND  APPLE  SUITES  ADVISORS  IS
INDETERMINABLE AND CANNOT BE STATED WITH CERTAINTY.

     Apple  Suites  Realty  and  Apple Suites Advisors will receive compensation
for  services  rendered  by them to us that cannot be determined with certainty.
Apple  Suites  Advisors will receive an asset management fee that may range from
$15,000  to  $750,000  per year. The asset management fee will be based upon the
ratio  of  funds  from  operations  to the amount raised in this offering. Apple
Suites  Realty  will receive a commission for each property purchased based upon
the  purchase  price  of  the  properties we purchase. The total compensation to
Apple  Suites Realty is therefore dependent upon (1) the number of properties we
purchase  and (2) the cost of each property purchased. In addition, Apple Suites
Advisors  and Apple Suites Realty will be reimbursed for their costs incurred on
our  behalf  and are entitled to compensation for other services and property we
may  request  that  they  provide  to  us. The dollar amount of the cost and the
compensation cannot now be determined.


THERE ARE CONFLICTS OF INTEREST WITH OUR PRESIDENT AND CHAIRMAN OF THE BOARD.

     Generally,  conflicts  of  interest  between  us  and Glade M. Knight arise
because  he  is  the  sole  shareholder  of  Apple Suites Advisors, Apple Suites
Realty  and  Apple  Suites Management. These companies will enter into contracts
with  us  to  lease  our  properties  or  provide  us  with asset management and
property  acquisition  and disposition services. In addition, Glade M. Knight is
and  will  be  a  principal  in  other  real  estate  investment transactions or
programs which may compete with us.


THERE ARE CONFLICTS OF INTEREST WITH OUR ADVISOR AND BROKER.

     We  will pay Apple Suites Realty an acquisition fee in connection with each
acquisition  of  a  property,  and a disposition fee in connection with property
dispositions. As a consequence, Apple Suites Realty may have an incentive to


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recommend  the  purchase or disposition of a property in order to receive a fee.
Apple  Suites  Advisors  will  receive  a fee which is a percentage of the total
consideration  we  receive  from  sale of common shares and, therefore, it could
have an incentive to close the sales of shares as rapidly as possible.


THERE ARE CONFLICTS OF INTEREST WITH OUR LESSEE.

     We   will   lease  our  extended-stay  hotel  properties  to  Apple  Suites
Management.  We  may be less willing to enforce provisions of the lease contract
against  Apple  Suites  Management  than  against  a  third-party non-affiliated
lessee.  Our  lessee may not be able to make its lease payments under the lease.
Although  failure  on  the  part of Apple Suites Management to materially comply
with  the  terms  of a lease including failure to pay rent when due will give us
the  right  to  terminate  the  lease,  repossess  the  property and enforce the
payment  obligations  under the lease, we would then be required to find another
lessee  to  lease  the  property  since  we  cannot  operate extended-stay hotel
properties  directly.  In  addition,  it  is possible that we would be unable to
enforce  the  payment  obligations  under  the leases following any termination.
There  can  be no assurance that we would be able to find another lessee or that
we  would  be  able  to  enter  into  a new lease on terms as favorable to us if
another lessee were found.


OUR MANAGEMENT WILL SPEND TIME ON OTHER ACTIVITIES.

     The  officers  and  directors of Apple Suites Advisors, Apple Suites Realty
and  Apple  Suites  Management  also serve as officers and directors of entities
which  engage  in  the  brokerage, sale, operation or management of real estate.
The  officers  and  directors  of Apple Suites Advisors, Apple Suites Realty and
Apple   Suites   Management  may  disproportionately  allocate  their  time  and
resources between us and these other entities.


WE OWN NO PROPERTIES AT THIS TIME.

     We  have  not  committed  to  purchasing  any  specific properties with the
proceeds  of  this  offering as of the date of this prospectus. However, when at
any  time  during  the  offering  period  we  believe that there is a reasonable
probability  that  any  specific property will be acquired, this prospectus will
be  supplemented  to  provide  a description of the property and the anticipated
terms  of its purchase, financing and management. A prospective shareholder will
only  be  able to evaluate information as to properties which are disclosed in a
prospectus  supplement  issued  before  the  prospective  shareholder  makes its
investment.


WE  ARE  NOT  DIVERSIFIED  AND  ARE  DEPENDENT  ON  OUR  INVESTMENT  IN A SINGLE
INDUSTRY.

     Our  current  strategy  is  to acquire interests primarily in extended-stay
hotel  properties.  As  a  result,  we  are  subject  to  the  risks inherent in
investing  in  a single industry. A downturn in the extended-stay hotel industry
may  have  more  pronounced  effects  on  the amount of cash available to us for
distribution  or  on  the  value  of  our  assets than if we had diversified our
investments.  We  will  also  be  subject  to  any  downturns  in  the business,
commercial and tourism travel industry as a whole.


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WE WILL BE DEPENDENT UPON APPLE SUITES MANAGEMENT FOR OUR REVENUES.

     Due  to  federal  income tax restrictions, we cannot operate our properties
directly.  Therefore,  we  intend to lease our extended-stay hotel properties to
Apple  Suites  Management  who  will manage the properties. Our revenues and our
ability  to  make  distributions to our shareholders will depend solely upon the
ability  of  Apple  Suites  Management  to  make rent payments under its leases.
Apple  Suites  Management has no significant assets. Any failure by Apple Suites
Management  to  make  rent  payments  would adversely affect our ability to make
distributions to our shareholders.


THERE  MAY  BE  OPERATIONAL  LIMITATIONS  ASSOCIATED  WITH  FRANCHISE AGREEMENTS
AFFECTING OUR PROPERTIES.

     Apple   Suites   Management  will  operate  a  substantial  number  of  our
properties   pursuant   to  franchise  or  license  agreements  with  nationally
recognized  hotel  brands.  These  franchise  agreements  may  contain  specific
standards   for,   and  restrictions  and  limitations  on,  the  operation  and
maintenance  of  our  properties  in  order  to  maintain  uniformity within the
franchisor  system.  We  do not know whether those limitations may conflict with
our  ability  to create specific business plans tailored to each property and to
each market.

