SC 13D/A

 


                          SCHEDULE 13D  
  
            Under the Securities Exchange Act of 1934  
                        (Amendment No. 2)  
                                  
       First Union Real Estate Equity and Mortgage Investments              
                         (Name of Issuer)  
                                  
             Shares of Beneficial Interest, $1.00 par value                
                   (Title of class of securities)  
                                  
                            337400105                          
                         (CUSIP Number)  
                                  
                      Stephen Fraidin, P.C.  
              Fried, Frank, Harris, Shriver & Jacobson  
                         One New York Plaza  
                    New York, New York  10004  
                         (212) 859-8140  
  
   (Name, address and telephone number of person authorized to  
               receive notices and communications)  
                                  
                        July 24, 1997  
     (Date of event which requires filing of this statement)  
                                  
If the filing person has previously filed a statement on Schedule  
13G to report the acquisition which is the subject of this  
Schedule 13D, and is filing this schedule because of Rule 13d-  
1(b)(3) or (4), check the following box [ ].  
  
Check the following box if a fee is being paid with the statement  
[ ].  (A fee is not required only if the reporting person: (1)  
has a previous statement on file reporting beneficial ownership  
of more than five percent of the class of securities described in  
Item 1; and (2) has filed no amendment subsequent thereto  
reporting beneficial ownership of five percent or less of such  
class.)  (See Rule 13d-7.)  
  
Note:  Six copies of this statement, including all exhibits,  
should be filed with the Commission.  See Rule 13d-1(a) for other  
parties to whom copies are to be sent.  
  
* The remainder of this cover page shall be filled out for a  
reporting person's initial filing on this form with respect to  
the subject class of securities, and for any subsequent amendment  
containing information which would alter disclosures provided in  
a prior cover page.  
  
The information required on the remainder of this cover page  
shall not be deemed to be "filed" for the purpose of Section 18  
of the Securities Exchange Act of 1934 ("Act") or otherwise  
subject to the liabilities of that section of the Act but shall  
be subject to all other provisions of the Act (however, see the  
Notes).  




                          SCHEDULE 13D  
  
CUSIP No. 337400105                                 Page 2 of 3 Pages  
                                                       
 This Amendment No. 2 amends and supplements the statement on 
Schedule 13D (the "Schedule 13D") filed by Gotham Partners, L.P. and Gotham 
Partners II, L.P. (Gotham  Partners, L.P. and Gotham Partners II, L.P. are 
collectively referred to hereinafter as the "Reporting Persons"), relating to 
shares of Beneficial Interest, par value $1.00 per share, of First Union Real 
Estate Equity and Mortgage Investments, an Ohio business trust (the 
"Company").  
1.	Item 4 of the Schedule 13D, "Purpose of the Transaction," is 
hereby amended by adding the following:
"On July 23, 1997, the letter attached hereto as 
Exhibit 7 and incorporated herein by this reference was sent to 
Mr. James Mastandrea, Chairman, President and Chief Executive 
Officer of the Company.
"Except to the extent indicated in this Item 4, 
neither of the Reporting Persons has any plans or proposals which 
would relate to or result in any of the matters set forth in items 
(a) through (j) of Item 4 of Schedule 13D."
2.	Item 7 of the Schedule 13D, "Material to be Filed as 
Exhibits," is hereby amended by adding the following:
"7.	Letter, dated July 23, 1997, sent to Mr. James 
Mastandrea."





                                                       Page 3 of 3 Pages
 
After reasonable inquiry and to the best of our knowledge and 
belief, the undersigned certify that the information set forth in this 
statement is true, complete and correct.

Dated:  July 24, 1997


GOTHAM PARTNERS, L.P.


By:	SECTION H PARTNERS, L.P.,
its general partner


By:	DPB CORP.,
a general partner


By:	/s/  David P. Berkowitz     
David P. Berkowitz
President


GOTHAM PARTNERS II, L.P.


By:	SECTION H PARTNERS, L.P.,
its general partner


By:	DPB CORP.,
a general partner


By:	/s/  David P. Berkowitz     
David P. Berkowitz
President

EX-99

July 23, 1997

Mr. James C. Mastandrea
Chairman/President/CEO
First Union Real Estate
55 Public Square, Suite 1900
Cleveland, OH 44113

Dear Mr. Mastandrea:

On July 14, we sent a letter to the Trustees of First Union Real Estate and 
Mortgage Investments and the Directors of First Union Management, Inc.  In 
that letter we asked the Trustees and Directors, as fiduciaries for the 
company's shareholders, to consider two questions.  First, is the company's 
new strategic plan the most appropriate plan to ensure long-term maximization 
of shareholder value?  Second, is the current management team capable of 
identifying, executing, and integrating the acquisitions necessary to maximize 
the value of the company's unusual corporate structure?

We offered what we believe to be reasoned arguments for questioning the logic 
of the company's recently revised strategic plan and current management's 
ability to implement it.  In the subsequent week, we have received no 
substantive response to our letter.

We are truly interested in being long-term shareholders of First Union and 
enjoying the benefit of the company's unusual corporate structure over a 
multi-year period.  We have absolutely no interest in any arrangement through 
which we receive short-term benefit at the expense of other shareholders.  
Further, we have several specific proposals which we believe will manifest our 
long-term commitment to First Union.

We would appreciate the opportunity to meet with the Trustees of First Union 
Real Estate and Mortgage Investments and the Directors of First Union 
Management, Inc. to discuss our original concerns and our proposals for the 
future.  We will make ourselves available at your convenience in Cleveland, 
New York, or any other mutually agreeable location.  We look forward to your 
response.

Very truly yours,

Gotham Partners, L.P.
Gotham Partners II, L.P.


______________________
William A. Ackman


______________________
David P. Berkowitz