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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
 
Filed by the Registrant  /X/
 
Filed by a Party other than the Registrant  / /
 
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
/ /  Definitive Additional Materials
/X/  Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12


 
                                  FIRST UNION
                (NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
 
                                  FIRST UNION
    (NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
 
Payment of Filing Fee (Check the appropriate box):
/ /  $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
     Item 22(a)(2) of Schedule 14A.
/ /  $500 per each party to the controversy pursuant to Exchange Act Rule
     14a-6(i)(3).
/ /  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:
               Not Applicable
 
     (2) Aggregate number of securities to which transaction applies:
               Not Applicable
 
     (3) Per unit price or other underlying value of transaction computed
         pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
         filing fee is calculated and state how it was determined):
               Not Applicable
 
     (4) Proposed maximum aggregate value of transaction:
               Not Applicable
 
     (5) Total fee paid:
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/X/  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:
               Not Applicable
 
     (2) Form, Schedule or Registration Statement No.:
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     (3) Filing Party:
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     (4) Date Filed:
               Not Applicable
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         IMPORTANT NOTICE TO FIRST UNION SHAREHOLDERS FROM THE COMPANY
 
                                    March 3, 1995
 
Dear Fellow Shareholder:
 
     You are probably already aware that Richard M. Osborne and his dissident
group, who call themselves the "Committee to Unlock the Value of First Union
Real Estate Investments," have commenced a proxy battle in an attempt to take
control of your Company. Mr. Osborne, who has been called a "predator" by the
news media, has a consistent investment history, typically buying significant
shares in a public company, threatening to take control, and shortly thereafter
selling out at a premium to the company itself or an acquirer. Though he has
grown wealthy on "greenmail," we do not intend to offer him any such
opportunity.
 
                  WHO IS THE "COMMITTEE TO UNLOCK THE VALUE OF
                     FIRST UNION REAL ESTATE INVESTMENTS"?
 
     In actuality, this group is the Turkey Vulture Fund XIII, Ltd., the same
group of at least seventeen different individuals and entities that was formed
November 22, 1994, and has since accumulated over 982,500 First Union shares.
Please remember that the members of "Vulture Group" are not long-term
shareholders. In fact, they are "corporate raiders" who have purchased their
shares on margin in hopes that the share price will rise so they can sell and
make a quick profit.
 
                        HOW WILL THEY ATTEMPT TO MISLEAD
                           FIRST UNION SHAREHOLDERS?
 
     Osborne or his "Vulture Group" will no doubt contact you in an attempt to
coerce you to elect his slate of trustees. Furthermore, it is very likely he
will try to mislead you and discredit the accomplishments made by your new
management team during 1994. He will accuse your Company of filing a
"mean-spirited lawsuit" against him. This lawsuit would not have been necessary
if Osborne and the "Vulture Group" had disclosed to you its true intentions and
ownership stake, as required by federal law, in his original 13(d) filing with
the Securities and Exchange Commission. Your entire Board of Trustees has
serious concerns about the motives of Osborne and his cohorts. These concerns
range from the false information he filed with the Securities and Exchange
Commission to his reputation as a "corporate raider" interested only in quick
profits for himself.
 
                       WHAT IS THE "VULTURE GROUP'S" PLAN
                         TO INCREASE SHAREHOLDER VALUE?
 
     To date, Osborne has not presented any long-term business plan for your
Company. Nor has he named any trustee candidates who are experienced in real
estate investment trust management. However, in his communications with you, he
will ask you to support the "Vulture Group's" scheme. The only business plan
Osborne has offered to date is to change management and elect himself and the
dissidents to the board, in spite of the fact that they have little or no
experience in running a publicly owned real estate company.
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     All of us as long-term shareholders are very aware of the stock's price
performance over the past three years. However, what Osborne purposely fails to
acknowledge is that the new management team has already set in place a Strategic
Plan to address this issue. As you may recall, five of our Trustees have joined
the Board since 1991, and many of the members of our senior management are
experts in real estate who have been in place only since I became Chairman and
CEO in January 1994. IN FACT, IN THE SHORT TIME THE NEW MANAGEMENT TEAM HAS BEEN
PURSUING ITS PLAN, YOUR COMPANY'S SHAREHOLDERS' EQUITY HAS INCREASED 28%, WHILE
PER SHARE NET BOOK VALUE HAS INCREASED 23%.
 
