Mine is kind of hard to see, but in the far back corner there is a small room that houses my Quincy 60-gallon vertical air compressor. The room measures approx. 4'x4', it is insulated and sheetrocked inside and draws air from inside the shop via several vents. It cuts down on the noise tremendously but the compressor running is still audible, just not as annoying. When I built my shop in 1995 this was part of my original design as it was not added on later. At my parents small workshop on their farm we had the air compressor out in the open in the shop and I hated it.
I have some shelves on the inside where I can store some small items and the top of the compressor room acts as a small mezzanine for storage to minimize wasted space.
In the picture it is a bit cluttered on top of the compressor room but the exhaust systems are now sold and the blankets and bedspreads are stacked more neatly. I use them for laying on carpets/interiors of RV's when working on them to avoid tracking anything inside on the carpets.
Mike.