If a dog is as you say just territorial, this means he tends to make some noise when people and animals he doesn't know approach his turf. A well-socialized, friendly dog will instantly warm up once he can actually SEE you. A poorly socialized dog who hasn't been taught to react properly to visitors may take more time warm up even after the new animal or human enters the home. Human visitors are rational enough that they can be shown how to react to a territorial dog to help this process. It's harder with other dogs, as the new dog will bring a unique personality, behavioral issues, and instinctive behaviors into the mix and you have to be more careful about the introduction.
The meeting really should be on neutral territory, some setting where neither dog has had the chance to claim space and things. I wouldn't even do it in your neighborhood, as your dog may have in a sense 'claimed' some of the areas he walks regularly when he's out.As a result, neither dog feels saddled with the 'job' of defending its space and making their status known. People frequently wonder why dogs get along with others easily at the dog park but have a harder time accepting newcommers at home. It's because the dog no longer has any concern about turf and can meet, greet, lick, sniff, and play without worries. Start with some separate exercise followed by an on-leash introduction. Hold the leash but don't try to hold the dogs back from eachother as long as you see no signs of aggression. Let them lick and sniff for a few minutes then release them for play. Let them get the excited energy out of their system then let them roam, explore, and relax side by side. THEN it's time to go home.