In California, lenders can come after your personal assets if you don't keep up with payments on the refinanced loan. That's because most lenders will make you sign a personal loan guarantee. Simply put, if you have two pieces of commercial real estate, one bad and one good, don't use the good piece as all or part of the collateral for refinancing the other. If you do and later default on the loan, your creditors will be able to take the good property from you. It's also extremely important to consider the tax ramifications of any commercial refinancing.
Many people refinance a piece of commercial real estate to avoid having to sell it and pay tax now.
In many cases, you can refinance the property and have more cash proceeds available than if you sold the property and paid tax. It's called having your cake and eating it, too. However, refinancing might not guarantee the best tax benefits. If you have excess money after the refinancing, be careful. The interest you pay on the excess proceeds will only be deductible if you can trace these funds to new investment property.