SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
First Union Real Estate Equity and
Mortgage Investments
(Name of Issuer)
Shares of Beneficial Interest
-------------------------------
(Title of Class of Security)
337 400 105
--------------
(CUSIP Number)
W. Edward Scheetz
c/o Apollo Real Estate Advisors, L.P.
1301 Avenue of the Americas
New York, New York 10019
Telephone: (212) 261-4000
----------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
With a copy to:
Patrick J. Foye, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, NY 10022
Telephone: (212) 735-2274
December 27, 1996
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(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 statement 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: [X]
SCHEDULE 13D
CUSIP No.
1 name of reporting person
s.s. or i.r.s. identification no. of above person
APOLLO REAL ESTATE INVESTMENT FUND II, L.P.
2 check the appropriate box if a member of a group (a) (X)
(b) ( )
3 sec use only
4 source of funds
AF
5 check box if disclosure of legal proceedings is required
pursuant to items 2(d) or 2(e) ( )
6 citizenship or place of organization
Delaware
7 sole voting power
0
NUMBER OF
SHARES 8 shared voting power
BENEFICIALLY 942,093
OWNED BY
EACH 9 sole dispositive power
REPORTING 0
PERSON
WITH 10 shared dispositive power
942,093
11 aggregate amount beneficially owned by each reporting person
942,093
12 check box if the aggregate amount in row (11) excludes certain
shares ( )
13 percent of class represented by amount in row (11)
5.2%
14 type of reporting person
PN
SCHEDULE 13D
CUSIP No.
1 name of reporting person
s.s. or i.r.s. identification no. of above person
APOLLO REAL ESTATE ADVISORS II, L.P.
2 check the appropriate box if a member of a group (a) (X)
(b) ( )
3 sec use only
4 source of funds
WC, OO
5 check box if disclosure of legal proceedings is required
pursuant to items 2(d) or 2(e) ( )
6 citizenship or place of organization
Delaware
7 sole voting power
0
NUMBER OF
SHARES 8 shared voting power
BENEFICIALLY 942,093
OWNED BY
EACH 9 sole dispositive power
REPORTING 0
PERSON
WITH 10 shared dispositive power
942,093
11 aggregate amount beneficially owned by each reporting person
942,093
12 check box if the aggregate amount in row (11) excludes certain
shares ( )
13 percent of class represented by amount in row (11)
5.2%
14 type of reporting person
PN
This Schedule 13D is being filed by Apollo Real
Estate Investment Fund II, L.P. and Apollo Real Estate
Advisors II, L.P. with respect to the Shares of
Beneficial Interest (the "Shares") of First Union Real
Estate Equity and Mortgage Investments, an Ohio business
trust ("First Union").
Item 1. Security and Issuer.
This statement relates to the Shares of First
Union. The principal executive offices of First Union
are located at 55 Public Square, Suite 1900, Cleveland,
Ohio 44113.
Item 2. Identity and Background.
(a)-(c), (f). This statement is being filed
jointly by Apollo Real Estate Investment Fund II, L.P.
("AREIF II"), a limited partnership organized under the
laws of Delaware and Apollo Real Estate Advisors II, L.P.
("AREA II"), a limited partnership organized under the
laws of Delaware. AREIF II and AREA II are sometimes
collectively referred to herein as the "Reporting
Persons".
AREIF II is principally engaged in the business
of investment in real estate-related interests. The
address of AREIF II's principal executive office and
principal business is c/o Apollo Real Estate Advisors II,
L.P., Two Manhattanville Road, Purchase, New York 10577.
AREA II is the managing general partner of
AREIF II. AREA II is principally engaged in the business
of serving as managing general partner of AREIF II. The
address of AREA II's principal executive office and
principal business is c/o Apollo Real Estate Advisors II,
L.P., Two Manhattanville Road, Purchase, New York 10577.
The sole general partner of AREA II is Apollo
Real Estate Capital Advisors II, Inc., a Delaware
corporation ("Capital Advisors II"). Capital Advisors II
is principally engaged in the business of serving as
general partner of AREA II.
Information attached hereto as Schedule I is
information concerning the general partners of the
Reporting Persons and the executive officers and
directors of Capital Advisors II, which information is
required to be disclosed in response to Item 2 and
general instruction C to Schedule 13D. Each of such
persons is a citizen of the United States. All such
persons on Schedule I disclaim beneficial ownership of
and any pecuniary interest in the Shares beneficially
owned by the Reporting Persons.
(d) and (e). Neither AREIF II, AREA II,
Capital Advisors II, nor, to the best of these entities
knowledge, any of the individuals named in Schedule I
hereto has during the last five years (i) been convicted
in a criminal proceeding (excluding traffic violations or
similar misdemeanors) or (ii) been a party to a civil
proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting activities
subject to, federal or state securities laws or finding
any violation of such laws.
Item 3. Source and Amount of Funds or Other
Consideration.
In connection with the purchase of the Shares,
the Reporting Persons beneficially own an aggregate of
942,093 Shares which were purchased at a total purchase
price of approximately $8,994,260 as of the date hereof.
The purchases were financed with cash on hand and
borrowed funds pursuant to a margin loan made in the
ordinary course of business by a registered broker-
dealer.
Item 4. Purpose of the Transaction.
