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 March 31, 2011      
|  |                                                                                                                                              
|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 May 1, 2011: 91,075,557

---



APPLE REIT SIX, INC.
FORM 10-Q
INDEX

|                              |                   |                                                                                        |  |              | 
|----------------------------- | ----------------- | -------------------------------------------------------------------------------------- |  | ------------ | 
|                              |                   |                                                                                        |  | Page
 Number
|                              |                   |                                                                                        |  |             
|PART I. FINANCIAL INFORMATION |                   |                                                                                        | 
|                              |                   |                                                                                        |  |              | 
|                              | Item 1.           | Financial Statements (Unaudited)                                                       |  | 3            | 
|                              |                   |                                                                                        |  |              | 
|                              |                   | Consolidated
 Balance Sheets 
 March 31, 2011 and December 31, 2010                   |  | 3            | 
|                              |                   |                                                                                        |  |              | 
|                              |                   | Consolidated
 Statements of Operations -
 Three months ended March 31, 2011 and 2010   |  | 4            | 
|                              |                   |                                                                                        |  |              | 
|                              |                   | Consolidated
 Statements of Cash Flows 
 Three months ended March 31, 2011 and 2010   |  | 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                             |  | 17           | 
|                              |                   |                                                                                        |  |              | 
|                              | Item 4.           | Controls and Procedures                                                                |  | 17           | 
|                              |                   |                                                                                        |  |              | 
|PART II.                      | OTHER INFORMATION |                                                                                        |  |             
|                              |                   |                                                                                        |  |              | 
|                              | Item 2.           | Unregistered Sales of Equity Securities and Use of Proceeds                            |  | 18           | 
|                              |                   |                                                                                        |  |              | 
|                              | Item 6.           | Exhibits                                                                               |  | 19           | 
|                              |                   |                                                                                        |  |              | 
|Signatures                    |                   | 20                                                                                     | 

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 service mark symbol
has been omitted but will be deemed to be included wherever the above
referenced terms are used.

2

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|                             
|-----------------------------
|PART I. FINANCIAL INFORMATION
|ITEM 1. FINANCIAL STATEMENTS 

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

|                                                                                                                                                 |  |                 |          |                    |   |          |  
|------------------------------------------------------------------------------------------------------------------------------------------------ |  | --------------- | -------- | ------------------ | - | -------- | -
|                                                                                                                                                 |  | March 31,
 2011 |          | December 31,
 2010 |  
|                                                                                                                                                 |  |                 |          |                    |  
|ASSETS                                                                                                                                           |  |                 |          |                    |   |          |  
|Investment in real estate, net of
 accumulated depreciation of $161,309 and $153,452, respectively                                               |  | $               | 760,130  |                    | $ | 764,557  |  
|Hotels held for sale                                                                                                                             |  |                 | 10,755   |                    |   | 10,755   |  
|Restricted cash-furniture, fixtures and
 other escrows                                                                                           |  |                 | 4,491    |                    |   | 4,344    |  
|Due from third party manager, net                                                                                                                |  |                 | 10,891   |                    |   | 5,935    |  
|Other assets, net                                                                                                                                |  |                 | 3,093    |                    |   | 2,622    |  
|                                                                                                                                                 |  |                 |          |                    |   |          |  
|                                                                                                                                                 |  |                 |          |                    |   |          |  
|TOTAL ASSETS                                                                                                                                     |  | $               | 789,360  |                    | $ | 788,213  |  
|                                                                                                                                                 |  |                 |          |                    |   |          |  
|                                                                                                                                                 |  |                 |          |                    |   |          |  
|LIABILITIES                                                                                                                                      |  |                 |          |                    |   |          |  
|Credit facility                                                                                                                                  |  | $               | 48,807   |                    | $ | 39,551   |  
|Mortgage debt                                                                                                                                    |  |                 | 23,913   |                    |   | 24,185   |  
|Accounts payable and accrued expenses                                                                                                            |  |                 | 4,299    |                    |   | 4,706    |  
|                                                                                                                                                 |  |                 |          |                    |   |          |  
|                                                                                                                                                 |  |                 |          |                    |   |          |  
|TOTAL LIABILITIES                                                                                                                                |  |                 | 77,019   |                    |   | 68,442   |  
|                                                                                                                                                 |  |                 |          |                    |   |          |  
|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 91,535,353 and 91,473,791
 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 91,535,353 and 91,473,791 shares,
 respectively               |  |                 | 903,090  |                    |   | 902,402  |  
|Distributions greater than net income                                                                                                            |  |                 | (190,773 | )                  |   | (182,655 | )
|                                                                                                                                                 |  |                 |          |                    |   |          |  
|                                                                                                                                                 |  |                 |          |                    |   |          |  
|TOTAL SHAREHOLDERS EQUITY                                                                                                                       |  |                 | 712,341  |                    |   | 719,771  |  
|                                                                                                                                                 |  |                 |          |                    |   |          |  
|                                                                                                                                                 |  |                 |          |                    |   |          |  
|TOTAL LIABILITIES AND SHAREHOLDERS EQUITY                                                                                                       |  | $               | 789,360  |                    | $ | 788,213  |  
|                                                                                                                                                 |  |                 |          |                    |   |          |  

See notes to consolidated financial
statements.

