I think the code only requires sheetrock if attached to the house, in which case it is under the residential code. If it is detached it falls under the building code, and it isn't required but still a good idea. If you do use Sheetrock put blocking in so you have good hard points to mount shelves, cabinets, and brackets to.
Personally, I think peg board wastes a lot of space, I'd install slat wall instead.
I recommend building on a two or three foot stem wall. This puts the ceiling height at ten or eleven feet with common studs.
My walls are covered with osb. The texture is a little strange, and takes a little while to get used to.
Lots of plug ins. I'm getting ready to install a new electrical system. I will be installing two 20-Amp, 110-volt, and one 20-Amp, 220-Volt circuits on each wall, at 4-ft spacing. I also plan to install two runs of 20-Amp, 220-Volt twist lock plugs on the ceiling, to power the big tools. The lights will be on two separate circuits. I haven't decided yet whether all the receptacles will be run through a latching contactor or not.
A separate room for a compressor, and dust collector to keep the noise down would be nice.
Hydronic in floor heating, would be nice, depending on where you live. Or, air conditioning. At least a few windows, or skylights.
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