THE gritty industrial neighborhood of West Chelsea between 10th and 11th Avenues and from 20th to 26th Streets is sporting a new look these days. New owners are taking unused former garages and warehouses and converting them into art galleries in hopes of luring buyers from more established gallery locations.

Many of the galleries are moving northwest from their previous locations in SoHo. They are following a predictable economic cycle: artists needing space and light take over old industrial buildings whose days as manufacturing facilities are over. Galleries, which also need space and light, follow, changing the tone of the neighborhood to artsy from industrial.

With affluent art collectors walking the streets, restaurants start to open, attracting more people who may not collect art but like trying new restaurants. Then the mom-and-pop stores start to disappear and are replaced by brand-name retailers, who often combine several old store spaces into a one bigger store.

Competition among retailers for street level space drives rents up beyond the ability, or inclination, of gallery owners to pay. The galleries then have to decide if the location is so good that they can survive on the upper floors of a building or whether it is time to move.

So far, 39 galleries have set up shop in West Chelsea, mostly between 20th and 24th Streets. As many as 50 are expected within the next year or so.

Barbara Gladstone is a gallery owner who decided to move. She shifted her operation from Greene Street in SoHo to 515 West 24th Street. ''My lease was coming to an end in SoHo and it did not make sense to stay there for another 10 years,'' she said.

She said the same problems that had driven her from 57th Street a decade ago had developed in SoHo. ''I left 57th Street because it was too crowded and it was difficult finding places for trucks to park,'' she said. ''It's the same way in SoHo now.''

The new home of the Barbara Gladstone Gallery is in a converted garage building with garage-style doors in front, which makes it easy to move big works of art in and out. (It is also next to a working garage, Adolph's Trucking, which Ms. Gladstone said was convenient for having her car repaired.) Ms. Gladstone bought the building with Metro Pictures and Matthew Marks, each of which has 50 feet of street-level frontage in the 150-foot-wide building. The galleries opened late last year.

One of the attractions of the old garage buildings, which once serviced the trucks that made deliveries to and from a largely vanished garment manufacturing industry, is the wide expanses of column-free space. The first floor of the Gladstone Gallery is mostly open space, well lit by natural night coming through the glass-paneled doors. There is also an interior space for viewing video art.

On the second floor are offices, the gallery's library, a screening room for special clients and kitchen facilities.

''These are solid industrial buildings with integrity in their space, so we did not have to do much,'' Ms. Gladstone said. ''We kept the facades intact and just sealed the floors.''

JUST down the block is another old garage building that is about to be converted into space for the Luhring Augustine and Andrea Rosen Galleries. If the starkly finished Gladstone Gallery illustrates what can be done with garage buildings, the structure at 525-531 West 24th Street shows what the owners have to start with.

The concrete floors there are still stained and a loading dock dominates the back of the building. The skylights still have wire mesh glass that reflects the building's 1930's roots.

Nevertheless, Roland Augustine, a partner in Luhring Augustine, pronounced himself delighted with the structure, whose steel truss roof makes it possible for the interior space to be completely free of columns. As with the Gladstone building, the two galleries will split the frontage, and the loading dock will be removed so a mezzanine level can be built in the back.

In Mr. Augustine's side of the building, the mezzanine level will house offices, a conference room and a video display room, all divided by a wall from the main gallery. ''We have learned that you need space that is separate from the main exhibition space,'' he said.

The old roll-up doors will be replaced by pivoting doors that will flip up as canopies over the sidewalk. Mr. Augustine said plans were to move the galleries into the building next April and to open in May.

Mr. Augustine said he was pleased to have street-level exposure, unlike his second-story location in SoHo, and to be away from what he considers to be the overcommercialization of that area. ''There is so much bad, schlock art on the market there,'' he said of SoHo.

Indeed, brokers said that many of the gallery owners were tired of swarms of what are derisively referred to as ''bridge and tunnel people'' crowding the streets of SoHo during weekends. ''The tourists go into the galleries, laugh at the art and don't buy anything,'' said Ruth Barone, a senior vice president with The Carlton Group Ltd. who has represented several gallery owners who have moved to West Chelsea. ''They are, in effect, providing free entertainment, which real collectors don't need.''