It could be efflorescence on the grout from too much moisture. 

Wood doesn't really ever fail unless it's been compromised by cutting or moisture.

Hi @Rich Riesmeyer,Another solution would be to re-install drywall, but instead of sitting the first row of sheetrock panels directly on the floor level, lift them up 6-8 inches above floor level to help deter moisture from wicking up from the floor, and install a PVC 1x10 or 1x12 as a baseboard trim at the base of the walls directly on top of the garage floor.

I've seen it in a few multi-family complexes and it is the WORST.Once all the drywall is gone and the water problems are solved, you have to eliminate the leftover moisture.  

This area is prime to form heart rot as any moisture will want to collect there.Most states have a forestry commission or a university extension service that will have an urban forester on staff.

I've seen this with moisture damage to the wood. 

Most likely there is too much cold is coming through window and the moisture is from condensationI would replace the window with a vinyl jamb, make the window a little smaller height wise so it would be raised at least 1" above where it starts right now, do aluminum capping around it a silicone the hell out of it outside

We called our licensed contractor who said the leak is coming from the roof, which he doesn't do, and the moisture doesn't appear to be in the wall.

Originally the purpose was for sensors (humidity/moisture, temperature, electrical consumption, motion), but them we started to add control features (thermostat limits, electronic lock, etc), with the ability to delegate some access to the tenants.While it doesn't increase our rent, it does make looking after our student houses easier and the "coolness" factor does seem to help with word-of-mouth marketing.

@Pavel Sakuretsbe careful with the vapor barrier over a zip wall barrier  might check with zip wall first and make sure you do not create a trapped zone where moisture can not get out  ... enjoy this post...thanks