The blog at RDNY.com seldom posts about commercial real estate. Quite frankly, we’re not all that interested in the ups and downs of the commercial market, only the residential rental market. But this post, we felt, was a public service to you, our readers. After all, when you shop at a high end store like Victoria’s Secret or Abercrombie & Fitch, or work for book publisher Hachette Book Group or advertising firm Euro RSCG Worldwide, you don’t expect to bring bugs home to infest your apartment.
So let this article be a warning. Bedbugs attack every age group and every income group.
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By Adrianne Pasquarelli in Crain’s New York Business.com. July 25, 2010

Move over, Dracula. There’s a new bloodsucker in town. Just ask lingerie chain Victoria’s Secret. Earlier this month, after news reports surfaced of a bedbug infestation at a downtown retailer, the Ohio-based company proactively checked its 10 Manhattan sites and found what officials described as “isolated areas that may have been impacted.” It closed one midtown store for several hours and discarded contaminated inventory. Such measures cost a bundle, but Victoria’s Secret can at least take comfort in the fact that it’s in good company.

“This summer alone, we’ve treated about 20 stores,” says Diego Vasquez, general manager at West Village-based exterminator EcoChoice. “Last year, it was mostly residential, but this year, we’re getting a lot of calls from federal and city buildings, libraries. It’s growing.”

Bedbugs—nocturnal, bloodsucking insects about the size of an apple seed and notoriously tough to eradicate—are taking a bite out of Manhattan business this summer. Once perceived as an outer-borough residential scourge, they’ve been found nesting in some of the city’s priciest spaces in recent weeks. The bugs may be little, but their effect can be big, from damaging a brand’s image, to sparking major changes in retailers’ return policies, to requiring frequent pest-control checkups that can cost thousands of dollars a visit.

So far, infested stores in Manhattan include Abercrombie & Fitch’s South Street Seaport shop, its Hollister division’s SoHo flagship, the Bed Bath & Beyond-owned BuyBuy Baby in Chelsea.

There are many more shopping haunts the public doesn’t know about, since retailers always request confidentiality agreements, according to Jennifer Erdogan, director of the bedbug division at exterminator Bell Environmental Services.

“Bedbugs scare people,” she says. “Stores don’t want to lose business.”

Perfect weather for breeding

Offices aren’t immune to the fear, either. Both advertising agency Euro RSCG Worldwide in Hudson Square and publishing firm Hachette Book Group near Grand Central Terminal discovered bedbugs in their offices this month.

“Employees were understandably concerned,” says a spokeswoman for Hachette, which spent last week chemically treating its Park Avenue offices. “You read about it all over town, and when it happens in your own office space, it’s a little worrying.”

Meanwhile, a Brooklyn movie theater has been infested. So, too, has the triage room in Kings County Hospital.

The city tracked more than 31,700 bedbug-related 311 calls during the year ended June 30, a nearly 20% rise over the prior year. During a scorching summer when temperatures have consistently exceeded 90 degrees, these relentless critters are multiplying exponentially.

“Heat speeds up their life cycle, and if the feeding is good for them, then more eggs can be produced and more bugs will populate,” says Lou Sorkin, an entomologist at the American Museum of Natural History.

Bedbugs don’t carry disease; they simply suck a person’s blood for up to 10 minutes, usually when that person is asleep, leaving an itchy welt. And bedbugs don’t fly (the only good news you’ll read in this story); they simply spread as if they do, lurking inside a fashionably cuffed pant leg or the lining of a handbag, commuting from home to store to office and back.

Since many stores downplay bedbug news—claiming, for instance, that an outpost is closed for “maintenance,” as a sign outside Hollister reportedly read this month—there’s no way to easily locate infestations.

“Most people don’t discover they have bedbugs until there are about 120 present, which takes close to a month,” says pest-control expert Ms. Erdogan.

The financial damage can be severe. It’s up to business owners to eliminate bedbugs in their buildings, according to a spokeswoman for the city’s Department of Health and Mental Hygiene. Businesses also must deal with potential public outcries, especially when databases like BedbugRegistry.com are tracking their every bug.

“It can be extremely damaging,” says Michael Londrigan, chair of merchandising at fashion institute LIM College. “If the news starts spreading nationally, people will be concerned.”

Pest-elimination measures generally start at around $5,000 for a simple 5,000-square-foot office and can surpass $50,000 for a 10,000-square-foot call center or store with lots of equipment or inventory. Since fumigation is illegal in crowded Manhattan, some companies opt to move items off-site for treatment and extermination. Heat chambers or freezing methods can also be employed on-site.

Fumigated inventory goes back on the shelves, but many retailers discard all infested product. For a 40,000-square-foot flagship like Hollister’s, this could mean $1 million in dumped apparel, experts estimate.

“Those sales are just lost”

Then there’s the lost revenue during the prime back-to-school shopping season. The Hollister and Abercrombie stores were both closed for several days, missing out on tens of thousands of dollars of sales per day.

“Those sales are just lost—they never get them back,” says Mr. Londrigan.

Since the outbreaks at stores might have been started by clothing returns, many retailers are expected to begin tightening their take-back policies, something they’ve been itching to do anyway, say industry pros. Instead of having a leisurely 90 days to return unwanted merchandise, customers might soon have just a week or two to bring back unused, unwashed items with attached tags and a receipt—in the same bag used for the purchase.

“Retailers will take advantage of this to be more restrictive with returns,” says Matt Hogan, a brand strategist.

Businesses are also trying to get ahead of the bugs by signing on for preventive programs with exterminators that can include monthly visits by bedbug-sniffing dogs. The costs can range from $250 to several thousand dollars a visit.

Timothy Wong, the technical director for Lower East Side-based M&M Pest Control, says his company now has 19 hotel clients, 50 commercial offices and 25 recent retail clients all receiving checkups.

“They don’t want to call us when they have the problem,” he says. “They want to call us before it starts.”

https://www.crainsnewyork.com/article/20100725/FREE/307259963

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Written by Lorenzo

Lorenzo has been hanging around the RDNY.com office for the past 24 years, and, in the process, has become the president of RDNY.com, Rent-Direct.com, and Acmelistings.com. His mission is to build RDNY.com into New York's largest no fee apartment rental service. Before RDNY.com, Lorenzo was a Regional Sales Manager for Time Equities, Inc., one of New York's largest converters of rental buildings to coops and condos. Lorenzo was once a part owner of Swift & Watson Real Estate in NYC's Greenwich Village.

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