Recently, local shops and small houses in Seoul have been converted to cafes, western style restaurants, and large chain stores. These changes, recognized as commercial gentrification in residential areas, are now a big issue in Korean society. This phenomenon has some positive effects, such as the emergence of new consumption spaces and improved neighborhood images. However, this study concentrated on changes in regional characteristics, landscape, and industry homogenization. This study demonstrates the presence of a cyclical environmental change process commonly identified in areas of gentrification and identifies characteristics of individual stages of the gentrification process. The results indicate that medium-scale local stores in Stage 1 changed to small-scale food and beverage businesses in Stage 2. Then, in Stage 3, they changed to large-scale clothing retailers. In particular, the process of change from Stage 2 to Stage 3 revealed that, as the diversity of business types decreases, their uses change and the proportion of chain stores increases. In other words, although Stage 2 has the highest level of mixed use and density, indicating the greatest level of vitality, commercial gentrification to Stage 3 results in decreases in use, the number of aged buildings, and density. Thus, Stage 3 can be identified as the stage in which streets lose their vitality, as suggested by Jacobs. To maintain street vitality, it is suggested that commercial district management occurs during the transformation from Stage 2 to Stage 3 of commercial gentrification.