     The  standards  are  subject  to  change  over  time,  in some cases at the
direction  of  the  franchisor,  and  may  restrict  Apple  Suites  Management's
ability,  as  franchisee,  to  make  improvements or modifications to a property
without  the  consent  of  the  franchisor.  In  addition,  compliance  with the
standards  could require us or Apple Suites Management, as franchisees, to incur
significant  expenses or capital expenditures. Action or inaction on our part or
by  Apple Suites Management could result in a breach of those standards or other
terms  and  conditions  of the franchise agreements and could result in the loss
or cancellation of a franchise license.

     In  connection  with terminating or changing the franchise affiliation of a
property,   we  may  be  required  to  incur  significant  expenses  or  capital
expenditures.  Moreover,  the  loss of a franchise license could have a material
adverse  effect  upon  the  operations  or  the underlying value of the property
covered  by  the  franchise  because of the loss of associated name recognition,
marketing   support   and   centralized  reservation  systems  provided  by  the
franchisor.


WE HAVE NO OPERATING HISTORY AND WE HAVE NO ASSURANCE OF SUCCESS.

     We  do  not  have  an operating history. There is no assurance that we will
operate successfully or achieve our objectives.


THERE  IS A POSSIBLE LACK OF DIVERSIFICATION AND LOWER RETURN DUE TO THE MINIMUM
SIZE OF OUR OFFERING.

     We   initially   will  be  funded  with  contributions  of  not  less  than
$15,000,000.  Our  profitability  could  be affected if we do not sell more than
the  minimum  offering.  In  the  event  we receive only the minimum offering of
1,666,666.67  common  shares,  we  will  invest  in  fewer properties. The fewer
properties purchased, the greater the


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potential   adverse   effect   of   a  single  unproductive  property  upon  our
profitability  since  a  reduced  degree of diversification will exist among our
properties.  In  addition, the returns on the common shares sold will be reduced
as a result of allocating our expenses among the smaller number of shares.


THERE  MAY BE DELAYS IN INVESTMENT IN REAL PROPERTY, AND THIS DELAY MAY DECREASE
THE RETURN TO SHAREHOLDERS.

     We  may  experience  delays  in  finding  suitable  properties  to acquire.
Pending  investment  of the proceeds of this offering in real estate, and to the
extent  the  proceeds  are  not  invested  in  real  estate, the proceeds may be
invested  in permitted temporary investments such as U.S. government securities,
certificates  of  deposit,  or  commercial  paper.  The  rate of return on those
investments  has  fluctuated  in  recent  years  and may be less than the return
obtainable from real property.


THE  ACTUAL  AMOUNT OF  PROCEEDS  AVAILABLE  FOR  INVESTMENT  IN  PROPERTIES  IS
UNCERTAIN.

     Although  we  estimate  in  this  prospectus  the  net  amount  of offering
proceeds  that will be available for investment in properties, the actual amount
available  for  investment  may be less. For example, we might deem it necessary
to  establish  a  larger than expected working capital or contingency reserve to
cover   unexpected   environmental   liabilities  from  unexpected  lawsuits  or
governmental  regulatory  judgments  or  fines. Any liabilities of this sort, or
other  unanticipated  expenses  or  debts,  would  reduce  the  amount  we  have
available for investment in properties.


THE  PER-SHARE  OFFERING  PRICES HAVE BEEN ESTABLISHED ARBITRARILY BY US AND MAY
NOT REFLECT THE TRUE VALUE OF THE COMMON SHARES.

     If  we  were  to  list the common shares on a national securities exchange,
the  common  share price might drop below our shareholder's original investment.
Neither  prospective investors nor shareholders should assume that the per-share
prices  reflect  the  intrinsic  or  realizable  value  of  the common shares or
otherwise  reflect our value, earnings or other objective measures of worth. The
increase  in  the  per-share  offering  price  from  $9  to $10 once the minimum
offering  is  achieved  is  also  not based upon or reflective of any meaningful
measure of our share value.


WE MAY BE UNABLE TO MAKE DISTRIBUTIONS.

     If  our  properties  do  not  generate sufficient revenue to meet operating
expenses,  our  cash  flow and our ability to make distributions to shareholders
may  be  adversely  affected.  Our properties are subject to all operating risks
common  to  hotel  properties.  These  risks might adversely affect occupancy or
room  rates. Increases in operating costs due to inflation and other factors may
not  necessarily  be offset by increased room rates. The local markets may limit
the  extent  to  which  room  rates may be increased to meet increased operating
expenses  without  decreasing  occupancy rates. In addition, a percentage of our
rents  will  be  based  on the gross income of Apple Suites Management from food
and  beverage, telephone and other revenue of each property. If the gross income
from these sources decreases, our rental income will also decrease.


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WE WILL FACE COMPETITION IN THE HOTEL INDUSTRY.

     The  extended-stay  hotel  industry is highly competitive. This competition
could  reduce  occupancy  levels  and  rental  revenues at our properties, which
would  adversely  affect our operations. We expect to face competition from many
sources.  We  will  face  competition  from  other  hotels both in the immediate
vicinity   and   the  geographic  market  where  our  hotels  will  be  located.
Over-building  in the hotel industry will increase the number of rooms available
and  may  decrease occupancy and room rates. In addition, increases in operating
costs  due  to inflation may not be offset by increased room rates. We will also
face  competition from nationally recognized hotel brands with which we will not
be associated.

     We   will   also  face  competition  for  investment  opportunities.  these
competitors  may  be  other real estate investment trusts, national hotel chains
and  other entities that may have substantially greater financial resources than
we  do. We will also face competition for investors from other hotel real estate
investment trusts and real estate entities.


INVESTORS  MAY  WAIT  UP  TO  ONE YEAR BEFORE RECEIVING THEIR COMMON SHARES OR A
REFUND OF THEIR MONEY IF THE MINIMUM OFFERING IS NOT ACHIEVED.

     Until  the  minimum  offering  of  1,666,666.67  common shares is achieved,
investors  will not receive their common shares. If at least 1,666,666.67 common
shares  have not been sold within one year after the date of this prospectus, we
will  terminate  this offering of common shares. If the minimum offering is sold
within  one  year,  investors  will receive their common shares plus interest on
their   subscription  monies  at  the  time  of  closing.  If  the  offering  is
terminated, investor will have their money promptly refunded with interest.


