PARSIPPANY, NJ-New research from Colliers International suggests that the New Jersey office market is stabilizing, although marked improvement is critically dependent on the pace of economic expansion. Until then, landlords are continuing to lower rents, albeit just slightly, and offer more concessions in advance of lease expirations. Some tenants have already capitalized on this by seeking upgrades to their existing space.

Meanwhile, a few large tenants are helping to stabilize the office market. Watson Pharmaceuticals Inc. is expanding in Parsippany to approximately 148,000 square feet, and BlackRock Inc., which at one point considered relocating from New Jersey, recently leased 141,375 square feet at 1 University Square Dr. in Princeton. In addition, chemical company BASF Corp. is building a new $100-million, 325,000-square-foot headquarters building in Florham Park.

Several positive macro-economic trends may spur additional expansions. US businesses with fewer than 20 employees are continuing to hire, which extends an upward trend that began in mid-2009, according to the June 2010 small-business employment index from Intuit Inc. In addition, the state’s recent budget plan may encourage small companies to become more confident about hiring later in the year.