I have the same thing going on with one of my Dragon Fruit plants. Something similar happened last year on one of the upper segments. The discoloration started as a lighter patch then it progressed to black. The rotted portion finally dried up but there's now a big chunk missing from the segment. I'm hoping that the whole base of this plant doesn't rot. I thought it might have been from excess moisture and cool nights but you wouldn't have that in your zone. It was still occasionally dipping into the low 50's at night when I put it outside. I'm interested in hearing what the cause is.
Karyn