3

---



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

|                                                                |  |                                     |        |                                     |   |        |  
|--------------------------------------------------------------- |  | ----------------------------------- | ------ | ----------------------------------- | - | ------ | -
|                                                                |  | Three months
 ended
 March 31, 2011 |        | Three months
 ended
 March 31, 2010 |  
|                                                                |  |                                     |        |                                     |  
|                                                               
|Revenues:                                                       |  |                                     |        |                                     |   |        |  
|Room revenue                                                    |  | $                                   | 50,769 |                                     | $ | 46,966 |  
|Other revenue                                                   |  |                                     | 3,758  |                                     |   | 3,465  |  
|Reimbursed expenses                                             |  |                                     | 1,824  |                                     |   | 1,632  |  
|                                                                |  |                                     |        |                                     |   |        |  
|Total revenue                                                   |  |                                     | 56,351 |                                     |   | 52,063 |  
|                                                                |  |                                     |        |                                     |   |        |  
|Expenses:                                                       |  |                                     |        |                                     |   |        |  
|Operating expense                                               |  |                                     | 14,368 |                                     |   | 13,398 |  
|Hotel administrative expense                                    |  |                                     | 4,699  |                                     |   | 4,378  |  
|Sales and marketing                                             |  |                                     | 4,417  |                                     |   | 4,066  |  
|Utilities                                                       |  |                                     | 2,371  |                                     |   | 2,358  |  
|Repair and maintenance                                          |  |                                     | 2,622  |                                     |   | 2,539  |  
|Franchise fees                                                  |  |                                     | 2,286  |                                     |   | 2,106  |  
|Management fees                                                 |  |                                     | 1,824  |                                     |   | 1,580  |  
|Taxes, insurance and other                                      |  |                                     | 3,008  |                                     |   | 3,161  |  
|General and administrative                                      |  |                                     | 1,245  |                                     |   | 1,037  |  
|Reimbursed expenses                                             |  |                                     | 1,824  |                                     |   | 1,632  |  
|Depreciation expense                                            |  |                                     | 7,857  |                                     |   | 7,631  |  
|                                                                |  |                                     |        |                                     |   |        |  
|Total expenses                                                  |  |                                     | 46,521 |                                     |   | 43,886 |  
|                                                                |  |                                     |        |                                     |   |        |  
|                                                                |  |                                     |        |                                     |   |        |  
|Operating income                                                |  |                                     | 9,830  |                                     |   | 8,177  |  
|                                                                |  |                                     |        |                                     |   |        |  
|Interest expense, net                                           |  |                                     | (889   | )                                   |   | (909   | )
|                                                                |  |                                     |        |                                     |   |        |  
|                                                                |  |                                     |        |                                     |   |        |  
|Income from continuing operations                               |  |                                     | 8,941  |                                     |   | 7,268  |  
|                                                                |  |                                     |        |                                     |   |        |  
|Income from discontinued operations                             |  |                                     | 515    |                                     |   | 389    |  
|                                                                |  |                                     |        |                                     |   |        |  
|                                                                |  |                                     |        |                                     |   |        |  
|Net income                                                      |  | $                                   | 9,456  |                                     | $ | 7,657  |  
|                                                                |  |                                     |        |                                     |   |        |  
|                                                                |  |                                     |        |                                     |   |        |  
|Basic and diluted net income per common
 share                  |  |                                     |        |                                     |   |        |  
|From continuing operations                                      |  | $                                   | 0.10   |                                     | $ | 0.08   |  
|From discontinued operations                                    |  |                                     |       |                                     |   |       |  
|                                                                |  |                                     |        |                                     |   |        |  
|                                                                |  | $                                   | 0.10   |                                     | $ | 0.08   |  
|                                                                |  |                                     |        |                                     |   |        |  
|                                                                |  |                                     |        |                                     |   |        |  
|Weighted average common shares outstanding
 - basic and diluted |  |                                     | 91,356 |                                     |   | 91,363 |  

See
notes to consolidated financial statements.

