UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-Q

|  |                                                                                                                                              
|- | ---------------------------------------------------------------------------------------------------------------------------------------------
|x | QUARTERLY
 REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2010       
|  |                                                                                                                                              
|o | TRANSITION
 REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF
 1934 FOR THE TRANSITION PERIOD FROM _______ TO _______

|                                                        |  |                     
|------------------------------------------------------- |  | --------------------
|Commission File Number 000-51270                       
|                                                       
|APPLE REIT SIX, INC.                                   
|(Exact
 name of registrant as specified in its charter)
|                                                        |  |                     
|VIRGINIA                                                |  | 20-0620523          
|(State
 or other jurisdiction                           |  | (IRS
 Employer      
|of
 incorporation or organization)                      |  | Identification
 No.)
|                                                        |  |                     
|814 EAST MAIN STREET                                    |  |                     
|RICHMOND, VIRGINIA                                      |  | 23219               
|(Address
 of principal executive offices)               |  | (Zip
 Code)         
|                                                        |  |                     
|(804) 344-8121                                         
|(Registrants
 telephone number, including area code)  

Indicate by
check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes x   No o

Indicate by
check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T during the
preceding 12 months (or for such shorter period that the registrant was
required to submit and post such files). Yes o   No o

Indicate by check mark
whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated filer, or a smaller reporting company. See the definitions of
large accelerated filer, accelerated filer and smaller reporting company
in Rule 12b-2 of the Exchange Act:


|                                                                       |                            
|---------------------------------------------------------------------- | ---------------------------
|Large accelerated filer o                                              | Accelerated filer o        
|Non-accelerated filer x (Do not check if a smaller reporting
 company) | Smaller reporting company o

Indicate by check mark
whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act). Yes o   No x

Number of
registrants common shares outstanding as of August 1, 2010: 91,038,450

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APPLE REIT SIX, INC.FORM 10-QINDEX

|                               |                   |                                                                                                                                   |  |              | 
|------------------------------ | ----------------- | --------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | 
|                               |                   |                                                                                                                                   |  | Page
 Number
|                               |                   |                                                                                                                                   |  |             
|PART I.
 FINANCIAL INFORMATION |                   |                                                                                                                                   | 
|                               |                   |                                                                                                                                   |  |              | 
|                               | Item 1.           | Financial
 Statements (Unaudited)                                                                                                 |  |              | 
|                               |                   |                                                                                                                                   |  |              | 
|                               |                   | Consolidated
 Balance Sheets - 
 June 30, 2010 and December 31, 2009                                                              |  | 3            | 
|                               |                   |                                                                                                                                   |  |              | 
|                               |                   | Consolidated
 Statements of Operations -
 Three and six months ended June 30, 2010 and 
 Three and six months ended June 30, 2009 |  | 4            | 
|                               |                   |                                                                                                                                   |  |              | 
|                               |                   | Consolidated
 Statements of Cash Flows - 
 Six months ended June 30, 2010 and 
 Six months ended June 30, 2009                    |  | 5            | 
|                               |                   |                                                                                                                                   |  |              | 
|                               |                   | Notes to
 Consolidated Financial Statements                                                                                       |  | 6            | 
|                               |                   |                                                                                                                                   |  |              | 
|                               | Item 2.           | Managements Discussion and Analysis of Financial Condition and
 Results of Operations                                            |  | 10           | 
|                               |                   |                                                                                                                                   |  |              | 
|                               | Item 3.           | Quantitative and Qualitative Disclosures About Market Risk                                                                        |  | 16           | 
|                               |                   |                                                                                                                                   |  |              | 
|                               | Item 4.           | Controls and Procedures                                                                                                           |  | 16           | 
|                               |                   |                                                                                                                                   |  |             
|PART II.                       | OTHER INFORMATION |                                                                                                                                   |  |             
|                               |                   |                                                                                                                                   | 
|                               | Item 1.           | Legal
 Proceedings (not applicable)                                                                                               |  |              | 
|                               |                   |                                                                                                                                   |  |              | 
|                               | Item 1A.          | Risk Factors
 (not applicable)                                                                                                    |  |              | 
|                               |                   |                                                                                                                                   |  |              | 
|                               | Item 2.           | Unregistered Sales of Equity Securities and Use of Proceeds                                                                       |  | 17           | 
|                               |                   |                                                                                                                                   |  |              | 
|                               | Item 3.           | Defaults
 Upon Senior Securities (not applicable)                                                                                 |  |              | 
|                               |                   |                                                                                                                                   |  |              | 
|                               | Item 4.           | (Removed and
 reserved)                                                                                                           |  |              | 
|                               |                   |                                                                                                                                   |  |              | 
|                               | Item 5.           | Other
 Information (not applicable)                                                                                               |  |              | 
|                               |                   |                                                                                                                                   |  |              | 
|                               | Item 6.           | Exhibits                                                                                                                          |  | 18           | 
|                               |                   |                                                                                                                                   |  |              | 
|Signatures                     |                   | 19                                                                                                                                | 

This
Form 10-Q includes references to certain trademarks or service marks. The
SpringHill Suites® by Marriott, TownePlace Suites® by Marriott, Fairfield Inn® by Marriott,
Courtyard® by Marriott, Residence Inn® by Marriott and Marriott Suites® trademarks are
the property of Marriott International, Inc. or one of its affiliates. The
Homewood Suites® by Hilton, Hilton Garden Inn®, Hampton Inn® and Hampton Inn & Suites® trademarks are the property of Hilton Worldwide or one or more of its affiliates.
For convenience, the applicable trademark or servicemark symbol has been
omitted but will be deemed to be included wherever the above referenced terms
are used.

2

---



Apple REIT
Six, Inc.
Consolidated Balance Sheets
(unaudited)
(in thousands, except share data)

|                                                                                                                                                |  |                |          |                     |   |          |  
|----------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------- | -------- | ------------------- | - | -------- | -
|                                                                                                                                                |  | June 30,
 2010 |          | December
 31,
 2009 |  
|                                                                                                                                                |  |                |          |                     |  
|ASSETS                                                                                                                                          |  |                |          |                     |   |          |  
|Investment in real estate, net of accumulated depreciation of
 $140,515 and $124,943, respectively                                              |  | $              | 789,388  |                     | $ | 801,646  |  
|Restricted cash-furniture, fixtures and other escrows                                                                                           |  |                | 4,556    |                     |   | 4,506    |  
|Due from third party manager, net                                                                                                               |  |                | 11,734   |                     |   | 6,331    |  
|Other assets, net                                                                                                                               |  |                | 3,431    |                     |   | 3,101    |  
|                                                                                                                                                |  |                |          |                     |   |          |  
|                                                                                                                                                |  |                |          |                     |   |          |  
|TOTAL
 ASSETS                                                                                                                                   |  | $              | 809,109  |                     | $ | 815,584  |  
|                                                                                                                                                |  |                |          |                     |   |          |  
|                                                                                                                                                |  |                |          |                     |   |          |  
|LIABILITIES                                                                                                                                     |  |                |          |                     |   |          |  
|Notes payable                                                                                                                                   |  | $              | 64,456   |                     | $ | 54,040   |  
|Other liabilities                                                                                                                               |  |                | 4,259    |                     |   | 4,056    |  
|                                                                                                                                                |  |                |          |                     |   |          |  
|                                                                                                                                                |  |                |          |                     |   |          |  
|TOTAL
 LIABILITIES                                                                                                                              |  |                | 68,715   |                     |   | 58,096   |  
|                                                                                                                                                |  |                |          |                     |   |          |  
|SHAREHOLDERS
 EQUITY                                                                                                                           |  |                |          |                     |   |          |  
|Preferred stock, authorized 15,000,000 shares; none issued and
 outstanding                                                                     |  |                |         |                     |   |         |  
|Series A preferred stock, no par value, authorized 200,000,000
 shares; issued and outstanding 91,514,588 and 91,472,421 shares, respectively   |  |                |         |                     |   |         |  
|Series B convertible preferred stock, no par value, authorized
 240,000 shares; issued and outstanding 240,000 and 240,000 shares, respectively |  |                | 24       |                     |   | 24       |  
|Common stock, no par value, authorized 200,000,000 shares; issued and
 outstanding 91,514,588 and 91,472,421 shares, respectively               |  |                | 902,822  |                     |   | 902,202  |  
|Distributions greater than net income                                                                                                           |  |                | (162,452 | )                   |   | (144,738 | )
|                                                                                                                                                |  |                |          |                     |   |          |  
|                                                                                                                                                |  |                |          |                     |   |          |  
|TOTAL
 SHAREHOLDERS EQUITY                                                                                                                     |  |                | 740,394  |                     |   | 757,488  |  
|                                                                                                                                                |  |                |          |                     |   |          |  
|                                                                                                                                                |  |                |          |                     |   |          |  
|TOTAL
 LIABILITIES AND SHAREHOLDERS EQUITY                                                                                                     |  | $              | 809,109  |                     | $ | 815,584  |  
|                                                                                                                                                |  |                |          |                     |   |          |  

See notes to consolidated financial statements.

