Two part question:

1. You own a 20-story Class A office building in a near urban suburb of a major city. The building is operating at 10% vacancy, but the three tenants who occupy the top seven floors have given notice that they will be vacating within two years. You are contemplating converting the top floors to luxury condominiums with an expected Net Present Value of $8.4 million. Would this be an operating, investing or financing activity?
2. Calculate the stabilized cash flow that you would need to achieve from staying the current course (I.e., renting the office space) if the Cap Rate for similar office buildings is 5.5%.