4

---



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

|                                                                               |  |                                    |         |                                    |   |         |  
|------------------------------------------------------------------------------ |  | ---------------------------------- | ------- | ---------------------------------- | - | ------- | -
|                                                                               |  | Three months ended
 March 31, 2011 |         | Three months ended
 March 31, 2010 |  
|                                                                               |  |                                    |         |                                    |  
|                                                                               |  |                                    |         |                                    |   |         |  
|Cash flow from operating activities:                                           |  |                                    |         |                                    |   |         |  
|Net income                                                                     |  | $                                  | 9,456   |                                    | $ | 7,657   |  
|Adjustments to reconcile net income to cash
 provided by operating activities: |  |                                    |         |                                    |   |         |  
|Depreciation, including discontinued operations                                |  |                                    | 7,857   |                                    |   | 7,762   |  
|Other non-cash expenses, net                                                   |  |                                    | 74      |                                    |   | 132     |  
|Changes in operating assets and
 liabilities, net of amounts acquired/assumed: |  |                                    |         |                                    |   |         |  
|Increase in funds due from third party
 managers                               |  |                                    | (4,956  | )                                  |   | (4,053  | )
|Increase in other assets                                                       |  |                                    | (682    | )                                  |   | (947    | )
|Increase (decrease) in accounts payable and
 accrued expenses                  |  |                                    | (307    | )                                  |   | 297     |  
|                                                                               |  |                                    |         |                                    |   |         |  
|Net cash provided by operating activities                                      |  |                                    | 11,442  |                                    |   | 10,848  |  
|                                                                               |  |                                    |         |                                    |   |         |  
|Cash flow used in investing activities:                                        |  |                                    |         |                                    |   |         |  
|Capital improvements                                                           |  |                                    | (3,530  | )                                  |   | (1,626  | )
|Net increase in cash restricted for
 property improvements                     |  |                                    | (76     | )                                  |   | (241    | )
|                                                                               |  |                                    |         |                                    |   |         |  
|Net cash used in investing activities                                          |  |                                    | (3,606  | )                                  |   | (1,867  | )
|                                                                               |  |                                    |         |                                    |   |         |  
|Cash flow used in financing activities:                                        |  |                                    |         |                                    |   |         |  
|Net proceeds from credit facility                                              |  |                                    | 9,256   |                                    |   | 9,505   |  
|Payment of mortgage notes                                                      |  |                                    | (206    | )                                  |   | (204    | )
|Net proceeds from issuance of Units                                            |  |                                    | 7,343   |                                    |   | 8,344   |  
|Redemptions of Units                                                           |  |                                    | (6,655  | )                                  |   | (7,039  | )
|Cash distributions paid to shareholders                                        |  |                                    | (17,574 | )                                  |   | (19,587 | )
|                                                                               |  |                                    |         |                                    |   |         |  
|Net cash used in financing activities                                          |  |                                    | (7,836  | )                                  |   | (8,981  | )
|                                                                               |  |                                    |         |                                    |   |         |  
|Net change in cash and cash equivalents                                        |  |                                    |        |                                    |   |        |  
|                                                                               |  |                                    |         |                                    |   |         |  
|Cash and cash equivalents, beginning of
 period                                |  |                                    |        |                                    |   |        |  
|                                                                               |  |                                    |         |                                    |   |         |  
|                                                                               |  |                                    |         |                                    |   |         |  
|Cash and cash equivalents, end of period                                       |  | $                                  |        |                                    | $ |        |  
|                                                                               |  |                                    |         |                                    |   |         |  

See
notes to consolidated financial statements.

5

---



NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS

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 2010 Annual Report on Form 10-K. Operating results
for the period ended March 31, 2011 are not necessarily indicative of the
results that may be expected for the period ending December 31, 2011.

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. The Company
concluded its best-efforts offering of Units (each Unit consists of one common
share and one Series A preferred share) in March 2006. 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 period. Diluted earnings per share are
calculated after giving effect to all potential common shares that were
dilutive and outstanding for the period. There were no potential common shares
with a dilutive effect during the three months ended March 31, 2011 or 2010. As
a result, basic and dilutive outstanding shares were the same. 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
eligible to be 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 consolidated financial statements and
accompanying notes. Actual results could differ from those estimates.

3. Notes Payable

The
Company has a $60 million unsecured credit facility with a commercial bank,
that is utilized for working capital, hotel renovations, and other general
corporate funding purposes, including the payment of redemptions and
distributions. The outstanding principal is required to be paid by the maturity
date of June 10, 2011, may be prepaid without penalty and may be extended at
the option of the Company to June 2012. 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 credit facility also
has an unused fee of 0.5%. At March 31, 2011 and December 31, 2010, the credit
facility had an outstanding principal balance of $48.8 million and $39.6
million.

6

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4. 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. Market rates and credit spreads take into consideration general market conditions and
maturity. As of March 31, 2011, the carrying value and estimated fair value of
the Companys debt was $72.7 million and $73.2 million. As of December 31,
2010, the carrying value and estimated fair value of the Companys debt was
$63.7 and $64.4 million. The carrying value of the Companys other financial
instruments approximates fair value due to the short-term nature of these
financial instruments.

5. Related Parties

The
Company has, and is expected to continue to engage in, 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s independent
members of the Board of Directors oversee and annually review the Companys
related party relationships (which include the relationships discussed in this
section) and are required to approve any significant modifications to the
contracts, as well as any new significant related party transactions. There
were no changes to the contracts discussed in this section and no new
significant related party transactions during the three months ended March 31,
2011. The Board of Directors is not required to approve each individual
transaction that falls under a related party relationship; however, under the
direction of the Board of Directors, at least one member of the Companys
senior management team approves each related party transaction.