THERE  WOULD  BE SIGNIFICANT ADVERSE CONSEQUENCES OF OUR FAILURE TO QUALIFY AS A
REIT.

     Qualification  as  a  real  estate  investment trust, or REIT, involves the
application  of  highly  technical  and complex Internal Revenue Code provisions
for  which  there  are limited judicial or administrative interpretations. If we
were  to  fail to qualify as a REIT for any taxable year, we would be subject to
federal  income  tax  on  our taxable income at corporate rates. In addition, we
would  generally  be  disqualified from treatment as a REIT for the four taxable
years  following  the  year  of  losing  our REIT status. Losing our REIT status
would  reduce  our  net earnings available for investment or distribution to our
shareholders   because   of   the   additional   tax   liability.  In  addition,
distributions  to  our  shareholders  would  no longer qualify for the dividends
paid  deduction and we would no longer be required to make distributions. To the
extent  we  would  have  made  distributions  in anticipation of qualifying as a
REIT,  we might be required to borrow funds or liquidate investments in order to
pay the applicable tax.


OUR REAL ESTATE INVESTMENTS WILL BE RELATIVELY ILLIQUID.

     Real  estate investments are, in general, relatively difficult to sell. Our
illiquidity  will  tend  to  limit our ability to promptly vary our portfolio in
response  to changes in economic or other conditions. In addition, provisions of
the Internal Revenue Code


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relating  to REITs limit our ability to sell properties held for fewer than four
years.  This  limitation  may  affect  our  ability  to  sell properties without
adversely affecting returns to our shareholders.


OUR BOARD MAY IN ITS SOLE DISCRETION DETERMINE THE AMOUNT OF OUR AGGREGATE DEBT.

     Subject  to  the  limitations in our bylaws on the permitted maximum amount
of  debt,  there  is  no limitation on the number of mortgages or deeds of trust
that  may be placed against any particular property. Our bylaws will prohibit us
from  incurring  debt  if the debt would result in our total debt exceeding 100%
of  the  value  of  our  assets  at  cost. The bylaws also will prohibit us from
allowing  total borrowings to exceed 50% of the fair market value of our assets.
However,  our  bylaws allow us to incur debt in excess of these limitations when
the  excess borrowing is approved by a majority of the independent directors and
disclosed  to  the  shareholders.  In addition, the bylaws will provide that our
borrowings  must  be  reasonable  in  relation  to  our  net  assets and must be
reviewed quarterly by the directors.


WE HAVE NO RESTRICTION ON CHANGES IN OUR INVESTMENT AND FINANCING POLICIES.

     Our  board  of  directors  approves  our investment and financing policies,
including  our policies with respect to growth, debt, capitalization and payment
of  distributions.  Although  the board of directors has no present intention to
amend  or  waive  its current policies, it could do so at any time, or from time
to  time, at its discretion without a vote of our shareholders. For example, our
board  could  determine  without  shareholder's  approval that it is in the best
interests  of  the  shareholders to cease all investments in extended-stay hotel
properties,  to  make  investments  in  other types of assets or to dissolve the
business.


THERE  WILL  BE DILUTION OF SHAREHOLDER'S INTERESTS UPON CONVERSION OF THE CLASS
B SHARES.

     Glade  M. Knight, who is our director, chairman of the board and president,
and  others  will  hold  Class  B  convertible shares which are convertible into
common  shares,  as described under "principal and management shareholders." The
number  of  common  shares  into  which  the  Class  B  convertible  shares  are
convertible  depends on the gross proceeds of the offering. The conversion ratio
is  one-to-one  for gross proceeds of $50 million (5,166,666 common shares). The
conversion  ratio  increases to eight-to-one for gross proceeds of $300 million.
The  conversion  of Class B convertible shares into common shares will result in
dilution of the shareholders' interests.

     o    Assuming 5,166,666 common shares offered by this prospectus were sold,
          and all of the Class B convertible  shares were  converted into common
          shares,  the  holders  of the  Class B  convertible  shares  would own
          approximately  240,000  common  shares or 4.44% of the total number of
          common shares then outstanding in exchange for an aggregate payment of
          24,000.

     o    If half of the  offering  is sold,  this would  represent  the sale of
          15,166,666 common shares. Assuming 15,166,666 common shares were sold,
          and all of the Class B convertible  shares were  converted into common
          shares, the


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<PAGE>

          holders  of the Class B  convertible  shares  would own  approximately
          840,000  common  shares or 5.25% of the total number of common  shares
          then outstanding in exchange for an aggregate payment of $24,000.

     o    Assuming all common shares offered by this  prospectus  were sold, and
          all of the authorized  Class B convertible  shares were converted into
          common shares, the holders of the Class B convertible shares would own
          approximately  1,920,000 common shares or 5.98% of the total number of
          common  shares  outstanding  in exchange for an  aggregate  payment of
          $24,000.


OUR SHAREHOLDERS' INTERESTS MAY BE DILUTED IN VARIOUS WAYS.

     The  board  of  directors  is  authorized, without shareholder approval, to
cause  us  to  issue  additional  common  shares or to raise capital through the
issuance  of  preferred shares, options, warrants and other rights, on terms and
for  consideration  as  the  board  of  directors  in  its  sole  discretion may
determine.  Any  such  issuance  could  result  in dilution of the equity of the
shareholders.  The  board of directors may, in its sole discretion, authorize us
to  issue  common shares or other equity or debt securities, (1) to persons from
whom  we  purchase  property,  as  part  or  all  of  the  purchase price of the
property,  or  (2)  to  Apple  Suites Advisors or Apple Suites Realty in lieu of
cash  payments  required  under  the  Advisory  Agreement  or  other contract or
obligation.  The  board  of directors, in its sole discretion, may determine the
value  of  any  common  shares  or  other  equity  or  debt securities issued in
consideration  of  property  or  services  provided,  or  to be provided, to us,
except  that  while  common  shares  are offered by us to the public, the public
offering price of the shares shall be deemed their value.

     We  have  agreed  to  sell  to  David  Lerner  Associates, Inc. warrants to
purchase  10%  of the shares sold, up to 3,000,000 common shares, at an exercise
price  of  $16.50  per  share.  To  the  extent that the warrants are exercised,
dilution  will occur if the warrant exercise price is less than the value of the
common shares at the time of exercise.

