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                                                                 EXHIBIT (10)(z)

                  THIRD AMENDMENT TO ASSET MANAGEMENT AGREEMENT

         This Third Amendment to Asset Management Agreement, dated as of August
17, 2000 (this "Third Amendment"), is entered into by and between Radiant
Partners, LLC, a New York limited liability company (the "Manager"), and First
Union Real Estate Equity and Mortgage Investments (the "Company").

                                    RECITALS

         1.       The Manager and the Company executed an Asset Management
                  Agreement, dated as of March 27, 2000;

         2.       The Manager and the Company executed a first amendment (the
                  "First Amendment") to the Asset Management Agreement, dated as
                  of May 31, 2000 and a second amendment (the "Second
                  Amendment") to the Asset Management Agreement, dated as of
                  June 16, 2000 (as amended, the "Agreement");

         3.       The parties hereto have determined to enter into this Third
                  Amendment for purposes of further amending the Agreement.

         NOW, THEREFORE, in consideration of the premises and mutual covenants
and agreements set forth herein, and for other consideration the adequacy of
which is hereby acknowledged, the parties hereby agree as follows:

         A.       Clause (v) of Article III(a) of the Agreement is deleted in
                  its entirety and replaced by the following clause (v) of
                  Article III(a):

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                  (v)      at the election of either party, any time prior to
                           December 1, 2000, upon thirty (30) days prior written
                           notice to the other party.

         B.       The Agreement, as amended by this Third Amendment, constitutes
                  the entire agreement between the parties with respect to the
                  subject matter hereof.

         C.       Unless otherwise provided herein, capitalized terms herein
                  shall have the meanings ascribed to them in the Agreement.

         D.       Except as otherwise provided in this Third Amendment to the
                  contrary, the terms and conditions of the Agreement as amended
                  by this Third Amendment shall remain in full force and effect.

         E.       In any case in which the terms of this Third Amendment are
                  inconsistent with the terms of the Agreement, the terms of
                  this Third Amendment shall govern.


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         IN WITNESS WHEREOF, the undersigned have executed this Third Amendment
as of the date first above written.


                                 FIRST UNION REAL ESTATE EQUITY
                                 and MORTGAGE INVESTMENTS



                                 By: /s/ William A. Ackman
                                     ------------------------------------
                                     William A. Ackman, Chairman


                                 RADIANT PARTNERS, LLC



                                 By: /s/ Daniel P. Friedman
                                     ------------------------------------
                                     Daniel P. Friedman, Managing Member


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