you could put a desk and some shelves for a little office.

Or a padded bench and some books shelves for a little reading nook!!

Or put a curtain in front of it and use it for storage.

I'm thinking of an easy chair tucked into that alcove, along with a good light and an end table; it'd be a wonderful little reading nook. Or, you could install shelves, for an inset bookcase.

It would look great stuffed with bookshelves top to bottom and a good-looking comfy reading chair tucked in. For a "working library" the chair could mask a flip up/down worksurface for your laptop.

Is that an electrical outlet in the center? Home theater comes to mind. Big mirror on the wall & instead of just a bar; a western type saloon. Or 50s diner style, lounge or reading nook. Interesting what you could also do with the space above the nook.

Wow! I love that. It just screams reading nook. There are quite a few nook ideas on Pinterest. I like the elements in these two...the first one with the rack to hold books and magazines:

http://pinterest.com/pin/165788830002989725/

And this one, which is obviously for a little girl, but I like the shelving again and the under the seat storage:

http://pinterest.com/pin/67905906850975748/

Have fun doing it up in your style! I would love to see you post an update when you're done.

Do you entertain? A BAR NOOK! I could see a cool contrasting wallpaper or color in there and a great unique console table/mirrored dresser/bar cart or whatever your style is- hanging some shelves above and making it a bar area. You can get a great serving set and some decanters and glasses etc. You could hang two curtains with hooks on either side and close the bar if you wanted at times that way. If you think you never would and have a more minimalist modern style just leave without curtains.

What a weird architectural choice. But you can definitely make it work. Go cozy - bookshelves that look built-in, a dark, rich paint color or wallpaper.

Also, think about what's going to go on top of it and next to it. Right now it looks very random and tacked-on. Is there a lofted space on top? Could you make one? Or maybe just plants, sculpture, or a table with some height. Something to tie it in to the rest of the room. Good luck!

It would become an office if I were living there. Hands down. With a little curtain to hide things when company comes.

Love meganross1's idea of a bar space! Perfect use of the space as it is off in the corner and I think a TV would look weird there if the room is really long (unless you have a stadium-sized TV). You could put a small frig in there to hold fresh stuff (cream, lemons & limes), even a wine frig if you wanted one. Countertop above the frig/cabinet space. Lots of possibilities!

Ah! Your so luck to have a nook! I would definitely put a little tiny office in there, but if you don't really need one... maybe one of those window nook benches (perhaps with storage?) with bookshelves on either side and loads of throws and pillows? Perfect reading nook. Like this: http://pinterest.com/pin/283797213988155929/

I'm thinking some sort of custom wine rack with storage for glasses

I would make it into an office or sitting space. Although you may not need it, I think it would add a lot of interest to the space and will look nicer than a curtain with storage behind. I don't know your style, but maybe just a clean modern white desk (like the Ikea Besta Burs), accent chair in a bright colour that works with the rest of the decor, and some chrome shelving to the side. Put some modern artwork on the wall and accessorize the shelves with books, sculptures, vases or other knick knacks. If you don't want the desk, get a cozy chair, small side table and a hanging lamp, maybe Moroccan or modern. I would also get some vintage trunks or suitcases to put on top of the nook for storage and a ladder to the side that gives you access to it and adds interest to the space.

I wish I had a space like that to decorate. I love it!

I vote home office in use but without an officy look. Console table instead of standard desk, comfy chair, crazy wallpaper or paint, some art, great light, fun little spot to surf the web, pay bills, read the paper, write thank you notes, etc.

That space looks perfect for a murphy bed.

Or if you want to keep it open I'd do one of those cool reading nooks I keep seeing on here.

Even better - you could make it into a small garden space with a vertical garden on the back wall.

You may find it's the perfect place to stash all that ugly but important stuff like your vacuum cleaner and luggage. But! You could put bookcases on wheels in front of it instead of curtains, sort of like this http://ana-white.com/2010/08/behind-closet-doors.html

If it is in Manhattan you could close it in with doors and rent it out as a studio with sleep loft above.

