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            FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS
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FIRST UNION REAL ESTATE INVESTMENTS
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AT THE COMPANY                                               IN CLEVELAND
- --------------                                               ------------
Thomas T. Kmiecik                                            Patrick Gallagher
Senior Vice President                                        Edward Howard & Co.
(216) 781-4030                                               (216) 781-2400

FOR IMMEDIATE RELEASE

                FIRST UNION ANNUAL MEETING RECESSED FOR ONE WEEK
                ------------------------------------------------
                          TO VERIFY SHAREHOLDER BALLOTS
                          -----------------------------

CLEVELAND, OHIO, MAY 19, 1998 -- FIRST UNION REAL ESTATE INVESTMENTS (NYSE:FUR)
announced that today's annual meeting of shareholders had been recessed for one
week to provide sufficient time for the inspector of elections to verify all
shareholder ballots.

The Trust said the annual meeting would be resumed at 2:00 P.M. Eastern Time on
Tuesday, May 26, at Company headquarters, 55 Public Square, Cleveland.

First Union has been engaged in a proxy contest with Gotham Partners, L.P., a
New York-based hedge fund trying to gain control of the real estate investment
trust. At issue at the annual meeting are Gotham's proposals to increase the
size of the Trust's Board from nine to 15 and to elect nine of their nominees.

The Trust said that preliminary indications are that Gotham has enough votes to
carry each of the issues presented to the meeting.

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

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