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Favorite room: "Walter's bed," a tiny sleeping/playroom just big enough for a 2-year-old grandson.

Created by: Al and Mary Hermansen, Excelsior.

The back story: The Hermansens had decided to downsize — by moving into the house that Mary's father had built in 1948, and undertaking a full remodel. "We designed it to age in place," said Al. The home's open floor plan includes wide doorways and just one bedroom. It was perfect for the two of them, but where would their youngest grandson sleep when he came for visits? "We started thinking, 'We want him to stay overnight. Where can we put him?' " said Mary. So the couple borrowed a few square feet from their front entry hall and built a 6½ by 8-foot bedroom inspired by the Dutch or "cupboard" beds they'd admired in Europe. "When we were traveling, we'd see places using space so well — so cozy!" said Mary. And it fit the couple's less-is-more philosophy and playful spirit. "I wanted it whimsical," said Mary. "I wanted a fun house. You don't need a lot of square footage."

How they created it: The Hermansens' cupboard bed is only as big as a single mattress, but it's packed with charming built-ins including a wooden headboard, a roll-out drawer under the bed for storing toys, a bedside table with bookshelves and even a small TV. Mary designed the room — "I was up many nights with pencil and paper," she said — and Al did the construction, using materials salvaged from other projects, including a vintage paned window from the home's basement. "We try to repurpose as much as we can — and keep things out of the landfill," said Mary. The room's sliding doors can be opened to overlook the couple's garden, or closed to create a tiny private retreat. Three windows let in plenty of light, and the couple also hired an electrician to install "mood lighting" in a ceiling beam. "I like it looking like candlelight," Mary said. For a finishing touch, they hung a distinctive and nostalgic piece of artwork, a photo of Mary's father ice-fishing that was enlarged and mounted on rustic wood.

The payoff: Grandson Matthew Mikkelson, for whom the room was built, is still in a crib and too young to sleep in Walter's bed, but he often plays there. "He loves it!" said Mary. So who's Walter? Mary's grandfather on her father's side. When the Hermansens' daughter Jenny Mikkelson was pregnant with Matthew, Mary's father suggested she name him Walter. She didn't, but the name stuck, and everyone in the family now refers to Matthew's room as Walter's bed. The room is getting more use than the Hermansens expected; sometimes the adults retreat to Walter's bed for a little R&R. "It's my "day-off room," said Jenny. "I can close the door and read." Al also finds many uses for Walter's bed. "It is perfect for an afternoon nap, late-night TV-watching or just a place to relax with a good book ... very comfy."