<PAGE> 1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------------
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
---------------------------------
Date of Report May 27, 1999
------------
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
- --------------------------- ------------------------ -------------------
State or other jurisdiction (Commission File Number) (I.R.S. Employer
Identification No.)
Suite 1900, 55 Public Square
Cleveland, Ohio 44113-1937
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (216) 781-4030
--------------
- --------------------------------------------------------------------------------
Former name or former address, if changed since last report.
Total number of pages in report 3.
<PAGE> 2
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
------------------------------------
The registrant sold certain assets during the first five months of
1999. The sales of these assets had been previously reported in Form
8-K dated April 15, 1999 as contracts that had been executed with
potential purchasers or as sales that had been completed. The net
proceeds of $98.7 million after repayment of mortgage debt secured by
the sold properties were used to partially repay bank loans and a note
payable. The properties sold and date of sale are as follows:
PROPERTY DATE SOLD
-------- ---------
Woodland Commons February 18, 1999
Beck Building March 17, 1999
Sutter Buttes April 1, 1999
Valley Mall May 5, 1999
Valley North May 5, 1999
Mall 205 May 5, 1999
Plaza 205 May 5, 1999
Somerset Lakes May 12, 1999
Steeplechase May 12, 1999
Briarwood May 12, 1999
Hunter's Creek May 12, 1999
Beechlake May 12, 1999
Woodfield Gardens May 12, 1999
Windgate May 12, 1999
Walden Village May 12, 1999
Magic Mile Parking Lot May 17, 1999
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
---------------------------------
a) Financial Statements
--------------------
Not applicable.
b) Proforma Financial Information
------------------------------
The Proforma Combined Balance Sheet of the registrant
as of March 31, 1999, attached hereto as Exhibit 99.1, the
Proforma Combined Statement of Operations for the three months
ended March 31, 1999, attached hereto as Exhibit 99.2 and the
twelve months ended December 31, 1998, attached hereto as
Exhibit 99.3 and Notes to Proforma Combined Financial
Statements, attached hereto as Exhibit 99.4, reflect proforma
adjustments to the registrant's historical financial
statements for the sale of five shopping centers, eight
apartment complexes, a parking facility and two office
buildings.
The Proforma Combined Statement of Operations for the
twelve months ended December 31, 1998, and for the three
months ended March 31, 1999 are not necessarily indicative of
the actual results that would have occurred had the property
sales been consummated at the beginning of the respective
periods or of future operations of the registrant. The
Proformas do not take into consideration the increase in the
registrant's liquidity or possible uses of those funds.
<PAGE> 3
These statements should be read in conjunction with
the Notes to Proforma Financial Statements.
c) Exhibits
--------
99.1) Proforma Combined Balance Sheet as of March 31, 1999.
99.2) Proforma Combined Statement of Operations for the
three months ended March 31, 1999.
99.3) Proforma Combined Statement of Operations for the
twelve months ended December 31, 1998.
99.4) Notes to Proforma Financial Statements.
99.5) Press release dated February 17, 1999 regarding sale of
Woodland Commons.
99.6) Press release dated March 23, 1999 regarding sale of
Beck Building.
99.7) Press release dated April 7, 1999 regarding sale of
Sutter Buttes.
99.8) Press release dated May 6, 1999 regarding sale of
Valley Mall, Valley North Mall, Mall 205 and Plaza 205.
99.9) Press release dated May 13, 1999 regarding sale of
Somerset Lakes, Beechlake, Steeplechase, Hunter's
Creek, Briarwood, Windgate, Woodfield and Walden
Village Apartments.
99.10) Press release dated May 21, 1999 regarding sale of
Magic Mile Parking facility.
