In many of the best locations for new residential development — places near existing jobs, schools and shopping — there's a scarcity of available land. Often, however, such neighborhoods have 150-acre and 200-acre sites, with great expanses of green, lush landscaping and the occasional pond. They're called golf courses, and in some markets residential developers are now offering owners twice what they would get by selling to another golf-course operator.

Demand is “almost insatiable,” says Chris Charnas, director of the national golf practice at Cushman & Wakefield in Chicago. Charnas says for every call he receives from a prospective course operator, he receives three calls from developers out looking for a course.

The developers' calls are coming at an opportune time for course owners. Thanks to an oversupply of golf courses and a slower-than-expected expansion of the golfing population, returns are being squeezed. “It's harder and harder to make a decent profit,” says Jim Koppenhaver of Pellucid Corp., a golf industry analyst based in Buffalo Grove, Ill.

Even at Myrtle Beach, S.C., a national golf mecca, the average number of paid rounds for each of area's courses has fallen from 45,000 rounds in 1998 to 35,000 a year in 2005, says Donald Wizeman, a Myrtle Beach-based resort consultant. That number is only slightly above break-even for any owner with a mortgage, he estimates — and that's after Myrtle Beach courses has shrunk from a peak of 120 in 1998 to about 100 now.

At the same time, Myrtle Beach property prices have skyrocketed. Fred Beall, a local commercial appraiser at Cox Beall Associates, says that golf-course parcels that sold for $2,000 to $5000 per acre 10 years ago are now selling anywhere from $40,000 to $75,000 an acre. About 10 conversion projects have been completed, most of them a mix of single-family residential and condominiums.

THF Realty of St. Louis, a major power center developer, opened a 425,000 sq. ft. power center on the former Gator Hole golf course two years ago. Tenants include Wal-Mart and Home Depot. About one-third of the 175-acre property was reserved for the center, and the remaining acreage was sold off for single-family homes and 400 to 500 units of apartments and condominiums.

Building on the property presented a few difficulties, according to CEO Michael Staenberg of THF. “We had drainage issues … because on a golf course they grow grass,” he says. Otherwise, he says the development went well and THF would be happy to convert another course if given the opportunity.

But that opportunity may be hard to come by. Unfortunately for developers — and owners stuck in fiscal sand traps — only a limited number of golf courses are available for redevelopment. Over the past 30 years, many courses were built as an amenity in new housing developments and as a sop to zoning boards that wanted to preserve open space.

Boards gave their approval, but only with a restrictive covenant that limited the future use of the property, says Laurence Hirsh, president of Golf Property Analysts based in Harrisburg, Penn. He estimates that the majority of the country's 15,000 golf courses have some kind of restrictive covenant on them.

Nationally, among larger home builders, Pulte Homes, based in Bloomfield, Mich., may be the most active in redeveloping golf courses, according to Charnas. “If they can find a golf course, they'll do it in a heartbeat,” he says. In Myrtle Beach, national redevelopers have included Centex, D.R. Horton, and Lennar.