First Union Real Estate Investments Announces Terms of Rights Offering.

CLEVELAND, Ohio--(BUSINESS WIRE)--April 19, 1999--

First Union Real Estate Investments (NYSE:FUR) today announced the terms of its rights offering.

The Trust will distribute to each record holder of the Trust's shares of beneficial interest ("Common Shares"), as of the close of business on April 21, 1999, the record date, one non-transferable right for every 2.5 Common Shares held. Each right allows the holder to purchase one Common Share at the $4.00 subscription price. The size of the rights offering is approximately $50.2 million.

Record holders will also have an oversubscription privilege permitting them to purchase Common Shares that are not subscribed for through the exercise of rights. Any rights holder who exercises in full its basic subscription without going over the 9.8% ownership limit may also oversubscribe at the same subscription price for additional Common Shares not otherwise purchased by others through the exercise of rights, up to the 9.8% ownership limit.

Gotham Partners, L.P. and its affiliates, shareholders of the Trust, have agreed to purchase at the $4.00 subscription price per share any Common Shares not purchased through the exercise of rights or the oversubscription privilege, up to a total of 12.5 million Common Shares having a total subscription price of up to $50 million.

A registration statement relating to the Rights and the underlying Common Shares has been filed with the Securities and Exchange Commission ("SEC"). This press release shall not constitute an offer to sell or the solicitation of an offer to buy the securities described above, nor shall there be any sale of those securities in any jurisdiction in which an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of that jurisdiction.

The Rights offering will be made only by means of a prospectus. A copy of the registration statement containing a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended, may be obtained through the World Wide Web at http://www.sec.gov or by contacting us at 55 Public Square, Suite 1900, Cleveland, Ohio 44113-1937, Attention: Jeanne Gibson (telephone number: [phone] ext. 1039).

ANNUAL MEETING

First Union welcomes all shareholders to attend the Annual Meeting of Shareholders at 10:00 a.m. EST on Monday May 17, 1999, in the Regent Parlor Room at the Hilton New York Towers located at 1335 Avenue of the Americas (53rd and 54th Streets), New York, NY 10019.

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