SIGNATURES
----------
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
------------------------
(Registrant)
Date: May 27, 1999 By:/S/ Gregory C. Scott
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Gregory C. Scott
Controller
<PAGE> 1
<TABLE>
<CAPTION>
FIRST UNION REAL ESTATE EQUITY and MORTGAGE INVESTMENTS Exhibit 99.1
-------------------------------------------------------
Proforma Combined Balance Sheet as of March 31, 1999
(in thousands)
Proforma
March 31, 1999 Adjustments March 31, 1999
-------------- ----------- --------------
<S> <C> <C> <C>
ASSETS
Investments in real estate
Land $ 122,937 (19,315) $ 103,622
Buildings and improvements 657,465 (120,616) 536,849
--------- -------- ---------
780,402 (139,931) 640,471
Less - Accumulated depreciation (165,466) 38,221 (127,245)
--------- -------- ---------
Total investments in real estate 614,936 (101,710) 513,226
Investment in joint venture 1,733 1,733
Mortgage loans and notes receivable 5,493 5,493
Other assets
Cash and cash equivalents - unrestricted 16,947 16,947
- restricted 15,561 15,561
Accounts receivable and prepayments 11,189 1,280 12,469
Inventory 2,839 2,839
Goodwill, net 45,806 45,806
Management and lease agreements, net 1,288 1,288
Deferred charges and other, net 6,978 (561) 6,417
Unamortized debt issue costs 8,239 (334) 7,905
Other 6,246 6,246
--------- -------- ---------
Total assets $ 737,255 (101,325) $ 635,930
========= ======== =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Mortgage loans $ 332,569 (37,523) $ 295,046
Notes payable 79,039 (23,210) 55,829
Senior notes 12,538 12,538
Bank loans 114,014 (64,385) 49,629
Accounts payable and accrued liabilities 40,407 (1,039) 39,368
Deferred obligations 10,597 10,597
Deferred capital gains and other deferred income 1,811 1,811
--------- -------- ---------
Total liabilities 590,975 (126,157) 464,818
--------- -------- ---------
Minority interest 1,047 1,047
Shareholders' equity
Preferred shares of beneficial interest, $25 liquidation preference,
2,300,000 shares authorized and 1,349,000 outstanding 31,737 31,737
Shares of beneficial interest, $1 par, unlimited authorization, outstanding 31,376 31,376
Paid-in capital 84,098 24,832 108,930
Foreign currency translation adjustment (1,978) (1,978)
--------- -------- ---------
Total shareholders' equity 145,233 24,832 170,065
--------- -------- ---------
$ 737,255 (101,325) $ 635,930
========= ======== =========
</TABLE>
The accompanying notes are an integral part of these statements
<PAGE> 1
Exhibit 99.2
FIRST UNION REAL ESTATE INVESTMENTS
PROFORMA COMBINED STATEMENT OF OPERATIONS
For the Three Months Ended March 31, 1999
(in thousands)
<TABLE>
<CAPTION>
Three months ended
Three months ended March 31, 1999
REVENUES March 31, 1999 Adjustments Proforma
------------------ ----------- ------------------
<S> <C> <C> <C>
Rents $ 78,879 $ 7,079 $ 71,800
Interest - Mortgage loans 115 115
- Short-term investments 234 234
- Investments
Joint venture income and fees 104 104
Other 81 81
-------- -------- --------
79,413 7,079 72,334
-------- -------- --------
EXPENSES
Property operating 55,386 2,688 52,698
Real estate taxes 3,160 533 2,627
Depreciation and amortization 9,489 1,381 8,108
Interest- Mortgages 7,252 810 6,442
Senior notes 278 278
Bank loans 3,105 1,288 1,817
Notes payable 2,539 885 1,654
General and administrative 3,723 52 3,671
Foreign currency gain (333) (333)
-------- -------- --------
84,599 7,637 76,962
-------- -------- --------
NET LOSS BEFORE EXTRAORDINARY LOSS AND CAPITAL GAINS $ (5,186) $ 558 $ (4,628)
-------- -------- --------
Preferred Dividend (708) (708)
-------- -------- --------
Net loss before extraordinary loss and capital gains $ (5,894) $ 558 $ (5,336)
======== ======== ========
Per share data
NET LOSS BEFORE EXTRAORDINARY LOSS AND CAPITAL GAINS,
BASIC AND DILUTED $ (0.19) $ (0.17)
======== ========
Adjusted shares of benificial interest, basic 31,376 31,376
Adjusted shares of benificial interest, diluted 31,376 31,376
The accompanying notes are an integral part of these statements
</TABLE>
<PAGE> 1
Exhibit 99.3
FIRST UNION REAL ESTATE INVESTMENTS
PROFORMA COMBINED STATEMENT OF OPERATIONS
For the Twelve months Ended December 31, 1998
(in thousands)
<TABLE>
<CAPTION>
1998
REVENUES 1998 Adjustments Proforma
--------- --------- ---------
<S> <C> <C> <C>
Rents $ 320,592 $ 31,178 $ 289,414
Interest - Mortgage loans 1,211 1,211
