This story was updated with further information on personnel changes.

Money manager BlackRock’s latest deal, a $12.5 billion purchase of Global Infrastructure Partners, provides further credence to the expectation that planes, trains and automobiles — as well as wind farms, natural gas pipelines and data centers — will be a major focus for commercial real estate investors.

BlackRock, the world’s largest investment overseer by assets under management, agreed on Friday to buy the New York-based operator of transportation, energy, waste and water companies GIP in a deal expected to close in the third quarter. The stock and cash deal, a move that helps BlackRock diversify its $10 trillion portfolio of assets, comes amid reports of management changes, including the departure of the firm's global head of infrastructure and real estate. BlackRock also plans to issue $3 billion in debt to fund the cash portion

From the perspective of commercial real estate, the move spotlights the rising importance of investments in major systems and networks used by the general public. Public and private sector leaders in the U.S. realize more money must be spent on rebuilding this infrastructure, the Council on Foreign Relations said in a September 2023 report.

“U.S. infrastructure is both dangerously overstretched and lagging behind that of its economic competitors, particularly China,” according to the report by the Washington, D.C.-based think tank. “Economists say that delays and rising maintenance costs are holding economic performance back.”

BlackRock’s deal comes as money is already pouring into large projects from an array of backers. The Biden administration is awarding billions of dollars in grants for infrastructure projects, from the installation of electric vehicle charging stations to providing broadband internet access to rural areas.

The state of California, with some federal help, may spend up to $128 billion to construct a high-speed passenger rail line between Los Angeles and San Francisco, according to trade publication Construction Dive.

BlackRock has experience investing in the global infrastructure market, which the company said Friday is valued at about $1 trillion. BlackRock has $50 billion of infrastructure assets under management, the company said in its Friday statement announcing the deal.

Due to the massive scale of infrastructure projects, funding typically comes from government sources or from private investors who have the financial wherewithal to park money in something where returns won’t be realized for years or decades, according to Bloomberg.

Large investment firms that already focus on major networks and support system properties include Allianz, Brookfield Asset Management and Macquarie Asset Management. Foreign governments are also major investors in infrastructure projects, according to the International Forum of Sovereign Wealth Funds, investing at least $17 billion worldwide in development of this kind.

Stephen Cohen will take over as chief product officer heading global product strategy, while Salim Ramji, global head of iShares and index investments, is leaving, Reuters reported, citing a company memo. The global head of infrastructure and real estate, Anne Valentine Andrews, is also departing, according to publication PERE, as BlackRock focuses on those types of properties. Edwin Conway, head of private markets equity and investing, will also leave BlackRock, PERE reported.

“Infrastructure is one of the most exciting long-term investment opportunities, as a number of structural shifts re-shape the global economy,” BlackRock CEO Laurence Fink said in the statement. “We believe the expansion of both physical and digital infrastructure will continue to accelerate, as governments prioritize self-sufficiency and security through increased domestic industrial capacity, energy independence, and onshoring or near-shoring of critical sectors.”

In the $12.5 billion deal, BlackRock agreed to pay $3 billion in cash and about 12 million shares of BlackRock common stock. About 30% of the purchase price will be deferred for five years and will be paid in common stock, based on “the satisfaction of certain post-closing events,” which BlackRock did not describe.

Earlier this week, BlackRock said it plans to terminate 600 workers, CNN reported, citing a separate internal BlackRock memo after technological changes in the financial industry. Fink reportedly wrote in the memo that exchange-traded funds, which require fewer staff to manage because of their passive-investing nature, have grown in popularity, requiring less staff to manage.

BlackRock also said Friday that it promoted Susan Chan to head its Asia Pacific region and named Hua Fan head of China. BlackRock also named Stephen Cohen head of a new global product strategy group focused on exchange-traded funds.