<PAGE>


                                                                    Exhibit 10.7

                          LIMITED PARTNERSHIP AGREEMENT
                                       OF
                          AHM RES I LIMITED PARTNERSHIP

     This Limited Partnership Agreement (this "Agreement") of AHM Res I Limited
Partnership, a Virginia limited partnership (the "Partnership"), is made as of
October 29, 2001 by and between AHM Res I GP, Inc., a Virginia corporation
("General Partner"), and AHM Res I LP, Inc., a Virginia corporation ("Limited
Partner").

                                    RECITALS

     The General Partner and the Limited Partner (collectively, the "Partners")
are each wholly-owned subsidiaries of Apple Hospitality Management, Inc., a
Virginia corporation and a wholly-owned subsidiary of Apple Hospitality Two,
Inc., a Virginia corporation and a real estate investment trust for federal
income tax purposes. The Partners have formed the Partnership as of the date of
this Agreement.

                                    ARTICLE I
                    DEFINITIONS, PURPOSE AND GENERAL MATTERS

     1.1 General Definitions. In addition to terms defined elsewhere in this
Agreement, the following terms shall have the meanings indicated below:

     "Act" shall mean the Virginia Revised Uniform Limited Partnership Act, as
it may be amended or replaced from time to time.

     "Internal Revenue Code" shall mean the Internal Revenue Code of 1986, as it
may be amended or replaced from time to time.

     References to a specific provision of the Act or the Internal Revenue Code
shall be deemed to refer to any successor provision.

     1.2 Purpose. The permitted purpose of the Partnership shall be to engage in
any of the following activities:

          (a) operating, managing, leasing and otherwise dealing with real
property, and any improvements located thereon, including (without limitation)
extended-stay hotels; and

          (b) exercising all powers that are enumerated in the Act and are
necessary or convenient for the accomplishment of the foregoing.

<PAGE>

     1.3 Names. The Partnership may conduct its affairs under its own name and
under such assumed names as it deems appropriate or convenient.

     1.4 Qualifications in Other Jurisdictions. To the extent required by law,
the Partnership shall promptly qualify or register to transact business in all
jurisdictions other than Delaware in which it transacts business.

                                   ARTICLE II
                                   MANAGEMENT

     2.1 Management Authority. The Partnership shall be managed by the General
Partner. The Limited Partner shall not participate in the management of the
Partnership or in the control of its business, and shall not have any authority
to sign for, or to bind, the Partnership.

     2.2 Authorization and Approval. In dealings with the Partnership, a third
party may accept the signature of the General Partner as evidence that such
dealings are authorized by the Partnership.

     2.3 Expenses and Reimbursement. The Partnership shall be responsible for
all expenses, costs and liabilities arising from the management, organization or
operation of the Partnership in accordance with this Agreement ("Partnership
Expenses"). The General Partner shall be entitled to receive prompt
reimbursement from the Partnership to the extent, if any, that the General
Partner incurs any Partnership Expenses, unless such Partnership Expenses arose
from a violation of this Agreement, willful misconduct or a knowing violation of
criminal law.

     2.4 Compensation. No salaries or other compensation shall be paid by the
Partnership to the General Partner for its management services on behalf of the
Partnership.

                                   ARTICLE III
               CAPITAL CONTRIBUTIONS, ACCOUNTS AND RELATED MATTERS

     3.1 Capital Contributions. The initial capital contributions made by the
Partners to the Partnership are shown on Exhibit A to this Agreement.
                                         ---------

     3.2 Capital Accounts. The Partnership shall maintain a separate capital
account for each Partner (a "Capital Account"). Each Capital Account shall be
maintained in accordance with the Internal Revenue Code.