- Short-term investments 1,337 1,337
- Investments 302 302
Joint venture income and fees 501 501
Other 583 583
--------- --------- ---------
324,526 31,178 293,348
--------- --------- ---------
EXPENSES
Property operating 223,667 11,464 212,203
Real estate taxes 12,453 2,146 10,307
Depreciation and amortization 33,389 5,424 27,965
Interest- Mortgages 29,032 3,719 25,313
Senior notes 5,856 2,156 3,700
Bank loans 12,214 5,389 6,825
Notes payable 3,757 1,070 2,687
General and administrative 37,577 150 37,427
Litigation and proxy expenses 4,848 4,848
Foreign currency loss 2,198 2,198
Unrealized loss on carrying value of assets identified -
for disposition and impaired assets 51,000 51,000
--------- --------- ---------
415,991 31,518 384,473
--------- --------- ---------
NET LOSS BEFORE EXTRAORDINARY LOSS AND CAPITAL GAINS $ (91,465) $ 340 $ (91,125)
--------- --------- ---------
Preferred Dividend (2,999) (2,999)
--------- --------- ---------
Net loss before extraordinary loss and capital gains $ (94,464) $ 340 $ (94,124)
========= ========= =========
Per share data
NET LOSS BEFORE EXTRAORDINARY LOSS AND CAPITAL GAINS,
BASIC AND DILUTED $ (3.07) $ (3.06)
========= =========
Adjusted shares of benificial interest, basic 30,772 30,772
Adjusted shares of benificial interest, diluted 31,015 31,015
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE> 1
EXHIBIT 99.4
Notes to Proforma Combined Financial Statements
1) Proceeds from Property Sales
<TABLE>
<CAPTION>
(In thousands) USE OF PROCEEDS
NET PROCEEDS
AFTER COSTS MORTGAGE NET PROCEEDS NOTE BANK
PROPERTY DATE SOLD AND PRORATIONS DEBT ASSUMED AFTER DEBT ASSUMPTION PAYABLE CREDIT FACILITY
-------- --------- -------------- ------------ --------------------- ------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Offices
Beck(a) March 23, 1999 $ 1,772 $ 1,772 $ 1,772
Sutter Buttes April 1, 1999 3,627 3,627 3,627
Apartments(b) May 12, 1999 83,523 $37,523 46,000 15,015 $30,985
Parking Facility
Magic Mile May 17, 1999 1,894 1,894 1,894
Retail
Woodland Commons(a) February 17, 1999 20,789 11,469 9,320 9,320
Northwest properties(c) May 5, 1999 36,074 36,074 2,674 33,400
</TABLE>
(a) Properties were sold during the first quarter of 1999 and the sales
transactions are included in the historical March 31, 1999
Combined Balance Sheet.
(b) Apartment portfolio sold to one purchaser. The apartment portfolio
consisted of the following properties:
Somerset Lakes
Steeplechase
Beechlake
Walden Village
Briarwood
Woodfield Gardens
Windgate
Hunter's Creek
(c) The Northwest properties were sold to one purchaser. This
portfolio consisted of the following properties:
Valley
Valley North
Mall 205
Plaza 205
2) Assumption of debt repayment from net proceeds on the Proforma Combined
Balance Sheet and Proforma Combined Income Statements.
(In Thousands)
--------------
Mortgage debt repaid $48,992
Bank credit facility repaid 64,385
Note payable 34,302
For purposes of the December 31, 1998 Proforma
Combined Income Statement, $34.3 million of
Senior notes are assumed repaid, as the Note
payable was used to repay $87.5 million of
Senior notes in August 1998.
For purposes of the March 31, 1999, Proforma
Combined Balance Sheet, $11.1 million repayment
of the Note Payable was reflected in the March
31, 1999 historical balance sheet as the
transaction occurred prior to March 31, 1999.
3) Apartment division general and administrative costs are eliminated with the
sale of all apartment assets.
<PAGE> 1
EXHIBIT 99.5
FIRST UNION REAL ESTATE INVESTMENTS
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AT THE COMPANY
- --------------
Jeanne E. Gibson
Director of Investor Relations
(216) 781-1039
FOR IMMEDIATE RELEASE
FIRST UNION REAL ESTATE ANNOUNCES SALE OF SHOPPING CENTER;
----------------------------------------------------------
UPDATES STATUS OF APARTMENT PORTFOLIO DISPOSITION
-------------------------------------------------
CLEVELAND, OHIO, FEBRUARY 17, 1999 --- FIRST UNION REAL ESTATE INVESTMENTS
(NYSE:FUR) today announced the sale of its Woodland Commons shopping center in a
transaction that totaled $21.6 million, including the assumption of an $11.5
million mortgage. The price represented a cap rate of 9.0% on 1998 NOI of $1.95
million. The net proceeds of $9.32 million, after closing costs and first
mortgage indebtedness, have been used to make a partial prepayment of the bridge
loan.
