It used to be a bunkerlike office complex with drab workspace, but a makeover is under way to turn the former NCR building in Kaka'ako into posh residential condominiums with industrial accents and rooftop lanais.

Construction recently began on the conversion project that involves renovating the nearly 50-year-old building at 720 Kapi'olani Blvd. and adding a new diamondhead wing to enlarge the six-story structure by about 60 percent.

Developer Cooke Clayton LLC, a firm affiliated with Honolulu-based U.S. Pacific Development LLC, has been working on the transformation plan since buying the property in early 2005.

The company received development approvals a little more than a year ago from the Hawai'i Community Development Authority, and since then has been refining project details and obtaining building permits for the project dubbed Vanguard Lofts.

Some local planners and development consultants believe Vanguard Lofts is the first office-to-residential building conversion in Honolulu's modern history, though such projects are popular in other cities around the country.

Chris Deuchar, a Cooke Clayton partner and U.S. Pacific president, said urban loft-style condos will be an unusual product for a local market rife with new luxury glass-sided condo towers.

"There really hasn't been anything built like this in Honolulu," he said.

As designed, the Cooke Clayton project will have 35 units, about half of which will feature private rooftop lanais from 335 square feet to 2,000 square feet.

Most of the rooftop lanais will be accessible from the residential units by exterior spiral staircases, and can be equipped with such amenities as a whirlpool spa, garden and outdoor kitchen.

The project is also designed with photovoltaic solar panels to produce electricity, and one shared-use rooftop area for an infinity edge pool, whirlpool spa and barbecue pavilion.

Unit interiors range from 835 square feet to 2,900 square feet with one to four bedrooms. Interior spaces will have high open ceilings exposing mechanical ductwork and sprinklers, accented with finished dropped ceilings. Other loft-style features include sliding bedroom walls, hardwood and polished concrete floors and 9-foot windows.

About 4,000 square feet of ground-floor space is available for retail use by one to three tenants.

"We are extremely excited about this project, Deuchar said. "The Vanguard Lofts will be located in the heart of Honolulu, establishing a new unique standard of living in the urban Downtown area."

Deuchar said prices haven't been set yet because construction costs haven't been finalized, but he expects units to sell roughly from the high $500,000s to more than $2 million.

Sales are expected to begin in February after a sales office and model unit are constructed in the building. The broker will be Karl Heyer of Heyer & Associates LLC.

Project completion is planned for February 2009.

Initially, Cooke Clayton envisioned the project having 47 units, 12 more than currently planned. Deuchar said market studies and comments from interested individuals convinced the development team to increase the size of units, which required reducing the number of units.

Deuchar said response to the project has been good.

Last year, officials with the Hawai'i Community Development Authority, a state agency regulating development in Kaka'ako, largely viewed the project as improving the fabric of the community as an alternative to the high-rise development that is sweeping Kaka'ako.

A presentation before the Ala Moana/Kaka'ako Neighborhood Board last year drew generally positive feedback in part because the project has relatively low density and renovates an eyesore.

The former NCR building, named for an Ohio-based firm once known as National Cash Register Co., was built in 1958 and expanded in 1963, according to city records. National Cash Register bought the property in 1974.

In 1998, nonprofit labor welfare organization Unity House bought the site for $5 million, and held it mainly as an investment after deciding not to move operations to the building.

Cooke Clayton bought the largely vacant property in early 2005 for $6 million, and initially envisioned remodeling the building and using part of it as a new headquarters for U.S. Pacific.

Reach Andrew Gomes at agomes@honoluluadvertiser.com.