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 0.1% to 0.25% of total equity proceeds received by the
Company, in addition to certain reimbursable expenses, are payable for these
services. During the three months ended March 31, 2011 and 2010, the Company
incurred $0.4 million in fees under this agreement for each period.

Through
its wholly-owned subsidiary, Apple Fund Management, LLC, the Company provides
support services to Apple Six Realty Group (A6RG), 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), Apple REIT Nine, Inc, Apple Ten Advisors, Inc. (A10A) and Apple
REIT Ten, 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. A10A provides day to day
advisory day and administrative functions for Apple REIT Ten, Inc. ASRG
provides real estate brokerage services to the Company, Apple REIT Seven, Inc.,
Apple REIT Eight, Inc., Apple REIT Nine, Inc and Apple REIT Ten, Inc. Each of
these companies has agreed to reimburse the Company for its costs in providing
these services. A6RG, ASRG, A6A, A7A, A8A, A9A, and A10A are 100% owned by
Glade Knight, the Companys Chairman and Chief Executive Officer. For the three
months ended March 31, 2011 and 2010, the Company received reimbursement of its
costs totaling approximately $1.8 million and $1.6 million from the
participating entities. The Companys net allocated cost for these support
services was approximately $0.4 million and $0.3 million for the three months
ended March 31, 2011 and 2010. As part of this arrangement, the day to day
transactions may result in amounts due to or from the related parties. To
effectively manage cash disbursements, the individual companies may make
payments for any or all of the related companies. The amounts due to or from
the related companies are reimbursed or collected and are not significant in
amount.

Although
there is a potential conflict on time allocation of personnel due to the fact
that a senior manager, officer or staff member will provide services to more
than one company, the Company believes that the executives and staff
compensation sharing arrangement allows the companies to share costs yet
attract and retain superior executives and staff. The cost sharing structure
also allows each entity to maintain a much more cost effective structure than
having separate staffing arrangements. Amounts

7

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reimbursed to
the Company include both compensation for personnel and overhead (office
rent, utilities, benefits, office supplies, etc.) utilized by the companies.
The allocation of costs is made by the management of the several REITs and is reviewed
at least annually by the Compensation Committees of the several REITs. In
making the allocation, management and the Compensation Committee consider all
relevant facts related to the Companys level of business activity and the
extent to which the Company requires the services of particular personnel. The
costs allocated are actual costs and do not include any profit/markup for the
Company. Such payments are not based on formal record keeping regarding the
time these personnel devote to the Company, but are based on a good faith
estimate by the employee and/or his or her supervisor of the time devoted by
the employee to each Company.

Including
A6RG, ASRG, A6A, A7A, A8A, A9A and A10A discussed above, Mr. Knight is
also Chairman and Chief Executive Officer of Apple REIT Seven, Inc., Apple REIT
Eight, Inc., Apple REIT Nine, Inc. and Apple REIT Ten, 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.

Included
in other assets, net on the Companys consolidated balance sheet is a 26%
ownership interest in Apple Air Holding, LLC (Apple Air). The other members
of Apple Air are Apple REIT Seven, Inc., Apple REIT Eight, Inc. and Apple REIT
Nine, Inc. Through its ownership interest the Company has access to Apple Airs
aircraft for asset management and renovation purposes. The Companys ownership
interest was approximately $1.9 million and $1.8 million at March 31, 2011 and
December 31, 2010. The Company has recorded its share of income and losses of
the entity under the equity method of accounting and adjusted its investment in
Apple Air accordingly. For the three months ended March 31, 2011 and 2010, the
Company recorded a loss of approximately $53,000 and $119,000 in each period as
its share of the net loss of Apple Air, which primarily relates to the
depreciation of the aircraft, and is included in general and administrative
expense in the Companys consolidated statements of operations. Apple Air owned
two aircraft during 2010, but reduced its ownership to one aircraft during the
first quarter of 2011.

6. 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 three months ended March 31, 2011, the
Company redeemed approximately 0.6 million Units in the amount of $6.7 million
under the program. Since the inception of the program through March 31, 2011,
the Company has redeemed approximately 14.5 million Units for $158.9 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
three months ended March 31, 2011, approximately 0.7 million Units,
representing $7.3 million in proceeds to the Company, were issued under the
plan. Since the inception of the plan through March 31, 2011, 14.9 million Units,
representing $163.8 million in proceeds to the Company, were issued under the
plan.

The
Companys annual distribution rate as of March 31, 2011 was $0.77 per common
share, payable monthly. For the three months ended March 31, 2011 and 2010 the
Company has made distributions of $0.193 and $0.215 per common share for a
total of $17.6 million and $19.6 million.

8

---



7. Discontinued Operations

Based
on the performance, location, and capital requirements of the Tempe, Arizona
TownePlace Suites and SpringHill Suites, the Company committed to sell these
two properties in the third quarter of 2010. These hotels have been classified
on the consolidated balance sheets as hotels held for sale as of March 31,
2011 and December 31, 2010, and are recorded at the fair value less cost to
sell. The results of operations for these properties for the three months ended
March 31, 2011 and 2010 are classified on the consolidated statements of
operations in the line item income from discontinued operations. The Company
entered into a contract to sell the properties in January 2011 and expects to
complete the sale in the second quarter of 2011.

