The Magic Shop, a recording studio on Crosby Street in SoHo that was a favorite of Lou Reed, Norah Jones and David Bowie, who secretly recorded his last two albums there, will close next month after 28 years, a victim of a changed music business and a red-hot real-estate market.

Steve Rosenthal, the Magic Shop’s founder, said in a statement on Monday that March 16 would be its final day. Though he gave no reason for the closing, the studio had been in a dispute with its landlord for more than a year. An attempt by Mr. Rosenthal to buy the property — backed by Dave Grohl of the Foo Fighters — failed when his bid was rejected by the co-op board of the building, 49 Crosby Street.

Mr. Rosenthal said he would continue his business in audio restoration and archiving. Over the years, he has worked on recordings by the Rolling Stones, Elvis Presley, Woody Guthrie and the jazz pianist Erroll Garner. He shared a Grammy nomination this year for his work on a recording by Mr. Garner.

“As the city becomes more of a corporate and condo island,” Mr. Rosenthal said, “some of us wish for a better balance between money and art, between progress and preservation, and we hope that one day we will see a reversal of the destruction of conscience and community we are witnessing.”