NEW YORK CITY – Penn South Capital, a subsidiary of RAP Equities, a real estate investment management firm, has acquired a $37.5 million portfolio that includes 39 Clarkson St., a 40,000-square-foot, mixed-use office development and a pair of multifamily buildings on the Lower East Side.

RAP Equities' acquisition of 39 Clarkson St. is a new play to diversify its portfolio and enter the boutique office sector in the Hudson Square submarket, which has grown into a media and tech hub with Google's new campus and Disney's new headquarters. The building is currently a manufacturing property that will be redeveloped into a boutique office building. The firm has already secured a high-end restaurant for the ground-floor retail of its building.

"We're seeing prices that are starting to make sense again. While cap rates have widened, interest rates remain at historic lows which are creating a very favorable cash flow play without having to drive any buyouts," Parag Sawhney, managing partner of Penn South Capital, said in a prepared statement.  "We are confident that these projects will create value for the community, the business ecosystem, and for our partners."