     We  have adopted two stock incentive plans for the benefit of our directors
and  a  limited  number  of our employees and employees of Apple Suites Advisors
and  Apple  Suites  Realty. The effect of the exercise of those options could be
to  dilute  the  value  of  the  shareholders'  investments to the extent of any
difference  between  the exercise price of an option and the value of the shares
purchased at the time of the exercise of the option.

     In  addition,  we  expressly  reserve  the  right  to  implement a dividend
reinvestment  plan  involving  the  issuance  of  additional shares by us, at an
issue price determined by the board of directors.


SEVEN PARTNERSHIPS PREVIOUSLY ORGANIZED BY GLADE M. KNIGHT FILED FOR BANKRUPTCY.

     Several  private  partnerships  previously  organized  by  Glade  M. Knight
experienced   operating   difficulties  and  adverse  business  developments.  A
prospective  investor may deem this relevant in evaluating the risk that we will
experience  operating  difficulties  and  adverse  business  developments. Seven
private   partnerships   previously   organized   by   Mr.   Knight   filed  for
reorganization under Chapter 11 of the


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United  States Bankruptcy Code. These partnerships ceased all cash distributions
to  their  investors.  In  addition,  the properties owned by other partnerships
organized by Mr. Knight were lost through foreclosure.


OUR ARTICLES AND BYLAWS CONTAIN ANTITAKEOVER PROVISIONS AND OWNERSHIP LIMITS.

     Ownership  Limits. Our bylaws contain restrictions on stock ownership which
may  discourage  third  parties  from  making  acquisition proposals. These same
antitakeover  provisions may also impede our shareholders' ability to change our
management.

     In  order  to  maintain  our  qualification  as a REIT, no more than 50% in
value  of  our  outstanding  shares  of  capital stock may be owned, directly or
indirectly,  by  five  or fewer individuals or entities. As a result, our bylaws
prohibit  ownership,  either  directly  or  indirectly, of more than 9.8% of the
common  shares by any shareholder. Our board may waive this ownership limitation
on  a  case-by-case  basis. As a result, without our board's approval, no person
may  acquire  more  than  9.8%  of  our  outstanding  common  shares, limiting a
third-party's ability to acquire control of us.

     Preferred  Shares.  Our  articles  of  incorporation authorize the board to
issue  up  to  15,000,000  preferred  shares and to establish the preference and
rights  of  those  shares. Thus, our board could create a new class of preferred
shares  with voting or other rights senior to any existing class of stock. These
rights  could  delay or prevent a change in control even if a change were in our
shareholders' best interest.


WE MAY BECOME SUBJECT TO ENVIRONMENTAL LIABILITIES.

     Although  we  will  subject  our  properties to an environmental assessment
prior  to  acquisition,  we  may  not  be  made  aware  of all the environmental
liabilities  associated  with  a  property  prior  to its purchase. There may be
hidden  environmental  hazards  that may not be discovered prior to acquisition.
The  costs  of investigation, remediation or removal of hazardous substances may
be  substantial. In addition, the presence of hazardous substances on one of our
properties,  or the failure to remediate properly a contaminated property, could
adversely  affect  our  ability  to sell or rent the property or to borrow using
the property as collateral.

     Various    federal,    state    and   local   environmental   laws   impose
responsibilities  on  an  owner  or  operator  of  real estate and subject those
persons  to potential joint and several liabilities. Typical provisions of those
laws include:

     --   Responsibility  and liability for the costs of removal or  remediation
          of hazardous  substances  released on or in real  property,  generally
          without regard to knowledge of or  responsibility  for the presence of
          the contaminants.

     --   Liability  for the  costs  of  removal  or  remediation  of  hazardous
          substances  at  disposal  facilities  for  persons who arrange for the
          disposal or treatment of those substances.

     --   Potential  liability under common law claims by third parties based on
          damages and costs of environmental contaminants.


                                       15
<PAGE>

WE  MAY  INCUR  SIGNIFICANT COSTS COMPLYING WITH THE AMERICANS WITH DISABILITIES
ACT AND SIMILAR LAWS.

     Our  properties  will  be  required to meet federal requirements related to
access  and  use  by  disabled  persons  as  a  result  of  the  Americans  with
Disabilities  Act  of  1990.  In addition, a number of additional federal, state
and  local  laws may require modifications to any properties we purchase, or may
restrict  further  renovations  thereof,  with  respect  to  access  by disabled
persons.  Noncompliance  with  these  laws  or  regulations  could result in the
imposition  of  fines  or  an  award of damages to private litigants. Additional
legislation  could  impose additional financial obligations or restrictions with
respect  to  access  by  disabled  persons.  If required changes involve greater
expenditures  than  we currently anticipate, or if the changes must be made on a
more  accelerated  basis,  our  ability  to make expected distributions could be
adversely affected.

OUR  COMPUTER  SYSTEMS  MAY  NOT  BE  YEAR  2000  COMPLIANT, WHICH WOULD LEAD TO
OPERATIONAL DIFFICULTIES AND INCREASED COSTS.

     Many  of the world's computer systems currently record years in a two-digit
format.  Those  computer  systems  will  be  unable  to properly interpret dates
beyond  the  year  1999,  which  could  lead  to  disruptions  in our operations
commonly  referred  to  as  the "Year 2000" issue. We and Apple Suites Advisors,
Apple  Suites  Realty  and  Apple  Suites  Management  do  not have any computer
systems  and  are  in  the process of developing initiatives to address the Year
2000  issue.  We  cannot  guarantee  that  our systems and those of Apple Suites
Advisors,  Apple  Suites  Realty  or  Apple  Suites Management will be Year 2000
compliant  or  that  other  companies  on  which  we  may  rely  will  be timely
converted. As a result, our operations could be adversely affected.


WE  MAKE  FORWARD-LOOKING  STATEMENTS  IN  THIS PROSPECTUS WHICH MAY PROVE TO BE
INACCURATE.