Woodland Commons is a 170,000-square-foot neighborhood shopping center located
in the upscale community of Buffalo Grove, Illinois, a suburb of Chicago. First
Union Real Estate Investments had acquired the property in 1995. Also included
in the transaction was the sale to Sunrise Development of a 2.6-acre tract
adjacent to Woodland Commons where Sunrise is building a 73-bed assisted-living
center.
First Union was represented in the transaction by its exclusive retail advisor,
Granite Partners, LLC.
APARTMENT PORTFOLIO SALE
The Trust had announced in mid-January that it had contracted to sell its 2,105
apartment units to one buyer. After completion of its due diligence, the
potential buyer of the portfolio had requested several material changes to the
contract including a price reduction. After careful review, the Trust decided
that the requested changes to the contract were unacceptable and, although the
Trust is continuing discussions with the potential buyer, it is currently
pursuing other alternatives including other buyers and/or the refinancing of all
or part of the portfolio.
Certain statements contained in this news release are forward-looking and 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 10-K.
First Union Real Estate Equity and Mortgage Investments is a NYSE-listed,
stapled-stock real estate investment trust (REIT) headquartered in Cleveland,
Ohio.
# # #
<PAGE> 1
EXHIBIT 99.6
FIRST UNION REAL ESTATE INVESTMENTS
- --------------------------------------------------------------------------------
AT THE COMPANY
- --------------
Jeanne E. Gibson
Director of Investor Relations
(216) 781-1039
FOR IMMEDIATE RELEASE
FIRST UNION REAL ESTATE INVESTMENTS ANNOUNCES
SALE OF SHREVEPORT OFFICE BUILDING
----------------------------------
CLEVELAND, OHIO, MARCH 23, 1999 --- FIRST UNION REAL ESTATE INVESTMENTS
(NYSE:FUR) today announced the sale of one of its office buildings, the Beck
Building, in a transaction that totaled $2.15 million. The net proceeds of
approximately $1.77 million, after closing costs and adjustments, were used to
make a partial re-payment of the bridge loan.
Located in Shreveport, Louisiana, the 162,000 square foot Beck Building
currently with 147 tenants was acquired by the Trust in 1974.
Commenting on the sale, Daniel P. Friedman, President and Chief Executive
Officer, stated, "The sale is consistent with First Union's continuing strategy
to sell some of its assets to repay the Trust's short-term recourse debt."
Friedman continued, "The decision to sell the Beck Building was based on several
factors including the size of this asset in relation to the time and resources
needed to manage a property of this type and the amount of capital required to
maintain its occupancy."
First Union Real Estate Equity and Mortgage Investments is a NYSE-listed,
stapled-stock real estate investment trust (REIT) headquartered in Cleveland,
Ohio.
# # #
<PAGE> 1
EXHIBIT 99.7
FIRST UNION REAL ESTATE INVESTMENTS
- --------------------------------------------------------------------------------
AT THE COMPANY
- --------------
Jeanne E. Gibson
Director of Investor Relations
(216) 781-1039
FOR IMMEDIATE RELEASE
FIRST UNION REAL ESTATE INVESTMENTS ANNOUNCES
SALE OF OFFICE BUILDING
-----------------------
CLEVELAND, OHIO, APRIL 7, 1999 --- FIRST UNION REAL ESTATE INVESTMENTS
(NYSE:FUR) today announced the sale of its Sutter Buttes office center in a
transaction that totaled $3.8 million. The net proceeds from the sale of
approximately $3.6 million, after closing costs and adjustments, were used to
make a partial repayment of the Trust's outstanding bridge loan.
Located in Marysville, California, the 427,000 square foot facility was acquired
by the Trust in 1979. The property (formerly called Peach Tree Center) through
1985 had been operated as an enclosed shopping mall. A flood, caused when a
nearby earthen levee broke, badly damaged the property in 1986. The Trust has
had limited success in leasing the property since that time. The Trust began to
officially market Sutter Buttes for office use in 1997. At present, it is 54%
occupied.
First Union retained its legal rights to pursue its claim against the State of
California due to the damages caused to the property by the 1986 flood. In
September 1991, the state court ruled in favor of the Trust on the liability
portion of this suit. The State of California appealed and a decision from the
Court of Appeals is still pending.
