That sounds like a good question for the trainer and current owner of the dog. The answer probably depends a lot on the indiviudal dog (it's energy level and behavior) and the confidence/skill/experience level of the handler.
If the dog is a heavy puller or reactive on leash (lunges, barkes, hackles at dogs or people, ect.) then it may not be wise to walk him with a toddler. That's just a lot to safely manage.
I'd probably walk him alone for a while (or when there's another person with you to manage the kids) so that you can get a feel for the dog, his temperment, how he reacts to things, and how to work with him.
I walk our GSDs (well, I'll choose one of our two) with our two-year-old and four-year-old sons all the time. This was much easier when I could put the kids in the double stroller. Now they prefer to walk, which makes things a bit more challenging. Although I go on easy outings with just myself, a dog, and the kids, I am the most at ease when I am with another person who can help corral the un-leashed members of my family.
So, yes, in answer to your question, I think you should be able to go on family walks if the GSD is trained and non-reactive, especially if someone else comes along to help you. I just wouldn't count on it as the dog's primary form of exercise, especially if he's young and active.
My GSDs have been nothing but patient, but even so I try to discourage the kids from hugging/groping at them; that puts the child right at face level, a dangerous place to be if the dog were to bite. Most dogs don't like to be hugged (and even if my dogs tolerate it, the neighbor's dog might not), and I just prefer for them them to interact in other ways.
When the boys want to interact with the dogs, I help them to pet or scratch them in appropriate places, or I will give them a soft bristled dog brush and help them to groom the dogs along their backs and sides. If we're out on a walk, sometimes they want to help, so I'll hold the leash up front and let the kids hold the back of the leash where they can't put any tension on it. If we're training, I'll sometimes let the kids give the treats (don't do this if your dog isn't gentle around food), or I'll let the boys give the commands while I'm standing nearby to give the hand signal so they obey. I tend to not let the kids touch the dogs' paws or ears because they're just sensative areas. I also put the dogs away when I feed them or if I give them high value treats/toys.
Good luck in your dog-search. Sounds like you have found a wonderful family dog. Be sure to keep us updated and to post pictures.
