I haven't built one myself but my thought would be to glue a piece of oversized balsa or closed cell foam under the deck where she wants the handle. Make a careful note of where its located (don't ask me how I know) and after gluing the deck down router or carve out a handle shape then seal it with epoxy. It might be a bit tricky getting the edges to be perfectly smooth. 

   I am building 2 Kaholo SUPs for my daughter and my future son-in-law as wedding presents.  I am also considering a recessed handle for these boards. My thoughts are to build a small box within the interiior framework of the board. I plan to deck over the board and then use a router to expose the box.  The next step would be to glue in a block of wood on each side for hand grips. I've made a proto-type out of a cardboard box. I am thinking that the box need only extend about half the thickness of the board rather than going all the way to the bottom.  

I would also be interested in hearing if anyone else has done this.

Bill

Bill- I've done what you're talking about and am happy with the results. The search feature on this message board isn't the best, but you should be able to find a few threads where different approaches are discussed.

My strategy was to build the "box" the full depth of the board (halfway seems a bit shallow? Seems best to err on the side of too deep.), and to angle the sides such that the box is wider on the bottom than the top. When walking with the board under your arm, your fingers can curl up for a better grip.

Be sure to pinpoint the balance point for your board- a misplaced grab handle is supremely aggravating. 

Good luck,

Patrick