Hagerstown Fire Department Chief Gary Hawbaker said fire damage was heaviest on the top floor, and that there was water damage throughout the building.
Blondies Santa Fe Restaurant and Boutique, a Mexican restaurant that closed about three months ago, had been on the first floor of the building.
There were six apartments in the top three floors. Five of those apartments were rented, building owner Mark Webb said.
Webb said the building's seven tenants all found temporary shelter either with friends or through The American Red Cross.
Hagerstown City Engineer Bruce Johnston said that an alley beside the building and the sidewalk, parking spaces and one traffic lane in front of the building will be closed until damaged walls are taken down or stabilized, probably within a few days.
Johnston, who said it appeared the building was repairable, said the tops of the exterior walls are unstable and "could easily come down in a thunderstorm or good gust of wind."
A little after noon, Helen Sanbower was working at the One Hour Professional Cleaners when a man came in and said there was a fire on the back porch of the building next door and they should call 911.
"We ran out the back and there was nothing but flames. It was unreal," Sanbower said.
Within 10 minutes a second fire alarm went out. Soon all of the city's fire department vehicles and as many as 50 firefighters were on the scene.
When Hawbaker arrived, the rear of the building was engulfed in flames, and he feared the fire would spread to the rest of the block.
The building is diagonally across Franklin Street from the post office and is between two three-story buildings.
One Hour Professional Cleaners, on the first floor of a building separated from the blazing building by a narrow alley, had some water damage.
On the other side is a brick building with the office of State Farm Insurance agent Steve Swayne on the ground floor.
Swayne's office had smoke and water damage, according to the Hagerstown Fire Department.
Hawbaker credited the first firefighters on the scene for keeping the fire from spreading to nearby buildings.
Firefighters wet down the walls and roofs of the adjoining buildings to keep them from igniting.
Monday's two-alarm fire marked the second multiple-alarm fire for the Hagerstown Fire Department in 1999.
The previous two-alarm fire this year was May 3, when an apartment building on East Wilson Boulevard was heavily damaged in an early-morning blaze.
Since 1988, the Hagerstown Fire Department has responded to 16 multiple-alarm fires within city limits, including Monday's.
According to fire department officials, multiple alarm fires occur when the assigned fire equipment and/or manpower initially dispatched to a fire scene prove to be inadequate, either because of the amount of fire or special circumstances such as trapped people or proximity to other buildings.
By 12:30 p.m., the first blocks of West Franklin and West Washington streets were closed to traffic. A portion of West Washington Street was closed because a fire hydrant on that block was being used.
More than 100 people stood outside the yellow police tape watching the fire burn through the top floor and the roof of the building. Flames shot out of the top floor windows for more than an hour.
Some spectators pulled their shirts over their noses and mouths to avoid breathing in too much smoke. At times the smoke was so thick it was impossible to see across the street.
Firefighters brought the fire under control by 1:48 p.m.
West Washington Street was opened to traffic about an hour later.
Shortly after 4 p.m. firefighters began leaving the scene. One lane of West Franklin Street was opened to traffic at about 4:15 p.m.
One Hagerstown fire engine was stationed at the building into the night in case the fire reignited.
Webb said that he bought the property four years ago and had replaced the plumbing and electric systems within the last year.
Webb said he had insurance on the building, which he said was "totaled" by the fire. He estimated damage at close to $300,000.
Webb said a friend of one of his tenants called him to tell him about the fire.
"At first you think they're exaggerating. But I smelled the fire at McDonald's (on Dual Highway) and that got me really worried," he said. "I thought it must be serious if you can smell it from here."
Staff writers Marlo Barnhart and Greg Simmons contributed to this story.