Closet to Powder Room

I have this small condo that has become my family's vacation home. One thing that would make a SIGNIFICANT improvement is the addition of a powder room. The only feasible spot might be the master closet. This closet backs up to the laundry room and water heater (shares a wall). The condo was built in 2003 and is located on the ground floor. We have a slab foundation.
My question is: are there any possible solutions to convert this closet into a small powder room? And if so, what would be the biggest hurdles?
The drawing in the photo is obv not drawn to scale.