SCHEDULE 14A

                               (RULE 14A-101)
                  INFORMATION REQUIRED IN PROXY STATEMENT
                          SCHEDULE 14A INFORMATION
        PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
                   EXCHANGE ACT OF 1934 (Amendment No. )

      Filed by the registrant |_|
      Filed by a party other than the registrant |X|

      Check the appropriate box:
      |_|   Preliminary proxy statement   |_|   Confidential, for Use of the
                                                Commission Only (as permitted 
                                                by Rule 14a-6(e)(2))
      |_|   Definitive proxy statement
      |X|   Definitive additional materials
      |_|   Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12

          First Union Real Estate Equity and Mortgage Investments
          -------------------------------------------------------
              (Name of Registrant as Specified in Its Charter)

                           Gotham Partners, L.P.
          -------------------------------------------------------
                  (Name of Person Filing Proxy Statement)

Payment of filing fee (Check the appropriate box):

      |X|   No fee required.
      |_|   Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
            and 0-11.

      (1)   Title of each class of securities to which transaction applies:

      (2)   Aggregate number of securities to which transactions applies:

      (3)   Per unit price or other underlying value of transaction computed
            pursuant to Exchange Act Rule 0-11:

      (4)   Proposed maximum aggregate value of transaction:

      |_|   Fee paid previously with preliminary materials.
      |_|   Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.

      (1)   Amount previously paid:

      (2)   Form, schedule or registration statement no.:

      (3)   Filing party:

      (4)   Date filed:



For Immediate Release
- ---------------------

Contacts:   Bill Ackman       or    George Sard/David Reno/Fred Bratman
            David Berkowitz         Sard Verbinnen & Co
            Gotham Partners         (212) 687-8080
            (212) 286-0300


             GOTHAM DENIES FIRST UNION REAL ESTATE ALLEGATIONS;
                    SAYS IT HAS ALERTED SEC OF POSSIBLE
                    PROXY RULE VIOLATIONS BY FIRST UNION

          NEW YORK, MAY 18, 1998 -- Gotham Partners today emphatically
denied allegations made by First Union Real Estate (NYSE:FUR) against
Gotham, and said that it has alerted the Securities and Exchange Commission
to possible violations by First Union of the Federal proxy rules.

          In an apparent act of desperation, First Union, its Board of
Trustees, and senior management have continued to issue false and
misleading accusations against Gotham in an effort to discredit Gotham and
to distract shareholders from First Union's poor business and share price
performance. First Union's false allegations are a clear attempt to
influence the votes of shareholders at the May 19 Special Meeting. While it
may be difficult to stop a public company from making baseless accusations
in a public forum, the making of false and misleading statements during a
proxy contest is a clear violation of the Federal securities laws. Gotham
has therefore brought this matter to the attention of the Securities and
Exchange Commission to require First Union to correct the public record.

          Among other accusations, First Union has alleged that Gotham has
engaged in "frivolous conduct" in making an application to an Ohio court on
May 14, 1998 to insure that Gotham be allowed to present, and that
shareholders be allowed to vote upon, Gotham's proposal and nominations at
the Company's Special Meeting tomorrow, May 19, 1998.

          In fact, Gotham was forced to act out of concern with statements
made in First Union's proxy statement that led Gotham to believe that
management might illegally attempt to prevent the consideration of Gotham's
proposal and nominations at the May 19 Special Meeting. Previously, Gotham
had sought assurance from First Union that Gotham's proposal and
nominations would be presented at the meeting. Unfortunately, First Union
would not supply this assurance. In a draft agreement relating to
procedures for the Special Meeting that Gotham had proposed to First Union,
First Union actually deleted a provision stating that Gotham had the right
to vote its shares and make its proposals at the meeting. As a result of
First Union's intransigence, Gotham sought an order from the Court to
insure that shareholders would be given the right to vote on the course of
the Company at tomorrow's meeting.

          On May 14, 1998, in the course of considering Gotham's
application, the Court referenced the final paragraph of its opinion on
March 27, 1998, in which the Court stated:

          The evidence adduced at this hearing demonstrated that
          the efforts of First Union's management following
          Gotham's July 14, 1997 letter were primarily motivated
          by a desire to derail Gotham's efforts to change the
          Company's course and replace top management. First
          Union's management's efforts to disenfranchise Gotham
          do not appear to be designed to protect First Union's
          REIT status but rather management. All the shareholders
          should have a fair opportunity to decide the direction
          of their corporation at the ... meeting.

          The Judge also referenced the record of the hearing on March 31,
at which the court ruled that any violation of his order of that date,
which included the holding of the May 19 Special Meeting, with no further
postponements, would be subject to a contempt hearing. First Union's claim
in a recent press release that the Court had denied Gotham's motion is
false. Based on assurances to the Court by First Union that it would permit
the Gotham proposal and nominations to be presented at the Special Meeting
and would allow Gotham to vote all shares it held on the record date, the
Court did not rule on Gotham's motion regarding the procedures.

          In a separate claim, the Company stated in a May 14 press release
that "it's appalling to learn that Bear Stearns, Gotham's brokerage house,
may have gone so far to "borrow" stock on the record date to increase its
votes without having to actually buy shares." The statement is cleverly
drafted to imply that Gotham was involved in such activity. This is totally
false. Gotham has not borrowed any shares and has no knowledge of any such
"borrowing." In fact, prior to the issuance of First Union's press release,
representatives of Gotham had informed First Union that it had not borrowed
any shares nor had any knowledge of such borrowings. Despite this, First
Union went ahead with its false allegations.

          First Union's May 14 press release also falsely alleged that
Gotham's recent demands indicated that it wants the Trustees to hand over
control of First Union without a contest. Actually, it is the so-called
"Independent Committee" of First Union's Board of Trustees that has been
making proposals to Gotham that would forestall the right of the
shareholders to determine the future of the Company. Gotham will not
preempt the shareholders from making this determination at tomorrow's
Special Meeting.

          First Union's senior management and Board of Trustees have
repeatedly shown that they value their own interests ahead of the interests
of shareholders. In order to restore credibility to the Company and value
for shareholders, the Gotham nominees have pledged to re-focus the
priorities of First Union if elected, and to retain new senior management
who will work diligently to create value for shareholders.

          Gotham has proposed expanding First Union's Board of Trustees
from nine to 15 members, and has nominated a slate to fill the nine seats
that would be up for election at the May 19 Special Meeting if the proposal
is adopted.

          Gotham Partners is a private investment partnership. First Union
is a stapled-stock real estate investment trust (REIT).

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