3

---



Apple REIT Six, Inc.
Consolidated Statements of Operations
(unaudited)
(in thousands, except per share data)

|                                                               |  |                                  |        |                                  |   |                               |   |                               |         |   |   |         |  
|-------------------------------------------------------------- |  | -------------------------------- | ------ | -------------------------------- | - | ----------------------------- | - | ----------------------------- | ------- | - | - | ------- | -
|                                                               |  | Three
 monthsendedJune 30,
 2010 |        | Three
 monthsendedJune 30,
 2009 |   | Six MonthsendedJune 30,
 2010 |   | Six MonthsendedJune 30,
 2009 |        
|                                                               |  |                                  |        |                                  |   |                               |   |                               |        
|                                                              
|Revenues:                                                      |  |                                  |        |                                  |   |                               |   |                               |         |   |   |         |  
|Room revenue                                                   |  | $                                | 55,468 |                                  | $ | 51,788                        |   | $                             | 103,860 |   | $ | 99,649  |  
|Other revenue                                                  |  |                                  | 3,665  |                                  |   | 3,762                         |   |                               | 7,142   |   |   | 7,473   |  
|Reimbursed expenses                                            |  |                                  | 1,636  |                                  |   | 1,310                         |   |                               | 3,268   |   |   | 2,620   |  
|                                                               |  |                                  |        |                                  |   |                               |   |                               |         |   |   |         |  
|Total revenue                                                  |  |                                  | 60,769 |                                  |   | 56,860                        |   |                               | 114,270 |   |   | 109,742 |  
|                                                               |  |                                  |        |                                  |   |                               |   |                               |         |   |   |         |  
|Expenses:                                                      |  |                                  |        |                                  |   |                               |   |                               |         |   |   |         |  
|Operating expense                                              |  |                                  | 15,035 |                                  |   | 14,413                        |   |                               | 28,788  |   |   | 27,939  |  
|Hotel administrative expense                                   |  |                                  | 4,849  |                                  |   | 4,735                         |   |                               | 9,366   |   |   | 9,407   |  
|Sales and marketing                                            |  |                                  | 4,810  |                                  |   | 4,579                         |   |                               | 8,976   |   |   | 8,776   |  
|Utilities                                                      |  |                                  | 2,251  |                                  |   | 2,208                         |   |                               | 4,653   |   |   | 4,705   |  
|Repair and maintenance                                         |  |                                  | 2,729  |                                  |   | 2,648                         |   |                               | 5,328   |   |   | 5,152   |  
|Franchise fees                                                 |  |                                  | 2,490  |                                  |   | 2,325                         |   |                               | 4,667   |   |   | 4,454   |  
|Management fees                                                |  |                                  | 1,783  |                                  |   | 1,722                         |   |                               | 3,435   |   |   | 3,520   |  
|Taxes, insurance and other                                     |  |                                  | 3,206  |                                  |   | 3,549                         |   |                               | 6,444   |   |   | 6,968   |  
|Reimbursed expenses                                            |  |                                  | 1,636  |                                  |   | 1,310                         |   |                               | 3,268   |   |   | 2,620   |  
|General and administrative                                     |  |                                  | 1,405  |                                  |   | 1,333                         |   |                               | 2,442   |   |   | 2,502   |  
|Depreciation expense                                           |  |                                  | 7,816  |                                  |   | 7,739                         |   |                               | 15,578  |   |   | 15,392  |  
|                                                               |  |                                  |        |                                  |   |                               |   |                               |         |   |   |         |  
|Total expenses                                                 |  |                                  | 48,010 |                                  |   | 46,561                        |   |                               | 92,945  |   |   | 91,435  |  
|                                                               |  |                                  |        |                                  |   |                               |   |                               |         |   |   |         |  
|                                                               |  |                                  |        |                                  |   |                               |   |                               |         |   |   |         |  
|Operating income                                               |  |                                  | 12,759 |                                  |   | 10,299                        |   |                               | 21,325  |   |   | 18,307  |  
|                                                               |  |                                  |        |                                  |   |                               |   |                               |         |   |   |         |  
|Interest expense, net                                          |  |                                  | (965   | )                                |   | (564                          | ) |                               | (1,874  | ) |   | (810    | )
|                                                               |  |                                  |        |                                  |   |                               |   |                               |         |   |   |         |  
|                                                               |  |                                  |        |                                  |   |                               |   |                               |         |   |   |         |  
|Net income                                                     |  | $                                | 11,794 |                                  | $ | 9,735                         |   | $                             | 19,451  |   | $ | 17,497  |  
|                                                               |  |                                  |        |                                  |   |                               |   |                               |         |   |   |         |  
|                                                               |  |                                  |        |                                  |   |                               |   |                               |         |   |   |         |  
|Basic and diluted net
 income per common share                 |  | $                                | 0.13   |                                  | $ | 0.11                          |   | $                             | 0.21    |   | $ | 0.19    |  
|                                                               |  |                                  |        |                                  |   |                               |   |                               |         |   |   |         |  
|                                                               |  |                                  |        |                                  |   |                               |   |                               |         |   |   |         |  
|Weighted average common shares outstanding - basic and diluted |  |                                  | 91,339 |                                  |   | 91,112                        |   |                               | 91,351  |   |   | 91,200  |  
|                                                               |  |                                  |        |                                  |   |                               |   |                               |         |   |   |         |  
|Distributions declared per
 common share                       |  | $                                | 0.19   |                                  | $ | 0.23                          |   | $                             | 0.41    |   | $ | 0.45    |  
|                                                               |  |                                  |        |                                  |   |                               |   |                               |         |   |   |         |  

See notes to consolidated financial
statements.

4

---



Apple REIT
Six, Inc.
Consolidated Statements of Cash Flows
(unaudited)
(in thousands)

|                                                                               |  |                                  |         |                                  |   |         |  
|------------------------------------------------------------------------------ |  | -------------------------------- | ------- | -------------------------------- | - | ------- | -
|                                                                               |  | Six months
 ended
 June 30, 2010 |         | Six months
 ended
 June 30, 2009 |  
|                                                                               |  |                                  |         |                                  |  
|                                                                               |  |                                  |         |                                  |   |         |  
|Cash flow
 provided by operating activities:                                   |  |                                  |         |                                  |   |         |  
|Net income                                                                     |  | $                                | 19,451  |                                  | $ | 17,497  |  
|Adjustments to reconcile net income to cash provided by operating
 activities: |  |                                  |         |                                  |   |         |  
|Depreciation                                                                   |  |                                  | 15,578  |                                  |   | 15,392  |  
|Other non-cash expenses, net                                                   |  |                                  | 377     |                                  |   | 58      |  
|Changes in operating assets and liabilities, net of amounts
 acquired/assumed: |  |                                  |         |                                  |   |         |  
|Due from third party manager                                                   |  |                                  | (5,403  | )                                |   | (2,836  | )
|Other assets                                                                   |  |                                  | (632    | )                                |   | (30     | )
|Other liabilities                                                              |  |                                  | 391     |                                  |   | 918     |  
|                                                                               |  |                                  |         |                                  |   |         |  
|Net cash provided by operating activities                                      |  |                                  | 29,762  |                                  |   | 30,999  |  
|                                                                               |  |                                  |         |                                  |   |         |  
|Cash flow
 used in investing activities:                                       |  |                                  |         |                                  |   |         |  
|Capital improvements                                                           |  |                                  | (3,508  | )                                |   | (8,233  | )
|Redemption of investment interest in non-hotel assets                          |  |                                  |        |                                  |   | 3,240   |  
|Net decrease (increase) in cash restricted for property improvements           |  |                                  | 26      |                                  |   | (147    | )
|                                                                               |  |                                  |         |                                  |   |         |  
|Net cash used in investing activities                                          |  |                                  | (3,482  | )                                |   | (5,140  | )
|                                                                               |  |                                  |         |                                  |   |         |  
|Cash flow
 used in financing activities:                                       |  |                                  |         |                                  |   |         |  
|Net proceeds from line of credit                                               |  |                                  | 10,800  |                                  |   | 19,790  |  
|Repayment of secured notes payable                                             |  |                                  | (420    | )                                |   | (391    | )
|Net proceeds from issuance of Units                                            |  |                                  | 15,744  |                                  |   | 17,597  |  
|Redemptions of Units                                                           |  |                                  | (15,239 | )                                |   | (22,666 | )
|Cash distributions paid to shareholders                                        |  |                                  | (37,165 | )                                |   | (41,124 | )
|                                                                               |  |                                  |         |                                  |   |         |  
|Net cash used in financing activities                                          |  |                                  | (26,280 | )                                |   | (26,794 | )
|                                                                               |  |                                  |         |                                  |   |         |  
|Decrease in cash and cash equivalents                                          |  |                                  |        |                                  |   | (935    | )
|                                                                               |  |                                  |         |                                  |   |         |  
|Cash and cash equivalents, beginning of period                                 |  |                                  |        |                                  |   | 935     |  
|                                                                               |  |                                  |         |                                  |   |         |  
|                                                                               |  |                                  |         |                                  |   |         |  
|Cash and cash equivalents, end of period                                       |  | $                                |        |                                  | $ |        |  
|                                                                               |  |                                  |         |                                  |   |         |  