First Union Real Estate Equity and Mortgage Investments is a NYSE-listed,
stapled-stock real estate investment trust (REIT) headquartered in Cleveland,
Ohio.
# # #
<PAGE> 1
EXHIBIT 99.8
FIRST UNION REAL ESTATE INVESTMENTS
- --------------------------------------------------------------------------------
AT THE COMPANY
- --------------
Jeanne E. Gibson
Director of Investor Relations
(216) 781-4030
FOR IMMEDIATE RELEASE
FIRST UNION REAL ESTATE INVESTMENTS ANNOUNCES
SALE OF RETAIL PROPERTIES
-------------------------
CLEVELAND, OHIO, MAY 6, 1999 --- FIRST UNION REAL ESTATE INVESTMENTS (NYSE:FUR)
today announced that the Trust completed the sale of four retail properties
located in the Pacific Northwest to Center Oak Properties for approximately
$37.5 million in cash. The properties include Valley North and Valley Mall,
located in Wenatchee and Union Gap, Washington, respectively, and two sister
properties, Mall 205 and Plaza 205, in Portland, Oregon.
Center Oak Properties is a private real estate company headquartered in
Torrance, California, specializing in the redevelopment of well located,
underperforming properties. Center Oak has recently completed several
transactions in the Northwest including the purchase of a mall in East
Wenatchee, which is slated for redevelopment.
The Trust also announced that it has entered into a contract with GP Properties,
Inc., an affiliate of Jager Management, to sell its Fingerlakes Mall in Auburn,
New York, for $2,500,000 and Mountaineer Mall in Morgantown, West Virginia, for
$11,000,000. The purchaser delivered a $2,050,000 non-refundable deposit which
can be applied to the purchase of either property. The closing is scheduled to
occur in the beginning of June.
The net proceeds of all these sales will be used to pay down the Trust's
short-term debt.
First Union Real Estate Equity and Mortgage Investments is a NYSE-listed,
stapled-stock real estate investment trust (REIT) headquartered in Cleveland,
Ohio.
# # #
<PAGE> 1
EXHIBIT 99.9
FIRST UNION REAL ESTATE INVESTMENTS
- --------------------------------------------------------------------------------
AT THE COMPANY
- --------------
Jeanne E. Gibson
Director of Investor Relations
(216) 781-4030
FOR IMMEDIATE RELEASE
FIRST UNION REAL ESTATE INVESTMENTS ANNOUNCES
---------------------------------------------
FIRST QUARTER RESULTS; CLOSES ON SALE OF APARTMENT PORTFOLIO;
-------------------------------------------------------------
CLOSES RIGHTS OFFERING
----------------------
CLEVELAND, OHIO, MAY 13, 1999 - FIRST UNION REAL ESTATE INVESTMENTS (NYSE:FUR)
announced the operating results for the first quarter ended March 31, 1999.
Financial results for the three months ended March 31, 1999 are as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED THREE MONTHS ENDED
(IN THOUSANDS EXCEPT PER SHARE) MARCH 31, 1999 MARCH 31, 1998 (RESTATED)
<S> <C> <C>
Revenues $79,413 $80,354
Loss from operations (5,186) (3,579)
Capital gains 523 -
Net loss (5,371) (4,454)
Funds from operations
before preferred dividend 2,470 3,548
Funds from operations
after preferred dividend 1,762 2,673
Funds from operations per share
before preferred dividend $.07 $.10
Funds from operations per share
after preferred dividend $.06 $.09
</TABLE>
The Trust's net loss increased by $.9 million when comparing the first quarter
of 1999 to 1998. The net loss increased primarily due to higher interest
expense, severance expense, legal fees and amortization of financing costs
related to the Trust's notes payable. However, the Trust's core property
portfolio on a "same-store basis" produced an 8% increase in operating income
when comparing the first quarter of 1999 to the first quarter of 1998. This
increase was due primarily to the leasing of additional space at the North
Valley Tech Center in Denver, CO, the opening of the first phase of a power
strip center in Abilene, TX, and strong occupancy of the Trust's apartment
portfolio. Additionally, Impark's results improved primarily due to the
reduction of losses at its manufacturing subsidiary. The increase in the Trust's
operating income was tempered by the adoption of Emerging Issues Task Force
98-9, "accounting for contingent rent in interim financial periods" which
resulted in $.7 million less participation rent being recorded in 1999 as
compared to 1998. As a result of the accounting change, the Trust will now
record the majority of its participation rent in the fourth quarter.
