Rents a barrier to build-outs.

Despite the continuous notching climb of commercial rents, and corresponding descending owner contributions, tenants are still spending money on design work and other perks for their new office.

But when most tenants recover from the sticker shock of high prices per square foot for their new or renewed spaces and the smaller work contribution from the building owner, they start looking for other ways to save.

For many tenants, that means getting more bang from their design and construction budget bucks by having architects and construction companies utilize sleek, uncluttered designs, less elaborate back office space, and employing value engineering on fixtures and finishes.

"Even the financial services firms are very cost-conscious," said Ted Moudis, principal of Ted Moudis & Associates. "They are paying higher rents and getting less in construction, so they have to lay out more out of pocket."

Some firms are upscaling customer and client areas, such as reception spaces and conference rooms, but notching costs down for the remainder of the space.

"Most know this is cyclical, and while everyone is riding the wave, down the road, it has to be a smart installation for the calm market as well," he added.

Many companies are trading institutional styles for the loft-office look first popularized by the advertising and high-tech firms that moved into renovated loft buildings.

"We are seeing more and more spaces being designed architecturally bare, which in essence is better architecture," suggested Steven Papadatos of S.P. Papadatos Associates.

For instance, rather than installing hung ceilings, the ceiling structure and ductwork may be left exposed. They may use less furniture in the waiting areas, no moldings and different surfaces.

Tenant firms are also putting out their installation work to bid, even if only to negotiate a better deal with the owner of the building.

"They are getting their own bids because they feel they can control the contractor and get better value," explained Papadatos, who personally feels the bids would not differ too much.

Sometimes, rather than allowing the owner of the building to do the work, tenants are often requesting the cash value of today's typical Class A $30 to $35 a foot workletter and doling it out themselves, sometimes towards construction, sometimes on fixtures and furniture.

Architect Lou Switzer said when the company gets cash value rather than a work letter, it provides the ability to competitively bid the construction work.

"If the owner is doing it, you may not have the options," he explained.

Getting the construction services, however, will also cost more, mostly because there is plenty of work to go around.

"Years ago, we could be competing with five to seven other firms, but now it's down to three or four because we are all busy," said Paula Myruski, vice president of Interior Construction Corp.

While getting asked to bid on a job still often depends on having a personal relationship with the company, the designers and contractors have to make the numbers work.

Myruski noted, "We still have to sharpen our pencils and do our homework to be competitive and be awarded the contract."

When costed out, one of Moudis' projects came in at $75 a foot, but the client only wanted to spend $65 to $70 a foot, he said. That becomes a time when surfaces and fixtures may get swapped for something similar at a lower cost.

"If the client feels it's over his budget, the architect may ask us to do value-engineering to see where we can substitute materials," explained Myruski.

But Switzer, chairman and CEO of The Switzer Group, which provides interior architectural design and consulting and is working on a number of high cost projects, thinks this is the right time to go to the board of directors and get approvals to upgrade the company's space and furniture, and perhaps create a more elaborate lighting scheme.

"Bottom lines are so positive that firms tend to upgrade when we're in this kind of growth market, versus when things tighten up and they go for plain vanilla buildouts," he said. "They will probably also spend more on the plants and flowers in their offices."