See notes to consolidated financial
statements.

5

---



NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS

Note 1

Basis of Presentation

The
accompanying unaudited consolidated financial statements have been prepared in
accordance with the instructions for Form 10-Q and Article 10 of Regulation
S-X. Accordingly, they do not include all of the information required by
accounting principles generally accepted in the United States. In the opinion
of management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. These
unaudited financial statements should be read in conjunction with the Companys
audited financial statements included in its 2009 Annual Report on Form 10-K.
Operating results for the period ended June 30, 2010 are not necessarily
indicative of the results that may be expected for the period ending December
31, 2010.

Note 2

General Information and Summary of Significant Accounting
Policies

Organization

Apple
REIT Six, Inc. (the Company) is a Virginia corporation formed to invest in
hotels and other selected real estate in select metropolitan areas in the
United States. The Company has elected to be treated as a real estate
investment trust (REIT) for federal income tax purposes. Initial
capitalization occurred on January 20, 2004 and operations began on May 28,
2004 when the Company acquired its first hotel. On March 3, 2006, the Company
concluded its best-efforts offering of Units (each Unit consists of one common
share and one Series A preferred share). The Company has no foreign operations
or assets and its operating structure includes only one segment. The
consolidated financial statements include the accounts of the Company and its
subsidiaries. All intercompany transactions and balances have been eliminated upon
consolidation.

Earnings per Common Share

Basic
earnings per common share are computed based upon the weighted average number
of shares outstanding during the year. Diluted earnings per share are
calculated after giving effect to all potential common shares that were
dilutive and outstanding for the year. There were no potential common shares
with a dilutive effect during the three and six months ended June 30, 2010 or
2009. Series B convertible preferred shares are not included in earnings per
common share calculations until such time as the Series B convertible preferred
shares are converted to common shares.

Use of Estimates

The
preparation of the financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the amounts reported in the financial statements and accompanying
notes. Actual results could differ from those estimates.

Recent Accounting Pronouncements

In
June 2009, the Financial Accounting Standards Board (FASB) issued a
pronouncement (Accounting Standards Update No. 2009-17) which amends its
guidance surrounding a companys analysis to determine whether any of its
variable interests constitute controlling financial interests in a variable
interest entity. This analysis identifies the primary beneficiary of a variable
interest entity as the enterprise that has both of the following
characteristics: (a) the power to direct the activities of a variable interest
entity that most significantly impact the entitys economic performance, and
(b) the obligation to absorb losses of the entity that could potentially be
significant to the variable interest entity or the right to receive benefits
from the entity that could potentially be significant to the variable interest
entity. Additionally, an

6

---



enterprise is required to
assess whether it has an implicit financial responsibility to ensure that a
variable interest entity operates as designed when determining whether it has
the power to direct the activities of the variable interest entity that most
significantly impact the entitys economic performance. The new pronouncement
also requires ongoing assessments of whether an enterprise is the primary
beneficiary of a variable interest entity and enhanced disclosure about an
enterprises involvement with a variable interest entity. This pronouncement
was adopted by the Company in the first quarter of 2010. The adoption of this
standard did not have a material impact on the Companys consolidated financial
statements.

Note 3

Sale of Ownership Interest

In
January 2009, the Companys ownership interest in Apple Air Holding, LLC
(Apple Air), was reduced from 50% to 26% through the redemption of a 24%
ownership interest by Apple Air. The Company received approximately $3.2
million for the ownership interest redeemed. No gain or loss from the
redemption was recognized by the Company. Due to the reduction in ownership the
Company deconsolidated Apple Air and now records its ownership interest of
approximately $2.2 and $2.4 million at June 30, 2010 and December 31, 2009 in
Other assets, net in the Companys Consolidated Balance Sheets. The Company
records its share of income or loss of Apple Air under the equity method of
accounting, adjusting its investment accordingly. The loss of $0.2 million for
the six months ended June 30, 2010 and 2009 is included in General and
administrative expense in the Companys Consolidated Statements of Operations.
The other members of Apple Air are Apple REIT Seven, Inc., Apple REIT Eight,
Inc. and Apple REIT Nine, Inc.

Note 4

Notes Payable

In
March 2008, the Company entered into a $20 million unsecured line of credit
with a commercial bank. In August 2009 and June 2010, the Company modified this
agreement, increasing its capacity to $60 million. The principal is required to
be paid by the maturity date of June 10, 2011, and may be prepaid without
penalty. The Company has an option to extend the line of credit one year,
subject to a fee and certain conditions. Interest payments are due monthly and
the applicable interest rate is equal to LIBOR (the London Interbank Offered
Rate) plus 3.5%, with a minimum interest rate of 5.0%. The line of credit also
has an unused fee of 0.5%. At June 30, 2010 and December 31, 2009, the credit
line had outstanding principal balances of $36.9 and $25.9 million.

Note 5

Fair Value of Financial Instruments

The
Company estimates the fair value of its fixed rate debt and the credit spreads
over variable market rates on its variable rate debt by discounting the future
cash flows of each instrument at estimated market rates or credit spreads
consistent with the maturity of the debt obligation with similar credit
policies. Credit spreads take into consideration general market conditions and
maturity. As of June 30, 2010, the carrying value and estimated fair value of
the Companys debt was $64.5 and $64.6 million. As of December 31, 2009, the
carrying value and estimated fair value of the Companys debt was $54.0 and
$55.5 million. The carrying value of the Companys other financial instruments
approximates fair value due to the short-term nature of these financial
instruments.

7

---



Note 6

Related Parties

The
Company has significant transactions with related parties. These transactions
cannot be construed to be arms length, and the results of the Companys
operations may be different if these transactions were conducted with
non-related parties.

The
Company is party to an advisory agreement with Apple Six Advisors, Inc.
(A6A), pursuant to which A6A provides management services to the Company. An
annual fee ranging from .1% to .25% of total equity proceeds received by the
Company, in addition to certain reimbursable expenses, is payable for these
services. During the first six months of 2010 and 2009, A6A utilized Apple Fund
Management, LLC, a subsidiary of the Company, to provide these services. The
advisory fees incurred under the agreement with A6A for the six months ended
June 30, 2010 and 2009, totaled approximately $0.8 million for each period.

Through
its wholly-owned subsidiary, Apple Fund Management, LLC, the Company provides
support services to Apple Suites Realty Group, Inc. (ASRG), A6A, Apple Seven
Advisors, Inc. (A7A), Apple REIT Seven, Inc., Apple Eight Advisors, Inc.
(A8A), Apple REIT Eight, Inc., Apple Nine Advisors, Inc. (A9A) and Apple
REIT Nine, Inc. A7A provides day to day advisory and administrative functions
for Apple REIT Seven, Inc. A8A provides day to day advisory and administrative
functions for Apple REIT Eight, Inc. A9A provides day to day advisory and
administrative functions for Apple REIT Nine, Inc. ASRG provides real estate
brokerage services to Apple REIT Seven, Inc., Apple REIT Eight, Inc. and Apple
REIT Nine, Inc. Each of these companies has agreed to reimburse the Company for
its costs in providing these services. For the six months ended June 30, 2010
and 2009, the Company received reimbursement of its costs totaling
approximately $3.3 and $2.6 million. ASRG, A6A, A7A, A8A and A9A are 100% owned
by Glade Knight, the Companys Chairman and Chief Executive Officer.