     Most importantly, we have repositioned your Company for continuing
improvement by implementing a tightly focused strategy. That strategy and some
of these accomplishments include:
 
- - IMPROVING PROPERTY NET OPERATING INCOME -- As a result of our restructuring
  program and repositioning of the Trust, property NOI increased in 1994,
  reversing a four-year decline that preceded the change in management.
 
- - SIGNING LEASES WITH KEY TENANTS -- We executed leases with many well-known
  tenants, including Wal-Mart, Kmart, Montgomery Ward, The Limited, Party Depot,
  Hardees, Pizza Hut, Mid-Continent Theaters, and NBC-WKYC Television.
 
- - MAKING NECESSARY CAPITAL EXPENDITURES -- Strategic capital expenditures in
  retail and apartment properties have positioned the Trust for rental increases
  which will ultimately generate future dividend growth.
 
- - REPOSITIONING THE PORTFOLIO -- We are focusing our activities in three
  high-growth regions -- the Southeast, Upper Midwest and Pacific Northwest --
  and plan to concentrate on consumer-driven real estate assets by growing our
  portfolio of retail and apartment properties. We are making strategic
  acquisitions, such as the Beech Lake Apartments in Durham, North Carolina, and
  selling non-strategic properties.
 
- - SELLING NON-STRATEGIC PROPERTIES -- We realized a gain of $30 million in 1995
  as a result of selling the only two shopping malls that we did not manage or
  control, also resolving lengthy and costly litigation.
 
- - REORGANIZING MANAGEMENT -- We reorganized the management of the Trust into
  separate business divisions for retail, apartment and office property
  operations, allowing us to pursue specific aspects of our new five-year
  Strategic Plan.
 
- - RESTRUCTURING BANK DEBT AND IMPROVING LIQUIDITY -- We renegotiated our $60
  million credit line, which improved our liquidity and avoided installment
  payments totaling $48 million over the next four years.
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     In summary, First Union's new management team has repositioned your Company
to generate significant growth in 1995 and beyond. Your Board of Trustees
remains committed to its Strategic Plan of maximizing shareholder value through
operating improvements that will result in share price appreciation and dividend
growth. Execution of this plan includes: improving the occupancy and performance
of our existing portfolio; making key capital improvements; targeting strategic
acquisitions and property sales; and reducing the high debt levels of the Trust
by infusing greater equity into the Company. I strongly urge you to review our
upcoming 1994 Annual Report and Proxy Statement, which elaborate on 1994's
achievements and reemphasize the Company's strategic focus.
 
     Please feel free to contact me if you should have any questions about this
important matter.
 
     THE BOARD OF TRUSTEES URGES YOU TO REJECT THIS DISSIDENT GROUP AND NOT
RETURN ANY PROXY CARD UNTIL YOU RECEIVE MANAGEMENT'S WHITE PROXY CARD. THE
TRUST'S PROXY STATEMENT AND 1994 ANNUAL REPORT WILL BE MAILED TO YOU SOON.
 
                                        SINCERELY,
                                        JAMES C. MASTANDREA
                                        CHAIRMAN & CHIEF EXECUTIVE OFFICER
 
                                   IMPORTANT
 
       1) Be sure to vote only on management's WHITE PROXY CARD. We urge
          you not to sign any other color proxy card.
 
       2) If you have any questions about voting your shares or want
          further information, please contact us or our proxy solicitor.
 
                      FIRST UNION REAL ESTATE INVESTMENTS,
                 THOMAS T. KMIECIK, VICE PRESIDENT -- TREASURER
                  (800) 394-4030 OR COLLECT AT (216) 781-4030
 
                    CORPORATE INVESTOR COMMUNICATIONS, INC.
                  (800) 346-7885 OR COLLECT AT (201) 896-1900.
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                                   IMPORTANT
 
       1) Be sure to vote only on management's WHITE PROXY CARD. We urge
          you not to sign any other color proxy card.
 
       2) If you have any questions about voting your shares or want
          further information, please contact us or our proxy solicitor.
 
                      FIRST UNION REAL ESTATE INVESTMENTS,
                 THOMAS T. KMIECIK, VICE PRESIDENT -- TREASURER
                  (800) 394-4030 OR COLLECT AT (216) 781-4030
 
                    CORPORATE INVESTOR COMMUNICATIONS, INC.
                  (800) 346-7885 OR COLLECT AT (201) 896-1900.