     3.3 Allocations and Percentage Interests. The percentage interests of the
Partners in the Partnership (and in the income, expenses, profits, losses and
assets thereof) shall be proportionate to their respective Capital Accounts. The
initial percentage interests of the Partners in the Partnership are shown on
Exhibit A to this Agreement.
---------

                                      -2-

<PAGE>

     3.4 Adjustments to Capital Accounts. The Capital Account for a Partner
shall be increased by (a) the amount of any cash contributed to the Partnership
by such Partner; (b) the value, as agreed upon by the Partnership and such
Partner, of any property contributed to the Partnership by such Partner; and (c)
any profits of the Partnership allocated to such Partner. The Capital Account
for a Partner shall be decreased by all distributions from the Partnership to
such Partner and by any losses of the Partnership allocated to such Partner.

     3.5 Restrictions on Capital Accounts. The Partners shall have no right to
receive interest with respect to their Capital Accounts, to withdraw or borrow
money from their Capital Accounts, or to pledge, or otherwise encumber, any part
of their Capital Accounts.

     3.6 Capital Account Deficits. No Partner shall be responsible for restoring
any deficit in such Partner's Capital Account upon the termination of the
Partnership or the withdrawal of such Partner from the Partnership in accordance
with this Agreement.

     3.7 Loans. Any loan from a Partner to the Partnership shall be made on
commercially reasonable terms and conditions and shall not be treated as a
capital contribution.

     3.8 Cash Distributions. The amount and frequency of any cash distributions
from the Partnership to the Partners shall be determined from time to time by
the General Partner in accordance with this Agreement.

                                   ARTICLE IV
                      ADMISSION AND WITHDRAWAL OF PARTNERS

     4.1 Admission of Additional or Replacement Partners. No person or entity
shall be admitted as a new Partner of the Partnership, whether in addition to
the existing Partners or in replacement of a Partner or Partners, unless all of
the following requirements are satisfied: (a) each Partner must grant prior
written consent to the admission of such person or entity as a new Partner; and
(b) such person or entity must execute a counterpart signature page to this
Agreement and must make any required capital contributions to the Partnership in
full. Each Partner is entitled to withhold consent to the admission of a new
Partner for any reason or no reason.

     4.2 Withdrawal. A Limited Partner shall not have the right or the power to
withdraw voluntarily from the Partnership at any time or for any reason. A
General Partner shall not withdraw voluntarily from the Partnership. Any
withdrawal by the General Partner in violation of this Agreement shall result in
the following: (a) the General Partner shall be liable for all damages incurred
by the Partnership as the direct or indirect result of such withdrawal,
including (without limitation) all costs of replacing such General Partner and
reasonable legal fees and expenses incurred in enforcing this Agreement; and (b)
the amount of such damages may be retained by the Partnership in reduction of
any distribution otherwise payable to the General Partner.

                                      -3-

<PAGE>

                                    ARTICLE V
                          ASSIGNMENTS AND ENCUMBRANCES

     5.1 Limitation on Assignments. Each Partner shall be prohibited from
assigning, selling, exchanging or otherwise transferring such Partner's interest
in the Partnership unless all of the following requirements are satisfied: (a)
the proposed transaction applies to the entire interest of such Partner in the
Partnership; (b) each other Partner grants prior written consent to the proposed
transaction; (c) the prospective transferee agrees to be bound by this Agreement
as a Partner; and (d) the Partnership receives an opinion from its legal
counsel, satisfactory to the Partnership in form and substance, confirming that
the proposed transaction would not violate any applicable laws, including but
not limited to state or federal securities laws, and would not terminate the
existence of the Partnership for tax or other purposes.

     5.2 Limitation on Encumbrances. Each Partner shall be prohibited from
pledging, granting a security interest in, or otherwise encumbering such
Partner's interest in the Partnership, or any part thereof, without the prior
written consent of each other Partner.

     5.3 Strict Compliance and Sole Discretion. Any transaction that is subject
to this Article and that fails to comply with its provisions in any way shall be
ineffective and void. Each Partner shall be entitled, in such Partner's sole
discretion, to withhold consent under this Article for any reason or no reason.