Including
ASRG, A6A, A7A, A8A and A9A discussed above, Mr. Knight is also Chairman and
Chief Executive Officer of Apple REIT Seven, Inc., Apple REIT Eight, Inc. and
Apple REIT Nine, Inc. Members of the Companys Board of Directors are also on
the boards of Apple REIT Seven, Inc., Apple REIT Eight, Inc. and Apple REIT
Nine, Inc.

Note 7

Shareholders Equity

In
July 2005, the Company instituted a Unit Redemption Program to provide limited
interim liquidity to its shareholders who have held their Units for at least
one year. Shareholders may request redemption of Units for a purchase price
equal to the lesser of: (1) the purchase price per Unit that the shareholder
actually paid for the Unit; or (2) $11.00 per Unit. The Company reserves the
right to change the purchase price of redemptions, reject any request for
redemption, or otherwise amend the terms of, suspend, or terminate the Unit
Redemption Program. During the six months ended June 30, 2010, the Company
redeemed approximately 1.4 million Units in the amount of $15.2 million under
the program. Since the inception of the program through June 30, 2010, the
Company has redeemed approximately 12.5 million Units for $137.1 million under
the program.

In
February 2006, the Company instituted a Dividend Reinvestment Plan for its
shareholders. The plan provides a convenient and cost effective way to increase
shareholder investment in the Company by reinvesting dividends to purchase
additional Units of the Company. The uses of the proceeds from this plan may
include purchasing Units under the Companys Unit Redemption Program, enhancing
properties, satisfying financing obligations and other expenses, increasing
working capital, funding various corporate operations, and acquiring hotels.
During the six months ended June 30, 2010, approximately 1.4 million Units,
representing $15.7 million in proceeds to the Company, were issued under the
plan. Since the inception of the plan through June 30, 2010, 12.9 million
Units, representing $141.8 million in proceeds to the Company, were issued
under the plan.

8

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Note 8

Subsequent Events

In
July 2010, the Company declared and paid approximately $5.9 million, or $.064
per share, in distributions to its common shareholders of which $2.5 million or
223,272 Units were reinvested under the Companys Dividend Reinvestment Plan.

On
July 20, 2010, the Company redeemed 699,410 Units in the amount of $7.7 million
under its Unit Redemption Program.

9

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Item 2. Managements Discussion
and Analysis of Financial Condition and Results of Operation

This
quarterly report contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Such statements involve known and
unknown risks, uncertainties, and other factors which may cause the actual
results, performance, or achievements of the Company to be materially different
from future results, performance or achievements expressed or implied by such
forward-looking statements. Such factors include, but are not limited to, the
ability of the Company to implement its acquisition strategy and operating
strategy; the Companys ability to manage planned growth; changes in economic
cycles, including the current economic recession throughout the United States;
and competition within the hotel industry. Although the Company believes that
the assumptions underlying the forward-looking statements contained herein are
reasonable, any of the assumptions could be inaccurate, and therefore there can
be no assurance that such statements included in the quarterly report will
prove to be accurate. In light of the significant uncertainties inherent in the
forward-looking statements included herein, the inclusion of such information
should not be regarded as a representation by the Company or any other person that
the results or conditions described in such statements or the objectives and
plans of the Company will be achieved. In addition, the Companys qualification
as a real estate investment trust involves the application of highly technical
and complex provisions of the Internal Revenue Code. Readers should carefully
review the Companys financial statements and the notes thereto, as well as the
risk factors described in the Companys filings with the Securities and
Exchange Commission. Any forward-looking statement that the Company makes
speaks only as of the date of this report. The Company undertakes no obligation
to publicly update or revise any forward-looking statements or cautionary
factors as a result of new information, future events or otherwise, except as
required by law.

Overview

Apple
REIT Six, Inc. (together with its wholly owned subsidiaries, the Company) was
formed and initially capitalized on January 20, 2004, with its first investor
closing on April 23, 2004. The Company owns 68 hotels within different markets
in the United States. The Company is treated as a Real Estate Investment Trust
(REIT) for federal income tax purposes. The Companys first hotel was
acquired on May 28, 2004. Although hotel performance can be influenced by many
factors including local competition, local and general economic conditions in
the United States and the performance of individual managers assigned to each
hotel, performance of the hotels within their respective markets, in general,
has met the Companys expectations for the period owned. With the decline in
economic conditions throughout the United States, the Company has experienced a
significant decline in revenue as compared to 2008, but a slight recovery in
revenue as compared to the first six months of 2009. Although there is no way
to predict general economic conditions, the Company anticipates revenue and
income to stabilize and improve slightly in 2010 as compared to 2009. In
evaluating financial condition and operating performance, the most important
matters on which the Company focuses are revenue measurements, such as: average
occupancy, average daily rate, revenue per available room, and market yield (a
comparison of a hotels revenue results to the average of other hotels in its
local market); and expenses, such as hotel operating expenses, general and
administrative and other expenses described below. The following is a summary
of the Companys results:

10

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|                                       |  |                             |        |                            |  |      |   |                            |        |               |  |      |   |                            |     |      |   |                            |   |               |     |   |   |         |   |  |     |   |  |     |  
|-------------------------------------- |  | --------------------------- | ------ | -------------------------- |  | ---- | - | -------------------------- | ------ | ------------- |  | ---- | - | -------------------------- | --- | ---- | - | -------------------------- | - | ------------- | --- | - | - | ------- | - |  | --- | - |  | --- | -
|                                       |  | Three months ended June 30, |        | Six months ended June 30,  | 
|                                       |  |                             |        |                            | 
|(in thousands except statistical data) |  | 2010                        |        | Percent of
 Hotel
 Revenue |  | 2009 |   | Percent of
 Hotel
 Revenue |        | PercentChange |  | 2010 |   | Percent of
 Hotel
 Revenue |     | 2009 |   | Percent of
 Hotel
 Revenue |   | PercentChange |    
|                                       |  |                             |        |                            |  |      |   |                            |        |               |  |      |   |                            |     |      |   |                            |   |               |    
|                                       |  |                             |        |                            |  |      |   |                            |        |               |  |      |   |                            |     |      |   |                            |   |               |     |   |   |         |   |  |     |   |  |     |  
|Total hotel revenue                    |  | $                           | 59,133 |                            |  | 100  | % | $                          | 55,550 |               |  | 100  | % |                            | 6   | %    | $ | 111,002                    |   |               | 100 | % | $ | 107,122 |   |  | 100 | % |  | 4   | %
|Hotel operating expenses               |  |                             | 33,947 |                            |  | 57   | % |                            | 32,630 |               |  | 59   | % |                            | 4   | %    |   | 65,213                     |   |               | 59  | % |   | 63,953  |   |  | 60  | % |  | 2   | %
|Taxes, insurance and other
 expense    |  |                             | 3,206  |                            |  | 5    | % |                            | 3,549  |               |  | 6    | % |                            | -10 | %    |   | 6,444                      |   |               | 6   | % |   | 6,968   |   |  | 7   | % |  | -8  | %
|General and administrative
 expense    |  |                             | 1,405  |                            |  | 2    | % |                            | 1,333  |               |  | 2    | % |                            | 5   | %    |   | 2,442                      |   |               | 2   | % |   | 2,502   |   |  | 2   | % |  | -2  | %
|                                       |  |                             |        |                            |  |      |   |                            |        |               |  |      |   |                            |     |      |   |                            |   |               |     |   |   |         |   |  |     |   |  |     |  
|Depreciation                           |  |                             | 7,816  |                            |  |      |   |                            | 7,739  |               |  |      |   |                            | 1   | %    |   | 15,578                     |   |               |     |   |   | 15,392  |   |  |     |   |  | 1   | %
|Interest expense, net                  |  |                             | 965    |                            |  |      |   |                            | 564    |               |  |      |   |                            | 71  | %    |   | 1,874                      |   |               |     |   |   | 810     |   |  |     |   |  | 131 | %
|                                       |  |                             |        |                            |  |      |   |                            |        |               |  |      |   |                            |     |      |   |                            |   |               |     |   |   |         |   |  |     |   |  |     |  
|Number of Hotels                       |  |                             | 68     |                            |  |      |   |                            | 68     |               |  |      |   |                            |    | %    |   | 68                         |   |               |     |   |   | 68      |   |  |     |   |  |    | %
|Average RevPAR Market Yield
 (1)       |  |                             | 120    |                            |  |      |   |                            | 119    |               |  |      |   |                            | 1   | %    |   | 121                        |   |               |     |   |   | 119     |   |  |     |   |  | 2   | %
|ADR                                    |  | $                           | 104    |                            |  |      |   | $                          | 106    |               |  |      |   |                            | -2  | %    | $ | 103                        |   |               |     |   | $ | 108     |   |  |     |   |  | -5  | %
|Occupancy                              |  |                             | 74     | %                          |  |      |   |                            | 68     | %             |  |      |   |                            | 9   | %    |   | 71                         | % |               |     |   |   | 64      | % |  |     |   |  | 11  | %
|RevPAR                                 |  | $                           | 77     |                            |  |      |   | $                          | 72     |               |  |      |   |                            | 7   | %    | $ | 73                         |   |               |     |   | $ | 70      |   |  |     |   |  | 4   | %

