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.  

I just recently joined Bigger Pockets and this is my first post... so be gentle!

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. 

The others were more gentle if that makes sense.Supposedly this was a 4.7 or something.  

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

That gentle introduction to all the experiences of owning property just gives too much invaluable experience (and confidence!)