The diocese said it lost $6 million last year because of changes in the way government compensates nursing-home services. Larger losses are projected if the diocese continues to maintain its four facilities.
Sullivan, whose decision was based on the advice of an expert advisory committee, said he was looking for buyers who would not only continue the homes' Catholic identity but also keep serving all 551 residents and retain the staff who serve them.
Proceeds from the homes' sales would be used to "transform health-care ministry to the poor and frail elderly through parish-based programs," the diocese said.
"We are not only seeking ways to change the way we minister to the elderly," Sullivan said, according to the diocese, "but also to expand the health-care ministry of the church."
The diocese, which was created in 1937 and now numbers about 475,000 members in Camden, Gloucester, Atlantic, Cumberland, Salem, and Cape May Counties, opened St. Mary's Home in 1952.
It purchased the facility that became Our Lady in 1966, created McCarthy Residence in 1975, and added the Manor in 1991.
Peter Feuerherd, spokesman for the diocese, said most of the homes are administered by religious orders, all are served by priest chaplains, and offer Mass daily or several times a week.
According to the diocese, its advisory committee of doctors, lawyers, clergy, health-care administrators, and financial experts concluded that Medicaid-managed care would likely place further financial stress on the homes "as government programs continue to divert seniors from nursing facilities to home- and community-based services."