|    |                                                                                                                                          
|--- | -----------------------------------------------------------------------------------------------------------------------------------------
|(1) | Excludes properties under
 renovation during the applicable periods. Calculated from information
 provided by Smith Travel Research, Inc.

Hotels Owned

As
of June 30, 2010, the Company owned 68 hotels, with a total of 7,897 rooms. The
following table summarizes the location, brand, manager, date acquired, number
of rooms and gross purchase price for each hotel. All dollar amounts are in
thousands.

|               |  |             |  |                      |  |              |  |                |  |       |  |                        |        | 
|-------------- |  | ----------- |  | -------------------- |  | ------------ |  | -------------- |  | ----- |  | ---------------------- | ------ | 
|City           |  | State       |  | Brand                |  | Manager      |  | Date
 Acquired |  | Rooms |  | Gross
 Purchase
 Price |       
|               |  |             |  |                      |  |              |  |                |  |       |  |                        |       
|Birmingham     |  | Alabama     |  | Fairfield Inn        |  | LBA          |  | 8/25/05        |  | 63    |  | $                      | 2,176  | 
|Dothan         |  | Alabama     |  | Courtyard            |  | LBA          |  | 8/11/05        |  | 78    |  |                        | 8,016  | 
|Dothan         |  | Alabama     |  | Hampton Inn & Suites |  | LBA          |  | 6/24/05        |  | 85    |  |                        | 8,673  | 
|Huntsville     |  | Alabama     |  | Fairfield Inn        |  | LBA          |  | 9/30/05        |  | 79    |  |                        | 4,954  | 
|Huntsville     |  | Alabama     |  | Residence Inn        |  | LBA          |  | 6/24/05        |  | 78    |  |                        | 8,288  | 
|Montgomery     |  | Alabama     |  | SpringHill Suites    |  | LBA          |  | 9/30/05        |  | 79    |  |                        | 6,835  | 
|Tuscaloosa     |  | Alabama     |  | Courtyard            |  | LBA          |  | 8/25/05        |  | 78    |  |                        | 7,551  | 
|Tuscaloosa     |  | Alabama     |  | Fairfield Inn        |  | LBA          |  | 8/25/05        |  | 63    |  |                        | 3,982  | 
|Anchorage      |  | Alaska      |  | Hampton Inn          |  | Stonebridge  |  | 3/14/05        |  | 101   |  |                        | 11,500 | 
|Anchorage      |  | Alaska      |  | Hilton Garden Inn    |  | Stonebridge  |  | 10/12/04       |  | 125   |  |                        | 18,900 | 
|Anchorage      |  | Alaska      |  | Homewood Suites      |  | Stonebridge  |  | 10/12/04       |  | 122   |  |                        | 13,200 | 
|Phoenix        |  | Arizona     |  | Hampton Inn          |  | Stonebridge  |  | 10/12/04       |  | 99    |  |                        | 6,700  | 
|Tempe          |  | Arizona     |  | SpringHill Suites    |  | Western      |  | 6/30/05        |  | 121   |  |                        | 8,060  | 
|Tempe          |  | Arizona     |  | TownePlace Suites    |  | Western      |  | 6/30/05        |  | 119   |  |                        | 8,128  | 
|Arcadia        |  | California  |  | Hilton Garden Inn    |  | Stonebridge  |  | 10/12/04       |  | 124   |  |                        | 12,000 | 
|Arcadia        |  | California  |  | SpringHill Suites    |  | Stonebridge  |  | 10/12/04       |  | 86    |  |                        | 8,100  | 
|Bakersfield    |  | California  |  | Hilton Garden Inn    |  | Hilton       |  | 3/18/05        |  | 120   |  |                        | 11,500 | 
|Folsom         |  | California  |  | Hilton Garden Inn    |  | Inn Ventures |  | 11/30/05       |  | 100   |  |                        | 18,028 | 
|Foothill Ranch |  | California  |  | Hampton Inn          |  | Stonebridge  |  | 4/21/05        |  | 84    |  |                        | 7,400  | 
|Lake Forest    |  | California  |  | Hilton Garden Inn    |  | Stonebridge  |  | 10/12/04       |  | 103   |  |                        | 11,400 | 
|Milpitas       |  | California  |  | Hilton Garden Inn    |  | Inn Ventures |  | 11/30/05       |  | 161   |  |                        | 18,600 | 
|Roseville      |  | California  |  | Hilton Garden Inn    |  | Inn Ventures |  | 11/30/05       |  | 131   |  |                        | 20,759 | 
|San Francisco  |  | California  |  | Hilton Garden Inn    |  | Inn Ventures |  | 1/30/06        |  | 169   |  |                        | 12,266 | 
|Boulder        |  | Colorado    |  | Marriott             |  | WLS          |  | 5/9/05         |  | 157   |  |                        | 30,000 | 
|Glendale       |  | Colorado    |  | Hampton Inn & Suites |  | Stonebridge  |  | 10/12/04       |  | 133   |  |                        | 14,700 | 
|Lakewood       |  | Colorado    |  | Hampton Inn          |  | Stonebridge  |  | 10/12/04       |  | 170   |  |                        | 10,600 | 
|Farmington     |  | Connecticut |  | Courtyard            |  | WLS          |  | 10/20/05       |  | 119   |  |                        | 16,330 | 
|Rocky Hill     |  | Connecticut |  | Residence Inn        |  | WLS          |  | 8/1/05         |  | 96    |  |                        | 12,070 | 
|Wallingford    |  | Connecticut |  | Homewood Suites      |  | WLS          |  | 7/8/05         |  | 104   |  |                        | 12,780 | 
|Clearwater     |  | Florida     |  | SpringHill Suites    |  | LBA          |  | 2/17/06        |  | 79    |  |                        | 6,923  | 
|Lake Mary      |  | Florida     |  | Courtyard            |  | LBA          |  | 3/18/05        |  | 86    |  |                        | 6,000  | 
|Lakeland       |  | Florida     |  | Residence Inn        |  | LBA          |  | 6/24/05        |  | 78    |  |                        | 9,886  | 
|Orange Park    |  | Florida     |  | Fairfield Inn        |  | LBA          |  | 11/8/05        |  | 83    |  |                        | 7,221  | 
|Panama City    |  | Florida     |  | Courtyard            |  | LBA          |  | 4/26/06        |  | 84    |  |                        | 9,245  | 
|Pensacola      |  | Florida     |  | Courtyard            |  | LBA          |  | 8/25/05        |  | 90    |  |                        | 11,369 | 
|Pensacola      |  | Florida     |  | Fairfield Inn        |  | LBA          |  | 8/25/05        |  | 63    |  |                        | 4,858  | 
|Pensacola      |  | Florida     |  | Hampton Inn & Suites |  | LBA          |  | 7/21/05        |  | 85    |  |                        | 9,279  | 
|Tallahassee    |  | Florida     |  | Hilton Garden Inn    |  | Hilton       |  | 3/18/05        |  | 99    |  |                        | 10,850 | 
|Albany         |  | Georgia     |  | Courtyard            |  | LBA          |  | 6/24/05        |  | 84    |  |                        | 8,597  | 
|Columbus       |  | Georgia     |  | Residence Inn        |  | LBA          |  | 6/24/05        |  | 78    |  |                        | 7,888  | 
|Savannah       |  | Georgia     |  | SpringHill Suites    |  | LBA          |  | 9/30/05        |  | 79    |  |                        | 5,407  | 

