8-K

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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

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                                    FORM 8-K

                 CURRENT REPORT PURSUANT TO SECTION 13 OR 15 (d)
                   OF THE SECURITIES AND EXCHANGE ACT OF 1934

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Date of Report: June 17, 1998
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             First Union Real Estate Equity and Mortgage Investments
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             (Exact name of registrant as specified in its charter)

         Ohio                         1-6249                    34-6513657
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State or other jurisdiction   (Commission File Number)       (I.R.S. Employer
                                                            Identification No.)

    Suite 1900, 55 Public Square
           Cleveland, Ohio                                    44113-1937
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(Address of principal executive offices)                      (Zip Code)



Registrant's telephone number, including area code:         (216) 781-4030
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Former name or former address, if changed since last report.




Total number of pages in report: 2





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ITEM 5. OTHER EVENTS.
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         On June 15, 1998 the Registrant issued a press release reporting
certain anticipated financial events and actions taken by its Board of Trustees.

ITEM 7.  EXHIBITS.
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         99                Press Release dated June 15, 1998 reporting certain
                           anticipated financial events and actions taken by the
                           Registrant's Board of Trustees.






                                   SIGNATURES
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         Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.



                                           First Union Real Estate Equity
                                             and Mortgage Investments
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                                                      (Registrant)



Date:    June 17, 1998                     By: /s/ Paul F. Levin
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                                                   Paul F. Levin
                                                   Senior Vice President
                                                   Secretary and General Counsel

EX-99

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                                                                      Exhibit 99

FIRST UNION REAL ESTATE INVESTMENTS
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AT THE COMPANY
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Steven M. Edelman
Interim Chief Executive Officer
(216) 781-4030


FOR IMMEDIATE RELEASE


             FIRST UNION REPORTS ANTICIPATED LOSS IN SECOND QUARTER;
                  SUSPENDS SECOND QUARTER COMMON SHARE DIVIDEND
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CLEVELAND, OHIO, JUNE 15, 1998 - FIRST UNION REAL ESTATE INVESTMENTS (NYSE:FUR)
today reported the following: (Note: A conference call will take place today at
4:00 p.m. EDT. Please refer to the invitation to participate at the end of this
release.)

The Trust expects income from operations for the second quarter to result in a
loss of approximately $18.8 million, or $.60 per share, due to, among other
things, extraordinary expenses recognized in the second quarter of the year of
approximately $17.5 million incurred in connection with the recent proxy fight
and in connection with the change-in-control that occurred resulting from the
former Trustees' unwillingness to approve the nomination or election of the
nominees proposed by Gotham Partners, L.P. These expenses include the following
approximate amounts:

$3.2  million for the Trust's proxy expenses and fees.

$3.4 million in cash severance to former Chairman and Chief Executive Officer,
James C. Mastandrea, on May 18th, and vesting of 128,000 shares of restricted
stock.

$5.0 million due to lifting of restrictions on restricted shares, which followed
the Trust's change in control.

$2.25 million reserve for loss on a contract to purchase a San Diego parking
facility.

$3.1 million reserve for reimbursement of Gotham Partners, L.P.'s proxy expenses
and legal fees. Gotham has agreed to postpone without interest its receipt of
its reimbursement until the Trust's financial condition has improved.

The Board announced that on Friday, June 12, 1998, the Trust received a notice
of default from National City Bank, the administrative agent for the lenders
under the Trust's $125 million credit facility, under which the Trust has drawn
approximately $100 million.

The lenders under the Trust's $125 million credit facility have proposed a
waiver of the change of control in exchange for a fee. The Trust is currently in
discussion with these lenders to negotiate an acceptable waiver.

The Board also announced that the Imperial Parking subsidiary of First Union
Management, Inc. reported that it was in technical default of financial
covenants under an approximately $25 million (U.S.) credit

                                     (more)


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facility largely due to losses at Imperial's VenTek manufacturing subsidiary.
The Imperial Parking lenders have proposed a six-month waiver of these financial
covenants in exchange for a 0.25% fee. Imperial Parking is currently in
discussion with these lenders regarding an acceptable waiver.