The
following table sets forth the components of income from discontinued
operations for the three months ended March 31, 2011 and 2010 (in thousands):

|                                     |  |                                     |       |                                     |   |       | 
|------------------------------------ |  | ----------------------------------- | ----- | ----------------------------------- | - | ----- | 
|                                     |  | Three months
 ended
 March 31, 2011 |       | Three months
 ended
 March 31, 2010 |  
|                                     |  |                                     |       |                                     |  
|                                     |  |                                     |       |                                     |   |       | 
|Total
 revenue                       |  | $                                   | 1,352 |                                     | $ | 1,438 | 
|Hotel
 operating expenses            |  |                                     | 760   |                                     |   | 841   | 
|Taxes,
 insurance and other          |  |                                     | 77    |                                     |   | 77    | 
|Depreciation
 expense                |  |                                     |      |                                     |   | 131   | 
|                                     |  |                                     |       |                                     |   |       | 
|Income from
 discontinued operations |  | $                                   | 515   |                                     | $ | 389   | 
|                                     |  |                                     |       |                                     |   |       | 

8. Subsequent Events

In
April 2011, 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
223,640 Units were reinvested under the Companys Dividend Reinvestment Plan.

In
April 2011, the Company redeemed 683,436 Units in the amount of $7.5 million
under its Unit Redemption Program.

On
April 1, 2011, the Company retired the mortgage associated with its Hampton Inn
hotel in Foothill Ranch, California four months prior to its scheduled maturity
date. The remaining principal balance of $4.0 million was paid using proceeds
from the Companys credit facility.

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 cycle; 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 as compared to other hotels within their
respective local markets, in general, has met the Companys expectations for
the period owned. With the significant decline in economic conditions throughout
the United States since 2008, the Company has experienced a decline in revenue
as compared to 2008, but an increase in revenue from continuing operations of
8% as compared to the first three months of 2010. Although there is no way to
predict future general economic conditions, the Company anticipates mid single
digit percentage revenue increases for the remainder of 2011 as compared to
2010.

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 (ADR), revenue per available room (RevPAR),
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
Company continually monitors the profitability of its properties and attempts
to maximize shareholder value by timely disposal of properties. During the
third quarter of 2010 the Company committed to sell two underperforming assets.
The properties are the Tempe, Arizona TownePlace Suites and SpringHill Suites.
The Company entered into a contract to sell the properties in January 2011 and
expects to close on the sale in the second quarter of 2011. The results of
these properties have been included in discontinued operations and are not
included in the summary below. The following is a summary of the Companys
results from continuing operations:

10

---



|                                        |  |                                     |        |                             |     |                                       |   |                            |   |                 |   |    |  
|--------------------------------------- |  | ----------------------------------- | ------ | --------------------------- | --- | ------------------------------------- | - | -------------------------- | - | --------------- | - | -- | -
|(in
 thousands except statistical data) |  | Three months
 ended March
 31, 2011 |        | Percent of 
 Hotel
 Revenue |     | Three months 
 ended March 
 31, 2010 |   | Percent of
 Hotel
 Revenue |   | Percent
 Change |  
|                                        |  |                                     |        |                             |     |                                       |   |                            |   |                 |  
|                                        |  |                                     |        |                             |     |                                       |   |                            |   |                 |   |    |  
|Total hotel revenue                     |  | $                                   | 54,527 |                             | 100 | %                                     | $ | 50,431                     |   | 100             | % | 8  | %
|Hotel operating expenses                |  |                                     | 32,587 |                             | 60  | %                                     |   | 30,425                     |   | 60              | % | 7  | %
|Taxes, insurance and other expense      |  |                                     | 3,008  |                             | 6   | %                                     |   | 3,161                      |   | 6               | % | -5 | %
|General and administrative expense      |  |                                     | 1,245  |                             | 2   | %                                     |   | 1,037                      |   | 2               | % | 20 | %
|                                        |  |                                     |        |                             |     |                                       |   |                            |   |                 |   |    |  
|Depreciation                            |  |                                     | 7,857  |                             |     |                                       |   | 7,631                      |   |                 |   | 3  | %
|Interest expense, net                   |  |                                     | 889    |                             |     |                                       |   | 909                        |   |                 |   | -2 | %
|                                        |  |                                     |        |                             |     |                                       |   |                            |   |                 |   |    |  
|Number of Hotels                        |  |                                     | 66     |                             |     |                                       |   | 66                         |   |                 |   |   |  
|Average RevPAR Market Yield (1)         |  |                                     | 124    |                             |     |                                       |   | 126                        |   |                 |   | -2 | %
|ADR                                     |  | $                                   | 107    |                             |     |                                       | $ | 102                        |   |                 |   | 5  | %
|Occupancy                               |  |                                     | 69     | %                           |     |                                       |   | 67                         | % |                 |   | 3  | %
|RevPAR                                  |  | $                                   | 74     |                             |     |                                       | $ | 68                         |   |                 |   | 9  | %
|Total rooms sold (000s)(2)             |  |                                     | 471    |                             |     |                                       |   | 460                        |   |                 |   | 2  | %
|Total rooms available (000s)(3)        |  |                                     | 685    |                             |     |                                       |   | 685                        |   |                 |   |   |  

