The Ben Franklin Five and Dime on 18th Street NW in Adams-Morgan, and its neighbors, The Dance Place, the Green Door Emporium, a laundromat and an antique store, will close soon. Trendy, up-scale boutiques catering to middle-income professionals will replace them.

The five buildings that house the familiar shops were recently bought for $1.6 million by a group of real estate developers who say they will triple, and in some cases quadruple, rents at the buildings within 90 days. Of the existing shops, only the proprietors of Proteus Bicycle Shop have indicated that they may stay.

The sale is the latest indication that the gentrification that has displaced poor blacks and Hispanics from the residential areas of Adams-Morgan threatens the ethnic and economic diversity of the commercial area.

Three years ago city assessors valued the just-sold buildings at $300,000. That assessment jumped to $1.4 million this year.

"I think this trend is an alarming situation," said George Frain, secretary of the 18th and Columbia Road Business Association. "The sad but true story here in Adams-Morgan is the city has [tripled] the property assessments in the last three years, and I don't see how ethnic groups can continue to afford these rents."

David Hartley, who heads the Adams-Morgan Advisory Neighborhood Commission, said that for many years the community has been "a model of unity and diversity . . . . Now it's a neighborhood changing, and the ethnic groups are the ones that are most vulnerable. We call it the Georgetownization of Adams-Morgan."

The Ontario Theater at 1700 Columbia Rd. NW, which had been showing Spanish movies, was recently renovated and is showing first-run movies for the first time in 15 years.

"In terms of increasing property values, [Adams-Morgan] is one of the fastest growing sections of the city with the exception of right downtown and near some Metro stops," explained George Altoft, a senior official in the city's property tax division of the D.C. Department of Finance and Revenue.

"Most properties have tripled there [in Adams-Morgan] in the last five years because it's a hot area, it's very exuberant," Altoft added.

John Hoskinson, one of four partners who recently purchased the three-story Ben Franklin building and the four adjoining one-story buildings, said the group "would like to put in up-scale retail establishments in keeping with the trend of higher-income people moving into Adams-Morgan."

The new owners plan to spend $2.5 million to upgrade the buildings, he said.

Kenneth Holden, who along with his brother inherited the 33-year-old Ben Franklin store at his father's death in 1974, said he made a bid of a "little less than full price" for the five buildings when they were put up for sale in March.

"I was surprised because I thought the buildings would be on the market for a while," said Holden, who is looking for a new location. "They went up for sale, and within one or two weeks [the former owners] had accepted a buyer at full price . . . . That's very unusual for a building like that."

"In five years it's going to be completely different . . . . I think the diversity of the neighborhood is what attracted a lot of people here initially," said Holden, who has known the area since he was 4 years old. "That's changing right now, and in five or 10 years you may not have that ethnic mix any more."

Judith Johnson, who manages the Green Door Emporium, a nonprofit thrift store that employs persons released from St. Elizabeths Hospital, said she talked recently to Hoskinson.

He called her to say her rent would double within 90 days.

"I asked him if we could negotiate a reduced rent," Johnson said. " . . . He said they really wanted to upgrade the place. He talked about a Georgetown feeling, boutiques and things like that," she said.

Hoskinson said, "We said that we would give the existing tenants first choice in renewing their leases but that the rents were going to be considerably higher. I told her that in her case we had some reservations with her renewing because it was not compatible with the types of retail establishments we want to get in there."

Johnson said Hoskinson asked her to describe the thrift store. When she had finished, "He said that was not the tone they wanted to set," she said.