                                   ARTICLE VI
                                   TAX MATTERS

     6.1 Tax Classification. The Partnership shall have a "Tax Matters Partner"
in accordance with the Internal Revenue Code. The General Partner shall be the
Tax Matters Partner.

     6.2 Tax Year. The Partnership shall use the calendar year as its tax year.

     6.3 Tax Accounting. The Partnership shall use the same method of accounting
for both tax purposes and financial reporting purposes, except as may be
required by the Internal Revenue Code.

                                   ARTICLE VII
                        INDEMNIFICATION AND REIMBURSEMENT

     7.1 Definitions. As used in this Article, the term "Indemnified Person"
means each Partner and (to the extent applicable) each shareholder, employee,
director and officer thereof.

     7.2 Indemnification. The Partnership shall indemnify and protect each
Indemnified Person against any and all claims, liabilities, costs and expenses
(including but not limited to reasonable legal fees and costs) arising directly
or indirectly from any suit, action, investigation

                                      -4-

<PAGE>

or other proceeding (whether formal or informal) that (a) is brought or
threatened against the Indemnified Person; and (b) is based on the acts or
omissions of such Indemnified Person on behalf of the Partnership, unless such
acts or omissions violated this Agreement, constituted willful misconduct or
resulted from a knowing violation of criminal law. The Partnership shall have no
obligation to indemnify an Indemnified Person to the extent, if any, that the
Indemnified Person is entitled to be indemnified by another source, such as,
without limitation, an insurance company.

     7.3 Reimbursement. If an Indemnified Person incurs or pays any indemnified
cost, the Partnership shall reimburse the Indemnified Person for the full amount
of such indemnified cost. Such reimbursement shall be due promptly after the
Partnership receives each of the following: (a) a written request for
reimbursement from the Indemnified Person; (b) all information necessary to
establish the nature and amount of the indemnified cost that was incurred or
paid by the Indemnified Person; and (c) a written agreement by the Indemnified
Person to repay such reimbursement if the Partnership subsequently determines
that the Indemnified Person was not entitled to indemnification, or if the
Indemnified Person subsequently receives reimbursement from another source, such
as, without limitation, an insurance company.

                                  ARTICLE VIII
                                   DISSOLUTION

     8.1 Events of Dissolution. The Partnership shall dissolve upon, and only
upon, the following: (a) the date specified in its Certificate of Partnership;
(b) the sale or other transfer of all, or substantially all, of the assets of
the Partnership outside the ordinary course of business; (c) the unanimous
written consent of the Partners; or (d) any action that requires or results in
dissolution under the Act.

     8.2 Winding Up of Affairs. Upon dissolution of the Partnership, the General
Partner shall wind up the affairs of the Partnership. The General Partner shall
determine the time, place, manner and other terms of any sales involving the
Partnership's assets, with due regard to the financial condition of the
Partnership and the relevant market and economic conditions. No Partner shall
have the right to require an in-kind distribution of the assets of the
Partnership in lieu of any cash distribution.

     8.3 Final Distributions. Upon the winding up of the Partnership, and
subject to the requirements of the Act, the General Partner shall distribute the
assets of the Partnership in the following order of priority:

          (a) first, to any creditors of the Partnership, including any Partners
who are creditors;

          (b) second, to known and reasonably estimated costs of dissolution and
winding up;

                                      -5-

<PAGE>

          (c) third, to any reserves established by the General Partner, in its
sole discretion, for contingent liabilities of the Partnership; and

          (d) fourth, to the Partners, in proportion to the positive balances of
their respective Capital Accounts.

     8.4 Filing of Certificate of Cancellation. Following the winding up of the
Partnership, the General Partner shall be responsible for filing a Certificate
of Cancellation on behalf of the Partnership with the Delaware Secretary of
State, together with any other documents required to terminate the Partnership
and its legal existence.

