When Robert Blumenthal decided to open his first gallery, he didn’t consider Chelsea, where most of his local contemporary-art peers operate.

He thought about the Lower East Side, where several younger art dealers have found lower rents, but in February, he opted for a third-floor location with distinctly un-Chelsea crown molding at 1045 Madison Ave., near 79th Street.

“The Upper East Side is so unhip, it’s hip,” said Mr. Blumenthal, 33 years old. “Chelsea is a generation before me.”