I see a retro bar setup and storage area. Look to install floating low cabinets from Ikea surrounding a retro Midcentury modern bar cabinet. Too bad the area isn't equipped for a sink.. Open floating shelves above the cabinets will finish the space off...Then finish by using sconce lighting to highlight the space. Sconces don't necessarily need to be installed, but converted to electrical plug in wiring.

A murphy bed for guests would work well; when the bed is in the up position, you have gained wall space which could be trimmed out architecturally, or wallpapered, or painted with a mural (maybe a mirror could be adhered). Add easily movable furniture piece/s on casters in front of the newly created wall - maybe two comfy chairs. Above the awkward space add something unexpected, - for example, a few large ceramic or paper mache animals, a collection of large birdcages some of which could be hung from the ceiling, oversized colored glass vases. Accentuate the objects of your choice with lighting,

Oooh what a lovely space for a bar! Counter height table, a couple of bar stools, lots of shelving to display beautiful glasses and decanters. Boom. I'm jealous already just thinking about it ;)

I love the idea of a library. Just shelves and shelves of books and curated items. Not sure how structurally sound it is, but if you put little ladder rungs on the side, you could have a pillow pit of sorts on top of the nook! I'm pictures lots of pillows and fabrics to make it feel homey and inviting. I think it'd be an awesome place to relax and read.

@meganross1 - just saw you post with almost the same suggestion as mine. Great minds think alike!

It's hard to tell, but it doesn't look big enough to actually fit a chair with an ottoman (every good reading chair needs an ottoman) and book shelves in there. I would try to find a daybed that fits in there and give it a built in look for a cozy nook (that can double as a guest bed).
I know you don't want to turn this into a closet/catch all, but if you don't have a big closet anywhere else in the loft, it might make sense to put some doors on it and use it that way.

Bust it out, patch the wall, paint, pretend like it was never there. No one will miss it.

LOL!

FORT!!!

I had a nook/closet with those proportions in an apartment I lived in in Brooklyn. It was built for a murphy bed when the building was renovated in the 1940s, and one of my neighbors still had the murphy bed mechanism in hers. But my murphy bed was long gone, sadly, so I used it as a home office with curtains in the front to hide my computer and file cabinet when I wasn't using them.

If that nook were mine, I would be tempted to build a big birdcage in it and keep finches. They need lots of space to fly back and forth. You could use a curtain to make it dark for them at night.

Or you could put grow lights at the top and make a little jungle. Or fish!

I love the idea of a closet! Thats what I would do with that space. Or maybe a library. Add shelves maybe a little table and chair. A nice quiet place to read.

Whatever you do, make sure you have decent lighting in there and a curtain that you can pull back easily and dramatically, so you can really wow your guests with whatever super cool thing you put in there.

In the Small Cool space contest, there was a man who put his D.J. equipment in a nook just like the one you are showing.
You don't need an office so besides the reading nook or bar, I agree with another post who said use it for storage or a guest room. Looks like a day bed would fit nicely in there with either a small end table or floating shelves as end tables. When you don't have guest, go ahead and use it for a reading room or nap space. Hang room darkening curtains pulled to the side when not in use.
Good Luck.

I am with the "make it a closet" folks. If you don't want it to be a focal point in the room, put some rolling garment racks in it with maybe some free standing shelves. Put a tension rod in the "doorway" and hang full length curtains. I think something in a bold color, thick & velvety would be a nice choice!

You could put in a large, fake fireplace and shelves on either side. Or do a couple large, potted plants in there with a chair, looks like there's a window nearby which would provide at least some natural light.

Display a large piece of art in the center, along with a comfortable chair. I also like the idea of a bar area there, or the mini library--do the shelves across each side of the opening, with a comfortable chair and a small table and lamp in the middle. They don't have to be confined to the space, you could extend it out with (again) plants on each side of the opening and the ottoman there. Put something funky and fun on top of the nook, like something sculptural or a collection you want to display but not get broken.

