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If you like the look of recessed shelves, go for it! And while you're at it, take advantage of the rest of that spare room inside the wall. Here, hidden cabinets on either side of the shelves can hold plenty, so you can keep the living room looking sleek.
Open up the space under built-in seating to hold books, shoes — pretty much anything your heart desires.
Guest rooms are a luxury not all of us can have, and even when we do it might need to work double-duty. By day this one is a slick library...