Bill Ackman, Chairman of First Union, indicated that he was confident that the
Trust would succeed in renegotiating and/or replacing the Trust's outstanding
credit facilities, stating, "We are currently in discussions with the Trust's
lenders about obtaining a waiver and extension of the Trust's debt obligations.
We are simultaneously seeking replacement financing for these obligations in the
event we are unsuccessful in negotiating with the Trust's lenders. While we have
had significant interest from potential new lenders to the Trust, we have not
yet negotiated suitable replacement financing."

In light of the Trust's anticipated quarterly results and its financial
condition, the Board of Trustees has voted unanimously to suspend the Trust's
quarterly dividend. In addition, the Board announced a new dividend policy. The
Trust intends to suspend its program of quarterly common dividends and to adopt
a policy of making only the minimum required distributions to maintain REIT
status. In order to facilitate this approach, the Trust will make annual
dividend distributions at the end of each calendar year of the Trust. Under this
new policy, the Trust will be able to estimate more accurately the minimum
amount of dividends required to maintain the Trust's REIT status in order to
maximize the amount of capital retained for operations or future acquisitions.
Based on current estimates of 1998 Trust taxable income, the Trust does not
anticipate any additional common dividend distributions this year. The Board did
declare a quarterly dividend for its Series A Cumulative Convertible Preferred
Shares of $.525 for the second quarter ended June 30, 1998. The dividend is
payable July 31, 1998 to preferred shareholders of record June 30, 1998.

The Board is analyzing all of the Trust's assets to assess their ongoing
potential to contribute to shareholder value. As part of this process, the Trust
has decided not to close on an uneconomic contract to purchase a parking
structure near the San Diego, California airport. The Trust has a deposit of
$2.25 million at risk. The Trust's attorneys are reviewing its rights and
options under the contract, however, there is a reasonable likelihood that the
Trust will lose some or all of its deposit.

The Board of Trustees has elected William A. Ackman as Chairman and David P.
Berkowitz as Vice Chairman. The Board's Executive Committee consists of Mr.
Ackman, Chairman, Mr. Berkowitz, Stephen J. Garchik, Mary Ann Tighe and James A.
Williams. The Board's Audit Committee consists of Daniel Altobello, Chairman,
Mr. Berkowitz and Allen Ford. The Board has created a Special Litigation
Committee to review possible claims against former Trustees and others due to
their past conduct. That committee consists of David S. Klafter, Chairman,
Steven S. Snider and James A. Williams.

Besides the people mentioned above, the Trustees also include William E. Conway,
Allen H. Ford, Russell R. Gifford and Daniel Shuchman. Except for Messrs.
Gifford, Ford and Conway, all other prior Trustees have resigned.

The Interim Chief Executive Officer of the Trust is Chief Financial Officer,
Steven M. Edelman. The Board is in discussions with a number of potential CEO
candidates and is continuing an active search for a new Chief Executive Officer.

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The Board has discharged Squire, Sanders & Dempsey and Thompson, Hine & Flory as
counsel and retained Hahn, Loeser & Parks LLP and Fried Frank Harris Shriver &
Jacobson LLP. The new counsel will work with the exiting counsel to ensure a
smooth transition.

The statements contained in this news release that are forward-looking are based
on current expectations that are subject to a number of uncertainties and risks,
and actual results may differ materially. The uncertainties and risks include,
but are not limited to, changes in market activity, changes in local real estate
conditions and markets, actions by competitors, interest rate movements and
general economic conditions. Further information about these matters can be
found in the information included in the Annual Report filed by the company with
the SEC on Form 10K.

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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A CONFERENCE CALL WILL BE HELD TODAY, JUNE 15, 1998 AT 4:00 P.M. EST. ALL
SHAREHOLDERS ARE WELCOME TO PARTICIPATE BY DIALING #212-748-2220. PLEASE REFER
TO PASSWORD "CURRENT EVENTS". THERE WILL BE A TAPED REPLAY OF THIS CONFERENCE
CALL BEGINNING TUESDAY, 9:00 A.M., JUNE 16 THROUGH FRIDAY, JUNE 19 AT 5:00 P.M.
EST. YOU MAY LISTEN TO THIS TAPED REPLAY BY DIALING #913-385-6780, REFER TO PIN
NUMBER #2002.