First Union Announces New York Court Hearing Concluded On Preferred Holder Allegations Regarding Proposed Merger; Court Orders Briefing Prior to Decision.

Business Editors

NEW YORK--(BUSINESS WIRE)--Dec. 3, 2002

First Union Real Estate Equity and Mortgage Investments (NYSE: FUR) announced today that the New York Supreme Court of New York County concluded the hearing that commenced on November 26.

The hearing related to a motion for injunction filed by a purported holder of shares of First Union's Series A Cumulative Convertible Redeemable Preferred Stock, $25.00 par value (the "Preferred Shares") in connection with the proposed merger of First Union with and into Gotham Golf Corp. The court has ordered the parties to file closing argument briefs by Thursday, December 5. Thereafter, the court will determine whether to grant further relief to plaintiff with respect to the proposed transaction and has indicated that the parties may expect a ruling by December 10, 2002. The temporary injunction barring the transaction will remain in effect until the court issues its ruling. The closing of the proposed merger transaction is scheduled to occur on December 12, 2002. In the event that the closing of the proposed merger transaction is enjoined, First Union common shareholders will be free to withdraw their share certificates, letters of transmittal and cash submitted in anticipation of receipt of merger consideration, including shares of Gotham Golf Corp or other debt securities.

The plaintiff in the case, George Kimeldorf, filed a lawsuit in April 2002, seeking the court's certification of the lawsuit as a class action and certifying Mr. Kimeldorf as a representative of the class. Named as defendants in the lawsuit were First Union, its five current trustees and Gotham Partners, L.P. First Carolina Investors, a holder of Preferred Shares, recently filed a separate lawsuit in the New York Supreme Court for New York County.

Materials with respect to the merger approval have been filed with the Securities and Exchange Commission and were sent to the First Union shareholders in early November. As previously announced, the Company's common shareholders approved the merger at a reconvened special meeting on November 27, 2002. In the proposed merger transaction, holders of Preferred Shares would receive preferred shares of Gotham Golf Corp, as provided for under the terms of the Preferred Shares.

The Company indicated that it will oppose any attempts by the plaintiffs to delay or interfere with the scheduled closing of the proposed merger transaction.

INVESTORS AND SECURITY HOLDERS SHOULD READ THE DEFINITIVE MERGER AGREEMENT AND THE REGISTRATION STATEMENT ON FORM S-4, AS AMENDED, OF GOTHAM GOLF AND SOUTHWEST SHOPPING CENTERS CO. II, LLC ("SSCC") FILED ON OCTOBER 31, 2002, TO APPRISE THEMSELVES OF THE PROPOSED TRANSACTION. IN ADDITION, INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT/FINAL PROSPECTUS REGARDING THE PROPOSED TRANSACTION REFERENCED IN THE FOREGOING BECAUSE IT CONTAINS IMPORTANT INFORMATION. The definitive proxy statement/final prospectus has been filed with the Securities and Exchange Commission by First Union, Gotham Golf and SSCC and was mailed to First Union's shareholders on or about November 6, 2002. Investors and security holders may obtain a free copy of the definitive proxy statement/final prospectus and other documents filed by First Union, Gotham Golf and SSCC with the Securities and Exchange Commission at the Commission's website at www.sec.gov. The definitive proxy statement/final prospectus and these other documents may also be obtained for free from First Union.

The definitive proxy statement/final prospectus filed on October 31, 2002 may be found at the Commission's website under the listings for either Gotham Golf Corp. or Southwest Shopping Centers Co. II, L.L.C.

Certain statements contained in this news release that are forward-looking are based on current expectations that are subject to a number of uncertainties and risks, and actual results may differ materially. The uncertainties and risks include, but are not limited to, changes in market activity, changes in local real estate conditions and markets, actions by competitors, interest rate movements and general economic conditions. Further information about these matters can be found in the information included in the Annual Report filed by First Union with the SEC on Form 10-K, as amended, for its fiscal year ended December 31, 2001.

First Union Real Estate Equity and Mortgage Investments is a NYSE-listed stapled-stock real estate investment trust (REIT) headquartered in New York, New York.