11

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|                 |  |                |  |                   |  |              |  |          |  |       |  |   |         | 
|---------------- |  | -------------- |  | ----------------- |  | ------------ |  | -------- |  | ----- |  | - | ------- | 
|Valdosta         |  | Georgia        |  | Courtyard         |  | LBA          |  | 10/3/05  |  | 84    |  |   | 8,284   | 
|Mt. Olive        |  | New Jersey     |  | Residence Inn     |  | WLS          |  | 9/15/05  |  | 123   |  |   | 12,070  | 
|Somerset         |  | New Jersey     |  | Homewood Suites   |  | WLS          |  | 8/17/05  |  | 123   |  |   | 17,750  | 
|Saratoga Springs |  | New York       |  | Hilton Garden Inn |  | WLS          |  | 9/29/05  |  | 112   |  |   | 17,750  | 
|Roanoke Rapids   |  | North Carolina |  | Hilton Garden Inn |  | Newport      |  | 3/10/08  |  | 147   |  |   | 17,764  | 
|Hillsboro        |  | Oregon         |  | Courtyard         |  | Inn Ventures |  | 3/9/06   |  | 155   |  |   | 11,000  | 
|Hillsboro        |  | Oregon         |  | Residence Inn     |  | Inn Ventures |  | 3/9/06   |  | 122   |  |   | 15,500  | 
|Hillsboro        |  | Oregon         |  | TownePlace Suites |  | Inn Ventures |  | 12/19/05 |  | 136   |  |   | 11,500  | 
|Portland         |  | Oregon         |  | Residence Inn     |  | Inn Ventures |  | 12/19/05 |  | 258   |  |   | 42,000  | 
|Pittsburgh       |  | Pennsylvania   |  | Residence Inn     |  | WLS          |  | 9/2/05   |  | 156   |  |   | 11,000  | 
|Myrtle Beach     |  | South Carolina |  | Courtyard         |  | Marriott     |  | 6/8/04   |  | 135   |  |   | 9,200   | 
|Nashville        |  | Tennessee      |  | Homewood Suites   |  | Hilton       |  | 5/24/05  |  | 121   |  |   | 8,103   | 
|Arlington        |  | Texas          |  | SpringHill Suites |  | Western      |  | 6/30/05  |  | 122   |  |   | 7,486   | 
|Arlington        |  | Texas          |  | TownePlace Suites |  | Western      |  | 6/30/05  |  | 95    |  |   | 7,148   | 
|Dallas           |  | Texas          |  | SpringHill Suites |  | Western      |  | 12/9/05  |  | 147   |  |   | 19,500  | 
|Ft. Worth        |  | Texas          |  | Homewood Suites   |  | Hilton       |  | 5/24/05  |  | 137   |  |   | 9,097   | 
|Ft. Worth        |  | Texas          |  | Residence Inn     |  | Western      |  | 5/6/05   |  | 149   |  |   | 17,000  | 
|Ft. Worth        |  | Texas          |  | SpringHill Suites |  | Marriott     |  | 5/28/04  |  | 145   |  |   | 13,340  | 
|Laredo           |  | Texas          |  | Homewood Suites   |  | Western      |  | 11/30/05 |  | 106   |  |   | 10,500  | 
|Laredo           |  | Texas          |  | Residence Inn     |  | Western      |  | 9/12/05  |  | 109   |  |   | 11,445  | 
|Las Colinas      |  | Texas          |  | TownePlace Suites |  | Western      |  | 6/30/05  |  | 136   |  |   | 7,178   | 
|McAllen          |  | Texas          |  | Hilton Garden Inn |  | Western      |  | 7/19/05  |  | 104   |  |   | 9,000   | 
|Fredericksburg   |  | Virginia       |  | Hilton Garden Inn |  | Hilton       |  | 12/20/05 |  | 148   |  |   | 16,600  | 
|Kent             |  | Washington     |  | TownePlace Suites |  | Inn Ventures |  | 12/19/05 |  | 152   |  |   | 12,000  | 
|Mukilteo         |  | Washington     |  | TownePlace Suites |  | Inn Ventures |  | 12/19/05 |  | 128   |  |   | 12,000  | 
|Redmond          |  | Washington     |  | Marriott          |  | Marriott     |  | 7/7/04   |  | 262   |  |   | 64,000  | 
|Renton           |  | Washington     |  | Hilton Garden Inn |  | Inn Ventures |  | 11/30/05 |  | 150   |  |   | 16,096  | 
|                 |  |                |  |                   |  |              |  |          |  |       |  |   |         | 
|                 |  |                |  |                   |  |              |  | Total    |  | 7,897 |  | $ | 845,330 | 
|                 |  |                |  |                   |  |              |  |          |  |       |  |   |         | 

Results of Operations

As
of June 30, 2010, the Company owned 68 hotels with 7,897 rooms. The Companys
portfolio of hotels owned is unchanged since 2008. Hotel performance is
impacted by many factors, including the economic conditions in the United
States, as well as each locality. Due to a continuing recessionary economic
environment throughout the United States, the financial results of the
Companys hotels continue to be below pre-recessionary levels. However,
economic conditions appear to be stabilizing and improving slightly as shown in
the Companys year to date growth in revenue of 4% from the same period of
2009. Although it is anticipated that the properties performance will continue
to be below comparable pre-recession operating periods until general economic
conditions improve, the Company does anticipate modest improvement in revenue
and income in 2010 as compared to 2009 results, which is consistent with many
industry forecasts. The Company will continue to aggressively pursue market
opportunities to improve revenue and aggressively pursue cost controls to
improve results during and after the economic downturn.

Revenues

The
Companys principal source of revenue is hotel room revenue and other related
revenue. For the three months ended June 30, 2010 and 2009, the Company had
total hotel revenue of $59.1 and $55.6 million, respectively, with average
occupancy of 74% and 68%, average daily rate (ADR) of $104 and $106 and
revenue per available room (RevPAR) of $77 and $72. For the six months ended
June 30, 2010 and 2009, the Company had total hotel revenue of $111.0 and
$107.1 million, respectively, with average occupancy of 71% and 64%, ADR of
$103 and $108 and RevPAR of $73 and $70. ADR is calculated as room revenue
divided by the number of rooms sold, and RevPAR is calculated as occupancy
multiplied by ADR. Since the end of 2009, the Company has experienced an
increase in demand as shown by the improved occupancy rates as compared to
prior year. However, in addition to a stabilizing economy, the improvement is a
result of reduced room rates as reflected in the ADR decline.

While
the revenue rates earned by the Company are consistent with industry and brand
averages, the Company continually works with the hotel managers to maximize
rates and occupancy. As a result, although RevPAR has declined from
pre-recession levels, the Company has increased its average market share as
compared to the first six months of 2009 by 2% and continues to be
significantly ahead of the market average of 100, with a RevPAR market yield of
121 year-to-date through June 30, 2010.

12

---



Expenses

With
the current state of the economy, the Company and its managers are aggressively
reducing expenses where possible while still maintaining the quality and
service levels of its properties. For the three months ended June 30, 2010 and
2009, hotel operating expenses totaled $33.9 and $32.6 million, respectively,
or 57% and 59% of total hotel revenue. For the six months ended June 30, 2010
and 2009, hotel operating expenses totaled $65.2 and $64.0 million,
respectively, or 59% and 60% of total hotel revenue. While certain costs of a
hotel are fixed in nature, such as management costs, certain utility costs,
minimum maintenance and supply costs, the Company has been successful in
reducing overall payroll costs, food and supplies, and utilities by continually
monitoring and sharing utilization data across its hotels and management
companies. The Company will continue to aggressively work with its managers to
contain operating costs.

Taxes,
insurance, and other expenses for the three months ended June 30, 2010 and 2009
were $3.2 and $3.5 million, or 5% and 6% of total hotel revenue. For the six
months ended June 30, 2010 and 2009, taxes, insurance, and other expenses were $6.4
and $7.0 million, or 6% and 7% of total hotel revenue. The decline is a result
of lower real estate property tax assessments at selected hotels, including the
results of successful appeals of initial assessments for some locations. In
addition, the Company has experienced slightly lower property insurance expense
for most hotel properties, in comparison to insurance rates in effect during
2009.

