MIAMI, March 24 (Reuters) - The once-booming real estate market that made Jorge Perez a billionaire is crumbling around Miami’s “condo king” in what may be the biggest U.S. condo glut.

The chief executive of the privately held Related Group is South Florida’s most prolific developer, a driving force behind a string of high-rises and mixed-use developments from Miami to West Palm Beach who championed the frenetic construction well after the market peaked in late 2005.

Today, Perez is trying to ride out a huge inventory buildup and falloff in property values across Florida, long on the frontlines of the U.S. housing and mortgage default crisis.

“I think he just kind of went overboard,” said Lucas Lechuga, a Miami realtor and blogger.

About 45 percent of the nearly 23,000 condo units added to downtown Miami since 2003 remain unsold, said Peter Zalewski, whose Florida-based Condo Vultures Realty firm represents investors looking to buy large blocks of condos and rent them out until the market recovers enough to sell then at a profit.

He said many builders were having trouble paying down construction loans.

Perez’s latest project, a gargantuan complex called Icon Brickell, consists of a boutique hotel and more than 1,640 luxury apartments packed into three gleaming towers on a spit of land where the Miami River meets Biscayne Bay.

It was supposed to be a crowning achievement after 30 years at the helm of Related for the man dubbed “Tropical Trump” after New York real estate mogul Donald Trump. But Icon Brickell opened as Florida was getting hit with a meltdown in its condo markets.

In an interview with Perez splashed across its front page on March 1, the Miami Herald reported that his real estate empire was teetering.

Perez declined to comment and Related had no response to e-mailed questions about the possibility it could soon be forced into filing for bankruptcy.

The Related Group has lost more than $1 billion in the last year, the newspaper said, adding that it had nearly $2 billion in debt including $700 million from Icon Brickell alone.

MIAMI ABUZZ

Whatever his personal wealth, estimated previously by Forbes magazine at $1.3 billion, Miami is abuzz with talk about whether he can survive an extended downturn.

“It really depends on what the lenders behind Icon Brickell are going to do. If they take a discount on what they’re owed then perhaps he can come out of this somehow,” said Lechuga.

Two other Perez condo projects, including one just across the street from Icon Brickell, were already struggling with poor sales before the newer development opened.

“They are going through what every other condo developer is going through only magnified probably 10 times due to their size,” said Mel Roth, president of International Mortgage and Equity Advisors of Lakeland, Florida.

Only 18 of Icon’s pricey condo units had closed as of March 12, according to Zalewski. The first closing on residential units in the complex, where condos have gone for an average of $760,317 or $566 per square foot, occurred on Dec. 5.

That glacial sales pace could spell disaster for Perez, who faces what some experts say is the biggest supply and demand imbalance in a condo market anywhere in the United States.

“Not only is this market unprofitable, but at the same time it’s money losing,” Zalewski said. “Nobody gets into the development game basically to have product out there that doesn’t make money for them.”

The U.S. credit crunch and curtailed financing for consumers has been affecting most real estate markets, and Miami is no exception.

New rules from lending giant Fannie Mae, which buys mortgages from banks, have been anything but helpful when it comes to providing potential condo buyers with end-loan financing, Zalewski and others said.

The guidelines are aimed at curbing some of the abuses of the recent past when Florida and other markets were awash in mortgage fraud.

Jay Massirman, whose Miami company the Massirman Group buys distressed property, said a lot was riding on Perez’s relations with his lenders.

“I think they’re probably doing everything they can to stay in the game,” he said. “I don’t think there’s a lot of near-term solutions for the current state of the market.

“This condo conundrum is going to take time to work through.” (Editing by Doina Chiacu and Pascal Fletcher)