The Red October chocolate factory has been producing confections on the banks of the Moscow River for more than 130 years. Opened in 1867, the factory was given its present name after the Bolshevik Revolution, in 1917. During the Second World War, it churned out emergency food rations for Red Army soldiers. Today, the redbrick building is one of the city's most recognizable and best-loved landmarks.

The five-story structure's next incarnation won't be as illustrious. Like a number of historic Moscow buildings, it is slated to be refashioned into luxury condominiums. The property sits in a desirable district near the Kremlin, and apartments could fetch as much as $30,000 per square meter (nearly $3,000 per square foot), according to local real estate brokers.

Nearly two decades after the fall of Communism, Russia’s rapidly expanding economy, led by the current oil and gas boom, is transforming Moscow real estate. Construction cranes have joined the cupolas of Russian Orthodox churches and the spires of Stalinist-era edifices on the city's skyline. Parts of the capital that were once desolate are filled with shiny new luxury boutiques. Drab, concrete apartment blocks have been restyled as condominiums and rental units that sell for millions of dollars. Mushrooming development is attracting such star architects as Norman Foster, who is designing a mixed-use skyscraper that will be Europe's tallest building when it is completed in 2010.

Property prices in the Russian capital's prime districts—where homes cost $7 million or more—are expected to appreciate 18 to 25 percent this year, according to British real estate broker Knight Frank, which opened a Moscow office in 2004. (Residences in that sector grew by 40.9 percent in 2007, compared with an 8.9 percent rise for the same market slice in London, the firm says.) New construction is fetching especially high prices.

The boom may be good for Moscow's swelling upper class, but it has endangered the city's architectural heritage. A number of landmarks, including important examples of Russian avant-garde and Constructivist design of the early 1920s—sometimes blocky, often austere, but nonetheless significant—are in danger of being wiped out.

The Moscow Architecture Preservation Society, a local nongovernmental organization, estimates that some 400 historically significant structures have been razed since 1992, and many others are crumbling after years of neglect. Even some buildings at Red Square, a Unesco World Heritage site, have been demolished to make way for a hotel and apartments.

"Moscow's architectural heritage is at a crisis point," says David Saarkisyan, head of the Schusev State Museum of Architecture in Moscow. "More and more new buildings are constructed every year, and no one seems to be enforcing laws to protect important monuments." He blames the unchecked destruction on local politicians, who, he claims, allow such projects because of financial incentives. (A small percentage of construction costs are levied by and paid to the city.)

Notable at-risk residences include the Narkomfin building, an acclaimed example of Constructivist architecture and avant-garde interior design that is near the top of Unesco's endangered-buildings list. Designed in 1928 by the architect Moisei Ginzburg, the six-story concrete-block residence influenced Le Corbusier, who studied it during his visits to the Soviet Union. After decades of neglect, it is now a crumbling relic owned by the Moscow city government and under threat of demolition. The building is increasingly being eyed by developers because it sits in an area of particularly lucrative real estate near the U.S. embassy.

"There are a lot of buildings in Moscow that are simply not worth saving in their present state," says Nikolai Mitevska, an independent developer who has worked with several large Moscow-based property-development firms. He says that while he and other big builders respect the efforts of preservationists, the Narkomfin underscores how older architecture is often ill-suited for sustained use. "It has minimal amenities, and even some residents are modifying the outdated interiors already," he says. "Moscow is growing economically, and there is now a tremendous need for luxury property, and that simply needs to be addressed."

The three-story Melnikov House, in central Moscow, has long been considered a landmark of Soviet architecture. Designed by architect Konstantin Melnikov for his family between 1927 and 1929, its Constructivist form—made up of two interlocking cylinders with rhomboid windows—was widely celebrated across Europe. In the 1990s, there were attempts to restore the home, but it has been deteriorating ever since. Now officials have given permission to a developer to break ground for a nearby high-rise condo project, which preservationists say has affected the stability of the site. (Billionaire property developer Sergey Gordeev bought a share of the house two years ago, but his office says he plans to preserve the building.)

The Moscow Architecture Preservation Society, a group of architects, historians, and international heritage managers, is aggressively campaigning for urgent action to save important buildings. The group is petitioning local and federal governments while fostering ties with international organizations like the International Council on Monuments and Sites and the World Monuments Fund. Last year, preservationists from around the world gathered for the Heritage at Risk Conference, which called on Moscow's mayor and former Russian president Vladimir Putin to stem the demolitions and protect important architecture from being razed.

"Most people don't really understand that Moscow's architectural history is at stake here," says Marina Khrustalyova, director of the Moscow Architectural Preservation Society. She says that because property buyers aren't typically concerned with historically significant architecture, the struggle to preserve important structures is daunting.

"The same wealthy people wielding influence in politics and Russian industry will have to step in and join this fight," says John Stubbs, of the New York-based World Monuments Fund. "If not, it will leave a period of incredibly bold architectural ideas that were unique to Russia unprotected."