     This  prospectus  contains forward-looking statements within the meaning of
the  federal  securities  laws  which  are  intended  to  be covered by the safe
harbors   created  by  those  laws.  These  statements  include  our  plans  and
objectives  for  future  operations,  including plans and objectives relating to
future  growth  and  availability of funds. These forward-looking statements are
based  on  current  expectations  that involve numerous risks and uncertainties.
Assumptions  relating  to  these  statements  involve judgments with respect to,
among  other  things,  future  economic,  competitive  and market conditions and
future  business  decisions,  all  of  which  are  difficult  or  impossible  to
accurately  predict  and  many  of  which  are  beyond  our control. Although we
believe  the  assumptions  underlying  the  forward-looking  statements, and the
forward  looking  statements  themselves, are reasonable, any of the assumptions
could  be  inaccurate  and,  therefore,  there  can  be  no assurance that these
forward-looking   statements  will  prove  to  be  accurate.  In  light  of  the
significant  uncertainties  inherent  in  these  forward-looking statements, the
inclusion  of  this information should not be regarded as a representation by us
or  any  other  person  that  our  objectives and plans, which we consider to be
reasonable, will be achieved.


                                       16
<PAGE>


                      INVESTMENT OBJECTIVES AND POLICIES

     The  following  is  a  discussion  of  our current policies with respect to
investments,   financing   and   other  activities.  These  policies  have  been
established  by  our  management.  These  policies may be amended or waived from
time  to  time at the discretion of our board of directors without a vote of our
shareholders.  No  assurance can be given that our investment objectives will be
attained.


INVESTMENTS IN REAL ESTATE OR INTERESTS IN REAL ESTATE.

     Our  primary  business  objective  is  to  maximize  shareholder  value  by
achieving  long-term growth in cash distributions to our shareholders. We intend
to  pursue  this  objective  by  acquiring  extended-stay  hotel  properties for
long-term   ownership.   We  intend  to  acquire  fee  ownership  of  our  hotel
properties.  We  intend  to  lease these properties to hotel operating companies
for  their  management. We seek to maximize current and long-term net income and
the  value  of  our  assets.  Our  policy  is to acquire assets where we believe
opportunities exist for acceptable investment returns.

     We  expect  to pursue our objectives primarily through the direct ownership
of  extended-stay  hotel  properties  located  in  selected  metropolitan areas.
However,  future  investment  activities  will  not be limited to any geographic
area or product type or to a specified percentage of our assets.

     Although  we are not currently doing so, we may also participate with other
entities  in property ownership, through joint ventures or other types of common
ownership.  Equity investments may be subject to existing mortgage financing and
other indebtedness which have priority over our equity interests.

     We  reserve  the  right  to  dispose  of  any  property if we determine the
disposition  of  a  property  is in our best interests and the best interests of
our shareholders.


BORROWING POLICIES

     To  maximize  our  potential  cash flow and minimize our risk, we intend to
purchase  our  properties  on an "all-cash" basis. However, we may initially use
limited  interim borrowings in order to purchase properties. We will endeavor to
repay  any  interim  borrowings with proceeds from the sale of common shares and
thereafter  to  hold  our  properties  on an unleveraged basis. However, for the
purpose  of  flexibility  in  operations, we will have the right, subject to the
approval of the board of directors, to borrow.

     One  purpose  of borrowing could be to permit our acquisition of additional
properties  through  the  "leveraging"  of  shareholders'  equity contributions.
Alternatively,  we  might  find  it necessary to borrow to permit the payment of
operating  deficits  at  properties  we  already  own. Furthermore, although not
anticipated,  properties may be financed or refinanced if the board of directors
deems   it   in  the  best  interests  of  shareholders  because,  for  example,
indebtedness   can   be  incurred  on  favorable  terms  and  the  incurring  of
indebtedness  is  expected to improve the shareholders' after-tax cash return on
invested capital.


                                       25
<PAGE>

     Loans  we  obtain may be evidenced by promissory notes secured by mortgages
on  our  properties.  As  a  general  policy,  we would seek to obtain mortgages
securing  indebtedness  which encumber only the particular property to which the
indebtedness  relates,  but  recourse  on  these  loans  may  include all of our
assets.  If  recourse  on  any  loan  incurred by us to acquire or refinance any
particular  property  includes all of our assets, the equity in other properties
could be reduced or eliminated through foreclosure on that loan.

     Subject  to  the  approval  of  the  board of directors, we may borrow from
Apple  Suites Advisors or Apple Suites Realty or establish a line of credit with
a  bank  or  other  lender.  Those  entities are under no obligation to make any
loans,  however.  After  the  initial  closing of $15,000,000, any loans made by
them  must be approved by a majority of the independent directors as being fair,
competitive  and  commercially reasonable and no less favorable to us than loans
between unaffiliated lenders and borrowers under the same circumstances.

     After  the initial closing of $15,000,000, our bylaws will prohibit us from
incurring  debt  if  the  debt  would result in aggregate debt exceeding 100% of
"Net  Assets,"  defined  generally  to  mean  assets at cost, before subtracting
liabilities,  unless  the  excess  borrowing  is  approved  by a majority of the
independent  directors  and  disclosed  to  the  shareholders as required by the
bylaws.  The  bylaws also will prohibit us from allowing aggregate borrowings to
exceed  50%  of our "Adjusted Net Asset Value," defined generally to mean assets
at  fair  market  value,  before  subtracting  liabilities,  subject to the same
exception  described  in  the  previous  sentence.  In addition, the bylaws will
provide  that the aggregate borrowings must be reasonable in relation to our net
assets  and  must  be  reviewed  quarterly  by  the  directors.  Subject  to the
limitations  on  the permitted maximum amount of debt, there is no limitation on
the  number  of  mortgages  or  deeds  of  trust which may be placed against any
particular property.

     Assuming  the  independent  directors  approve,  we may initially borrow in
excess  of  the debt limitations described in the previous paragraph in order to
acquire  a  portfolio  of  extended-stay  hotel  properties.  If attainable, the
acquisition  of  a  portfolio of properties early in our existence would, in the
opinion   of  our  management,  provide  us  with  greater  ability  to  acquire
extended-stay  hotel  properties  in  the  future  as  proceeds from the sale of
common  shares  are  received  and  provide  us with economies of scale from the
outset.  We  would endeavor to use only interim borrowing for these acquisitions
in  order  to  maintain  our long-term policy of purchasing our properties on an
all  cash  basis.  We  would repay any interim borrowings with proceeds from the
sale of common shares.


