"You know" is a phrase that introduces a sentence. It has lots of different uses, but one use is to make it sound softer when you have to disappoint someone or say "no" to their request:

A: Hey, do you want to go out for lunch?

B: You know, I'd love to, but I can't.

A: Do you know which direction Lincoln Avenue is in?

B: You know, I'm not sure.