After its founding in 1854, the Waltham Watch Co., originally known as the American Watch Co., helped keep trains on schedule. Located in Waltham, Mass., the company became a huge business, with workers operating amid 23 brick buildings to produce more than 40 million railroad watches and other precision instruments.

The company closed the factory in 1957, and in 1989 the site was placed on the National Register of Historic Places. A variety of businesses moved in, yet they occupied only a quarter of the buildings’ almost 405,000 square feet.

Although many of the buildings had greatly deteriorated, they offered potential for adaptive reuse, which real estate investor First Republic Corp. recognized when it bought the complex in 2007. Location also played a major role, with the buildings adjacent to the Charles River and only 11 miles from Boston.

To convert the buildings into a mix of offices, shops, restaurants, and apartments, First Republic hired Boston-based developer Berkeley Investments, which purchased an ownership stake and worked with the U.S. National Park Service to obtain historic tax credits. Berkeley, in turn, brought on board Cambridge, Mass.–based architects Bruner/Cott & Associates, who had expertise in adaptive reuse. A collective effort led to the project’s renaming as The Watch Factory.

Because of the enormous scope of work required, the team broke the construction into three phases, leaving intact exposed brick, wooden beams, and wood floor joists, but changing almost everything else, says Joseph Laurano, Berkeley’s director of operations. In went steel cross bracings to meet current seismic codes, as well as new plumbing, HVAC, electrical wiring, and windows. Brick throughout was tuckpointed.

As work proceeded, designs remained flexible for unforeseen contingencies. “Opening roofs, walls, and floors led to surprises—and changes. Nothing’s ever as straightforward with adaptive reuse as when building a new building,” says Laurano. In opening a space between two of the buildings, for instance, two 8-by-16-inch-wide columns were exposed; neither could be removed. They were incorporated into the design, visual reminders of how buildings used to be built.

Phase one started with transforming 11 buildings measuring 160,000 square feet into 24 offices, with two large glass vestibules added as entries. Office space was leased quickly, to mostly small businesses.

Phase two, which consisted of converting six buildings into residences, presented a challenge because of the narrow, 25-foot widths with windows on both sides. While that configuration admitted good daylight for watchmaking, it made livable layouts tougher. Bruner/Cott’s solution was to orient the 96 units vertically as two-story open lofts, says architect Christopher Stanley, senior project manager for the job.

The third phase, now under way, is adding 67 lofts in three buildings, with occupancy slated for 2014.

The project’s professional quarters were designed with neutral painted backgrounds and columns and red brick walls to recall the buildings’ roots. Residences, in contrast, were overlaid with a modern vibe and playful colors. The developer also allotted space for a community center, a fitness facility, and historic exhibition space.

Outdoor areas became another priority. The team, in conjunction with landscape architects Richard Burck Associates in Somerville, Mass., demolished three buildings to fashion three courtyards with sitting areas and circulation paths. A new shed houses bikes and kayaks, and two docks are going up along the river. The firm worked with a watershed association to design downspouts, runnels, and plant beds that clean rainwater and send it to rain gardens and on to the river.

The redevelopment cost totaled $118 million, which Laurano says was a sound investment. “Our due diligence proved our timing was right. Waltham has benefited in our bringing an old dame back to its original glory,” he says.