Paragon Files Registration Statement for Proposed Public Offering

Cleveland, Ohio, UNITED STATES

CLEVELAND, Oct. 24, 2005 (PRIMEZONE) -- Paragon Real Estate Equity and Investment Trust (AMEX:PRG) announced today that it has filed a registration statement with the Securities and Exchange Commission containing a preliminary prospectus relating to a proposed public offering of its common shares. Paragon has also granted the underwriters an option to purchase additional common shares to cover over-allotments, if any, and expects to complete the offering by the end of the year. Ferris, Baker Watts, Incorporated is acting as the sole manager of the offering.

A registration statement relating to these securities has been filed with the Securities and Exchange Commission but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This press release does not constitute an offer to sell or the solicitation of an offer to buy nor will there be any sale of these securities in any state in which the offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any state. When available, a copy of the preliminary prospectus relating to the offering may be obtained from Ferris, Baker Watts, Incorporated, Capital Markets, 100 Light Street, Baltimore, Maryland 21202.

Paragon is a real estate company with a value-added business plan to acquire well located, under-performing multifamily properties and reposition them through renovation, leasing, improved management and additional capital investment.

Forward-Looking Statements

Certain matters discussed within this press release may be deemed to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although Paragon Real Estate Equity and Investment Trust believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that the planned implementation of a national real estate acquisition, development and re-development strategy will be completed in whole or in part. Factors that could cause actual results to differ materially from Paragon's expectations include changes in local or national economic or real estate conditions, the ability to meet competition, loss of existing key personnel, ability to hire and retain future personnel and other risks detailed from time to time in Paragon's SEC reports and filings, including its annual report on Form 10-KSB, quarterly reports on Form 10-QSB and periodic reports on Form 8-K. Paragon assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.


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