When t-shirt store Brooklyn Industries opened on the corner of Bedford Avenue and North Eighth Street in 2001, the only local competition was the Salvation Army thrift shop a block away.

How things have changed.

Bedford Avenue between North Third and North 10th streets, in the heart of the Williamsburg neighborhood of Brooklyn, has become one of the city's hottest retail strips. Shoppers can now find everything from a $318 silk muumuu at Jumelle to blue cheese wrapped in olive leaves for $43 a pound at the Bedford Cheese Shop.

"After we opened, other stores started to crop up," says Lexy Funk, co-founder of Brooklyn Industries, which has added $142 trench coats and $30 linen scarves to its product lineup. "As the neighborhood has gentrified and become more professional, the stores are becoming more high-end."

Destination shopping

Driving that transformation has been a huge influx of young residents and  as the area's reputation has grown  visitors from as far away as England and China.

"We're really starting to see the effects of the rezoning and overall planning," says David Rosenberg, executive vice president at Robert K. Futterman & Associates, referring to the 2005 rezoning of 175 blocks in Williamsburg and Greenpoint that paved the way for high-rise apartment complexes along the waterfront. "As the population grows, the demand for retail grows with it," he says.

Nowhere is demand hotter than the swath of Bedford Avenue a few blocks on either side of the L line subway stop on North Seventh Street. Rents on those blocks have surged to $100 a square foot  double what landlords were seeking just a year ago and four or five times the rates of five years ago.

Small packages

Merchants are coming from outside the neighborhood and outside the borough, according to David Tricarico, associate director of the retail services group at Cushman & Wakefield Inc.

Mr. Tricarico has been fielding calls from banks and what he describes as "mall-type tenants," all of whom have one question: "Can you get me something on Bedford?"

For stores that need a lot of space, including many national chains, the answer is no. With few exceptions, space on the avenue comes in packages of 2,500 square feet or less, notes Mr. Rosenberg at Futterman.

What the area lacks in scale, however, it makes up for in traffic. The hub near the subway station draws the heaviest volume, and not just people going home.

Jumelle owner Candice Waldron says that since opening the boutique last year, she has averaged one foreign tourist a day, in addition to shoppers from across the city and nation.

"This is very much a destination neighborhood," Ms. Waldron says. Those who trek to her shop find many designs from Brooklyn artists, including necklaces by Camille Hempel and dresses by Caitlin Mociun.

Residence Furniture owner Serhat Devecioglu says walk-ins have surged at his store  which sells midcentury sofas and desks, as well as other pieces  since last year, when he moved from several blocks away to a minimall with an entrance on Bedford Avenue.

"The foot traffic's better here," Mr. Devecioglu says, adding that sales have doubled at the larger location. In addition, the avenue is busier longer, in large part because of the thriving dining, bar and music scene.

Brooklyn Industries is "quite busy around 8 p.m.," Ms. Funk says.

Clearly, the street has become too much for some retailers, who are moving to side streets or to Driggs Avenue, which runs parallel to Bedford one block east.

"A lot of people are requesting Bedford," says Neil Dolgin, executive vice president at Kalmon Dolgin Affiliates. "But they also know they can't afford it."