|    |                                                                                                                                           
|--- | ------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Excludes
 properties under renovation during the applicable periods. Calculated from
 information provided by Smith Travel Research, Inc.®
|(2) | Represents
 the number of room nights sold during the period.                                                                             
|(3) | Represents
 the number of rooms owned by the Company multiplied by the number of nights
 in the period.                                   

Hotels Owned

As
of March 31, 2011, the Company owned 68 hotels, with a total of 7,898 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 | 

11

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|                                            |  |                |  |                      |  |              |  |          |  |       |  |   |         | 
|------------------------------------------- |  | -------------- |  | -------------------- |  | ------------ |  | -------- |  | ----- |  | - | ------- | 
|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   | 
|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  |  | 148   |  |   | 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    |  | 7,898 |  | $ | 845,330 | 
|                                            |  |                |  |                      |  |              |  |          |  |       |  |   |         | 
|*     Hotels
 are reported as held for sale

Results of Operations

As
of March 31, 2011, the Company owned 68 hotels with 7,898 rooms, including the
two hotels held for sale. 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. During the
period from the second half of 2008 through 2010, the overall weakness in the
U.S. economy has had a considerable negative impact on both consumer and
business travel. As a result, revenue in most markets in the United States has
declined from levels of 2007 and the first half of 2008. However, economic
conditions are showing evidence of improvement as shown in the Companys year
to date growth in revenue from continuing operations of 8% from the same period
of 2010. While the Company does anticipate improvement in revenue and operating
income in 2011 as compared to 2010 results, it is not expected that revenue and
operating income will reach pre-recession levels. The Companys hotels in
general have shown results consistent with industry and brand averages for the
period of ownership.

Revenues

The
Companys principal source of revenue is hotel room revenue and other related
revenue. For the three months ended March 31, 2011 and 2010, the Company had
total hotel revenue from continuing operations of $54.5 million and $50.4
million, respectively, with average occupancy of 69% and 67%, ADR of $107 and
$102 and RevPAR of $74 and $68 for each period. ADR is calculated as room
revenue

12

---



divided by the number of
rooms sold, and RevPAR is calculated as occupancy multiplied by ADR. Since the
beginning of 2010, the Company has experienced an increase in demand as shown
by the improved occupancy rates as compared to prior year. In addition, also
signifying a stabilizing economy, the Company experienced an increase in
average room rates versus the first quarter of 2010. With demand and rate
improvement, the Company and industry anticipate percentage revenue growth for
the remainder of 2011 in the mid single digits, as compared to 2010. While
reflecting the impact of post-recessionary levels of single-digit growth in
national economic activity, the Companys hotels also continue to be leaders in
their respective markets. The Companys average Market Yield for the first
three months of 2011 was 124. The Market Yield is a measure of each hotels
RevPAR compared to the average (100) in its local market (the index excludes
hotels under renovation).

Expenses

For
the three months ended March 31, 2011 and 2010, hotel operating expenses from
continuing operations totaled $32.6 million and $30.4 million, respectively, or
60% of total hotel revenue. Hotel operating expenses consist of operating
expense, hotel administrative expense, sales and marketing expense, utilities
expense, repair and maintenance expense, franchise fees and management fees.
Results for the three months ended March 31, 2011 reflect the impact of
increases in revenues and occupancy at most of the Companys hotels, and the
Companys efforts to control costs in a challenging economic environment.
Certain operating costs, such as management costs, certain utility costs and
minimum supply and maintenance costs are relatively fixed in nature. The
Company has been successful in reducing, relative to revenue, increases in
certain labor costs, maintenance costs, and utilities by continually monitoring
and sharing utilization data across its hotels and management companies.
Although operating expenses will increase as occupancy and revenue increases,
the Company has and will continue to work with its managers to reduce costs as
a percentage of revenue as aggressively as possible while maintaining quality
and service levels at each property.

Taxes,
insurance, and other expenses from continuing operations for the three months
ended March 31, 2011 and 2010 were $3.0 million and $3.2 million, or 6% 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
assessments for some locations. In addition, the Company has experienced lower
property insurance expense for most hotel properties, in comparison to
insurance rates in effect during 2010.

General
and administrative expenses from continuing operations for the three months
ended March 31, 2011 and 2010 were $1.2 million and $1.0 million, or 2% of
total hotel revenue for each period. The principal components of general and
administrative expense are advisory fees and reimbursable expenses, legal fees,
accounting fees, reporting expenses and the Companys share of the loss from
its investment in Apple Air Holding, LLC.

