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Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
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MIC-Info: RSA-MD5,RSA,
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 fgCRwxnZsAVsxkjdCZTFwg==

<SEC-DOCUMENT>0001181431-05-033136.txt : 20050611
<SEC-HEADER>0001181431-05-033136.hdr.sgml : 20050611
<ACCEPTANCE-DATETIME>20050606112207
ACCESSION NUMBER:		0001181431-05-033136
CONFORMED SUBMISSION TYPE:	4
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20050603
FILED AS OF DATE:		20050606
DATE AS OF CHANGE:		20050606

ISSUER:		

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			PARAGON REAL ESTATE EQUITY & INVESTMENT TRUST
		CENTRAL INDEX KEY:			0000928953
		STANDARD INDUSTRIAL CLASSIFICATION:	REAL ESTATE INVESTMENT TRUSTS [6798]
		IRS NUMBER:				396594066
		STATE OF INCORPORATION:			MD
		FISCAL YEAR END:			1231

	BUSINESS ADDRESS:	
		STREET 1:		1240 HURON RD
		STREET 2:		STE 301
		CITY:			CLEVELAND
		STATE:			OH
		ZIP:			44115
		BUSINESS PHONE:		2164302706

	MAIL ADDRESS:	
		STREET 1:		1240 HURON RD
		STREET 2:		STE 301
		CITY:			CLEVELAND
		STATE:			OH
		ZIP:			44115

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	STONEHAVEN REALTY TRUST
		DATE OF NAME CHANGE:	20000321

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	WELLINGTON PROPERTIES TRUST
		DATE OF NAME CHANGE:	19940829

REPORTING-OWNER:	

	OWNER DATA:	
		COMPANY CONFORMED NAME:			LAMBERT PAUL T
		CENTRAL INDEX KEY:			0001056572

	FILING VALUES:
		FORM TYPE:		4
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-15409
		FILM NUMBER:		05879633

	BUSINESS ADDRESS:	
		STREET 2:		PO BOX 11063
		CITY:			TELLURIDE
		STATE:			CO
		ZIP:			81435
		BUSINESS PHONE:		8707281777
</SEC-HEADER>
<DOCUMENT>
<TYPE>4
<SEQUENCE>1
<FILENAME>rrd80961.xml
<DESCRIPTION>FORM 4
<TEXT>
<XML>
<?xml version="1.0"?>
<ownershipDocument>

    <schemaVersion>X0202</schemaVersion>

    <documentType>4</documentType>

    <periodOfReport>2005-06-03</periodOfReport>

    <notSubjectToSection16>0</notSubjectToSection16>

    <issuer>
        <issuerCik>0000928953</issuerCik>
        <issuerName>PARAGON REAL ESTATE EQUITY &amp; INVESTMENT TRUST</issuerName>
        <issuerTradingSymbol>PRG</issuerTradingSymbol>
    </issuer>

    <reportingOwner>
        <reportingOwnerId>
            <rptOwnerCik>0001056572</rptOwnerCik>
            <rptOwnerName>LAMBERT PAUL T</rptOwnerName>
        </reportingOwnerId>
        <reportingOwnerAddress>
            <rptOwnerStreet1>1240 HURON ROAD, SUITE 301</rptOwnerStreet1>
            <rptOwnerStreet2></rptOwnerStreet2>
            <rptOwnerCity>CLEVELAND</rptOwnerCity>
            <rptOwnerState>OH</rptOwnerState>
            <rptOwnerZipCode>44115</rptOwnerZipCode>
            <rptOwnerStateDescription></rptOwnerStateDescription>
        </reportingOwnerAddress>
        <reportingOwnerRelationship>
            <isDirector>1</isDirector>
            <isOfficer>0</isOfficer>
            <isTenPercentOwner>0</isTenPercentOwner>
            <isOther>0</isOther>
        </reportingOwnerRelationship>
    </reportingOwner>

    <nonDerivativeTable>
        <nonDerivativeTransaction>
            <securityTitle>
                <value>Common Shares</value>
            </securityTitle>
            <transactionDate>
                <value>2005-06-03</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>A</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>50000</value>
                </transactionShares>
                <transactionPricePerShare>
                    <value>0.14</value>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>A</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>2458619</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>I</value>
                </directOrIndirectOwnership>
                <natureOfOwnership>
                    <value>Lambert Equities II, LLC</value>
                    <footnoteId id="F1"/>
                </natureOfOwnership>
            </ownershipNature>
        </nonDerivativeTransaction>
    </nonDerivativeTable>

    <derivativeTable>
        <derivativeTransaction>
            <securityTitle>
                <value>Share Option</value>
            </securityTitle>
            <conversionOrExercisePrice>
                <value>0.14</value>
            </conversionOrExercisePrice>
            <transactionDate>
                <value>2005-06-03</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>A</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>25000</value>
                </transactionShares>
                <transactionPricePerShare>
                    <footnoteId id="F2"/>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>A</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <exerciseDate>
                <value>2006-06-03</value>
            </exerciseDate>
            <expirationDate>
                <value>2015-06-03</value>
            </expirationDate>
            <underlyingSecurity>
                <underlyingSecurityTitle>
                    <value>Common Shares</value>
                </underlyingSecurityTitle>
                <underlyingSecurityShares>
                    <value>25000</value>
                </underlyingSecurityShares>
            </underlyingSecurity>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>125000</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                </directOrIndirectOwnership>
            </ownershipNature>
        </derivativeTransaction>
    </derivativeTable>

    <footnotes>
        <footnote id="F1">Includes 766,354 shares held by Lambert Equities II, LLC, of which Mr. Lambert is the controlling majority member and sole manager.</footnote>
        <footnote id="F2">The reporting person was not required to pay for the options granted under an issuer-sponsored plan.</footnote>
    </footnotes>

    <ownerSignature>
        <signatureName>/s/ Christopher J. Hubbert, Attorney-in-Fact for Paul T. Lambert</signatureName>
        <signatureDate>2005-06-06</signatureDate>
    </ownerSignature>
</ownershipDocument>
</XML>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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