Eldridge Street was a bleak stretch of high-rise projects and boarded-up buildings when Recon opened a store selling high-end street wear there five years ago.

Though the block was barren of retail, there was one perk. The rent for the 800-square-foot space at 237 Eldridge was so low, it was “laughable,” Recon CEO Maurice Menares said.

Mr. Menares took a gamble that shoppers would find their way to his offbeat location in a rough neighborhood; it appears to have paid off. A handful of other retail shops, including Moby’s Little Idiot Collective, have joined him on the block.

With the Lower East Side becoming increasingly popular, nearby Allen Street and the Bowery are expected to become retail thoroughfares. Will Recon and its sister store, Nort 235, an upscale Nike shop next door, relocate?

“No, we’re not that type of brand,” Mr. Menares said. “It’s not like we’re produced for mass consumption. It’s a niche market.”

High rents in Manhattan’s competitive real estate market have driven certain retailers to side streets in many neighborhoods that previously were bereft of retail or only had stores on the avenues. At the same time, side streets that already had retail space have gone increasingly high-end.

From the late 1990s until the economy soured in 2001, a similar wave of retail expansion saw stores pushing into the Meatpacking District and the West Village. Now, that expansion has picked up again, with the Lower East Side, Midtown West, and Harlem seeing new retail growth.

“In a very vibrant market, such as we have today, there is so much demand for retail,” said Faith Hope Consolo, chairman of Prudential Douglas Elliman Real Estate’s retail leasing and sales division. “The avenues have so much competition; and the rents have gone up so much, that it does drive retail to the side streets all over the city.”

From March 2004 to March 2005, the number of stores in Manhattan rose to 2,248 from 2,044 and total retail space expanded to 13.1 million square feet from 11.8 million, according to the Real Estate Board of New York’s spring 2005 retail report.

Some of that growth has come through construction of new retail space in mixed-use residential developments, brokers said. But where retail already existed, such as in Chelsea, fancier stores have moved in.

Formerly a working-class neighborhood, Chelsea’s side streets were full of ground-level retail shops offering neighborhood services, such as dry cleaners, tailors, and hardware stores. That’s all changing.

“It was mom and pop shops, but now those spaces are becoming very nice, elegant stores,” said Richard Ingenito, a lifelong downtown resident and manager of Bellmarc Property Management Sales Group. “All those very high-end stores are obviously catering to the changing demographic of the neighborhood.”

From 16th to 19th streets between Sixth and Eighth avenues, there are upscale shops selling designer furnishings and household items, art galleries and froufrou pet spas, and boutiques tucked among the remaining cleaners, thrift shops, and psychic readers.

Gil Neary, a Chelsea resident of 25 years and founder of DG Neary Realty, is working with his co-op board to restore the vintage 1930s facades to the ground-level retail space at 255 W. 23rd St. between Seventh and Eighth avenues. Tenants include Ben & Jerry’s, a bakery, pet shop, barber shop, newspaper stand, and a clothing boutique.

Mr. Neary said one more tenant is needed to fill the renovated space, and he doesn’t anticipate any trouble finding one.

“Midblock retail is doing a lot better, because people feel it’s safe to walk around in midblock,” he said. “Before, people only dipped down the midblock if they had to.”

Designer Karim Rashid recently opened a midblock store at 137 W. 19th St. between Sixth and Seventh.

“It had to do with economics more than anything,” studio manager Michael Regan said. “The rents are way less on the side streets.”

The 1,500-square-foot Karim Rashid Shop is paying about $5,000 a month, he said, which is an astoundingly good deal for Chelsea. The Real Estate Board’s report lists average asking rents for Midtown South from 15th to 34th streets at about $74 a square foot.

On 19th Street around Karim Rashid’s store, development has picked up.

“A couple of restaurants have opened up, and a condominium is going up where an old parking garage used to be,” Mr. Regan said. “I think in a couple years, the street will be even more conducive to foot traffic.”

Foot traffic is what retailers typically sacrifice when they locate on side streets, so midblock retail development doesn’t take place without a hefty residential population.

“A neighborhood with significant retail on side streets is probably pretty densely populated,” said Robin Abrams, executive vice president at the Lansco Corporation, a tenant brokerage firm. “It has the foot traffic to sustain those tenants.”

Or the retailers have to be so unusual, like Recon, that they can draw clientele despite being pioneers in their area. For example, Miya Shoji, a custom, handcrafted Japanese interiors business, landed on 17th Street between Sixth and Seventh avenues in Chelsea in the 1960s, well before the current wave of upscale retail redevelopment, store owner Zui Hanafusa said.

“I think some of the newer retailers probably chose this area partially because their stuff looks like our stuff,” he said. “There’s a place across the street that tries to do something mimicking what we do.”

Still, even in well-established neighborhoods, surviving off an avenue can be a severe test for a retailer. Clothing designer Vertigo closed a store on Madison Avenue two years ago in search of a larger space, and set up with a private owner at 36 E. 60th St. closer to Park. The new store, Vertigo and Friends, which opened nine months ago, has had trouble attracting shoppers, especially as the landlord won’t allow an awning.

“It’s a major struggle,” manager Lizzie Treister said. “You can miss us if you live on 63rd Street. You just don’t know we’re here unless you see an ad.”

However, Vertigo’s new space is about triple the size of its old store. Brokers said rents on Madison Avenue in the 60s are typically $800 a foot compared with side-street rents of as little as $200 a foot. Plus the unique space, with its exposed brick walls, two skylights, and Brazilian mahogany wood floors, was perfect, Ms. Treister said.

She said the store is doing well with destination customers.

“We’re lucky to have a loyal customer base, because they seek us out,” Ms. Treister said.

One area expected to see an explosion of retail growth, much of it off main thoroughfares, is the Financial District in Lower Manhattan, said Alexandra Akira, vice president at CB Richard Ellis, a global commercial real estate company. In fact, retail growth has been pegged as the cornerstone of Lower Manhattan’s resurgence.

“Since 1997, you’ve got 6.8 million square feet of conversion space that came online with a lot of retail space,” Ms. Akira said. “What’s proposed is another 3.2 million square feet of residential space with a lot of retail attached, as well.

“The whole demographic of downtown is changing, and we need to be able to service it,” she said.

In Lower Manhattan, retail development off Broadway will provide essential services to a burgeoning community currently lacking them. Filling in the side streets will be key.