General
and administrative expenses for the three months ended June 30, 2010 and 2009
were $1.4 and $1.3 million, or 2% of total hotel revenue for each period. For
the six months ended June 30, 2010 and 2009, general and administrative
expenses were $2.4 and $2.5 million, or 2% of hotel revenue for each period.
The principal components of general and administrative expense are advisory
fees, loss on equity method investment in Apple Air Holding, LLC, legal fees,
accounting fees and reporting expenses.

Depreciation
expense was $7.8 and $7.7 million for the three months ended June 30, 2010 and 2009.
For the six months ended June 30, 2010 and 2009, depreciation expense was $15.6
and $15.4 million. Depreciation expense represents expense of the Companys 68
hotels and related personal property for their respective periods owned. The
increase in depreciation is due to renovations completed throughout 2009 and in
the first six months of 2010.

Interest
expense, net was $1.0 and $0.6 million for the three months ended June 30, 2010
and 2009, and $1.9 and $0.8 million for the six months ended June 30, 2010 and
2009. Interest expense relates to debt assumed with certain properties
acquired, as well as borrowings on the Companys line of credit. During the six
months ended June 30, 2010 and 2009, the Company capitalized approximately $0.1
and $0.3 million of interest associated with renovation activities. Interest
expense increased from 2009 to 2010 as the Company increased borrowings on its
line of credit.

Liquidity and Capital Resources

Operating
cash flow from the properties owned and a $60 million line of credit are the
Companys principal source of liquidity. In addition, the Company may also
borrow additional funds, subject to limitations set forth in its bylaws. The
Company anticipates that cash flow and the credit line will be adequate to
cover substantially all of its operating expenses and to permit the Company to
meet substantially all of its anticipated liquidity requirements, including
required distributions, capital expenditures and debt service. The Company
intends to maintain a relatively stable dividend rate instead of raising and
lowering the distribution rate with varying economic cycles. With the depressed
financial results of the Company and the lodging industry, the Company will
attempt if necessary to utilize additional financing to achieve this objective.
Although the Company has relatively low levels of debt, there can be no
assurances it will be successful with obtaining additional financing if
necessary and may need to reduce its distributions to required levels.

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To
maintain its REIT status the Company is required to distribute at least 90% of
its ordinary income. Distributions in the first six months of 2010 totaled
$37.2 million. For the same period the Companys cash generated from operations
was $29.8 million. The shortfall was funded by borrowings on the line of
credit. The Company intends to continue paying distributions on a monthly
basis. However, since there can be no assurance of the ability of the Companys
properties to provide income at this level, there can be no assurance as to the
classification or duration of distributions at the current rate. Additionally,
in light of the weakness in economic conditions throughout the United States,
the Board of Directors monitors the Companys distribution rate relative to the
performance of the hotels on an ongoing basis and may make adjustments to the
distribution rate as determined to be prudent in relation to other cash
requirements of the Company. In January 2010 the Board of Directors reduced the
Companys annual distribution rate from $0.90 to $0.77 per common share. The
reduction was effective March 2010. The dividend continues to be paid monthly.

The
Company has on-going capital commitments to fund its capital improvements. The
Company is required, under all of the hotel management agreements, to make
available, for the repair, replacement, refurbishing of furniture, fixtures,
and equipment, an amount of 3% to 5% of gross revenues provided that such
amount may be used for the Companys capital expenditures with respect to the
hotels. The Company expects that this amount will be adequate to fund required
repair, replacement, and refurbishments and to maintain the Companys hotels in
a competitive condition. During the first six months of 2010, total capital
expenditures were approximately $3.5 million. The Company anticipates
expenditures of approximately $10-$12 million for the full year of 2010 in
connection with renovations and brand initiatives. With the depressed economic
environment, the Company will only complete the most cost-effective projects.

In
July 2005, the Company instituted a Unit Redemption Program to provide limited
interim liquidity to its shareholders who have held their Units for at least
one year. Shareholders may request redemption of Units for a purchase price
equal to the lesser of: (1) the purchase price per Unit that the shareholder
actually paid for the Unit; or (2) $11.00 per Unit. The Company reserves the
right to change the purchase price of redemptions, reject any request for
redemption, or otherwise amend the terms of, suspend, or terminate the Unit
Redemption Program. During the six months ended June 30, 2010, the Company
redeemed approximately 1.4 million Units in the amount of $15.2 million under
the program. Since the inception of the program through June 30, 2010, the
Company has redeemed approximately 12.5 million Units for $137.1 million under
the program.

In
February 2006, the Company instituted a Dividend Reinvestment Plan for its
shareholders. The plan provides a convenient and cost effective way to increase
shareholder investment in the Company by reinvesting dividends to purchase
additional Units of the Company. The uses of the proceeds from this plan may
include purchasing Units under the Companys Unit Redemption Program, enhancing
properties, satisfying financing obligations and other expenses, increasing
working capital, funding various corporate operations, and acquiring hotels.
During the six months ended June 30, 2010, approximately 1.4 million Units,
representing $15.7 million in proceeds to the Company, were issued under the
plan. Since the inception of the plan through June 30, 2010, 12.9 million
Units, representing $141.8 million in proceeds to the Company, were issued
under the plan.

Related Party Transactions

The
Company has significant transactions with related parties. These transactions
cannot be construed to be arms length, and the results of the Companys
operations may be different if these transactions were conducted with
non-related parties.

The
Company is party to an advisory agreement with Apple Six Advisors, Inc.
(A6A), pursuant to which A6A provides management services to the Company. An
annual fee ranging from .1% to .25% of total equity proceeds received by the
Company, in addition to certain reimbursable expenses, is payable for these
services. During the first six months of 2010 and 2009, A6A utilized Apple Fund
Management, LLC, a subsidiary of the Company, to provide these services. The
advisory fees incurred under the agreement with A6A for the six months ended
June 30, 2010 and 2009, totaled approximately $0.8 million for each period.

14

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Through
its wholly-owned subsidiary, Apple Fund Management, LLC, the Company provides
support services to Apple Suites Realty Group, Inc. (ASRG), A6A, Apple Seven
Advisors, Inc. (A7A), Apple REIT Seven, Inc., Apple Eight Advisors, Inc.
(A8A), Apple REIT Eight, Inc., Apple Nine Advisors, Inc. (A9A) and Apple
REIT Nine, Inc. A7A provides day to day advisory and administrative functions
for Apple REIT Seven, Inc. A8A provides day to day advisory and administrative
functions for Apple REIT Eight, Inc. A9A provides day to day advisory and
administrative functions for Apple REIT Nine, Inc. ASRG provides real estate
brokerage services to Apple REIT Seven, Inc., Apple REIT Eight, Inc. and Apple
REIT Nine, Inc. Each of these companies has agreed to reimburse the Company for
its costs in providing these services. For the six months ended June 30, 2010
and 2009, the Company received reimbursement of its costs totaling
approximately $3.3 and $2.6 million. ASRG, A6A, A7A, A8A and A9A are 100% owned
by Glade Knight, the Companys Chairman and Chief Executive Officer.

Including
ASRG, A6A, A7A, A8A and A9A discussed above, Mr. Knight is also Chairman and
Chief Executive Officer of Apple REIT Seven, Inc., Apple REIT Eight, Inc. and
Apple REIT Nine, Inc. Members of the Companys Board of Directors are also on
the boards of Apple REIT Seven, Inc., Apple REIT Eight, Inc. and Apple REIT
Nine, Inc.

In
January 2009, the Companys ownership interest in Apple Air Holding, LLC (Apple
Air), was reduced from 50% to 26% through the redemption of a 24% ownership
interest by Apple Air. The Company received approximately $3.2 million for the
ownership interest redeemed. No gain or loss from the redemption was recognized
by the Company. Due to the reduction in ownership the Company deconsolidated
Apple Air and now records its ownership interest of approximately $2.2 and $2.4
million at June 30, 2010 and December 31, 2009 in Other assets, net in the
Companys Consolidated Balance Sheets. The Company records its share of income
or loss of Apple Air under the equity method of accounting, adjusting its
investment accordingly. The loss of $0.2 million for the six months ended June
30, 2010 and 2009 is included in General and administrative expense in the
Companys Consolidated Statements of Operations. The other members of Apple Air
are Apple REIT Seven, Inc., Apple REIT Eight, Inc. and Apple REIT Nine, Inc.