<PAGE> 2
The positive increases in property operations were offset by $.5 million in
severance expenses as the downsizing of the Trust's operations continued and $.3
million in legal fees incurred in renegotiating the senior credit facility and
bridge loan. The Trust's interest expense increased over the same period in 1998
because the Trust repaid $87.5 million in senior notes bearing interest at
8.875% per annum in August 1998 with a $90 million bridge loan that currently
bears interest at 12% per annum. The senior notes were repurchased to prevent
the possibility that the Trust would be required to repurchase the senior notes
at 101% as a result of a credit downgrade and to provide the Trust with
financial and operating flexibility.
RIGHTS OFFERING
First Union successfully completed its rights offering yesterday, May 12th,
raising $50 million in new equity from its existing holders of common shares.
Based upon preliminary figures provided by the subscription agent, holders of
9.8 million rights exercised their basic subscription and then oversubscribed
for 13.3 million additional common shares. The offering was limited to 12.5
million shares. Oversubscribed shares will be prorated among those holders who
exercised their basic subscriptions.
APARTMENT PORTFOLIO SALE
The Trust has completed the sale of of its apartment portfolio to Apartment
Investment and Management Company, a NYSE-listed company ("AIMCO"), for
approximately $86 million. As previously announced, AIMCO assumed approximately
$37.5 million of first mortgage debt (allowing the Trust to avoid more than $5
million in prepayment penalties), delivered 530,000 shares of common stock, and
paid $24.9 million in cash after prorations and fees.
As anticipated, AIMCO has extended offers of employment to all First Union
employees that are currently located at each of the properties.
SUPPLEMENTAL FINANCIAL INFORMATION
To receive the Trust's 14-page supplemental financial information for the First
Quarter 1999, please call our toll-free NewsOnDemand Service. Simply dial
#800-683-8431 and press #3 to place your order. The order number for this
information is #5200. The information will be faxed to you within minutes of
placing your order.
Certain 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 on Form
10-K and the registration statement for the proposed rights offering filed by
the Company with the SEC.
First Union Real Estate Equity and Mortgage Investments is a NYSE-listed,
stapled-stock real estate investment trust (REIT) headquartered in Cleveland,
Ohio.
<PAGE> 1
EXHIBIT 99.10
FIRST UNION REAL ESTATE INVESTMENTS
- --------------------------------------------------------------------------------
AT THE COMPANY
- --------------
Jeanne E. Gibson
Director of Investor Relations
(216) 781-4030
FOR IMMEDIATE RELEASE
FIRST UNION REAL ESTATE INVESTMENTS ANNOUNCES
---------------------------------------------
SUCCESSFUL COMPLETION OF RIGHTS OFFERING;
-----------------------------------------
ANNUAL MEETING RESULTS; SALE OF PARKING FACILITY
------------------------------------------------
CLEVELAND, OHIO, MAY 21, 1999 --- FIRST UNION REAL ESTATE INVESTMENTS (NYSE:FUR)
today announced that the rights offering which commenced on April 21, 1999 has
been completed and that 100% of the 12,500,000 available shares were subscribed
for in the offering raising gross proceeds of $50,200,000.
Shareholders of record as of April 21, 1999 exercised rights to purchase
9,763,084 shares of the Company's common stock at an exercise price of $4.00 per
share. First Union received oversubscriptions for 13,232,844 common shares which
exceeded the amount of common shares available to allocate for the
oversubscription. Oversubscribing shareholders will receive the lesser of the
total number of shares they oversubscribed for or .88241896 multiplied by their
total basic subscription shares.
The net proceeds of the offering will be used to repay short term debt.
RESULTS OF THE ANNUAL MEETING
The Company announced that the certified results showed shareholders of the
Company voted in favor of the three proposals at its recent annual meeting held
on Monday, May 17, 1999. These proposals included (1) the re-election of Daniel
J. Altobello, David S. Klafter and William A. Scully to serve on the Board of
Trustees, (2) the adoption of certain amendments to the Trust's 1994 Long Term
Incentive Performance Plan, and (3) the adoption of a share option plan for
Trustees.
SALE OF PARKING FACILITY
The Company also announced that it has completed the sale of its parking
facility located in Arlington, Texas for $2 million to Chavez Properties. The
net proceeds of approximately $1.9 million, after closing costs and adjustments,
were used to make a partial repayment of the Company's outstanding bridge loan.
First Union Real Estate Equity and Mortgage Investments is a NYSE-listed,
stapled-stock real estate investment trust (REIT) headquartered in Cleveland,
Ohio.