RESERVES

     A  portion  of  the  proceeds  of  this  offering  will be reserved to meet
working  capital needs and contingencies associated with our operations. We will
initially  allocate  to  our  working  capital reserve not less than 0.5% of the
proceeds  of  the  offering. As long as we own any properties, we will retain as
working  capital  reserves  an  amount equal to at least 0.5% of the proceeds of
the  offering, subject to review and re-evaluation by the board of directors. If
reserves and any other


                                       26
<PAGE>

available  income  become  insufficient  to  cover  our  operating  expenses and
liabilities,  it  may  be  necessary  to  obtain  additional funds by borrowing,
refinancing  properties  or  liquidating our properties on an all cash basis. We
would repay any interim borrowings with investment in one or more properties.


SALE POLICIES

     We  are  under  no  obligation  to  sell  our  investment  properties,  and
currently  anticipate  that  we  will  hold  our  investment  properties  for an
indefinite  length  of time. However, a sale of one or more properties may occur
at  any  time  if  Apple  Suites  Advisors  deems it advisable for us based upon
current  economic  considerations,  and  the board of directors concurs with the
decision.  In  deciding  whether  to sell a property, Apple Suites Advisors will
also  take  into  consideration  factors  such as: the amount of appreciation in
value,  if  any,  to be realized; federal, state and local tax consequences; the
possible  risks  of  continued  ownership;  and the anticipated advantages to be
gained  for  the  shareholders from sale of a property versus continuing to hold
property.

     Currently,  we  expect  that  within  approximately  three  years  from the
initial closing, we will either:

       (1) cause  the  common  shares  to  be  listed  on  a national securities
    exchange or quoted on the NASDAQ National Market System or

       (2) with  shareholder  approval,  dispose  of  all of our properties in a
    manner which will permit distributions to our shareholders of cash.

     The  taking  of  either type of action would be conditioned on the board of
directors  determining the action to be prudent and in the best interests of the
shareholders,  and  would  be  intended  to  provide shareholders with liquidity
either  by  initiating  the  development of a market for the common shares or by
disposing  of properties and distributing to shareholders cash. Virginia law and
our  articles  of  incorporation state that a majority of the common shares then
outstanding  and  entitled  to  vote  is  required to approve the sale of all or
substantially  all  our  assets. However, we are under no obligation to take any
of  these  actions,  and  these  actions,  if  taken,  might  be taken after the
three-year period.


CHANGES IN OBJECTIVES AND POLICIES

     Subject  to  the  limitations  in the articles of incorporation, the bylaws
and  the  Virginia  Stock  Corporation  Act,  the  powers of our company will be
exercised  by  or  under  the  authority of, and the business and affairs of our
company  will  be  controlled by, the board of directors. The board of directors
also  has  the  right and power to establish policies concerning investments and
the   right,   power  and  obligation  to  monitor  the  procedures,  investment
operations and performance of our company.

     In  general,  the  articles  of incorporation and the bylaws can be amended
only  with  the affirmative vote of a majority of the outstanding common shares,
except  that the bylaws may be amended by the board of directors if necessary to
comply


                                       27
<PAGE>

with  the  real  estate investment trust provisions of the Internal Revenue Code
or  with  other  applicable  laws,  regulations  or  requirements  of  any state
securities  regulator.  The bylaws can also be amended by the board of directors
to:

     o    correct any ambiguity in the bylaws or resolve inconsistencies between
          the bylaws and the Articles;

     o    make  changes  that  are  not  materially  adverse  to the  rights  of
          shareholders; or

     o    allow us to take any action or  fulfill  any  obligation  which we are
          legally obligated or permitted to take.

     Within  the  express  restrictions  and  prohibitions  of  the  bylaws, the
articles  of  incorporation  and applicable law, however, the board of directors
has  significant discretion to modify our investment objectives and policies, as
stated  in  this  prospectus.  We have no present intention to modify any of our
investment  objectives and policies, and it is anticipated that any modification
would  occur  only if business and economic factors affecting us made our stated
investment   objectives   and  policies  unworkable  or  imprudent.  By  way  of
illustration  only,  the  board  of directors could elect to acquire residential
apartment  communities,  or  to  acquire  one  or  more commercial properties in
addition to extended-stay hotel properties.

     Thus,  while  this  prospectus  accurately  and fully discloses our current
investment  objectives and policies, prospective shareholders must be aware that
the  board  of directors, acting consistently with our organizational documents,
applicable  law  and  their fiduciary obligations, may elect to modify or expand
our  objectives  and  policies  from  time  to  time. Any action by the board of
directors  would  be  based upon the perceived best interests of our company and
the shareholders.


                                       28
<PAGE>

                                   BUSINESS


GENERAL

     We  are  a Richmond, Virginia-based company. We plan to elect to be treated
as  a  real  estate  investment  trust for federal income tax purposes beginning
with  our  taxable  year  ending  December 31, 1999. We plan to purchase and own
extended-stay  hotel properties located in selected metropolitan areas. However,
we currently own no properties.


BUSINESS STRATEGIES

     Our  primary  business  objective  is  to  maximize  shareholder  value  by
maintaining  long-term  growth  in  cash  distributions  to our shareholders. To
achieve  this  objective, we will focus on maximizing the internal growth of our
portfolio  by  selecting properties that have strong cash flow growth potential.
We  intend  to pursue this objective by acquiring extended-stay hotel properties
for  long-term  ownership by purchasing properties in fee simple. Because we are
prohibited  under the federal tax laws pertaining to qualifying as a real estate
investment  trust  from  operating  our  extended stay hotel properties, we will
lease  each of our hotel properties to Apple Suites Management or another lessee
for  their  management.  We  anticipate  that  substantially  all  of  our hotel
properties  will  be  leased to Apple Suites Management, a Virginia corporation,
the sole shareholder and chief executive officer of which is Glade M. Knight.

     We  will  seek  associations  with  distinctive brands in the extended-stay
hotel  market.  We  are currently negotiating a license agreement and management
agreement   with  Promus  Hotels,  Inc.  with  respect  to  extended-stay  hotel
properties  we  may  purchase  from  Promus  Hotels, Inc. These agreements would
permit  us  to  have  our  properties  identified  as  Homewood  Suites(Reg. TM)
properties.