Impact of Inflation

Operators
of hotels, in general, possess the ability to adjust room rates daily to
reflect the effects of inflation. Competitive pressures may, however, limit the
operators ability to raise room rates. Currently the Company is not
experiencing any material impact from inflation.

Business Interruption

Being
in the real estate industry, the Company is exposed to natural disasters both
locally and nationally, and although management believes there is adequate
insurance to cover this exposure, there can be no assurance that such events
will not have a material adverse effect on the Companys financial position or
results of operations.

Seasonality

The
hotel industry historically has been seasonal in nature. Generally, occupancy
rates and hotel revenues are greater in the second and third quarters than in
the first and fourth quarters. As a result, there may be quarterly fluctuations
in results of operations. To the extent that cash flow from operations is
insufficient during any quarter, due to temporary or seasonal fluctuations in
revenue, the Company expects to utilize cash on hand and available credit to
make distributions.

Recent Accounting Pronouncements

In
June 2009, the Financial Accounting Standards Board (FASB) issued a
pronouncement (Accounting Standards Update No. 2009-17) which amends its
guidance surrounding a companys analysis to determine whether any of its variable
interests constitute controlling financial interests in a variable interest
entity. This analysis identifies the primary beneficiary of a variable interest
entity as the enterprise

15

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that has both of the
following characteristics: (a) the power to direct the activities of a variable
interest entity that most significantly impact the entitys economic
performance, and (b) the obligation to absorb losses of the entity that could
potentially be significant to the variable interest entity or the right to
receive benefits from the entity that could potentially be significant to the
variable interest entity. Additionally, an enterprise is required to assess
whether it has an implicit financial responsibility to ensure that a variable
interest entity operates as designed when determining whether it has the power
to direct the activities of the variable interest entity that most
significantly impact the entitys economic performance. The new pronouncement
also requires ongoing assessments of whether an enterprise is the primary
beneficiary of a variable interest entity and enhanced disclosure about an
enterprises involvement with a variable interest entity. This pronouncement
was adopted by the Company in the first quarter of 2010. The adoption of this standard
did not have a material impact on the Companys consolidated financial
statements.

Subsequent Events

In
July 2010, the Company declared and paid approximately $5.9 million, or $.064
per share, in distributions to its common shareholders of which $2.5 million or
223,272 Units were reinvested under the Companys Dividend Reinvestment Plan.

On
July 20, 2010, the Company redeemed 699,410 Units in the amount of $7.7 million
under its Unit Redemption Program.

|                                                                    | 
|------------------------------------------------------------------- | 
|Item 3. Quantitative
 and Qualitative Disclosures About Market Risk

The
Company does not engage in transactions in derivative financial instruments or
derivative commodity instruments. As of June 30, 2010, the Companys financial
instruments were not exposed to significant market risk due to interest rate
risk, foreign currency exchange risk, commodity price risk or equity price
risk. The Company is exposed to changes in short term interest rates paid on
its line of credit. Based on the balance of the Companys line of credit at
June 30, 2010, of $36.9 million, every 100 basis points change in interest
rates will impact the Companys annual net income by $369,000, all other
factors remaining the same.

|                                 | 
|-------------------------------- | 
|Item 4. Controls
 and Procedures

Senior
management, including the Chief Executive Officer and Chief Financial Officer,
evaluated the effectiveness of the Companys disclosure controls and procedures
as of the end of the period covered by this report. Based on this evaluation
process, the Chief Executive Officer and Chief Financial Officer have concluded
that the Companys disclosure controls and procedures are effective and that
there have been no changes in the Companys internal control over financial
reporting that occurred during the last fiscal quarter that have materially
affected, or are reasonably likely to materially affect, the Companys internal
control over financial reporting. Since that evaluation, there have been no
significant changes in internal controls or in other factors that could significantly
affect these controls.

16

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|         |                  
|-------- | -----------------
|PART II. | OTHER INFORMATION

Item 2. Unregistered Sales of Equity
Securities and Use of Proceeds

Unit Redemption Program

In
July 2005, the Company instituted a Unit redemption program to provide its
shareholders who have held their Units for at least one year with the benefit
of limited interim liquidity, by presenting for redemption all or any portion
of their Units at any time and in accordance with certain procedures. Once this
time limitation has been met, the Company may, subject to certain conditions
and limitations, redeem the Units presented for redemption for cash, to the
extent that the Company has sufficient funds available to fund the redemption.
If Units are held for the required one-year period, the Units may be redeemed
for a purchase price equal to the lesser of: (1) $11.00 per Unit; or (2) the
purchase price per Unit that was actually paid for the Units. The board of
directors reserves the right, in its sole discretion, at any time and from time
to time, to waive the one-year holding period, reject any request for
redemption, change the purchase price for redemptions or otherwise amend the
terms of, suspend, or terminate the Unit redemption program. The following is a
summary of redemptions during the second quarter of 2010 (no redemptions
occurred in May and June 2010):

|                                      |  |                               |  |                            |  |                                                                                 |  |                                                                              
|------------------------------------- |  | ----------------------------- |  | -------------------------- |  | ------------------------------------------------------------------------------- |  | -----------------------------------------------------------------------------
|Issuer Purchases of Equity Securities
|                                      |  |                               |  |                            |  |                                                                                 |  |                                                                              
|                                      |  | (a)                           |  | (b)                        |  | (c)                                                                             |  | (d)                                                                          
|Period                                |  | Total Numberof UnitsPurchased |  | Average Price Paidper Unit |  | Total Number of
Units Purchased as
Part of Publicly
Announced Plans
or Programs |  | Maximum Number
of Units that May
Yet Be Purchased
Under the Plans or
Programs
|                                      |  |                               |  |                            |  |                                                                                 |  |                                                                              
|April 2010                            |  | 747,651                       |  | $ 10.97                    |  | 12,498,522                                                                      |  | (1)                                                                          

(1) The maximum number of Units
that may be redeemed in any 12 month period is limited to five percent (5.0%)
of the weighted average number of Units outstanding from the beginning of the
12 month period.

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Item 6. Exhibits

|                |  |                                                                                                                                                                                                             
|--------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit 
Number |  | Description                                                                                                                                                                                                 
|                |  |                                                                                                                                                                                                             
|                |  |                                                                                                                                                                                                             
|3.1             |  | Articles of
Incorporation of the Company. (Incorporated by reference to Exhibit 3.1 to
the Companys registration statement on Form S-11 (SEC File No. 333-112169)
effective April 23, 2004).               
|                |  |                                                                                                                                                                                                             
|3.2             |  | Bylaws of
the Company. (Incorporated by reference to Exhibit 3.2 to the Companys
Post-Effective Amendment No. 4 to Form S-11 (SEC File No. 333-112169)
effective June 14, 2005).                           
|                |  |                                                                                                                                                                                                             
|31.1            |  | Certification
of the Companys Chief Executive Officer pursuant to Rule 13a  14(a) and
Rule 15d  14(a) of the Securities Exchange Act, as amended (FILED HEREWITH).                                       
|                |  |                                                                                                                                                                                                             
|31.2            |  | Certification
of the Companys Chief Financial Officer pursuant to Rule 13a  14(a) and
Rule 15d  14(a) of the Securities Exchange Act, as amended (FILED HEREWITH).                                       
|                |  |                                                                                                                                                                                                             
|32.1            |  | Certification
of the Companys Chief Executive Officer and Chief Financial Officer pursuant
to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 (FILED HEREWITH).

18

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SIGNATURES

Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.

|                     |                                                        |  |                     
|-------------------- | ------------------------------------------------------ |  | --------------------
|APPLE REIT SIX, INC.
|                     |                                                        |  |                     
|By:                  | /s/   GLADE M. KNIGHT                                  |  | Date: August
3, 2010
|                     |                                                        |  |                     
|                     | Glade M. Knight,                                       |  |                     
|                     | Chairman of the Board and                              |  |                     
|                     | Chief Executive Officer                                |  |                     
|                     | (Principal Executive Officer)                          |  |                     
|                     |                                                        |  |                     
|                     |                                                        |  |                     
|By:                  | /s/   BRYAN
PEERY                                      |  | Date: August
3, 2010
|                     |                                                        |  |                     
|                     | Bryan Peery,                                           |  |                     
|                     | Chief Financial Officer                                |  |                     
|                     | (Principal Financial and Principal Accounting Officer) |  |                     

19

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