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               [FIRST UNION REAL ESTATE INVESTMENTS LETTERHEAD]

FOR IMMEDIATE RELEASE
October 24, 1996


                 FIRST UNION REAL ESTATE INVESTMENTS ANNOUNCES
                      $50 MILLION PREFERRED SHARE OFFERING


Cleveland, Ohio, October 24, 1996 - First Union Real Estate Investments 
(NYSE:FUR), a leading property repositioning REIT, today announced the public
offering of 2,000,000 shares of its 8.4% Series A Cumulative Convertible
Redeemable Preferred Shares at a price of $25.00 per share.  The offering was
underwritten by Sutro & Co. Incorporated, as lead manager, with BT Securities
Corporation and Tucker Anthony Incorporated as co-managers.  First Union (the
Trust) also granted the underwriters the option to purchase 300,000 additional
shares of the offering to cover over-allotments.

The Series A Preferred Shares are convertible, at the option of the
shareholder, into common shares at the conversion price of $7.5625 per common
share, which represents a 10% premium.  After October 29, 2001, the Shares will
be redeemable, in whole or in part, at a rate of 3.31 common shares for each
Series A Preferred Share, when the common share price exceeds the conversion
price. 

Commenting on the offering, James C. Mastandrea, chairman and chief executive
officer of First Union Real Estate Investments, said, "This is the first time
that First Union has been to the equity market since 1977.  The successful
completion of this offering, reflected by the favorable pricing and strong
demand, is evidence that the market supports our strategic plan to reposition
assets to maximize total return to shareholders.  The proceeds of the offering
will be used to substantially clear the outstanding balance on our $96 million
line of credit which will enhance financial flexibility and allow us to pursue
additional acquisitions."

This press release does not constitute an offer to sell or the solicitation of
an offer to buy securities.  Such offers may be made only by means of a
prospectus, copies of which may be obtained from the Trust, or the
underwriters. 

First Union Real Estate Investments (NYSE:FUR) is an equity real estate
investment trust (REIT) specializing in repositioning real estate to extract
intrinsic value.


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