Training Facility
A training facility is an equestrian property designed and operated for the professional training of horses and/or riders. Training facilities typically include multiple stalls, one or more riding arenas, round pens, longe areas, and sometimes cross-country or trail courses depending on the discipline.
They are commercial operations that generate revenue from training fees, lesson programs, and show preparation services. Training facilities require commercial or agricultural zoning and, in many jurisdictions, a conditional use permit.
They are classified as income-producing properties for financing purposes and cannot be purchased using residential mortgage products. Lenders evaluating training facility loans assess the business income, operating history, and collateral value of the equestrian improvements independently.
Training facilities require specific zoning and permitting that differs from personal-use horse property. In most Arizona jurisdictions, operating a commercial training business on residentially zoned land requires a conditional use permit. Agriculturally zoned land may permit training as a by-right agricultural use, but this varies by county and sub-classification. Buyers purchasing a property with an existing training operation should obtain copies of all permits and CUPs associated with the commercial use and review the conditions attached to those approvals before closing.
Financing a training facility requires commercial or agricultural mortgage products. Residential loan programs are not available for income-producing equestrian properties. Lenders underwriting training facility loans evaluate both the real property value and the business — its income history, client base, competition, and management — as components of the credit decision. Buyers without an established training business purchasing a facility they plan to operate must demonstrate their qualifications and provide a business plan, which is a materially different underwriting process than a residential purchase.
Insurance requirements for training facilities are substantial. Commercial equine liability coverage, workers' compensation for employees, commercial property coverage for structures and equipment, and professional liability coverage for training instruction are all components of a comprehensive risk management program for a training operation. Buyers should obtain an insurance quote for the intended operation before closing to understand ongoing insurance costs, which can be significant and affect the financial feasibility of the business.
Key Points
- Training facilities are commercial equestrian operations generating revenue from horse and rider training.
- They require agricultural or commercial zoning and often a conditional use permit.
- Training facilities are classified as income-producing properties for financing purposes.
- Residential mortgage products cannot be used to purchase training facilities.