Room Sharing

I currently live in a 2 bedroom town home. My 26 month old DD is in one room while I have been bedsharing with DD2 who is 7 months old. I have been trying to transition DD2 to her own bed but I feel like being in the room with her is making the transition more difficult. I have been thinking about moving DD1 into my room and giving DD2 a room to herself. Is that crazy? I think DD1 would like being in the same room as me, but I worry that she will feel like the baby is taking her room away from her.