Algae on coral

[cactusreef]

I picked up this frag of branching cyphastrea from my LFS. It looks like it has algae growing inside of it? This one spot seems to be rotting with algae growing inside it. Is this a problem? Should I take it out of tank? Will it spread to other corals? I lightly picked at it with tweezers and pulled some of the algae away. Thanks in advance!

 

[cactusreef]

Hard to tell from photos but it looks like it is actually in the coral and that is a little hole where the algae is.

 

[slingfox]

If I were you I would frag off the healthy portion and discard the portion with algae.