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            FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS
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FIRST UNION MANAGEMENT, INC.
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AT THE COMPANY           IN CLEVELAND           IN CHICAGO               IN NEW YORK
- --------------           ------------           ----------               -----------
                                                            
Thomas T. Kmiecik        Stanley L. Ulchaker    Peter Wentz           Arthur Gormley
Senior Vice President    Edward Howard & Co.    Dilenschneider Group  Dilenschneider Group
(216) 781-4030           (216) 781-2400         (312) 553-0700        (212) 922-0900


FOR IMMEDIATE RELEASE

             FIRST UNION MANAGEMENT INC. TO CONVERT TENNESSEE MALL
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                  INTO TELECOMMUNICATIONS AND BUSINESS CENTER
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CLEVELAND, OHIO, MAY 8, 1998 - FIRST UNION MANAGEMENT, INC., today announced
plans to transform a substantial portion of the Two Rivers Mall in Clarksville,
Tennessee, into a telecommunications and business center.

First Union Management, which operates the Two Rivers Mall, is the affiliated
management company of First Union Real Estate Investments (FUR:NYSE).

"We are pleased to have received so much positive support for this concept from
community leaders in Clarksville and such encouraging feedback from the various
businesses that have toured the premises," said Dan Nixon, executive vice
president of First Union Management.

Plans indicate that 100,000 contiguous square feet at the facility will be
offered to call centers and other telecommunications companies. "It's wonderful
that the Two Rivers location will be utilized for these types of businesses. 
We're delighted about the prospects of growing our corporate community," said
Clarksville Mayor Don Trotter.

Nixon noted several reasons for converting the retail space, "Not only does
First Union have a very accommodating facility for telecommunications
businesses; but Clarksville also has an outstanding and plentiful labor force in
addition to great amenities such as the adjacent RiverWalk project."

First Union Real Estate Investments is a unique stapled-stock real estate
investment trust (REIT) headquartered in Cleveland, Ohio, and traded on the
New York Stock Exchange.

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