I'm perplexed that a boarding stable owner would allow a horse to get in this condition.
I know that it wasn't their horse, but I couldn't stand to see a horse that got in such horrible condition he couldn't *walk* around the arena without tiring out. This sounds much worse than just being under conditioned. Was he kept in a stall all this time?? If so, that seems soooo CRUEL to me.
I would worry about fattening him up a little first. Empower is a fantastic fat supplement that will yield results almost immediately! Not overly expensive, either.
But are you sure there isn't something more significantly wrong with him if he can't even be lunged around at a walk?? That sounds much, much worse than a horse who just hasn't been exercised. Sounds like he was confined in a small space to the point his muscles have begun to atrophy...and like I said...had I been the barn owner, I'd never have allowed this to happen. Ever. I wouldn't care if it wasn't my horse.
That being said, get the recommendations of a good vet. Have some blood work done. Take it slow and easy, but work with him every day.