The Reporting Persons acquired beneficial
ownership of the Shares in the ordinary course of
business for investment purposes and not with the purpose
of changing or influencing control of First Union. The
Reporting Persons have considered various alternative
proposals to increase the value of their Shares and may
from time to time consider implementing such
alternatives. In this respect, the Reporting Persons
retain the right to change their investment intent, to
propose one or more possible transactions to First
Union's trustees, to acquire additional Shares from time
to time or to sell or otherwise dispose of all or part of
the Shares beneficially owned by them in any manner
permitted by law. On December 23, 1996,
representatives of the Reporting Persons met with First
Union's chairman and chief executive, James C.
Mastandrea, to discuss the foregoing intentions with
respect to the Shares. In the event of a material change
in the present plans or intentions of the Reporting
Persons, the Reporting Persons will amend this Schedule
13D to reflect such change.
Item 5. Interest in Securities of the Issuer.
(a) As of the date hereof, the Reporting
Persons beneficially own an aggregate of 942,093 Shares
which represents approximately 5.2% of the outstanding
Shares of First Union. This amount is represented by
216,800 Shares and 219,400 shares of First Union Series A
Cumulative Convertible Redeemable Preferred Shares of
Beneficial Interest (the "Preferred Shares"). Each
Preferred Share is immediately convertible into 3.3058
Shares.
(b) The Reporting Persons share the voting and
dispositive power with respect to the 942,093 Shares
which they beneficially own.
To the best of the Reporting Persons'
knowledge, none of the individuals listed on Schedule I
owns any Shares or can vote or direct the vote of any
Shares, nor can any such individual dispose or direct the
disposition of any Shares.
(c) Except as set forth on Schedule II, no
person named in response to paragraph (a) of this Item
has effected any transaction in the Shares during the
past sixty days.
(d) No other person is known to have the right
to receive or the power to direct the receipt of
dividends from, or the proceeds from the sale of, the
Shares.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or
Relationships With Respect to Securities of the
Issuer.
Not applicable.
Item 7. Material to be Filed as Exhibits.
Not applicable.
SCHEDULE I
The following sets forth information with
respect to the executive officers and directors of
Capital Advisors II, which is the sole general partner of
AREA II.
Messrs. Leon D. Black, John J. Hannan and
William L. Mack are executive officers and directors of
Capital Advisors II. The principal occupation of each of
Messrs. Black and Hannan is to act as an executive
officer and director of Apollo Capital Management, Inc.,
a Delaware corporation ("Apollo Capital"), and of Lion
Capital Management, Inc., a Delaware corporation ("Lion
Management"). Messrs. Black and Hannan are founding
principals of Apollo Advisors, L.P. ("Apollo Advisors"),
Lion Advisors, L.P. ("Lion Advisors"), and together with
Mr. Mack of Apollo Real Estate Advisors II, L.P. The
principal occupation of Mr. Mack is to act as a
consultant to Apollo Advisors and as a principal to
Apollo Real Estate Advisors, L.P. and to act as President
and Managing Partner of the Mack Organization, an owner
and developer of and investor in office and industrial
buildings and other commercial properties. The principal
business of Apollo Advisors and of Lion Advisors is to
provide advice regarding investments in securities and
the principal business of Apollo Real Estate Advisors,
L.P. is to provide advice regarding investments in real
estate and real estate-related investments. The business
address of each of Messrs. Black, Hannan and Mack is c/o
Apollo Real Estate Management II, L.P., 1301 Avenue of
the Americas, New York, New York 10019.
SCHEDULE II
TRANSACTIONS IN THE SECURITIES
Set forth below are the transactions in the
Shares and the Preferred Shares that were effected during
the past sixty days by AREIF II through its registered
broker-dealer in New York. Transactions in parenthesis
indicate the disposition of Shares.
Number of Price per
Date Shares Share Series
11/8/96 75,000 $8.6250 Shares
11/11/96 438,000 8.9934 Shares
11/11/96 25,700 30.1196 Preferred
11/12/96 240,600 9.9438 Shares
11/12/96 10,200 32.9608 Preferred
11/14/96 (38,600) 10.3750 Shares
11/14/96 11,700 34.3750 Preferred
11/15/96 (52,800) 10.1998 Shares
11/15/96 16,000 33.9570 Preferred
11/21/96 (506,400) 10.1224 Shares
11/21/96 153,200 33.9821 Preferred
11/25/96 2,600 33.5000 Preferred
12/27/96 45,000 12.0000 Shares
12/30/96 1,000 11.8750 Shares
12/30/96 15,000 12.0000 Shares
SIGNATURE
After reasonable inquiry and to the best of my
knowledge and belief, I certify that the information set
forth in this statement is true, complete and correct.
Dated: January 6, 1997
APOLLO REAL ESTATE INVESTMENT FUND II, L.P.
By: Apollo Real Estate Advisors II, L.P.
Managing Member
By: Apollo Real Estate Capital Advisors II, Inc.
General Partner
By: /s/ Michael D. Weiner
---------------------------
Name: Michael D. Weiner
Title: Vice President,
Apollo Real Estate Capital
Advisors II, Inc.
APOLLO REAL ESTATE ADVISORS II, L.P.
By: Apollo Real Estate Capital Advisors II, Inc.
General Partner
By: /s/ Michael D. Weiner
--------------------------
Name: Michael D. Weiner
Title: Vice President,
Apollo Real Estate Capital
Advisors II, Inc.