                                   ARTICLE IX
                                 ADMINISTRATION

     9.1 Registered Agent and Specified Office. The Partnership shall
continuously maintain a registered agent and a specified office in accordance
with the Act. The General Partner shall be entitled to change the registered
agent and specified office from time to time, in its sole discretion, subject to
any requirements of the Act.

     9.2 Records. The Partnership shall keep accurate and complete information
and records at its specified office, including the information and records set
forth in Section 50-73.8 of the Act.

     9.3 Inspection. Upon prior notice to the Partnership of at least two (2)
business days, any Partner, and any designated agent or representative of a
Partner, shall be granted access to the books and records of the Partnership and
shall be entitled, during ordinary business hours, to inspect such books and
records and to make copies thereof at the expense of such Partner.

                                    ARTICLE X
                            MISCELLANEOUS PROVISIONS

     10.1 Notices. All notices and other communications with respect to this
Agreement shall be in writing and shall be delivered, as applicable, to the
Partnership at its specified office or to a Partner at the address and/or
facsimile number shown in the records of the Partnership. Each notice or other
communication that satisfies the requirements set forth above shall be deemed to
have been properly given or delivered: (a) on the fifth business day after being
mailed by United States certified mail, return receipt requested, postage
prepaid; (b) on the day when delivered by hand; (c) on the first business day
after being deposited with a national overnight courier; or (d) on the day when
transmitted by facsimile with confirmation of receipt or successful
transmission. A party to this Agreement may elect to receive notices or
communications at a different address by notifying each other party in
accordance with the preceding requirements.

                                      -6-

<PAGE>

     10.2 Governing Law. This Agreement shall be interpreted and enforced in
accordance with the laws of the Commonwealth of Virginia, without regard to any
provisions or principles relating to choice of law.

     10.3 Entire Agreement. This Agreement represents the entire agreement of
the parties with respect to the operation, management and governance of the
Partnership, and shall supersede all prior agreements, whether written or oral,
with respect to such matters.

     10.4 Modification and Waiver. Modifications of this Agreement shall not be
binding, valid or enforceable unless they are set forth in writing and are
signed by each of the parties. A party may unilaterally waive any of its rights
under this Agreement by delivering to each other party a written notice that
states the nature and scope of such waiver.

     10.5 Severable Provisions. All provisions in this Agreement are severable.
Each valid and enforceable provision shall remain in full force and effect,
regardless of any determination that is binding upon, or enforceable against,
the parties and that declares certain provisions to be invalid or unenforceable.

     10.6 Captions. Captions and headings are used in this Agreement for
convenience only and shall not affect the interpretation of this Agreement.
Terms such as "hereof," "hereby," "hereto," "herein" and "hereunder" shall be
deemed to refer to this Agreement as a whole, rather than to any particular
provision of this Agreement.

     10.7 Binding Effect. This Agreement shall be binding upon, and shall
operate to the benefit of, the parties and their permitted assignees and
successors in title or interest.

     10.8 Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original and all of which shall constitute, when taken
together, a single instrument.

                          [Next Page is Signature Page]

                                      -7-

<PAGE>

WITNESS the following signatures:

GENERAL PARTNER:                            AHM Res I GP, Inc.
---------------


                                            By: /s/ J. Philip Hart
                                                --------------------------------
                                                 J. Philip Hart
                                                 Vice President


LIMITED PARTNER:                            AHM Res I LP, Inc.
---------------


                                            By: /s/ J. Philip Hart
                                                --------------------------------
                                                 J. Philip Hart
                                                 Vice President

                                      -8-

<PAGE>

                                    EXHIBIT A
                (Capital Contributions and Percentage Interests)

                   Name and                   Capital         Percentage
                   Business Address           Contributions   Interests
                   ----------------           -------------   ----------

General Partner:   AHM Res I GP, Inc.             $ 1.00          1%
                   10 South Third Street
                   Richmond, Virginia 23219

Limited Partner:   AHM Res I LP, Inc.             $99.00         99%
                   10 South Third Street
                   Richmond, Virginia 23219