A method includes receiving a source file specifying circuit components and electrical connections therebetween. At least a portion of the circuit components and electrical connections are within one or more of a set of logical hierarchical groupings, and a given one of the groupings has one or more electrical connections to at least another one of the groupings. The method also includes selecting an initial subset of the groupings based on one or more characteristics of respective ones of the set of groupings and performing individual logical optimization of respective ones of the initial subset. The method further includes determining a revised subset based on the one or more characteristics of the respective ones of the set of groupings as modified by the logical optimization, and performing global physical optimization of the circuit components and electrical connections based at least in part on the revised subset.