Depreciation expense from continuing operations was $7.9 million and $7.6
million for the three months ended March 31, 2011 and 2010. Depreciation
expense represents expense of the Companys 66 hotels that are included in
continuing operations and related personal property for their respective
periods owned. The increase in depreciation is due to renovations completed
throughout 2010 and in the first three months of 2011.

Interest
expense, net from continuing operations was $0.9 million for the three months
ended March 31, 2011 and 2010. Interest expense relates to debt assumed with
certain properties acquired, as well as borrowings on the Companys credit
facility. During the three months ended March 31, 2011 and 2010, the Company
capitalized approximately $154,000 and $32,000 of interest associated with
renovation activities.

Liquidity and Capital
Resources

Operating
cash flow from the properties owned and a $60 million credit facility 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. With
the availability of this credit facility, the Company maintains little cash on
hand, accessing the facility as necessary. As a result, cash on hand was $0 at
March 31, 2011. The

13

---



outstanding balance on the
credit facility was $48.8 million at March 31, 2011 and its interest rate was
5.0%. The Company anticipates that cash flow from operations and the credit
facility will be adequate to meet its anticipated liquidity requirements in
2011, including distributions to shareholders, capital expenditures and debt
service. While the Companys credit facility matures in June 2011, it has an
option to extend maturity to June 2012. The Company will either elect to extend
the facility or refinance the facility. The Company intends to maintain a
relatively stable distribution 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 as compared to pre-recessionary
levels, 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 this strategy and
may need to reduce its distributions to required levels. If the Company were
unsuccessful in extending its maturing debt in 2011 or if it were to default on
its debt, it may be unable to make distributions.

To
maintain its REIT status the Company is required to distribute at least 90% of
its ordinary income. Distributions in the first three months of 2011 totaled
$17.6 million. For the same period the Companys cash generated from operations
was $11.4 million. The shortfall includes a return of capital and was funded
primarily by borrowings on the credit facility. 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. 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
distribution 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 three months of 2011, total capital
expenditures were approximately $3.5 million. The Company anticipates
expenditures of approximately $13-$15 million for the full year of 2011 in
connection with renovations and brand initiatives.

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 three months ended March 31, 2011, the Company
redeemed approximately 0.6 million Units in the amount of $6.7 million under
the program. Since the inception of the program through March 31, 2011, the
Company has redeemed approximately 14.5 million Units for $158.9 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 three months ended March 31, 2011, approximately 0.7 million Units,
representing $7.3 million in proceeds to the Company, were issued under the
plan. Since the inception of the plan through March 31, 2011, 14.9 million
Units, representing $163.8 million in proceeds to the Company, were issued
under the plan.

14

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Related Party Transactions

The
Company has, and is expected to continue to engage in, 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s independent
members of the Board of Directors oversee and annually review the Companys
related party relationships (which include the relationships discussed in this
section) and are required to approve any significant modifications to the
contracts, as well as any new significant related party transactions. There
were no changes to the contracts discussed in this section and no new
significant related party transactions during the three months ended March 31,
2011. The Board of Directors is not required to approve each individual
transaction that falls under a related party relationship; however, under the
direction of the Board of Directors, at least one member of the Companys
senior management team approves each related party transaction.

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 0.1% to 0.25% of total equity proceeds received by the
Company, in addition to certain reimbursable expenses, are payable for these
services. During the three months ended March 31, 2011 and 2010, the Company
incurred $0.4 million in fees under this agreement for each period.

Through
its wholly-owned subsidiary, Apple Fund Management, LLC, the Company provides support
services to Apple Six Realty Group (A6RG), 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), Apple REIT Nine, Inc, Apple Ten Advisors, Inc. (A10A)
and Apple REIT Ten, 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. A10A provides
day to day advisory day and administrative functions for Apple REIT Ten, Inc.
ASRG provides real estate brokerage services to the Company, Apple REIT Seven,
Inc., Apple REIT Eight, Inc., Apple REIT Nine, Inc and Apple REIT Ten, Inc.
Each of these companies has agreed to reimburse the Company for its costs in
providing these services. A6RG, ASRG, A6A, A7A, A8A, A9A, and A10A are 100%
owned by Glade Knight, the Companys Chairman and Chief Executive Officer. For
the three months ended March 31, 2011 and 2010, the Company received
reimbursement of its costs totaling approximately $1.8 million and $1.6 million
from the participating entities. The Companys net allocated cost for these
support services was approximately $0.4 million and $0.3 million for the three
months ended March 31, 2011 and 2010. As part of this arrangement, the day to
day transactions may result in amounts due to or from the related parties. To
effectively manage cash disbursements, the individual companies may make
payments for any or all of the related companies. The amounts due to or from
the related companies are reimbursed or collected and are not significant in
amount.

