Grammar question: Verb suffix – Is the conjugated always written separately?

Example: The man is walking around.

Of course, it's written separately here. (I'm running around, you're running around, he/she/it's running around, etc.)

And although my German skills are above average, I'm not 100% sure about the following.

Option 1: He can't look right now because he's walking around.

Option 2: He can't look right now because he's walking around.

Which variant is correct?