I bought a 140,000 square foot warehouse for $1.4 million when I ran my 3PL.
That's $10 per square foot. Central Pennsylvania, not that long ago.
Industrial space traded at an average of $138 per square foot through the first four months of this year. Closed sales, not asking prices. And that's the national average. Port markets like LA run far higher.
I keep thinking about that gap because of what I'm seeing on the other side of the table now.
A meaningful share of the distressed 3PL acquisitions we help with at
Fulfill.com traces back to the same decision. The operator committed to real estate at prices where the math never had a chance.
Here's the trap in slow motion.
You fill your warehouse. Growth feels inevitable. So you sign a 7 or 10 year lease on a bigger building at whatever the market demands, with 3.5 to 4 percent annual escalators baked in. Often with a personal guarantee.
Then the market moves underneath you. Inland Empire rents are down nearly 40 percent from peak. The operators who signed at the top are now paying above-market rent, on an escalator, in a soft freight market, and they can't get out. Sublease space clears at a discount, when it clears at all.
And your margin was never built to absorb any of this. GXO, the largest pure-play contract logistics company on earth, posted a 0.3 percent net margin in 2025. Most independent 3PLs live in the low single digits.
Rent doesn't care about your margin.
The brutal part is that the riskiest moment in growing a 3PL is the one that feels most like winning: the jump to a bigger building. One signature can convert years of future profit into someone else's mortgage payment.
It's why more operators are expanding through acquisition instead of square footage. And why more founders with a full warehouse are selling at the top of their curve instead of re-rolling the dice on a lease.
I don't have a clean answer for the owners already locked in. Some of these lease structures leave very few moves.
If you've navigated this from either side, operator or landlord, I'd genuinely like to hear how.