[photoadjuster]

Tom, what ever you do make sure there is drywall of some type all the way to the bottom.

I am a 30 year property insurance adjuster who has worked hundreds of fire claims and based on what I have seen, it is safer to drywall all. If you skip the lower drywall do some metal. Do not just install pegboard without drywall behind it because it will not pass a underwriting inspection and it will be hard to insure.