-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
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 TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
 AyI+qkKo7AaAt6qk8qKJjJjum3VViu5OnZnCc3yYdxpDv0AkNTvjoRF4x8Nwcphh
 p0fl+fvYNIxp77ijf+TeTA==

<SEC-DOCUMENT>0001181431-06-056428.txt : 20061003
<SEC-HEADER>0001181431-06-056428.hdr.sgml : 20061003
<ACCEPTANCE-DATETIME>20061003170742
ACCESSION NUMBER:		0001181431-06-056428
CONFORMED SUBMISSION TYPE:	4
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20060929
FILED AS OF DATE:		20061003
DATE AS OF CHANGE:		20061003

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:			MASTANDREA JAMES C
		CENTRAL INDEX KEY:			0001225704

	FILING VALUES:
		FORM TYPE:		4
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-15409
		FILM NUMBER:		061125600

	BUSINESS ADDRESS:	
		BUSINESS PHONE:		2164302706

	MAIL ADDRESS:	
		STREET 1:		1240 HURON ROAD SUITE 301
		CITY:			CLEVELAND
		STATE:			OH
		ZIP:			44115
</SEC-HEADER>
<DOCUMENT>
<TYPE>4
<SEQUENCE>1
<FILENAME>rrd131529.xml
<DESCRIPTION>FORM 4
<TEXT>
<XML>
<?xml version="1.0"?>
<ownershipDocument>

    <schemaVersion>X0202</schemaVersion>

    <documentType>4</documentType>

    <periodOfReport>2006-09-29</periodOfReport>

    <notSubjectToSection16>0</notSubjectToSection16>

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

    <reportingOwner>
        <reportingOwnerId>
            <rptOwnerCik>0001225704</rptOwnerCik>
            <rptOwnerName>MASTANDREA JAMES C</rptOwnerName>
        </reportingOwnerId>
        <reportingOwnerAddress>
            <rptOwnerStreet1>1240 HURON ROAD</rptOwnerStreet1>
            <rptOwnerStreet2>SUITE 301</rptOwnerStreet2>
            <rptOwnerCity>CLEVELAND</rptOwnerCity>
            <rptOwnerState>OH</rptOwnerState>
            <rptOwnerZipCode>44115</rptOwnerZipCode>
            <rptOwnerStateDescription></rptOwnerStateDescription>
        </reportingOwnerAddress>
        <reportingOwnerRelationship>
            <isDirector>1</isDirector>
            <isOfficer>1</isOfficer>
            <isTenPercentOwner>1</isTenPercentOwner>
            <isOther>0</isOther>
            <officerTitle>Chairman, CEO and President</officerTitle>
        </reportingOwnerRelationship>
    </reportingOwner>

    <derivativeTable>
        <derivativeTransaction>
            <securityTitle>
                <value>Class C Convertible Preferred Shares</value>
            </securityTitle>
            <conversionOrExercisePrice>
                <footnoteId id="F1"/>
            </conversionOrExercisePrice>
            <transactionDate>
                <value>2006-09-29</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>A</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>56944</value>
                </transactionShares>
                <transactionPricePerShare>
                    <value>0.00</value>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>A</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <exerciseDate>
                <footnoteId id="F1"/>
            </exerciseDate>
            <expirationDate>
                <footnoteId id="F1"/>
            </expirationDate>
            <underlyingSecurity>
                <underlyingSecurityTitle>
                    <value>Common Shares</value>
                </underlyingSecurityTitle>
                <underlyingSecurityShares>
                    <value>569440</value>
                </underlyingSecurityShares>
            </underlyingSecurity>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>56944</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                </directOrIndirectOwnership>
            </ownershipNature>
        </derivativeTransaction>
    </derivativeTable>

    <footnotes>
        <footnote id="F1">The Series C Convertible Preferred Shares are convertible into common shares ay any time by dividing the sum of $10.00 and any accrued but unpaid dividends on the Class C Convertible Preferred Shares by the conversion price of $1.00, and have no expitation date.</footnote>
    </footnotes>

    <ownerSignature>
        <signatureName>/s/ Christopher J. Hubbert, Attorney-in-Fact for James C. Mastandrea</signatureName>
        <signatureDate>2006-10-03</signatureDate>
    </ownerSignature>
</ownershipDocument>
</XML>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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