In the past year, defense company SAIC Inc. has shrunk the office space it either owns or leases by 306,000 square feet, the size of about five football fields, Reuters reported.

Now, it is thinking about tearing down many of the walls at its headquarters in McLean, Va., replacing private offices with open-floor layouts. Fewer offices mean the same space can accommodate more people, which will help cut costs further at a time when the defense industry is facing a downturn.

"The consequences of making smart real estate decisions are more pronounced because we have, candidly, greater cost pressures, greater competitive pressures today than we have had in years," said Mark Sopp, SAIC's chief financial officer. "It has to have the latest technology and collaboration environment, but it's got to be smaller and cheaper than what we might have otherwise built 10 years ago."

The palatial headquarters that came to symbolize the rise - and the fall - of companies such as AOL Time Warner Inc. and CIT Group Inc. may have had their day, executives and real estate experts said. While the bare-bones headquarters favored by Wal-Mart Stores Inc. may be too spartan for many, plenty of companies are rethinking real estate costs as they look to boost margins in a slow-growing economy, they said. Read more.