The Black Cats will drop down to the third tier of English football next term for only the second time in their history after suffering back-to-back relegations.
"It is a great club and it has an absolutely fantastic support, no question about that," O'Neill told Sky Sports News.
"It's been a really frustrating time, it's been really frustrating for a number of seasons now. Staying in the Premier League seems to be what they were doing for a number of years and then they dropped out of it.
"And to go right through, it's just catastrophic. However, I think they are capable of coming back up and I have no doubt, if there are new owners, they will have that expectation and ambition to drive on again. It is probably a good time to take over."