HOMEWOOD SUITES(Reg. TM)

     Consistent  with  our strategy to invest in extended-stay hotel properties,
we  are  in  the  process  of  negotiating  an agreement to purchase a number of
Homewood  Suites(Reg.  TM)  properties  from  Promus  Hotels,  Inc. No agreement
presently  exists.  If we are successful in negotiating an agreement with Promus
Hotels,  Inc.,  any  such  agreement  would  have a number of conditions to each
party's  obligations thereunder, including our achieving the minimum offering of
1,666,666.67  common  shares.  Accordingly,  there  can  be no assurance we will
purchase any Homewood Suites(Reg. TM) properties.

     If  we  are successful in negotiating an agreement with Promus Hotels, Inc.
and  are  able  to  sell  the minimum offering of 1,666,666.67 common shares, we
expect  that  we  would  purchase  five  Homewood Suites(Reg. TM) properties for
approximately  $50,000,000. Since the net proceeds of the minimum offering would
be  approximately $12,675,000, our ability to purchase five Homewood Suites(Reg.
TM)  properties would depend on our ability to arrange financing for the balance
of the purchase price either from Promus Hotels, Inc. or a bank.


                                       30
<PAGE>

     We  have  no  commitments  from  either  Promus  Hotels,  Inc. or a bank to
provide  such  financing  and  there  can  be  no  assurance  that  financing on
acceptable  terms  will be available. Furthermore, such financing, if available,
would  require  the  approval  of  a majority of the independent directors if it
would  exceed  the  limit  on  debt allowed in the bylaws in the absence of such
approval.

     There  are  currently  more  than 70 Homewood Suites(Reg. TM) properties in
the   United  States.  Homewood  Suites(Reg.  TM)  offers  upscale,  all-suites,
high-quality,  residential-style  lodging  with a comprehensive package of guest
services  and  amenities,  for  extended-stay  business  and  leisure travelers.
Homewood  Suites(Reg.  TM)  properties  are  designed  to  meet the needs of the
business  and  leisure  traveler  whose  stay  is typically five nights or more.
Homewood  Suites(Reg.  TM) was designed for people working on field assignments,
relocating   to   a   new   community,   attending   seminars  and  conventions,
participating  in  corporate  training  programs, taking an extended vacation or
attending a family event.

     Homewood  Suites(Reg.  TM)  properties  consist  of  suites  built around a
central  hospitality center or lodge. Homewood Suites(Reg. TM) provides spacious
residential-style  quarters with separate living and sleeping areas large enough
for  work,  study,  entertaining  or  relaxation.  Each  suite  features a fully
equipped  kitchen  and  worksite  with  two  telephones featuring data ports and
voice  mail.  Each  lodge  or  hospitality  center features a complete executive
center  with  fax  machine  and  photocopier  in addition to an exercise center,
swimming pool and other recreational facilities.

     Homewood  Suites(Reg.  TM)  is  a service mark owned by Promus Hotels, Inc.
Promus  Hotels,  Inc.,  its  subsidiaries  or  affiliates also own the following
trademarks   and   service   marks:   Doubletree(Reg.   TM),  Doubletree  Guests
Suites(Reg.  TM),  Club  Hotel  by  Doubletree(Reg.  TM)  Hampton  Inn(Reg. TM),
Hampton  Inn  &  Suites(Reg.  TM), Embassy Vacation Resorts(Reg. TM) and Hampton
Vacation  Resorts.  SM Promus Hotels, Inc., its subsidiaries or affiliates serve
guests  in more than 1,275 hotels and more than 186,000 rooms and suites. We are
not affiliated with Promus Hotels, Inc. or any of its affiliates.


DESCRIPTION OF LEASES

     We  expect  to  lease our properties to an operator under long-term leases.
We  anticipate  that  substantially  all of our properties will be leased to and
operated  by  Apple  Suites  Management  on  the following anticipated terms and
conditions.

     TERM.  We  anticipate  that  each lease will provide for an initial term of
five  years commencing on the date on which the property is acquired. Each lease
will  provides  the  lessee  with  renewal options, provided that (a) the lessee
will  not  have  the right to a renewal if there shall have occurred a change in
the  tax  law  that would permit us to operate the hotel properties directly and
(b)  the  rent  for  each renewal term will be adjusted to reflect the then fair
market  rental  value  of  the property. If we are unable to agree upon the then
fair  market  rental  value  of  a  property,  the lease will terminate upon the
expiration  of  the  then  current  term and Apple Suites Management will have a
right  of  first  refusal  to lease the property from us on terms as we may have
agreed upon with a third-party lessee.

     BASE  RENT;  PARTICIPATING  RENT.  Our rents will be based on a base amount
and  a  percentage  of  gross income. We anticipate that each lease will require
the lessee to


                                       31
<PAGE>

pay  (1)  fixed  monthly  base  rent,  (2)  on  a  monthly  basis, the excess of
"participating   rent"   over  base  rent,  with  participating  rent  based  on
percentages  of  room revenue, food and beverage revenue and telephone and other
revenue  at  each property, and (3) other amounts, including interest accrued on
any  late  payments  or charges. Base rent may increase annually by a percentage
equal  to  the  percentage  increase in the consumer price index compared to the
prior  year.  Base  rent  will be payable monthly in advance. Participating rent
may  be  payable  in arrears based on a monthly schedule adjusted to reflect the
seasonal variations in the property's revenue.

     In  addition  to rent, the leases may require the lessee to pay many of the
following  items:  liability  insurance; real estate and personal property taxes
and  assessments;  casualty  insurance,  including loss of income insurance; and
all  costs  and  expenses  and  all  utility  and  other charges incurred in the
operation  of  the  properties.  The leases may also provide for rent reductions
and  abatements  in the event of damage or destruction or a partial condemnation
of any property.


OTHER REAL ESTATE INVESTMENTS.

     Although  we  anticipate  that  our  focus  will  be on extended-stay hotel
properties  our  bylaws  and  articles  of incorporation do not preclude us from
acquiring  other residential properties. Although we currently own no properties
we  may  acquire  other  real  estate  assets  including,  but  not  limited to,
multi-family  residential  properties  and  other income producing properties in
addition  to  extended-stay  hotel properties. The purchase of any property will
be  based  upon  our  perceived  best  interests  and those of our shareholders.
Regardless  of  the mix of properties we may own, our primary business objective
is  to  maximize shareholder value by acquiring properties that have strong cash
flow growth potential.