If you're going to do storage, I'd add doors to it, somehow; I think curtains look cheap in that function, personally.

Or make it a kind of shelf space not just for a library, but a kind of curiosities--put something more exotic in there, things you or other people have picked up from their travels, etc.

Most importantly, though, I don't know that you have to confine anything to within the space; let the doorway simply be a larger frame for whatever you do that can extend out.

What a cool space. Definitely a reading nook with a beautiful screen for privacy.

If all else fails, make it a custom shoe/clothing closet!
http://pinterest.com/pin/120330621263941634/
http://pinterest.com/pin/235031674274287462/
http://pinterest.com/pin/194851121348806102/

Perfect place for a daybed/spare bedroom/reading nook? But a catchall closet isn't bad either. Never can have too much storage.

LOL. My sister once rented what was basically a walk in storage room with a window in Manhattan.

Yay! I live in downtown Knoxville too. Welcome to the neighborhood!

As for the nook, I agree that a library would be great, or a home theater.

A Moroccan inspired oasis comes to mind. Hang a lantern inside, put in a bench/chaise/ottoman with lots of plush pillows, and then hang curtains from the inside and tie them back so they hang in a lush way, almost hiding the space to make people wonder what loveliness is in there.

One of my friends has one of those, he made an awesome bar out of it. He has wine racks & shelves inside the nook and then a bar & stools in front of it, it looks really nice.

I'm with Duluth Girl; it doesn't need to be there, and nobody will miss it if it's gone.

Put in a ladder and get an indoor treehouse feel on top whatever you do below. Or just tear it out if you don't want it, like Duluthgirl said.

Why waste the material tearing it out? A bar would be nice.

I don't have a bar setup myself, but that nook SCREAMS bar space to me, especially with the benefit of the outlet and the framing. :)

Second choice: library. Third choice: display shelves with art objects, etc. OR if you have pets, it could be a perfect pet "lounge" area with a pet daybed (or cat tower), plus pet food/water and a basket of pet toys. To hide it all, you could have drapes that you can let hang loose, or tie back to open the space up.

I would NOT make it into an office area, if it meant that your desk would be facing into the nook and you'd be staring at the wall.

Alternatively, it'd also be a great spot for a huge flat-screen TV ... or for a huge aquarium. Or if you have art projects that you like to work on, it could be good workspace for those, especially if you could use drapery material to hide the art projects in between sessions.

(p.s. 'scuse if this Comment posts more than once; either my computer or the site was hanging up on me...)

It would be helpful to know the size of the nook and what other room/closet areas you have in your loft.
Do you do any kind of crafts? It would make a lovely workshop. You could put up curtains that you just close to hide the current project and or tools. A nice non see through railing around the top would give you some storage for off season things, or just use decorative containers.

Puppet theatre!
(Or a reading nook.)

It appears as if there are electrical and phone outlets inside the nook, so it seems perfect for an entertainment alcove. You can tuck your entire entertainment system in there, and the cave-like nook might even prove to be a nice amplifier for the sound. When not in use, you could hang sliding curtain panels (like these from IKEA - http://www.ikea.com/us/en/catalog/categories/departments/living_room/10702/) to add a shot of color and texture.

I like the idea of a reading nook, but you could also have a little bar-let in there... I see a pair of heavy ceiling to floor curtains to frame the opening (and to draw when you just want to hide in there with a book and a glass of wine!) ....a good comfy chair and footstool... a tiny table for your glass and book... shelves packed with books and objet ... and a small tiered glass and metal drinks cart in the opposite corner of the nook.

It will have a reflective quality and add to the feeling of opulence, while giving you the bar space everyone is suggesting.

Give yourself a nice relaxing and indulgent space!

paint it out in a contrasting shade and put a bench in it:

http://www.flickr.com/photos/63122153@N00/5459667144/

The space begs for a shelves/books/entertainment center.

Get rid of it. It doesn't seem to serve any purpose.