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                                  SCHEDULE 14A
                                   (RULE 14a)
                    INFORMATION REQUIRED IN PROXY STATEMENT
                            SCHEDULE 14A INFORMATION
          PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
                              EXCHANGE ACT OF 1934
 
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[X]  Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12


 
            FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS
                (NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
 

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FIRST UNION REAL ESTATE INVESTMENTS
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AT THE COMPANY                                       IN CLEVELAND, OHIO   IN CHICAGO            IN NEW YORK
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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

                       SHAREHOLDER ASSOCIATION RECOMMENDS
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                    VOTE AGAINST GOTHAM BOARD-PACKING SCHEME
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CLEVELAND, OHIO, MAY 11, 1998 -- FIRST UNION REAL ESTATE INVESTMENTS (NYSE:FUR)
today announced that it has received a copy of the vote recommendation of
Independent Shareholder Services (ISS) in First Union's proxy contest with
Gotham Partners. ISS recommends that shareholders vote against expansion of 
First Union's Board and against the election of six Gotham nominees to new 
seats. The report also cites the lack of a "chartered course" in Gotham's 
action plan for the Company. The report concludes, "Considering the 
incongruity of its action plan for the Company, ISS does not believe 
shareholder interests would best be served by ceding complete control of 
First Union to Gotham."

A committee of independent Trustees of First Union responds to the ISS report
by urging Gotham to accept the Committee's proposal to put representatives from
four large shareholders on the board, including one from Gotham. Russell R.
Gifford, chair of the special committee, said, "The ISS report recommends that
Gotham should have a minority position on the board, in line with its 
holdings. We agree and have been trying to settle this matter by creating a 
consensus board including representatives from Gotham, Apollo, Cerberus and 
one other, as well as a fifth independent real estate expert, and four 
existing Trustees. Gotham has rejected this idea, but we urge them to work 
with us to resolve this matter in a way that benefits all shareholders, 
not just one."

Mr. Gifford continued, "As the ISS report properly points out, Gotham apparently
does not want a truly independent board; we believe it just wants control of the
company, as evidenced by the fact that all nine of its director nominees are
employees, limited partners or affiliates of Gotham. This concern, and its lack
of an action plan for the Company makes us believe that Gotham has not
demonstrated it can effectively manage the Trust."


                                    (more)

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Mr. Gifford also said, "As an association of institutional investors, ISS is
totally independent from the Company, and its report reflects a balanced view.
It praises management for 'turning the company around from its muddled state of
affairs in 1993' but also says Gotham has 'expertise in the transactional end of
the business.' But the report concludes that Gotham's contribution could be
effective from 'a minority position in line with its level of shareholdings.'
Although we believe there is evidence Gotham has overstepped the bounds of
federal and state securities laws, we also believe a board that includes
representation of several minority shareholders is in the interest of the
Company and its long-term shareholders."

Firs 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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