LEGAL PROCEEDINGS

     We  are not presently subject to any material litigation. To our knowledge,
there  is no material litigation threatened against us. We may become subject in
the  future  to litigation, including routine litigation arising in the ordinary
course of business.


REGULATION

     GENERAL.  Our  properties  may  be  subject to various laws, ordinances and
regulations,  including  regulations relating to recreational facilities such as
swimming  pools,  activity  centers and other common areas. We intend to acquire
the   necessary  permits  and  approvals  under  present  laws,  ordinances  and
regulations to operate our business.

     AMERICANS  WITH  DISABILITIES  ACT. Our properties will need to comply with
Title  III  of  the  Americans  with Disabilities Act of 1990 (the "ADA") to the
extent  they  are  "public  accommodations" and/or "commercial facilities" under
the  ADA.  Compliance  with ADA requirements could require removal of structural
barriers  to  handicapped access in public areas of the properties where removal
is readily achievable.


                                       32
<PAGE>

ENVIRONMENTAL MATTERS

     Under   federal,   state  and  local  environmental  laws,  ordinances  and
regulations,  a  current  or  previous  owner  or operator of real estate may be
required   to  investigate  and  remediate  hazardous  or  toxic  substances  or
petroleum  product  releases  at  a property. In addition, the owner or operator
may  be  held  liable  to a government entity or third party for property damage
and  investigation  and remediation costs incurred by parties in connection with
the  contamination.  These  laws  typically  impose  cleanup  responsibility and
liability  without  regard  to  whether the owner or operator knew of, or caused
the  presence  of,  the contaminants. The costs of investigation, remediation or
removal  of substances may be substantial, and the presence of these substances,
or  the failure to properly remediate these substances, may adversely affect the
owner's  ability  to  sell  or  rent the real estate or to borrow using the real
estate as collateral.

     In  addition,  some  environmental  laws  create a lien on the contaminated
site  in  favor  of  the government for damages and costs incurred in connection
with  the  contamination.  Individuals who arrange for the disposal or treatment
of  hazardous  or  toxic  substances  may  be  held  liable  for  the  costs  of
investigation,  remediation  or  removal  of hazardous or toxic substances at or
from  the  disposal  or treatment facility regardless of whether the facility is
owned  or operated by the person. Finally, the owner of a site may be subject to
common  law  claims  by  third parties based on damages and costs resulting from
environmental contamination emanating from a site.

     Federal,  state  and local laws, ordinances and regulations also govern the
removal,  encapsulation or disturbance of asbestos-containing materials ("ACMs")
when  the  materials  are  in  poor condition or in the event of the remodeling,
renovation  or demolition of a building. These laws may impose liability for the
release  of  ACMs and may provide for third parties to seek recovery from owners
or  operators  of  real  estate  for  personal  injury  associated with ACMs. In
connection  with  the  ownership  and  operation  of  its  properties, we may be
potentially  liable  for  costs  in  connection  with ACMs or other hazardous or
toxic substances.

     Prior  to  acquisition, all of our properties will have been the subject of
environmental  assessments,  which are intended to reveal information regarding,
and  to  evaluate  the  environmental  condition of, the surveyed properties and
surrounding properties.

     These assessments will generally include:

     --   a historical review,

     --   a public records review,

     --   a  preliminary   site   investigation  of  the  site  and  surrounding
          properties,

     --   examining for the presence of asbestos,

     --   examining for equipment containing polychlorinated biphenyls,

     --   examining for underground storage tanks, and

                                       33
<PAGE>

     --   the preparation of a written report.

     These  assessments  generally  will not include soil sampling or subsurface
investigations.

     Nevertheless,  it  is  possible  that these assessments will not reveal all
environmental  liabilities  or  that  there  are  unknown material environmental
liabilities. Moreover, we cannot guarantee that

     --   future laws,  ordinances or regulations  will not require any material
          expenditures by or impose any material  liabilities in connection with
          environmental conditions by or on us or our properties,

     --   the  environmental  condition  of a property we  purchase  will not be
          adversely affected by residents and occupants of the property,  by the
          condition  of  properties  in the  vicinity,  such as the  presence of
          underground storage tanks, or by unrelated third parties, or

     --   prior owners of any property we purchase will not have created unknown
          environmental problems.

     We  will  endeavor  to  ensure  our properties will be in compliance in all
material  respects  with  all  Federal,  state  and  local  laws, ordinances and
regulations regarding hazardous or toxic substances or petroleum products.


INSURANCE

     We  will  carry comprehensive liability, fire, extended coverage and rental
loss   insurance   with   respect  to  any  property  we  acquire,  with  policy
specifications,  insured  limits and deductibles customarily carried for similar
properties.  There are, however, certain types of losses, such as losses arising
from  earthquakes  or  wars,  that  are  not  generally insured because they are
either  uninsurable or not economically insurable. Should an uninsured loss or a
loss  in  excess  of insured limits occur, we could lose our capital invested in
the  affected  property,  as  well  as  the anticipated future revenues from the
property  and  would  continue  to  be obligated on any mortgage indebtedness or
other  obligations  related  to  the property. We could be adversely affected by
any such loss.


AVAILABLE INFORMATION

     We  have  filed  a  registration  statement,  of which this prospectus is a
part,   on   Form   S-11  with  the  Securities  and  Exchange  Commission  (the
"Commission")  relating  to this offering of common shares. This prospectus does
not  contain  all  of  the  information  in  the  registration statement and the
exhibits  and  financial statements included with the registration statement. If
we  describe  the contents of any contract or other document in this prospectus,
the  description may not necessarily be a complete description. You should refer
to  the  copy  of the document filed as an exhibit to the registration statement
or incorporated by reference for a complete description.

     You  can obtain copies of the registration statement and the exhibits for a
fee from the Commission at its principal office in Washington, D.C.


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     We  will also file periodic reports, proxy statements and other information
with  the  Commission. You can review and copy these documents at the offices of
the  Commission  in Washington, D.C. and at the Commission's regional offices in
Chicago,  Illinois  and  New  York,  New  York. The Commission also maintains an
Internet  web site that contains these documents and other information regarding
registrants  that  file electronically. The Internet address of the Commission's
web site is: http://www.sec.gov.

     We  will  furnish our shareholders with annual reports containing financial
statements audited by our independent auditors.


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