Should I pay off my commercial property now?

[David Ruppert]

I have commercial property that I currently owe $141,000 through a SBA-HEDCO loan at 4.25%.   The tenant of this property is a brick and mortar retail business I own and the current market value of the property is approximately $1.5M.    I plan to build a 6 unit multi-residential building on the back of the property in the next few years which most likely will complicate keeping the current SBA-HEDCO loan due to restrictions of the loan.  I also want to payoff the property to reduce my debt liability and make it easier for my family to deal with should anything ever happen to me.

Are there any negatives to paying off the SBA-HEDCO property loan now?

Also, I was considering subdividing or CPRing the property into 2 lots, one property lot with the current retail building, and another property lot for the site of the future 6 unit multi-residential building.   I thought by dividing the property and putting ownership in separate LLCs it would limit my exposures and liability.   Does anyone see other pros or cons to dividing the property?