Tax consequences of refinancing for and LLC (Partnership)

[DJ Birnie]

I own a few single family rental properties in an LLC with a few other partners. With rates at all time lows I am considering refinancing these properties. There are a few portfolio lenders who will make a loan directly to the LLC. However, to get the best rates we would need to get agency debt (which only lends to individuals - not entities). We can still get agency debt, but it would require taking the property out of the LLC (aka "distributing property from the partnership) and then immediately placing the property back in the LLC (aka "contributing property to the partnership).

My question....

- Would this transaction trigger any negative (or positive) tax consequences?  ie - would the partners have to recognize gain on the appreciated value of the property?  do the distribution and contribution just cancel each other out, in effect making the transaction unreportable?  any other consequences that I am not considering?

Any help is much appreciated.  

Thanks,
DJ