Although
there is a potential conflict on time allocation of personnel due to the fact
that a senior manager, officer or staff member will provide services to more
than one company, the Company believes that the executives and staff
compensation sharing arrangement allows the companies to share costs yet
attract and retain superior executives and staff. The cost sharing structure
also allows each entity to maintain a much more cost effective structure than
having separate staffing arrangements. Amounts reimbursed to the Company
include both compensation for personnel and overhead (office rent, utilities,
benefits, office supplies, etc.) utilized by the companies. The allocation of
costs is made by the management of the several REITs and is reviewed at least annually
by the Compensation Committees of the several REITs. In making the allocation,
management and the Compensation Committee consider all relevant facts related
to the Companys level of business activity and the extent to which the Company
requires the services of particular personnel. The costs allocated are actual
costs and do not include any profit/markup for the Company. Such payments are
not based on formal record keeping regarding the time these personnel devote to
the Company, but are based on a good faith estimate by the employee and/or his
or her supervisor of the time devoted by the employee to each Company.

15

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Including
A6RG, ASRG, A6A, A7A, A8A, A9A and A10A discussed above, Mr. Knight is also
Chairman and Chief Executive Officer of Apple REIT Seven, Inc., Apple REIT
Eight, Inc., Apple REIT Nine, Inc. and Apple REIT Ten, 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.

Included
in other assets, net on the Companys consolidated balance sheet is a 26%
ownership interest in Apple Air Holding, LLC (Apple Air). The other members
of Apple Air are Apple REIT Seven, Inc., Apple REIT Eight, Inc. and Apple REIT
Nine, Inc. Through its ownership interest the Company has access to Apple Airs
aircraft for asset management and renovation purposes. The Companys ownership
interest was approximately $1.9 million and $1.8 million at March 31, 2011 and
December 31, 2010. The Company has recorded its share of income and losses of
the entity under the equity method of accounting and adjusted its investment in
Apple Air accordingly. For the three months ended March 31, 2011 and 2010, the
Company recorded a loss of approximately $53,000 and $119,000 in each period as
its share of the net loss of Apple Air, which primarily relates to the
depreciation of the aircraft, and is included in general and administrative
expense in the Companys consolidated statements of operations. Apple Air owned
two aircraft during 2010, but reduced its ownership to one aircraft during the
first quarter of 2011.

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 or available credit to
make distributions.

Subsequent Events

In
April 2011, 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
223,640 Units were reinvested under the Companys Dividend Reinvestment Plan.

In
April 2011, the Company redeemed 683,436 Units in the amount of $7.5 million
under its Unit Redemption Program.

On
April 1, 2011, the Company retired the mortgage associated with its Hampton Inn
hotel in Foothill Ranch, California four months prior to its scheduled maturity
date. The remaining principal balance of $4.0 million was paid using proceeds
from the Companys credit facility.

16

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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 March 31, 2011, the Companys financial
instruments were not exposed to significant market risk due to 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 credit facility.
Based on the balance of the Companys credit facility at March 31, 2011, of
$48.8 million, every 100 basis points change in interest rates could impact the
Companys annual net income by $488,000, subject to the interest rate floor
provisions of the credit facility and all other factors remaining the same.
Although the Company had no invested cash at March 31, 2011, the Company is
exposed to changes in short-term money market rates to the extent that it
invests its cash.

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 process was completed,
there have been no significant changes in internal controls or in other factors
that could significantly affect these controls.

17

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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 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. As of March 31, 2011, the Company has redeemed
approximately 14.5 million Units in the amount of $158.9 million under the
program. The redemptions represent 100% of the redemption requests as of the
last scheduled redemption date as of March 31, 2011. See the Companys complete
consolidated statements of cash flows for the three months ended March 31, 2011
and 2010 in the Companys interim financial statements in Item 1 of this Form
10-Q for a description of the sources and uses of the Companys cash flows. The
following is a summary of redemptions during the first quarter of 2011 (no
redemptions occurred in February and March 2011):

Issuer Purchases of Equity Securities

|              |  |                                    |  |                               |  |                                                                                      |  |                                                                                   
|------------- |  | ---------------------------------- |  | ----------------------------- |  | ------------------------------------------------------------------------------------ |  | ----------------------------------------------------------------------------------
|              |  | (a)                                |  | (b)                           |  | (c)                                                                                  |  | (d)                                                                               
|Period        |  | Total
 Number
 of Units
 Purchased |  | Average
 Price Paid
 per 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
|              |  |                                    |  |                               |  |                                                                                      |  |                                                                                   
|January
 2011 |  | 606,064                            |  | $ 10.98                       |  | 14,483,815                                                                           |  | (1)                                                                               

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

18

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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).

19

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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: May 6, 2011
|                     |                                                        |  |                  
|                     | Glade M. Knight,                                       |  |                  
|                     | Chairman of the Board and                              |  |                  
|                     | Chief Executive Officer                                |  |                  
|                     | (Principal Executive Officer)                          |  |                  
|                     |                                                        |  |                  
|By:                  | /s/   BRYAN PEERY                                      |  | Date: May 6, 2011
|                     |                                                        |  |                  
|                     | Bryan Peery,                                           |  |                  
|                     | Chief Financial Officer                                |  |                  
|                     | (Principal Financial and Principal Accounting Officer) |  |                  

20

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