Chalk me up to another in the camp of exercise is more important than space!
We had our husky in our little 2 bedroom apartment when we first got him, and he did amazingly well because of how much time we spent out walking and playing.
I'm going to plant the idea of an adult in your head, though!
I totally see where people are coming from saying that raising a puppy with a cat is easier. Every issue is going to be MUCH easier starting from scratch rather than trying to change a set in habit. However, there are often dogs in rescues that have previously lived fine with cats, and GOOD rescues (something you need to search out as much as good breeders!) will have their dogs cat tested and know which ones will be fine, and which ones seem like to have a problem. With an adult dog, you are past all of the puppy phase: longer attention span, able to hold their bladder for much longer, possibly come to you with obedience under their belts, etc. They're also likely to be calmer, so they may not need as much rigorous exercise and training to wear them out. You also have a much better idea of the dog's temperament than you would with a puppy, who is a wild card.
That said, if you actively WANT a puppy, I'm not at all putting you off from a breeder. Our husky was an adult rescue because we were just looking for a pet dog. We're waiting on a GSD puppy from a good breeder this time around, because I want to actually go out and be active in sports and competitive obedience. We have our husky, a cat, AND a toddler, so that combined with what we want in a sport dog, it makes it INSANELY hard to find in a rescue. We're going to have the time for it, and a puppy can come with me to work while it's potty training, so that's our plan.
It's really all a matter of figuring out your situation, what you specifically want out of a dog, and what you feel most comfortable raising.
Don't let something like one particular issue (good with cats) make your whole decision for you!